Luzon Stevedoring Corp v Court of Tax Appeals
GR No L-30232, July 29, 1988
FACTS:
Luzon Stevedoring Corp imported various engine parts and other equipment for tugboat repair and maintenance in 1961 and 1962. It paid the assessed compensation tax under protest. Unable to secure a tax refund from the Commissioner for the amount of P33,442.13, it filed a petition for review with the Court of Tax Appeals. The CTA denied the petition as well as the motion for reconsideration filed thereafter. Hence, this petition.
ISSUE:
Is the Corporation exempt from compensation tax?
RULING:
No. As the power of taxation is a high prerogative of sovereignty, the relinquishment of such is never presumed and any reduction or diminution thereof with respect to its mode or its rate, must be strictly construed, and the same must be couched in clear and unmistakable terms in order that it may be applied. The corporation’s tugboats do not fall under the categories of passenger or cargo vessels to avail of the exemption from compensation tax in Section 190 of the Tax Code. It may be further noted that the amendment of Section 190 of Republic Act of 3176 was intended to provide incentives and inducements to bolster the shipping industry and not in the business of stevedoring, in which the corporation is engaged in.
Thus, Luzon Stevedoring Corp is not exempt from compensation tax under Section 190, and is thus not entitled to refund.
FACTS:
Luzon Stevedoring Corp imported various engine parts and other equipment for tugboat repair and maintenance in 1961 and 1962. It paid the assessed compensation tax under protest. Unable to secure a tax refund from the Commissioner for the amount of P33,442.13, it filed a petition for review with the Court of Tax Appeals. The CTA denied the petition as well as the motion for reconsideration filed thereafter. Hence, this petition.
ISSUE:
Is the Corporation exempt from compensation tax?
RULING:
No. As the power of taxation is a high prerogative of sovereignty, the relinquishment of such is never presumed and any reduction or diminution thereof with respect to its mode or its rate, must be strictly construed, and the same must be couched in clear and unmistakable terms in order that it may be applied. The corporation’s tugboats do not fall under the categories of passenger or cargo vessels to avail of the exemption from compensation tax in Section 190 of the Tax Code. It may be further noted that the amendment of Section 190 of Republic Act of 3176 was intended to provide incentives and inducements to bolster the shipping industry and not in the business of stevedoring, in which the corporation is engaged in.
Thus, Luzon Stevedoring Corp is not exempt from compensation tax under Section 190, and is thus not entitled to refund.
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