FIRST DIVISION

[G.R. No. 222239. January 15, 2020.]

ASSOCIATION OF INTERNATIONAL SHIPPING LINES, INC., APL CO.

PTE. LTD., and MAERSK-FILIPINAS, INC. , petitioners, vs. SECRETARY
OF FINANCE and COMMISSIONER OF INTERNAL REVENUE,
respondents.

DECISION

LAZARO-JAVIER, J : p

Antecedents
On July 1, 2005, Republic Act No. 9337 1 (RA 9337) was enacted, amending
select provisions of the 1997 National Internal Revenue Code (NIRC), namely, Sections
27, 28, 34, 106, 107, 108, 109, 110, 111, 112, 113, 114, 116, 117, 119, 121, 148, 151,
236, 237 and 288.
In relation to these amendments, then Commissioner of Internal Revenue (CIR)
Lilian Hefti issued Revenue Memorandum Circular No. 31-2008 2 (RMC 31-2008) dated
January 30, 2008. It sought to "clarify certain provisions of the National Internal
Revenue Code of 1997, as amended (Code), as it applies to shipping companies and
their agents as well as their suppliers to ensure that the law is properly implemented
and taxes are properly collected, in a manner that aligns with acceptable business
practices." Its relevant portions read:
Q-3: Are on-line international sea carriers subject to VAT?
A-3: No. On-line international sea carriers are not subject to VAT they being
subject to percentage tax under Title V of the Tax Code. They are liable to
the three percent (3%) percentage tax imposed on their gross receipts
from outbound fares and freight, pursuant to Section 118 of the Code.
However, if these on-line international sea carriers engage in other
transactions not exempt under Section 119 of the Code, they shall be
liable to the twelve percent (12%) VAT on these transactions.
Q-4: Are demurrage fees collected by on-line international sea carriers due
to delay by the shipper in unloading their inbound cargoes subject to tax?
A-4: Yes, Demurrage fees, which are in the nature of rent for the use of
property of the carrier in the Philippines is considered income from
Philippine source and is subject to income tax under the regular rate as
the other types of income of the on-line carrier. Said other line of business
may likewise be subject to VAT or percentage tax applying the rule on
threshold discussed in the succeeding paragraph.
Q-5: Are detention fees and other charges collected by international sea
carriers subject to tax?
A-5: Detention fees and other charges relating to outbound cargoes and
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 inbound cargoes are all considered Philippine-sourced income of the
international sea carriers they being collected for the use of property or
rendition of services in the Philippines, and are subject to the Philippine
income tax under the regular rate, and to the Value-Added Tax, if the total
annual receipts from all the VAT-registered activities exceeds one million
five hundred thousand pesos (P1,500,000.00). However, if the total annual
gross receipts do not exceed one million five hundred thousand pesos,
said taxpayer is liable to pay the 3% percentage tax.
xxx xxx xxx
Q-14: Are sales of goods, supplies, equipment, fuel and services to persons
engaged in international shipping operations subject to VAT?
A-14: The sale of goods, supplies, equipment, fuel and services (including
leases of property) to the common carrier to be used in its international
sea transport operations is zero-rated. Provided, that the same is limited
to goods, supplies, equipment, fuel and services pertaining to or
attributable to the transport of goods and passengers from a port in the
Philippines directly to a foreign port without docking or stopping at any
other port in the Philippines to unload passengers and/or cargoes loaded
in and from another domestic port; Provided, further, that if any portion of
such fuel, equipment, goods or supplies and services is used for purposes
other than that mentioned in this paragraph, such portion of fuel,
equipment, goods, supplies and services shall be subject to 12% VAT.
xxx xxx xxx
Q-34: Are commission incomes received by the local shipping agents from
their foreign principals subject to VAT?
A-34: The commission income or fees received by the local shipping agents
for outbound freights/fares received by their foreign principals which are
on-line international sea carriers (touching any port in the Philippines as
part of their operation) shall be zero-rated pursuant to the provisions of
Section 108(B)(4) of the Code. Said provision does not require that
payments of the commission income or fees for "services rendered to
persons engaged in international shipping operations, including leases of
property for use thereof," be paid in acceptable foreign currency in order
that such transaction may be zero-rated. On the other hand, commission
income or fees received by the local shipping agents pertaining to inbound
freights/fares received by their foreign principals/on-line international sea
carriers or pertaining to freights/fares received by off-line international sea
carriers shall be subject to VAT at 12%.
Five (5) years after the enactment of RA 9337, on December 6, 2010, petitioners
Association of International Shipping Lines, Inc. 3 (AISL), APL Co. Pte. Ltd. 4 (APL),
and Maersk-Filipinas, Inc. (Maersk) sought to nullify RMC 31-2008 via a petition for
declaratory relief entitled "Association of International Shipping Lines, Inc. (AISL), APL
Co. Pte. Ltd. (APL), and Maersk-Filipinas, Inc. (Maersk) v. Commissioner of Internal
Revenue." The case was raffled to RTC-Branch 98, Quezon City, and docketed as Civil
Case No. Q-09-64241. 5
Petitioners prayed that the trial court: 1) issue a writ of preliminary injunction
enjoining the then BIR Commissioner and her representatives, agents, or those acting
under her instructions or on her behalf from implementing, enforcing, or acting pursuant
to or on the basis of the challenged provisions of RMC 31-2008; and 2) render judgment
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 declaring these challenged provisions void. 6
According to petitioners, RMC 31-2008 was void insofar as it imposed regular tax
rate of thirty percent (30%) and twelve percent (12%) VAT on the demurrage and
detention fees collected by international shipping carriers from shippers or consignees
for delay in the return of containers, on the domestic portion of services to persons
engaged in international shipping operations, and on commission income received by
local shipping agents from international shipping carriers or in connection with inbound
shipments.
By Order 7 dated May 18, 2012, Branch 98 held that international carriers were
not subject to income tax under Section 28 (A) (1) (3b) 8 of the NIRC. Too, demurrage
fees were not considered income derived from other or separate business of the
international carrier. Being incidental to the trade or business of the international carrier,
demurrage fees should instead form part of the Gross Philippine Billings (GPB) subject
to 2.5% tax under Section 28. Further the law did not expressly impose 12% VAT on the
domestic portion of the services rendered by international carriers. 9 Thus:
WHEREFORE, premises considered, and pursuant to Rule 35 of the
1997 Rules of Civil Procedure, the Court grants the motion for summary
judgment and declares as INVALID, the pertinent portions of Revenue
Memorandum Circular No. 31-2008, insofar as the latter subjects the: a)
demurrage and detention fees to the regular corporate income tax rate under
Section 28(A)(1) and 12% VAT; b) domestic portion of the services rendered to
persons engaged in international shipping operation to 12% VAT; and c)
commission income or fees received by local shipping agents from international
shipping carriers for the latter's inbound freights/fares to 12% VAT, for being
contrary to Section 28 (A)(1), and (3) and Section 108 (B)(4) of the National
Internal Revenue Code of 1997, as amended.
SO ORDERED. 10
The Order became final and executory as of June 16, 2012. 11

On March 7, 2013, Republic Act No. 10378 12 (RA 10378) was enacted,
amending Section 28 (A) (3) (a) of the NIRC. The provision now reads:
SEC. 28. Rates of Income Tax on Foreign Corporations. —
(A) Tax on Resident Foreign Corporations. —
(1) xxx
(2) xxx
(3) International Carrier. — An international carrier doing
business in the Philippines shall pay a tax of two and one-half
percent (2 1/2%) on its 'Gross Philippine Billings' as defined
hereunder:
(a) International Air Carrier. — 'Gross Philippine Billings'
refers to the amount of gross revenue derived from carriage of
persons, excess baggage, cargo, and mail originating from the
Philippines in a continuous and uninterrupted flight, irrespective of
the place of sale or issue and the place of payment of the ticket
or passage document: Provided, That tickets revalidated,
exchanged and/or indorsed to another international airline form
part of the Gross Philippine Billings if the passenger boards a
plane in a port or point in the Philippines: Provided, further, That
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 for a flight which originates from the Philippines, but
transshipment of passenger takes place at any part outside the
Philippines on another airline, only the aliquot portion of the cost
of the ticket corresponding to the leg flown from the Philippines to
the point of transshipment shall form part of Gross Philippine
Billings.
(b) International Shipping. — 'Gross Philippine Billings' means
gross revenue whether for passenger, cargo or mail originating
from the Philippines up to final destination, regardless of the place
of sale or payments of the passage or freight documents.
Provided, That international carriers doing business in the
Philippines may avail of a preferential rate or exemption from the
tax herein imposed on their gross revenue derived from the
carriage of persons and their excess baggage on the basis of an
applicable tax treaty or international agreement to which the
Philippines is a signatory or on the basis of reciprocity such that
an international carrier, whose home country grants income tax
exemption to Philippine carriers, shall likewise be exempt from the
tax imposed under this provision.
xxx xxx xxx.
The Secretary of Finance, thereafter, issued the implementing rules under
Revenue Regulations No. 15-2013 13 (RR 15-2013), the validity of which is now the
subject of this petition.
The Proceedings Before the Trial Court
Over three (3) years later, on December 4, 2013, petitioners initiated the present
petition for declaratory relief, 14 this time, challenging Section 4.4 of RR 15-2013 and
impleading as respondents both the Secretary of Finance and the CIR. Section 4.4
reads:
4.4) Taxability of Income Other Than Income from International Transport
Services. — All items of income derived by international carriers that do not
form part of Gross Philippine Billings as defined under these Regulations shall
be subject to tax under the pertinent provisions of the NIRC, as amended.
Demurrage fees, which are in the nature of rent for the use of
property of the carrier in the Philippines, is considered income from
Philippine source and is subject to income tax under the regular rate as
the other types of income of the on-line carrier.
Detention fees and other charges relating to outbound cargoes and
inbound cargoes are all considered Philippine-sourced income of
international sea carriers they being collected for the use of property or
rendition of services in the Philippines, and are subject to the Philippine
income tax under the regular rate. (Emphasis supplied)
The case was raffled to RTC-Branch 77, Quezon City, and docketed Special Civil
Action No. R-QZN-13-05590-CV, then presided by Acting Presiding Judge Cleto R.
Villacorta III.
Petitioners' Arguments
Petitioners argued that Section 4.4 of RR 15-2013 invalidly subjects demurrage
and detention fees collected by international shipping carriers to regular corporate
income tax rate. This very same imposition had been previously declared invalid by
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 Branch 98 through its final and executory Order dated May 18, 2012. 15 Section 4.4 of
RR 15-2013 should not, therefore, be given effect by reason of res judicata. 16 The
treatment of demurrage and detention fees on the carriage of cargoes prior to and after
the enactment of RA 10378 did not change. There is nothing in RA 10378 which even
touches on demurrage and detention fees, much less, provides or even implies that
they should be treated as income subject to tax at the regular corporate income tax
rate. 17
In fact, RR 15-2013 unduly widens the scope of RA 10378 by imposing additional
taxes on international shipping carriers not authorized or provided by law. Besides,
demurrage and detentions fees are not income but penalties imposed by the carrier on
the charterer, shipper, consignee, or receiver, as the case may be, to allow the carrier
to recover losses or expenses associated with or caused by the undue delay in the
loading and/or discharge of the latter's shipments from the containers. 18 They are akin
to damages. 19 Assuming that demurrage and detention fees may be treated as
income, these fees are taxable only if they form part of Gross Philippine Billings (GPB)
and taxed at the preferential rate of 2.5%. 20
Further, RR 15-2013 is invalid because it was promulgated without public hearing
as required by the Revised Administrative Code and case law. Also, no copies of RR
15-2013 were filed with the University of the Philippines-Law Center, as required by the
Revised Administrative Code, thus, the same is deemed not to have become effective.
21

Respondents' Arguments
By Comment 22 dated February 3, 2014, the Secretary of Finance, through the
Office of the Solicitor General (OSG), countered that the Order dated May 18, 2012 in
Civil Case No. Q-09-64241 did not preclude the Secretary of Finance from issuing
Section 4.4 of RR 15-2013 because a) the first case involves RMC 31-2008 which the
CIR issued to clarify matters involving common carriers by sea, in relation to their
transport of passengers, goods, and services, while the second case involves RR 15-
2013 which the Secretary of Finance issued pursuant to his mandate under RA 10378;
b) RMC 31-2008 was issued based on the authority of the CIR to interpret the
provisions of the NIRC while RR 15-2013 was issued by virtue of the authority of the
Secretary of Finance under RA 10378; and c) the Secretary of Finance was not
impleaded as respondent in the first case, thus, he is not bound by the finality of Order
dated May 18, 2012. Besides, the Secretary of Finance and the CIR are two (2) distinct
officials governing two (2) separate agencies.
According to respondents, RR 15-2013 does not expand the provisions of RA
10378. It simply clarifies what constitutes Gross Philippine Billings (GPB) such that
anything outside the definition of GPB is subject to the regular income tax rate for
resident foreign corporations. Thus, the law need not specifically mention demurrage or
detention fees as among those falling outside the definition of GPB. 23
Respondents stress that demurrage and detention fees are income. They not
only serve as penalties for consignees, they also serve as compensation for extended
use of containers. As resident foreign corporations, they are covered by the provisions
on the regular income tax rate and not the preferential rate of 2.5% imposed on GPB. 24
Lastly, respondents argue that the absence of public hearing prior to the
publication of RR 15-2013 or non-submission of copies thereof to the UP-Law Center
did not render it ineffective. An interpretative regulation such as RR 15-2013, to be
effective, needs nothing further than its bare issuance for it gives no real consequence
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 more than what the law itself already prescribes. It adds nothing to the law and does not
affect the substantial rights of any person. 25
In its Answer 26 dated January 27, 2014, the CIR, through the BIR Litigation
Department riposted that the trial court had no jurisdiction over the petition for
declaratory relief because its subject matter involved a revenue regulation. Under
Commonwealth Act No. 55 27 (CA 55), actions for declaratory relief do not apply to
cases involving tax liabilities under any law administered by the BIR. 28 Further, res
judicata does not apply to the case.
Petitioners' Omnibus Motion
Petitioners subsequently filed an Omnibus Motion 1) for Judicial Notice; and 2)
for Summary Judgment 29 dated December 4, 2014.
Petitioners prayed that the trial court take judicial notice of the following: 1) the
existence of RMC 31-2008; 2) the final and executory Order dated May 18, 2012 in Civil
Case No. Q-09-64241 and its Certificate of Finality dated August 28, 2012; 3) the
enactment of Republic Act No. 10378 30 (RA 10378), which recognized the principle of
reciprocity for grant of income tax exemptions to international shipping carriers and
rationalized the taxes imposed thereon; and 4) the issuance of RR 15-2013.
Petitioners also filed a motion for summary judgment on ground that there was
no genuine issue as to any material fact and/or the facts were undisputed and certain
based on the pleadings, admissions, and affidavits on record.
The Ruling of the Trial Court
Following the parties' exchange of pleadings, the trial court, then presided by
Acting Presiding Judge Villacorta, through its first assailed Order 31 dated September
15, 2015: 1) granted petitioners' motion for judicial notice of the existence of RMC 31-
2008, the issuance of Order dated May 18, 2012 in Civil Case No. Q-09-64241 and its
corresponding Certificate of Finality dated August 28, 2012, and the enactment of RA
10378 — all these being the official acts of different branches of government; 2)
declared that it had no jurisdiction over the petition for declaratory relief pursuant to CA
55 which removed from regional trial courts the authority to rule on cases involving
one's liability for tax, duty, or charge collectible under any law administered by the
Bureau of Customs or the BIR; 3) ruled against the application of res judicata to the
case because — first, res judicata does not give rise to a cause of action for the
purpose of initiating a complaint, res judicata being a shield not a sword and executive
and legislative authorities have the power to enact laws and rules to supersede judge-
made laws or rules, second, the enactment and implementation of RA 10378
constituted a supervening event which negated the application of res judicata, third,
there is no similarity of parties, subject matters, and causes of action between the
present case and Civil Case No. Q-09-64241; and 4) found RR No. 15-2013 to be a
reasonable tax regulation and an interpretative issuance, the effectivity of which does
not require a public hearing, nay, prior registration with the UP Law Center. Thus, the
trial court decreed:
WHEREFORE:
(1) The Motion for Judicial Notice is granted. This Court declares
that the issuance of (i) RMC 31-2008, (ii) RTC-Branch 98 Order dated May 18,
2012 in Civil Case No. Q-09-64241, (iii) RTC-Branch 98 Certification of the
finality of the Order dated May 18, 2012 in Civil Case No. Q-09-64241, (iv) RA
10378, and (v) RR 15-2013, is an established fact in this case.
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 (2) The Motion for Summary Judgment is denied and as a result the
instant petition for declaratory relief is dismissed.
Costs de oficio.
SO ORDERED. 32
Petitioners' partial motion for reconsideration was denied under Order dated
January 8, 2016.
The Present Petition
Petitioners now seek, on pure questions of law, the Court's discretionary
appellate jurisdiction to review and reverse the assailed dispositions. They essentially
reiterate the arguments raised in their petition for declaratory relief, i.e., a) res judicata
and immutability of judgments apply to this case and the enactment of RA 10378 is not
a supervening event which operates to negate the application of the aforesaid
principles; b) RR 15-2013 is invalid because it erroneously subjects demurrage and
detention fees collected by international shipping carriers to regular income tax rate,
albeit these are not income; and c) RR 15-2013 is not an interpretative issuance, thus, a
public hearing and prior registration with the UP Law Center are required for its validity
and effectivity.
Respondents Secretary of Finance and CIR, through Senior State Solicitor
Jonathan dela Vega, submits: Res judicata does not apply here because there is no
commonality of parties between this case and Civil Case No. Q-09-64241. The
Secretary of Finance and the CIR are two (2) distinct officials. 33 RR 15-2013 does not
add to the provisions of RA 10378. It simply clarifies how the GPB of international sea
carriers should be determined. Its issuance is germane to the purpose of the law. 34
Lastly, RR 15-2013 is an interpretative regulation, thus, to be effective, it need not be
filed with the UP Law Center. 35
Petitioners' Reply 36 dated October 27, 2016 echoes their previous arguments
against RR 15-2013.
Issues
1. Does res judicata apply in this case?
2. Is a petition for declaratory relief proper for the purpose of invalidating RR
No. 15-2013?
3. Is RR 15-2013 a valid revenue regulation?
Ruling
Res judicata does not apply here
Res judicata applies in the concept of "bar by prior judgment" if the following
requisites concur: (1) the former judgment or order must be final; (2) the judgment or
order must be on the merits; (3) the decision must have been rendered by a court
having jurisdiction over the subject matter and the parties; and (4) there must be,
between the first and the second action, identity of parties, of subject matter, and of
causes of action. 37
Here, we rule that there is no substantial identity of parties and subject matter.
a) No substantial identity of parties
Tambunting, Jr. v. Sumabat 38 explains the nature of a petition for declaratory
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 relief, thus:
An action for declaratory relief should be filed by a person interested
under a deed, will, contract or other written instrument, and whose rights are
affected by a statute, executive order, regulation or ordinance before breach or
violation thereof. The purpose of the action is to secure an authoritative
statement of the rights and obligations of the parties under a statute,
deed, contract, etc. for their guidance in its enforcement or compliance
and not to settle issues arising from its alleged breach. It may be
entertained only before the breach or violation of the statute, deed, contract,
etc. to which it refers. Where the law or contract has already been contravened
prior to the filing of an action for declaratory relief, the court can no longer
assume jurisdiction over the action. In other words, a court has no more
jurisdiction over an action for declaratory relief if its subject, i.e., the statute,
deed, contract, etc., has already been infringed or transgressed before the
institution of the action. Under such circumstances, inasmuch as a cause of
action has already accrued in favor of one or the other party, there is nothing
more for the court to explain or clarify short of a judgment or final order.
(Emphasis supplied)
Thus, it is required that the parties to the action for declaratory relief be those
whose rights or interests are affected by the contract or statute being questioned. 39
Section 2 of Rule 63 of the Rules of Court further underscores that a judgment in a
petition for declaratory relief binds only the impleaded parties:
Section 2. Parties. — All persons who have or claim any interest which
would be affected by the declaration shall be made parties; and no declaration
shall, except as otherwise provided in these Rules, prejudice the rights of
persons not parties to the action. (2a, R64)
Heirs of Marcelino Doronio v. Heirs of Fortunato Doronio 40 further elucidates
on this principle, thus:
Petitioners cannot also use the finality of the RTC decision in
Petition Case No. U-920 as a shield against the verification of the validity
of the deed of donation. According to petitioners, the said final decision is
one for quieting of title. In other words, it is a case for declaratory relief
under Rule 64 (now Rule 63) of the Rules of Court, which provides:
SECTION 1. Who may file petition. — Any person interested
under a deed, will, contract or other written instrument, or whose
rights are affected by a statute, executive order or regulation, or
ordinance, may, before breach or violation thereof, bring an action
to determine any question of construction or validity arising under
the instrument or statute and for a declaration of his rights or
duties thereunder.
An action for the reformation of an instrument, to quiet title to real
property or remove clouds therefrom, or to consolidate ownership under Article
1607 of the Civil Code, may be brought under this rule.
SECTION 2. Parties. — All persons shall be made parties
who have or claim any interest which would be affected by the
declaration; and no declaration shall, except as otherwise
provided in these rules, prejudice the rights of persons not parties
to the action.
However, respondents were not made parties in the said Petition Case
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 No. U-920. Worse, instead of issuing summons to interested parties, the RTC
merely allowed the posting of notices on the bulletin boards of Barangay
Cabalitaan, Municipalities of Asingan and Lingayen, Pangasinan. As pointed
out by the CA, citing the ruling of the RTC:
x x x In the said case or Petition No. U-920, notices were posted
on the bulletin boards of barangay Cabalitaan, Municipalities of
Asingan and Lingayen, Pangasinan, so that there was a notice to
the whole world and during the initial hearing and/or hearings, no
one interposed objection thereto.
Suits to quiet title are not technically suits in rem, nor are they, strictly
speaking, in personam, but being against the person in respect of theres, these
proceedings are characterized as quasi in rem. The judgment in such
proceedings is conclusive only between the parties. Thus, respondents
are not bound by the decision in Petition Case No. U-920 as they were not
made parties in the said case. (Emphasis supplied)
Applying the foregoing principles here, we find that there is no identity of parties
between Civil Case No. Q-09-64241 and this case.
The final and executory Order dated May 18, 2012 of RTC-Branch 98 in Civil
Case No. Q-09-64241 is only binding on herein petitioners Association of International
Shipping Lines, Inc., APL Co. Pte. Ltd. and Maersk-Filipinas, Inc. and the lone
respondent in that case, the CIR. Meanwhile, in this case, although the petitioners are
the same, the respondents include not only the CIR but the Secretary of Finance as
well. Note that the Secretary of Finance was not party in Civil Case No. Q-09-64241.
Consequently, the Secretary of Finance is not bound by the final and executory
judgment in Civil Case No. Q-09-64241. Additionally, unlike in the said case, it is the
Secretary of Finance's issuance which is the subject of the present challenge, not the
CIR's.
The distinction between the CIR and the Secretary of Finance, as respondents, is
not hairsplitting. On one hand, when BIR Commissioner Lilian B. Hefti issued RMC 31-
2008 on January 30, 2008, she did so under the auspices of Section 4 41 of the NIRC.
On the other hand, when Secretary Cesar Purisima issued RR 15-2013 on September
20, 2013, he did so in obedience to the legislative directive under Section 5 42 of RA
10378 and pursuant to his rule-making power under Section 244 43 of the NIRC.
Verily, the Commissioner and the Secretary cannot be considered as one, for
when they issued their respective revenue memoranda or regulation, they did so
pursuant to the separate powers and prerogatives granted by law.
b) No substantial identity of subject matter
While it is true that RMC 31-2008, subject of Civil Case No. Q-09-64241, on one
hand, and RR 15-2013, subject of the present case, on the other, both treat demurrage
and detention fees to be within the prism of regular corporate income tax rate, each,
however, differs from the other with respect to the authority from which it emanated.
In Civil Case No. Q-09-64241, what was challenged was the CIR's authority to
issue RMC 31-2008 pursuant to Section 4 of the NIRC. On the other hand, what is
being challenged here is the Secretary of Finance's authority to issue RR 15-2013 in
accordance with Section 244 of the NIRC and Section 5 of RA 10378. The CIR and the
Secretary of Finance derive their respective powers from two (2) distinct sources, thus,
their respective issuances, too, are separate and independent of each other.
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 More, the supposed invalidity of the CIR's issuance in Civil Case No. Q-09-64241
does not preclude the Secretary of Finance from rendering his issuance on the same
subject.
More important, the judgment in Civil Case No. Q-09-64241 does not rise to a
level of a judicial precedent to be followed in subsequent cases by all courts in the land,
since the same was rendered by a regional trial court, and not by this Court. Verily, the
Order dated May 18, 2012 of RTC-Branch 98, although binding on the CIR, cannot
serve as a judicial precedent for the purpose of precluding the Secretary of Finance
from promulgating a similar issuance on the same subject.
A petition for declaratory
relief is not the proper remedy
to seek the invalidation of RR 15-2013;
petition is treated as one for prohibition
To begin with, the trial court dismissed the case below, among others, for lack of
jurisdiction pursuant to Section 1 of CA 55, which reads:
Section 1. Section one of Act Numbered Thirty-seven hundred and thirty-
six is hereby amended so as to read as follows:
"SECTION 1. Construction. — Any person interested under a deed,
contract or other written instrument, or whose rights are affected by a statute,
may bring an action in a Court of First Instance to determine any question of
construction or validity arising under such deed, contract, instrument or statute
and for a declaration of his rights or duties thereunder: Provided, however, That
the provisions of this Act shall not apply to cases where a taxpayer
questions his liability for the payment of any tax, duty, or charge
collectible under any law administered by the Bureau of Customs or the
Bureau of Internal Revenue." (Emphasis supplied)
In CJH Development Corp. v. BIR , 44 this Court clarified that CA 55 is still good
law, thus:
CJH alleges that CA No. 55 has already been repealed by the Rules of
Court; thus, the remedy of declaratory relief against the assessment made by
the BOC is proper. It cited the commentaries of Moran allegedly to the effect
that declaratory relief lies against assessments made by the BIR and BOC. Yet
in National Dental Supply Co. v. Meer, this Court held that:
From the opinion of the former Chief Justice Moran may be
deduced that the failure to incorporate the above proviso [CA No.
55] in section 1, rule 66, [now Rule 64] is not due to an intention
to repeal it but rather to the desire to leave its application to the
sound discretion of the court, which is the sole arbiter to
determine whether a case is meritorious or not. And even if it be
desired to incorporate it in rule 66, it is doubted if it could be done
under the rule-making power of the Supreme Court considering
that the nature of said proviso is substantive and not adjective, its
purpose being to lay down a policy as to the right of a
taxpayer to contest the collection of taxes on the part of a
revenue officer or of the Government. With the adoption of said
proviso, our law-making body has asserted its policy on the
matter, which is to prohibit a taxpayer to question his liability
for the payment of any tax that may be collected by the
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 Bureau of Internal Revenue. As this Court well said, quoting
from several American cases, "The Government may fix the
conditions upon which it will consent to litigate the validity of its
original taxes. . ." "The power of taxation being legislative, all
incidents are within the control of the Legislature." In other words,
it is our considered opinion that the proviso contained in
Commonwealth Act No. 55 is still in full force and effect and bars
the plaintiff from filing the present action.
As a substantive law that has not been repealed by another statute,
CA No. 55 is still in effect and holds sway. Precisely, it has removed from
the courts' jurisdiction over petitions for declaratory relief involving tax
assessments. The Court cannot repeal, modify or alter an act of the
Legislature. (Emphasis supplied)
CIR v. Standard Insurance, Co., Inc. 45 further reinforced the rule that regional
trial courts have no jurisdiction over petitions for declaratory relief against the imposition
of tax liability or validity of tax assessments:
The more substantial reason that should have impelled the RTC to
desist from taking cognizance of the respondent's petition for declaratory relief
except to dismiss the petition was its lack of jurisdiction.
We start by reminding the respondent about the inflexible policy that
taxes, being the lifeblood of the Government, should be collected promptly and
without hindrance or delay. Obeisance to this policy is unquestionably dictated
by law itself. Indeed, Section 218 of the NIRC expressly provides that "[n]o
court shall have the authority to grant an injunction to restrain the collection of
any national internal revenue tax, fee or charge imposed by th[e] [NIRC]." Also,
pursuant to Section 11[15] of R.A. No. 1125, as amended, the decisions or
rulings of the Commissioner of Internal Revenue, among others,
assessing any tax, or levying, or distraining, or selling any property of
taxpayers for the satisfaction of their tax liabilities are immediately
executory, and their enforcement is not to be suspended by any appeals
thereof to the Court of Tax Appeals unless "in the opinion of the Court [of
Tax Appeals] the collection by the Bureau of Internal Revenue or the
Commissioner of Customs may jeopardize the interest of the Government
and/or the taxpayer," in which case the Court of Tax Appeals "at any
stage of the proceeding may suspend the said collection and require the
taxpayer either to deposit the amount claimed or to file a surety bond for
not more than double the amount."
In view of the foregoing, the RTC not only grossly erred in giving due
course to the petition for declaratory relief, and in ultimately deciding to
permanently enjoin the enforcement of the specified provisions of the NIRC
against the respondent, but even worse acted without jurisdiction. (Emphasis
supplied)
Tambunting, Jr. v. Sumabat, 46 explained the nature of a petition for declaratory
relief, thus:
An action for declaratory relief should be filed by a person interested
under a deed, will, contract or other written instrument, and whose rights are
affected by a statute, executive order, regulation or ordinance before breach or
violation thereof. The purpose of the action is to secure an authoritative
statement of the rights and obligations of the parties under a statute, deed,
contract, etc. for their guidance in its enforcement or compliance and not to
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 settle issues arising from its alleged breach. It may be entertained only before
the breach or violation of the statute, deed, contract, etc. to which it refers.
Where the law or contract has already been contravened prior to the filing of an
action for declaratory relief, the court can no longer assume jurisdiction over
the action. In other words, a court has no more jurisdiction over an action for
declaratory relief if its subject, i.e., the statute, deed, contract, etc., has already
been infringed or transgressed before the institution of the action. Under such
circumstances, inasmuch as a cause of action has already accrued in favor of
one or the other party, there is nothing more for the court to explain or clarify
short of a judgment or final order.
Verily, since there is no actual case involved in a petition for declaratory relief, it
cannot be the proper vehicle to invoke the power of judicial review to declare a statute
as invalid or unconstitutional. As decreed in DOTr v. PPSTA , 47 the proper remedy is
certiorari or prohibition, thus:
The Petition for Declaratory Relief is not the proper remedy
One of the requisites for an action for declaratory relief is that it must be
filed before any breach or violation of an obligation. Section 1, Rule 63 of the
Rules of Court states, thus:
xxx xxx xxx
Thus, there is no actual case involved in a Petition for Declaratory
Relief. It cannot, therefore, be the proper vehicle to invoke the judicial
review powers to declare a statute unconstitutional.
It is elementary that before this Court can rule on a constitutional issue,
there must first be a justiciable controversy. A justiciable controversy refers to
an existing case or controversy that is appropriate or ripe for judicial
determination, not one that is conjectural or merely anticipatory. As We
emphasized in Angara v. Electoral Commission, any attempt at abstraction
could only lead to dialectics and barren legal questions and to sterile
conclusions unrelated to actualities.
To question the constitutionality of the subject issuances,
respondents should have invoked the expanded certiorari jurisdiction
under Section 1 of Article VIII of the 1987 Constitution. The adverted
section defines judicial power as the power not only "to settle actual
controversies involving rights which are legally demandable and
enforceable," but also "to determine whether or not there has been a
grave abuse of discretion amounting to lack or excess of jurisdiction on
the part of any branch or instrumentality of the Government."
There is a grave abuse of discretion when there is patent violation of the
Constitution, the law, or existing jurisprudence. On this score, it has been ruled
that "the remedies of certiorari and prohibition are necessarily broader in scope
and reach, and the writ of certiorari or prohibition may be issued to correct
errors of jurisdiction committed not only by a tribunal, corporation, board or
officer exercising judicial, quasi-judicial or ministerial functions, but also to set
right, undo[,] and restrain any act of grave abuse of discretion amounting to
lack or excess of jurisdiction by any branch or instrumentality of the
Government, even if the latter does not exercise judicial, quasi-judicial or
ministerial functions." Thus, petitions for certiorari and prohibition are the
proper remedies where an action of the legislative branch is seriously
alleged to have infringed the Constitution. (Emphasis supplied)
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 I n Diaz, et al. v. Secretary of Finance, et al. , 48 the Court, nonetheless, held
that a petition for declaratory relief may be treated as one for prohibition if the case has
far-reaching implications and raises questions that need to be resolved for the public
good; or if the assailed act or acts of executive officials are alleged to have usurped
legislative authority, thus:
On August 24, 2010 the Court issued a resolution, treating the petition
as one for prohibition rather than one for declaratory relief, the characterization
that petitioners Diaz and Timbol gave their action. The government has sought
reconsideration of the Court's resolution, however, arguing that petitioners'
allegations clearly made out a case for declaratory relief, an action over which
the Court has no original jurisdiction. The government adds, moreover, that the
petition does not meet the requirements of Rule 65 for actions for prohibition
since the BIR did not exercise judicial, quasi-judicial, or ministerial functions
when it sought to impose VAT on toll fees. Besides, petitio ners Diaz and Timbol
has a plain, speedy, and adequate remedy in the ordinary course of law against
the BIR action in the form of an appeal to the Secretary of Finance.
But there are precedents for treating a petition for declaratory relief
as one for prohibition if the case has far-reaching implications and raises
questions that need to be resolved for the public good. The Court has
also held that a petition for prohibition is a proper remedy to prohibit or
nullify acts of executive officials that amount to usurpation of legislative
authority.
Here, the imposition of VAT on toll fees has far-reaching implications. Its
imposition would impact, not only on the more than half a million motorists who
use the tollways everyday, but more so on the government's effort to raise
revenue for funding various projects and for reducing budgetary deficits.
(Emphasis supplied)
Here, RR 15-2013 greatly impacts the Philippine maritime industry since it is
considered "as more of the 'backbone' of the Philippines' burgeoning economy due to
its significance both for trade and transportation." 49 For this reason and the fact that the
issue at hand has already pended since 2013 or for more than six (6) years now, first
with the trial court and now with this Court, we resolve to treat the present case as one
f o r certiorari or prohibition and settle the controversy once and for all. Diaz aptly
enunciated:
Although the petition does not strictly comply with the
requirements of Rule 65, the Court has ample power to waive such
technical requirements when the legal questions to be resolved are of
great importance to the public. The same may be said of the requirement
of locus standi which is a mere procedural requisite. (Emphasis supplied)
RR 15-2013 is a valid
issuance
In treating demurrage and detention fees as regular income subject to regular
income tax rate, the Secretary of Finance relied on Section 28 (A) (I) (3a) of the NIRC,
as amended by RA 10378, viz.:
SEC. 28. Rates of Income Tax on Foreign Corporations. —
(A) Tax on Resident Foreign Corporations. —
(1) xxx
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 (2) xxx
(3). International Carrier. — An international carrier doing business in
the Philippines shall pay a tax of two and one-half percent (2 1/2%) on its
'Gross Philippine Billings' as defined hereunder:
(c) International Air Carrier. — 'Gross Philippine Billings' refers to the
amount of gross revenue derived from carriage of persons, excess baggage,
cargo, and mail originating from the Philippines in a continuous and
uninterrupted flight, irrespective of the place of sale or issue and the place of
payment of the ticket or passage document: Provided, That tickets revalidated,
exchanged and/or indorsed to another international airline form part of the
Gross Philippine Billings if the passenger boards a plane in a port or point in the
Philippines: Provided, further, That for a flight which originates from the
Philippines, but transshipment of passenger takes place at any part outside the
Philippines on another airline, only the aliquot portion of the cost of the ticket
corresponding to the leg flown from the Philippines to the point of
transshipment shall form part of Gross Philippine Billings.
(d) International Shipping. — 'Gross Philippine Billings' means gross
revenue whether for passenger, cargo or mail originating from the
Philippines up to final destination, regardless of the place of sale or
payments of the passage or freight documents.
Provided, That international carriers doing business in the
Philippines may avail of a preferential rate or exemption from the tax
herein imposed on their gross revenue derived from the carriage of
persons and their excess baggage on the basis of an applicable tax treaty
or international agreement to which the Philippines is a signatory or on
the basis of reciprocity such that an international carrier, whose home
country grants income tax exemption to Philippine carriers, shall likewise
be exempt from the tax imposed under this provision. (Emphasis
supplied)
xxx xxx xxx.
This provision is still in effect since it was not amended by RA 10963 or the Tax
Reform for Acceleration and Inclusion law.
To determine whether demurrage and detention fees are subject to the
preferential 2.5% rate, we refer to the definition of "Gross Philippine Billings" (GPB)
under Section 28 (A) (I) (3a) of the NIRC, as amended by RA 10378, viz.: "gross
revenue whether for passenger, cargo or mail originating from the Philippines up to final
destination, regardless of the place of sale or payments of the passage or freight
documents."
RR 15-2013 echoes this definition, thus:
B) Determination of Gross Philippine Billings of International Sea Carriers.
— In computing for "Gross Philippine Billings" of international sea carriers,
there shall be included the total amount of gross revenue whether for
passenger, cargo, and/or mail originating from the Philippines up to final
destination, regardless of the place of sale or payments of the passage or
freight documents.
xxx xxx xxx
Verily, the GPB covers gross revenue derived from transportation of
passengers, cargo and/or mail originating from the Philippines up to the final
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 destination. Any other income, therefore, is subject to the regular income tax rate. When
the law is clear, there is no other recourse but to apply it regardless of its perceived
harshness. Dura lex sed lex. 50
Under RR 15-2013, demurrage and detention fees are not deemed within the
scope of GPB. For demurrage fees "which are in the nature of rent for the use of
property of the carrier in the Philippines, is considered income from Philippine source
and is subject to income tax under the regular rate as the other types of income of the
on-line carrier." On the other hand, detention fees and other charges "relating to
outbound cargoes and inbound cargoes are all considered Philippine-sourced income of
international sea carriers they being collected for the use of property or rendition of
services in the Philippines, and are subject to the Philippine income tax under the
regular rate."
Demurrage fee is the allowance or compensation due to the master or owners of
a ship, by the freighter, for the time the vessel may have been detained beyond the time
specified or implied in the contract of affreightment or the charter-party. It is only an
extended freight or reward to the vessel, in compensation for the earnings the carrier is
improperly caused to lose. 51
Detention occurs when the consignee holds on to the carrier's container outside
of the port, terminal, or depot beyond the free time that is allotted. Detention fee is
charged when import containers have been picked up, but the container (regardless if it
is full or empty) is still in the possession of the consignee and has not been returned
within the allotted time. Detention fee is also charged for export containers in which the
empty container has been picked up for loading, and the loaded container is returned to
the steamship line after the allotted free time. 52
Indeed, the exclusion of demurrage and detention fees from the preferential rate
of 2.5% is proper since they are not considered income derived from transportation of
persons, goods and/or mail, in accordance with the rule expressio unios est exclusio
alterius.
Demurrage and detention fees definitely form part of an international sea carrier's
gross income. For they are acquired in the normal course of trade or business. The
phrase "in the course of trade or business" means the regular conduct or pursuit of a
commercial or an economic activity, including transactions incidental thereto, by any
person regardless of whether or not the person engaged therein is a nonstock, nonprofit
private organization (irrespective of the disposition of its net income and whether or not
it sells exclusively to members or their guests), or government entity. 53
Surely, gross income means income derived from whatever source, including
compensation for services; the conduct of trade or business or the exercise of a
profession; dealings in property; interests; rents; royalties; dividends; annuities; prizes
and winnings; pensions; and a partner's distributive share in the net income of a general
professional partnership, 54 among others. Demurrage and detention fees fall within the
definition of "gross income" — the former is considered as rent payment for the vessel;
and the latter, compensation for use of a carrier's container.
RR 15-2013 is an
interpretative and internal issuance
An interpretative or implementing rule is defined under Section 2 (2), Chapter 1,
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 Book VIII of the Revised Administrative Code, viz.:
Section 2. Definitions. — As used in this Book:
xxx xxx xxx
(2) "Rule" means any agency statement of general applicability that
implements or interprets a law, fixes and describes the procedures in, or
practice requirements of, an agency, including its regulations. The term includes
memoranda or statements concerning the internal administration or
management of an agency not affecting the rights of, or procedure available to,
the public.
Chapter 2 of Book VII of the same Code further provides the manner by which
administrative rules attain effectivity:
Section 3. Filing. —
(1) Every agency shall file with the University of the Philippines Law Center
three (3) certified copies of every rule adopted by it. Rules in force on the
date of effectivity of this Code which are not filed within three (3) months
from that date shall not thereafter be the basis of any sanction against any
party or persons.
(2) The records officer of the agency, or his equivalent functionary, shall
carry out the requirements of this section under pain of disciplinary action.
(3) A permanent register of all rules shall be kept by the issuing agency and
shall be open to public inspection.
Section 4. Effectivity. — In addition to other rule-making
requirements provided by law not inconsistent with this Book, each rule
shall become effective fifteen (15) days from the date of filing as
above provided unless a different date is fixed by law, or specified in
the rule in cases of imminent danger to public health, safety and welfare,
the existence of which must be expressed in a statement accompanying
the rule. The agency shall take appropriate measures to make
emergency rules known to persons who may be affected by them.
SECTION 5. Publication and Recording. — The University of the
Philippines Law Center shall:
(1) Publish a quarterly bulletin setting forth the text of rules filed with it during
the preceding quarter; and
(2) Keep an up-to-date codification of all rules thus published and remaining
in effect, together with a complete index and appropriate tables.
SECTION 6. Omission of Some Rules. — (1) The University of the
Philippines Law Center may omit from the bulletin or the codification any
rule if its publication would be unduly cumbersome, expensive or
otherwise inexpedient, but copies of that rule shall be made available on
application to the agency which adopted it, and the bulletin shall contain
a notice stating the general subject matter of the omitted rule and new
copies thereof may be obtained.
(2) Every rule establishing an offense or defining an act which,
pursuant to law is punishable as a crime or subject to a penalty shall in
all cases be published in full text.
SECTION 7. Distribution of Bulletin and Codified Rules. — The
University of the Philippines Law Center shall furnish one (1) free copy
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 each of every issue of the bulletin and of the codified rules or
supplements to the Office of the President, Congress, all appellate
courts and the National Library. The bulletin and the codified rules shall
be made available free of charge to such public officers or agencies as
the Congress may select, and to other persons at a price sufficient to
cover publication and mailing or distribution costs.
SECTION 8. Judicial Notice. — The court shall take judicial notice of
the certified copy of each rule duly filed or as published in the bulletin or
the codified rules.
SECTION 9. Public Participation. — (1) If not otherwise required
by law, an agency shall, as far as practicable, publish or circulate
notices of proposed rules and afford interested parties the
opportunity to submit their views prior to the adoption of any rule.
(2) In the fixing of rates, no rule or final order shall be valid
unless the proposed rates shall have been published in a
newspaper of general circulation at least two (2) weeks before the
first hearing thereon.
(3) In case of opposition, the rules on contested cases shall be
observed. (Emphasis supplied)
Excepted are interpretative regulations and those merely internal in nature, which
do not require filing with the U.P. Law Center for their effectivity. On this score, ASTEC
v. ERC 55 is proper:
As interpretative regulations, the policy guidelines of the ERC on the
treatment of discounts extended by power suppliers are also not required to be
filed with the U.P. Law Center in order to be effective. Section 4, Chapter 2,
Book VII of the Administrative Code of 1987 requires every rule adopted by an
agency to be filed with the U.P. Law Center to be effective. However, in Board
of Trustees of the Government Service Insurance System v. Velasco , this Court
pronounced that "[n]ot all rules and regulations adopted by every
government agency are to be filed with the UP Law Center." Interpretative
regulations and those merely internal in nature are not required to be filed
with the U.P. Law Center. Paragraph 9 (a) of the Guidelines for Receiving and
Publication of Rules and Regulations Filed with the U.P. Law Center states:
9. Rules and Regulations which need not be filed with the
U.P. Law Center, shall, among others, include but not be limited
to, the following:
a. Those which are interpretative regulations and those
merely internal in nature, that is, regulating only the
personnel of the Administrative agency and not the public.
(Emphasis supplied)
RR 15-2013 is an internal issuance for the guidance of "all internal revenue
officers and others concerned." It is also an interpretative issuance vis-à-vis RA 10378,
thus:
SECTION 2. SCOPE. — Pursuant to Section 244 of the National Internal
Revenue Code of 1997 (NIRC), as amended, and Section 5 of RA No. 10378,
these Regulations are hereby promulgated to implement RA No. 10378,
amending Sections 28(A)(3)(a), 109, 118 and 236 of the NIRC.

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 RR 15-2013 merely sums up the rules by which international carriers may avail of
preferential rates or exemption from income tax on their gross revenues derived from
the carriage of persons and their excess baggage based on the principle of reciprocity
or an applicable tax treaty or international agreement to which the Philippines is a
signatory. Interpretative regulations are intended to interpret, clarify or explain existing
statutory regulations under which the administrative body operates. Their purpose or
objective is merely to construe the statute being administered and purport to do no
more than interpret the statute. Simply, they try to say what the statute means and refer
to no single person or party in particular but concern all those belonging to the same
class which may be covered by the said rules. 56
Indeed, when an administrative rule is merely interpretative in nature, its
applicability needs nothing further than its bare issuance, for it gives no real
consequence more than what the law itself has already prescribed. 57 As such, RR 15-
2013 need not pass through a public hearing or consultation, get published, nay,
registered with the U.P. Law Center for its effectivity.
ACCORDINGLY, the petition is DENIED for lack of merit. The Orders dated
September 15, 2015 and January 8, 2016 of the Regional Trial Court, Branch 77,
Quezon City, in Special Civil Action No. R-QZN-13-05590-CV are AFFIRMED.
SO ORDERED.
Peralta, C.J., Caguioa, J.C. Reyes, Jr. and Lopez, JJ., concur.

Footnotes

1. AN ACT AMENDING SECTIONS 27, 28, 34, 106, 107, 108, 109, 110, 111, 112, 113, 114,
116, 117, 119, 121, 148, 151, 236, 237 AND 288 OF THE NATIONAL INTERNAL
REVENUE CODE OF 1997, AS AMENDED, AND FOR OTHER PURPOSES.

2. Clarification of Issues Concerning Common Carriers by Sea and their Agents Relative to the
Transport of Passengers, Goods or Cargoes.
3. Is a non-stock, non-profit corporation duly organized and existing under the laws of the
Republic of the Philippines, whose members are international shipping carriers and/or
their agents operating in the Philippines.

4. Is an AISL member-firm engaged in international shipping business. It is a corporation duly

organized and existing under the laws of Singapore and licensed to do business in the
Philippines.

5. Rollo, p. 102.

6. Id.

7. Id. at 102-115.

8. SEC. 28. Rates of Income Tax on Foreign Corporations. —

(A) Tax on Resident Foreign Corporations. —

(1) In General. — Except as otherwise provided in this Code, a corporation organized,

authorized, or existing under the laws of any foreign country, engaged in trade or
business within the Philippines, shall be subject to an income tax equivalent to thirty-five
percent (35%) of the taxable income derived in the preceding taxable year from all
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 sources within the Philippines: Provided, That effective January 1, 2009, the rate of
income tax shall be thirty percent (30%).

In the case of corporations adopting the fiscal-year accounting period, the taxable
income shall be computed without regard to the specific date when sales, purchases
and other transactions occur. Their income and expenses for the fiscal year shall be
deemed to have been earned and spent equally for each month of the period.

The corporate income tax rate shall be applied on the amount computed by multiplying
the number of months covered by the new rate within the fiscal year by the taxable
income of the corporation for the period, divided by twelve.
Provided, however, That a resident foreign corporation shall be granted the option to be
taxed at fifteen percent (15%) on gross income under the same conditions, as provided
in Section 27 (A).

xxx xxx xxx

(3) International Carrier. — An international carrier doing business in the Philippines
shall pay a tax of two and one-half percent (2 1/2%) on its 'Gross Philippine Billings' as
defined hereunder:

xxx xxx xxx

(b) International Shipping. — 'Gross Philippine Billings' means gross revenue whether
for passenger, cargo or mail originating from the Philippines up to final destination,
regardless of the place of sale or payments of the passage or freight documents.

xxx xxx xxx

9. Rollo, pp. 111-114.

10. Id. at 114-115.

11. Id. at 116.

12. AN ACT RECOGNIZING THE PRINCIPLE OF RECIPROCITY AS BASIS FOR THE

GRANT OF INCOME TAX EXEMPTIONS TO INTERNATIONAL CARRIERS AND
RATIONALIZING OTHER TAXES IMPOSED THEREON BY AMENDING SECTIONS
28 (A) (3) (a), 109, 118 AND 236 OF THE NATIONAL INTERNAL REVENUE CODE
(NIRC), AS AMENDED, AND FOR OTHER PURPOSES.

13. Revenue Regulations Implementing Republic Act No. 10378 entitled "An Act Recognizing
the Principle of Reciprocity as Basis for the Grant of Income Tax Exemptions to
International Carriers and Rationalizing Other Taxes Imposed thereon by Amending
Sections 28 (A) (3) (A), 109, 118 and 236 of the National Internal Revenue Code
(NIRC), as amended, and for other Purposes."

14. With applications for a temporary restraining order and a writ of preliminary injunction,rollo,
pp. 136-165.

15. Id. at 139.

16. Id. at 141-146.

17. Id. at 149.

18. Id. at 150-151.

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 19. Id. at 152.

20. Id. at 155.

21. Id. at 160.

22. Id. at 411-426.

23. Id. at 417-418.

24. Id. at 420-424.

25. Id. at 424.

26. Id. at 427-444.

27. AN ACT TO AMEND SECTION ONE OF ACT NUMBERED THIRTY-SEVEN HUNDRED

AND THIRTY-SIX, BY PROVIDING THAT THE PROVISIONS OF THE SAID ACT
SHALL NOT APPLY TO CASES INVOLVING LIABILITY FOR ANY TAX, DUTY, OR
CHARGE COLLECTIBLE UNDER ANY LAW ADMINISTERED BY THE BUREAU OF
CUSTOMS OR THE BUREAU OF INTERNAL REVENUE.

28. Rollo, pp. 428-432.

29. Id. at 474-491.

30. AN ACT RECOGNIZING THE PRINCIPLE OF RECIPROCITY AS BASIS FOR THE

GRANT OF INCOME TAX EXEMPTIONS TO INTERNATIONAL CARRIERS AND
RATIONALIZING OTHER TAXES IMPOSED THEREON BY AMENDING SECTIONS
28 (A) (3) (a), 109, 118 AND 236 OF THE NATIONAL INTERNAL REVENUE CODE
(NIRC), AS AMENDED, AND FOR OTHER PURPOSES.

31. Rollo, pp. 89-94.

32. Id. at 94.

33. Id. at 654-655.

34. Id. at 658.

35. Id. at 665.

36. Id. at 674-700.

37. Diaz, Jr. v. Valenciano, Jr., G.R. No. 209376, December 06, 2017, 848 SCRA 85, 96
(2017).

38. 507 Phil. 94, 98 (2005).

39. City of Lapu-Lapu v. PEZA, 748 Phil. 473, 512-513 (2014).

40. 565 Phil. 766, 786-787 (2007).

41. SEC. 4. Power of the Commissioner to Interpret Tax Laws and to Decide Tax Cases. —
The power to interpret the provisions of this Code and other tax laws shall be under the
exclusive and original jurisdiction of the Commissioner, subject to review by the
Secretary of Finance.
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 The power to decide disputed assessments, refunds of internal revenue taxes, fees or
other charges, penalties imposed in relation thereto, or other matters arising under this
Code or other laws or portions thereof administered by the Bureau of Internal Revenue
is vested in the Commissioner, subject to the exclusive appellate jurisdiction of the
Court of Tax Appeals.

42. Section 5. Implementing Rules and Regulations. — The Secretary of Finance shall, upon
the recommendation of the Commissioner of Internal Revenue, promulgate not later
than thirty (30) days upon the effectivity of this Act the necessary rules and regulations
for its effective implementation. The Department of Finance (DOF), in coordination with
the Department of Foreign Affairs (DFA), shall oversee the exchange of notes between
the Philippines and concerned countries for purposes of facilitating the availment of
reciprocal exemptions intended under this Act.

43. SEC. 244. Authority of Secretary of Finance to Promulgate Rules and Regulations. — The
Secretary of Finance, upon recommendation of the Commissioner, shall promulgate all
needful rules and regulations for the effective enforcement of the provisions of this
Code.

44. 595 Phil. 1051, 1057-1058 (2008).

45. G.R. No. 219340, November 07, 2018.

46. Supra note 38.

47. G.R. No. 230107, July 24, 2018.

48. 669 Phil. 371, 382-383 (2011).

49. Letran, Bjorn Biel M. "A bustling and thriving sector," BWorldOnline.Com., April 25, 2018.
See https://www.bworldonline.com/a-bustling-and-thriving-sector.

50. Obiasca v. Basallote, 626 Phil. 775, 785 (2010).

51. Black's Law Dictionary See: <a

href="https://thelawdictionary.org/demurrage/"title="DEMURRAGE">DEMURRAGE</a>
(Last accessed: November 13, 2019).
52. PNG Logistics See: http://pnglc.com/detention-and-demurrage-whats-the-difference/ (Last
accessed: November 13, 2019).

53. Section 105, RA 8424.

54. See CIR v. PAL, 535 Phil. 95, 106 (2006).

55. 695 Phil. 243, 280 (2012).

56. Republic of the Philippines v. Drugmaker's Laboratories, Inc., et al., 728 Phil. 480, 490
(2014).

57. Id.

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