Republic of the Philippines SUPREME COURT Manila SECOND DIVISION G.R. No.

153205 January 22, 2007

COMMISSIONER OF INTERNAL RE ENUE, Petitioner, vs. !URMEISTER AN" #AIN SCAN"INA IAN CONTRACTOR MIN"ANAO, INC., Respondent. DECISION CARPIO, J.: T$% Ca&% his petition for revie!" see#s to set aside the "$ %pril &''& Decision& of the Court of %ppeals in C%().R. SP No. $$*+" affir,inthe . %u-ust &''" Decision* of the Court of a/ %ppeals 0C %1. he C % ordered the Co,,issioner of Internal Revenue 0petitioner1 to issue a ta/ credit certificate for P$,22+,$32.$4 in favor of 5ur,eister and 6ain Scandinavian Contractor Mindanao, Inc. 0respondent1. T$% An'%(%)%n'& he C % su,,ari7ed the facts, !hich the Court of %ppeals adopted, as follo!s8 9Respondent: is a do,estic corporation dul; or-ani7ed and e/istin- under and b; virtue of the la!s of the Philippines !ith principal address located at Daru,a 5uildin-, <ose P. =aurel %venue, =anan-, Davao Cit;. It is represented that a forei-n consortiu, co,posed of 5ur,eister and 6ain Scandinavian Contractor %>S 056SC(Den,ar#1, Mitsui En-ineerin- and Shipbuildin-, =td., and Mitsui and Co., =td. entered into a contract !ith the National Po!er Corporation 0N%POCOR1 for the operation and ,aintenance of 9N%POCOR?s: t!o po!er bar-es. he Consortiu, appointed 56SC(Den,ar# as its coordination ,ana-er. 56SC(Den,ar# established 9respondent: !hich subcontracted the actual operation and ,aintenance of N%POCOR?s t!o po!er bar-es as !ell as the perfor,ance of other duties and acts !hich necessaril; have to be done in the Philippines. N%POCOR paid capacit; and ener-; fees to the Consortiu, in a ,i/ture of currencies 0Mar#, @en, and Peso1. he freel; convertible non(Peso co,ponent is deposited directl; to the Consortiu,?s ban# accounts in Den,ar# and <apan, !hile the Peso( deno,inated co,ponent is deposited in a separate and special desi-nated ban# account in the Philippines. On the other hand, the Consortiu, pa;s 9respondent: in forei-n currenc; in!ardl; re,itted to the Philippines throu-h the ban#in- s;ste,. In order to ascertain the ta/ i,plications of the above transactions, 9respondent: sou-ht a rulin- fro, the 5IR !hich responded !ith 5IR Rulin- No. '&*(23 dated Aebruar; "+, "223, declarin- therein that if 9respondent: chooses to re-ister as a V% person and the consideration for its services is paid for in acceptable forei-n currenc; and accounted for in accordance !ith the rules and re-ulations of the 5an-#o Sentral n- Pilipinas, the aforesaid services shall be subBect to V% at 7ero(rate. 9Respondent: chose to re-ister as a V% ta/pa;er. On Ma; &$, "223, the Certificate of Re-istration bearin- RDO Control No. 23( ""*(''433$ !as issued in favor of 9respondent: b; the Revenue District Office No. ""* of Davao Cit;. Aor the ;ear "22$, 9respondent: seasonabl; filed its Cuarterl; Value(%dded a/ Returns reflectin-, a,on- others, a total 7ero(rated sales of P"+4,*"4,".2.$& !ith V% input ta/es of P*,*$","4+."+, detailed as follo!s8 Dtr. "st &nd E/h. E A Date Ailed '+(".(2$ '4("$(2$ Eero(Rated Sales P **,'"2,$3".'4 *4,"'.,.$*.** V% Input a/ P$'.,23*.+. 43$,.'&.$$

*rd +th

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"'("+(2$ '"(&'(24 otals

*+,"2$,*4&.*3 +&,22&,*'&..4 P"+4,*"4,".2.$&

2*',&42."+ ",'$3,"*...$ P*,*$","4+."+

On Dece,ber &2, "224, 9respondent: availed of the Voluntar; %ssess,ent Pro-ra, 0V%P1 of the 5IR. It alle-edl; ,isinterpreted Revenue Re-ulations No. 3(2$ dated Aebruar; &', "22$ to be applicable to its case. Revenue Re-ulations No. 3(2$ provides in part thus8 SEC IONS +."'&(&0b10&1 and +."'*("0510c1 of Revenue Re-ulations No. 4(23 are hereb; a,ended to read as follo!s8 Section +."'&(&0b10&1 G HServices other than processin-, ,anufacturin- or repac#in- for other persons doin- business outside the Philippines for -oods !hich are subseCuentl; e/ported, as !ell as services b; a resident to a non(resident forei-n client such as proBect studies, infor,ation services, en-ineerin- and architectural desi-ns and other si,ilar services, the consideration for !hich is paid for in acceptable forei-n currenc; and accounted for in accordance !ith the rules and re-ulations of the 5SP.H / / / / / / / / / /. In 9confor,it;: !ith the aforecited Revenue Re-ulations, 9respondent: subBected its sale of services to the Consortiu, to the "'I V% in the total a,ount of P"'*,33.,**.."" representin- %pril to Dece,ber "22$ sales since said Revenue Re-ulations No. 3(2$ beca,e effective onl; on %pril "22$. he su, of P+*,.2*,23".'4, representin- <anuar; to March "22$ sales !as subBected to 7ero rate. ConseCuentl;, 9respondent: filed its "22$ a,ended V% return consolidatin- therein the V% output and input ta/es for the four calendar Cuarters of "22$. It paid the a,ount ofP$,22+,$32.$4 throu-h 5IR?s collectin- a-ent, PCI5an#, as its output ta/ liabilit; for the ;ear "22$, co,puted as follo!s8 %,ount subBect to "'I V% P"'*,33.,**.."" Multipl; b; "'I V% Output a/ P "',*33,.**.." =ess8 "22$ Input V% P *,*$","4+."+ V% Output a/ Pa;able P $,22+,$32.$4 On <anuar; 4,"222, 9respondent: !as able to secure V% Rulin- No. ''*(22 fro, the V% Revie! Co,,ittee !hich reconfir,ed 5IR Rulin- No. '&*(23 Hinsofar as it held that the services bein- rendered b; 56SCMI is subBect to V% at 7ero percent 0'I1.H On the stren-th of the afore,entioned rulin-s, 9respondent: on %pril &&,"222, filed a clai, for the issuance of a ta/ credit certificate !ith Revenue District No. ""* of the 5IR. 9Respondent: believed that it erroneousl; paid the output V% for "22$ due to its avail,ent of the Voluntar; %ssess,ent Pro-ra, 0V%P1 of the 5IR. + On &4 Dece,ber "222, respondent filed a petition for revie! !ith the C % in order to toll the runnin- of the t!o(;ear prescriptive period under the a/ Code. T$% Ru*+n, o- '$% Cour' o- Ta. A//%a*& In its . %u-ust &''" Decision, the C % ordered petitioner to issue a ta/ credit certificate for P$,22+,$32.$4 in favor of respondent. he C %?s rulin- stated8 9Respondent?s: sale of services to the Consortiu, 9!as: paid for in acceptable forei-n currenc; in!ardl; re,itted to the Philippines and accounted for in accordance !ith the rules and re-ulations of 5an-#o Sentral n- Pilipinas. hese !ere established b; various 5PI Credit Me,os sho!in- re,ittances in Danish Jroner 0DJJ1 and KS dollars 0KSL1 as pa;,ents for the specific invoices billed b; 9respondent: to the consortiu,. hese re,ittances !ere further certified b; the 5ranch Mana-er / / / of 5PI(Davao =anan- 5ranch to represent pa;,ents for sub(contract fees that ca,e fro, Den Dans#e %#tiesels#ab 5an#(Den,ar# for the account of 9respondent:. Clearl;, 9respondent?s: sale of services to the Consortiu, is subBect to V% at 'I pursuant to Section "'.0510&1 of the a/ Code. ////

he 7ero(ratin- of 9respondent?s: sale of services to the Consortiu, !as even confir,ed b; the 9petitioner: in 5IR Rulin- No. '&*(23 dated Aebruar; "3, "223, and later b; V% Rulin- No. ''*(22 dated <anuar; 4,"222, / / /. Since it is apparent that the pa;,ents for the services rendered b; 9respondent: !ere indeed subBect to V% at 7ero percent, it follo!s that it ,ista#enl; availed of the Voluntar; %ssess,ent Pro-ra, b; pa;in- output ta/ for its sale of services. / / / / / / Considerin- the principle of solutio indebiti !hich reCuires the return of !hat has been delivered b; ,ista#e, the 9petitioner: is obli-ated to issue the ta/ credit certificate pra;ed for b; 9respondent:. / / /3 Petitioner filed a petition for revie! !ith the Court of %ppeals, !hich dis,issed the petition for lac# of ,erit and affir,ed the C % decision.$ Fence, this petition. T$% Cour' o- A//%a*&0 Ru*+n, In affir,in- the C %, the Court of %ppeals reBected petitioner?s vie! that since respondent?s services are not destined for consu,ption abroad, the; are not of the sa,e nature as proBect studies, infor,ation services, en-ineerin- and architectural desi-ns, and other si,ilar services ,entioned in Section +."'&(&0b10&1 of Revenue Re-ulations No. 3(2$ 4as subBect to 'I V% . hus, accordin- to petitioner, respondent?s services cannot le-all; Cualif; for 'I V% but are subBect to the re-ular "'I V% . . he Court of %ppeals found untenable petitioner?s contention that under V% Rulin- No. '+'(2., respondent?s services should be destined for consu,ption abroad to enBo; 7ero(ratin-. Contrar; to petitioner?s interpretation, there are t!o #inds of transactions or services subBect to 7ero percent V% under V% Rulin- No. '+'(2.. hese are 0a1 services other than repac#in- -oods for other persons doin- business outside the Philippines !hich -oods are subseCuentl; e/portedM and 0b1 services b; a resident to a non( resident forei-n client, such as proBect studies, infor,ation services, en-ineerin- and architectural desi-ns and other si,ilar services, the consideration for !hich is paid for in acceptable forei-n currenc; and accounted for in accordance !ith the rules and re-ulations of the Bangko Sentral ng Pilipinas05SP1.2 he Court of %ppeals stated that Honl; the first classification is reCuired b; the provision to be consu,ed abroad in order to be ta/ed at 7ero rate. In / / / the absence of such e/press or i,plied stipulation in the statute, the second classification need not be consu,ed abroad.H"' he Court of %ppeals further held that assu,in- petitioner?s interpretation of Section +."'&(&0b10&1 of Revenue Re-ulations No. 3(2$ is correct, such ad,inistrative provision is void bein- an a,end,ent to the a/ Code. Petitioner !ent be;ond ,erel; providin- the i,ple,entin- details b; addin- another reCuire,ent to 7ero(ratin-. H his is indicated b; the additional phrase Nas !ell as services b; a resident to a non(resident forei-n client, such as proBect studies, infor,ation services and en-ineerin- and architectural desi-ns and other si,ilar services.? In effect, this phrase adds not Bust one but t!o reCuisites8 0a1 services ,ust be rendered b; a resident to a non(residentM and 0b1 these ,ust be in the nature of proBect studies, infor,ation services, etc.H"" he Court of %ppeals e/plained that under Section "'.0b10&1 of the a/ Code,"& for services !hich !ere perfor,ed in the Philippines to enBo; 7ero(ratin-, these ,ust co,pl; onl; !ith t!o reCuisites, to !it8 0"1 pa;,ent in acceptable forei-n currenc; and 0&1 accounted for in accordance !ith the rules of the 5SP. Section "'.0b10&1 of the a/ Code does not provide that services ,ust be Hdestined for consu,ption abroadH in order to be V% 7ero(rated."* he Court of %ppeals disa-reed !ith petitioner?s ar-u,ent that our V% la! -enerall; follo!s the destination principle 0i.e., e/ports e/e,pt, i,ports ta/able1."+ he Court of %ppeals stated that Hif indeed the Ndestination principle? underlies and is the basis of the V% la!s, then petitioner?s proper re,ed; !ould be to reco,,end an a,end,ent of Section "'.0b10&1 to Con-ress. 6ithout such a,end,ent, ho!ever, petitioner should appl; the ter,s of the basic la!. Petitioner could not resort to ad,inistrative le-islation, as !hat 9he: had done in this case.H"3 T$% I&&u% he lone issue for resolution is !hether respondent is entitled to the refund of P$,22+,$32.$4 as erroneousl; paid output V% for the ;ear "22$."$ T$% Ru*+n, o- '$% Cour' 6e den; the petition. %t the outset, the Court declares that the denial of the instant petition is not on the -round that respondent?s services are subBect to 'I V% . Rather, it is based on the non(retroactivit; of the preBudicial revocation of 5IR Rulin- No. '&*(23 "4 and V% Rulin- No.

''*(22,". !hich held that respondent?s services are subBect to 'I V% and !hich respondent invo#ed in appl;in- for refund of the output V% . Section "'&0b1 of the a/ Code,"2 the applicable provision in "22$ !hen respondent rendered the services and paid the V% in Cuestion, enu,erates !hich services are 7ero(rated, thus8 0b1 Transactions subject to zero-rate. O he follo!in- services perfor,ed in the Philippines b; V% (re-istered persons shall be subBect to 'I8 0"1 Processin-, ,anufacturin- or repac#in- -oods -or o'$%r /%r&on& )o+n, 1u&+n%&& ou'&+)% '$% P$+*+//+n%& !hich -oods are subseCuentl; e/ported, !here the services are paid for in acceptable forei-n currenc; and accounted for in accordance !ith the rules and re-ulations of the Bangko Sentral ng Pilipinas05SP1M 0&1 S%r2+(%& o'$%r '$an '$o&% 3%n'+on%) +n '$% /r%(%)+n, &u14/ara,ra/$, the consideration for !hich is paid for in acceptable forei-n currenc; and accounted for in accordance !ith the rules and re-ulations of the Bangko Sentral ng Pilipinas 05SP1M 0*1 Services rendered to persons or entities !hose e/e,ption under special la!s or international a-ree,ents to !hich the Philippines is a si-nator; effectivel; subBects the suppl; of such services to 7ero rateM 0+1 Services rendered to vessels en-a-ed e/clusivel; in international shippin-M and 031 Services perfor,ed b; subcontractors and>or contractors in processin-, convertin-, or ,anufacturin- -oods for an enterprise !hose e/port sales e/ceed sevent; percent 04'I1 of total annual production. 0E,phasis supplied1 In insistin- that its services should be 7ero(rated, respondent clai,s that it co,plied !ith the reCuire,ents of the a/ Code for 7ero ratin- under the second para-raph of Section "'&0b1. Respondent asserts that 0"1 the pa;,ent of its service fees !as in acceptable forei-n currenc;, 0&1 there !as in!ard re,ittance of the forei-n currenc; into the Philippines, and 0*1 accountin- of such re,ittance !as in accordance !ith 5SP rules. Moreover, respondent contends that its services !hich Hconstitute the actual operation and ,ana-e,ent of t!o 0&1 po!er bar-es in MindanaoH are not Heven re,otel; si,ilar to proBect studies, infor,ation services and en-ineerin- and architectural desi-ns under Section +."'&(&0b10&1 of Revenue Re-ulations No. 3(2$.H %s such, respondent?s services need not be Hdestined to be consu,ed abroad in order to be V% 7ero(rated.H Respondent is ,ista#en. he a/ Code not onl; reCuires that the services be other than Hprocessin-, ,anufacturin- or repac#in- of -oodsH and that pa;,ent for such services be in acceptable forei-n currenc; accounted for in accordance !ith 5SP rules. %nother essential condition for Cualification to 7ero(ratin- under Section "'&0b10&1 is that the recipient of such services is doin- business outside the Philippines. 6hile this reCuire,ent is not e/pressl; stated in the second para-raph of Section "'&0b1, this is clearl; provided in the first para-raph of Section "'&0b1 !here the listed services ,ust be Hfor other persons doin- business outside the Philippines.H he phrase Hfor other persons doin- business outside the PhilippinesH not onl; refers to the services enu,erated in the first para-raph of Section "'&0b1, but also pertains to the -eneral ter, HservicesH appearin- in the second para-raph of Section "'&0b1. In short, services other than processin-, ,anufacturin-, or repac#in- of -oods ,ust li#e!ise be perfor,ed for persons doin- business outside the Philippines. his can onl; be the lo-ical interpretation of Section "'&0b10&1. If the provider and recipient of the Hother servicesH are both doinbusiness in the Philippines, the pa;,ent of forei-n currenc; is irrelevant. Other!ise, those subBect to the re-ular V% under Section "'&0a1 can avoid pa;in- the V% b; si,pl; stipulatin- pa;,ent in forei-n currenc; in!ardl; re,itted b; the recipient of services. o interpret Section "'&0b10&1 to appl; to a pa;er(recipient of services doin- business in the Philippines is to ,a#e the pa;,ent of the re-ular V% under Section "'&0a1 dependent on the -enerosit; of the ta/pa;er. he provider of services can choose to pa; the re-ular V% or avoid it b; stipulatin- pa;,ent in forei-n currenc; in!ardl; re,itted b; the pa;er(recipient. Such interpretation re,oves Section "'&0a1 as a ta/ ,easure in the a/ Code, an interpretation this Court cannot sanction. % ta/ is a ,andator; e/action, not a voluntar; contribution. 6hen Section "'&0b10&1 stipulates pa;,ent in Hacceptable forei-n currenc;H under 5SP rules, the la! clearl; envisions the pa;er( recipient of services to be doin- business outside the Philippines. Onl; those not doin- business in the Philippines can be reCuired under 5SP rules&' to pa; in acceptable forei-n currenc; for their purchase of -oods or services fro, the Philippines. In a do,estic transaction, !here the provider and recipient of services are both doin- business in the Philippines, the 5SP cannot reCuire an; part; to ,a#e pa;,ent in forei-n currenc;. Services covered b; Section "'&0b1 0"1 and 0&1 are in the nature of e/port sales since the pa;er(recipient of services is doinbusiness outside the Philippines. Knder 5SP rules,&" the proceeds of e/port sales ,ust be reported to the 5an-#o Sentral nPilipinas. hus, there is reason to reCuire the provider of services under Section "'&0b1 0"1 and 0&1 to account for the forei-n

currenc; proceeds to the 5SP. he sa,e rationale does not appl; if the provider and recipient of the services are both doinbusiness in the Philippines since their transaction is not in the nature of an e/port sale even if pa;,ent is deno,inated in forei-n currenc;. Aurther, !hen the provider and recipient of services are both doin- business in the Philippines, their transaction falls sCuarel; under Section "'&0a1 -overnin- do,estic sale or e/chan-e of services. Indeed, this is a purel; local sale or e/chan-e of services subBect to the re-ular V% , unless of course the transaction falls under the other provisions of Section "'&0b1. hus, !hen Section "'&0b10&1 spea#s of H5&6%r2+(%& o'$%r '$an '$o&% 3%n'+on%) +n '$% /r%(%)+n, &u1/ara,ra/$,7the le-islative intent is that onl; the services are different bet!een subpara-raphs " and &. he reCuire,ents for 7ero(ratin-, includin- the essential condition that the recipient of services is doin- business outside the Philippines, re,ain the sa,e under both subpara-raphs. Si-nificantl;, the a,ended Section "'.0b1&& 9previousl; Section "'&0b1: of the present a/ Code clarifies this le-islative intent. E/pressl; included a,on- the transactions subBect to 'I V% are H5&:ervices other than those ,entioned in the 9first: para-raph 9of Section "'.0b1: rendered to a person en-a-ed in business conducted outside the Philippines or to a nonresident person not en-a-ed in business !ho is outside the Philippines !hen the services are perfor,ed, the consideration for !hich is paid for in acceptable forei-n currenc; and accounted for in accordance !ith the rules and re-ulations of the 5SP.H In this case, the pa;er(recipient of respondent?s services is the Consortiu, !hich is a Boint(venture doin- business in the Philippines. 6hile the Consortiu,?s principal ,e,bers are non(resident forei-n corporations, the Consortiu, itself is doin- business in the Philippines. his is sho!n clearl; in 5IR Rulin- No. '&*(23 !hich states that the contract bet!een the Consortiu, and N%POCOR is for a "3(;ear ter,, thus8 his refers to ;our letter dated <anuar; "+, "22+ reCuestin- for a clarification of the ta/ i,plications of a contract bet!een a consortiu, co,posed of 5ur,eister P 6ain Scandinavian Contractor %>S 0H56SCH1, Mitsui En-ineerin- P Shipbuildin-, =td. 0MES1, and Mitsui P Co., =td. 0HMI SKIH1, all referred to hereinafter as the HConsortiu,H, and the National Po!er Corporation 0HN%POCORH1 -or '$% o/%ra'+on an) 3a+n'%nan(% o- '8o 1004M%,a8a'' /o8%r 1ar,%& 97Po8%r !ar,%&7: a(;u+r%) 1y NAPOCOR -or a 154y%ar '%r3.&* 0E,phasis supplied1 Considerin- this len-th of ti,e, the Consortiu,?s operation and ,aintenance of N%POCOR?s po!er bar-es cannot be classified as a sin-le or isolated transaction. he Consortiu, does not fall under Section "'&0b10&1 !hich reCuires that the recipient of the services ,ust be a person doin- business outside the Philippines. herefore, respondent?s services to the Consortiu,, not beinsupplied to a person doin- business outside the Philippines, cannot le-all; Cualif; for 'I V% . Respondent, as subcontractor of the Consortiu,, operates and ,aintains N%POCOR?s po!er bar-es in the Philippines. N%POCOR pa;s the Consortiu,, throu-h its non(resident partners, partl; in forei-n currenc; out!ardl; re,itted. In turn, the Consortiu, pa;s respondent also in forei-n currenc; in!ardl; re,itted and accounted for in accordance !ith 5SP rules. his pa;,ent sche,e does not entitle respondent to 'I V% . %s the Court held in Co,,issioner of Internal Revenue v. %,erican E/press International, Inc. 0Philippine 5ranch1,&+ the place of pa;,ent is i,,aterial, ,uch less is the place !here the output of the service is ulti,atel; used. %n essential condition for entitle,ent to 'I V% under Section "'&0b10"1 and 0&1 is that the recipient of the services is a person doin- business outside the Philippines. In this case, the recipient of the services is the Consortiu,, !hich is doin- business not outside, but !ithin the Philippines because it has a "3(;ear contract to operate and ,aintain N%POCOR?s t!o "''(,e-a!att po!er bar-es in Mindanao. he Court reco-ni7es the rule that the V% s;ste, -enerall; follo!s the Hdestination principleH 0e/ports are 7ero(rated !hereas i,ports are ta/ed1. Fo!ever, as the Court stated in %,erican E/press, there is an e/ception to this rule. &3 his e/ception refers to the 'I V% on services enu,erated in Section "'& and perfor,ed in the Philippines. Aor services covered b; Section "'&0b10"1 and 0&1, the recipient of the services ,ust be a person doin- business outside the Philippines. hus, to be e/e,pt fro, the destination principle under Section "'&0b10"1 and 0&1, the services ,ust be 0a1 perfor,ed in the PhilippinesM 0b1 for a person doinbusiness outside the PhilippinesM and 0c1 paid in acceptable forei-n currenc; accounted for in accordance !ith 5SP rules. Respondent?s reliance on the rulin- in %,erican E/press&$ is ,isplaced. hat case involved a recipient of services, specificall; %,erican E/press International, Inc. 0Fon-#on- 5ranch1, doin- business outside the Philippines. here, the Court stated8 Respondent 9%,erican E/press International, Inc. 0Philippine 5ranch1: is a V% (re-istered person that facilitates the collection and pa;,ent of receivables belon-in- to its non(resident forei-n client 9%,erican E/press International, Inc. 0Fon-#on- 5ranch1:, for !hich it -ets paid in acceptable forei-n currenc; in!ardl; re,itted and accounted for in accordance !ith 5SP rules and re-ulations. / / / /&4 0E,phasis supplied1 In contrast, this case involves a recipient of services G the Consortiu, G !hich is doin- business in the Philippines. Fence, %,erican E/press? services !ere subBect to 'I V% , !hile respondent?s services should be subBect to "'I V% .

Nevertheless, in see#in- a refund of its e/cess output ta/, respondent relied on V% Rulin- No. ''*(22,&. !hich reconfir,ed 5IR Rulin- No. '&*(23&2 Hinsofar as it held that the services bein- rendered b; 56SCMI is subBect to V% at 7ero percent 0'I1.H Respondent?s reliance on these 5IR rulin-s binds petitioner. Petitioner?s filin- of his %ns!er before the C % challen-in- respondent?s clai, for refund effectivel; serves as a revocation of V% Rulin- No. ''*(22 and 5IR Rulin- No. '&*(23. Fo!ever, such revocation cannot be -iven retroactive effect since it !ill preBudice respondent. Chan-in- respondent?s status !ill deprive respondent of a refund of a substantial a,ount representin- e/cess output ta/.*' Section &+$ of the a/ Code provides that an; revocation of a rulin- b; the Co,,issioner of Internal Revenue shall not be -iven retroactive application if the revocation !ill preBudice the ta/pa;er. Aurther, there is no sho!in- of the e/istence of an; of the e/ceptions enu,erated in Section &+$ of the a/ Code for the retroactive application of such revocation. Fo!ever, upon the filin- of petitioner?s %ns!er dated & March &''' before the C % contestin- respondent?s clai, for refund, respondent?s services shall be subBect to the re-ular "'I V% .*" Such filin- is dee,ed a revocation of V% Rulin- No. ''*(22 and 5IR Rulin- No. '&*(23. #<EREFORE, the Court "ENIES the petition. SO OR"ERE". ANTONIO T. CARPIO %ssociate <ustice 6E CONCKR8 LEONAR"O A. =UISUM!ING %ssociate <ustice Chairperson CONC<ITA CARPIO MORALES %ssociate <ustice PRES!ITERO J. ELASCO, JR. %ssociate <ustice "ANTE O. TINGA %sscociate <ustice