Scribd Logo
Upload

Welcome to Scribd!

  • 130 views

    Cir Vs Tours Specialist

    Uploaded by

    J.C. S. Maala
    The Commissioner of Internal Revenue assessed Tours Specialist, a local travel agency, deficiency contractor's tax on amounts received from foreign tour agencies for hotel room charges. Tours Specialist argued these amounts were held in trust and did not constitute gross receipts. The Court ruled in favor of Tours Specialist, finding that gross receipts subject to tax do not include amounts entrusted to a taxpayer which do not belong to or benefit the taxpayer. As the hotel room charges were entrusted by foreign agencies to Tours Specialist and did not belong to or benefit Tours Specialist, they were not part of Tours Specialist's gross receipts subject to tax.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd

    Cir Vs Tours Specialist

    Uploaded by

    J.C. S. Maala
    130 views1 page
    The Commissioner of Internal Revenue assessed Tours Specialist, a local travel agency, deficiency contractor's tax on amounts received from foreign tour agencies for hotel room charges. Tours Specialist argued these amounts were held in trust and did not constitute gross receipts. The Court ruled in favor of Tours Specialist, finding that gross receipts subject to tax do not include amounts entrusted to a taxpayer which do not belong to or benefit the taxpayer. As the hotel room charges were entrusted by foreign agencies to Tours Specialist and did not belong to or benefit Tours Specialist, they were not part of Tours Specialist's gross receipts subject to tax.

    Original Description:

    tax

    Original Title

    20. Cir vs Tours Specialist

    Copyright

    © © All Rights Reserved

    Available Formats

    PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    The Commissioner of Internal Revenue assessed Tours Specialist, a local travel agency, deficiency contractor's tax on amounts received from foreign tour agencies for hotel room charges. Tours Specialist argued these amounts were held in trust and did not constitute gross receipts. The Court ruled in favor of Tours Specialist, finding that gross receipts subject to tax do not include amounts entrusted to a taxpayer which do not belong to or benefit the taxpayer. As the hotel room charges were entrusted by foreign agencies to Tours Specialist and did not belong to or benefit Tours Specialist, they were not part of Tours Specialist's gross receipts subject to tax.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    130 views1 page

    Cir Vs Tours Specialist

    Uploaded by

    J.C. S. Maala
    The Commissioner of Internal Revenue assessed Tours Specialist, a local travel agency, deficiency contractor's tax on amounts received from foreign tour agencies for hotel room charges. Tours Specialist argued these amounts were held in trust and did not constitute gross receipts. The Court ruled in favor of Tours Specialist, finding that gross receipts subject to tax do not include amounts entrusted to a taxpayer which do not belong to or benefit the taxpayer. As the hotel room charges were entrusted by foreign agencies to Tours Specialist and did not belong to or benefit Tours Specialist, they were not part of Tours Specialist's gross receipts subject to tax.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 1

    COMMISSIONER V TOURS SPECIALIST

    183 SCRA 402 | March 21, 1990 | J. Gutierrez, Jr.

    Gross receipts subject to tax under the Tax Code do not include monies or receipts entrusted to the
    taxpayer which do not belong to them and do not redound to the taxpayer’s benefit; and it is not
    necessary that there must be a law or regulation which would exempt such monies or receipts within the
    meaning of gross receipts under the Tax Code

    Facts:

    The Commissioner of Internal Revenue filed a petition to review on certiorari to the CTA decision which
    ruled that the money entrusted to private respondent Tours Specialist (TS), earmarked and paid for
    hotel room charges of tourists, travellers and/or foreign travel agencies do not form part of its gross
    receipt subject to 3% independent contractor’s tax.

    Tours Specialist derived income from its activities and services as a travel agency, which included
    booking tourists in local hotels. To supply such service, TS and its counterpart tourist agencies abroad
    have agreed to offer a package fee for the tourists (payment of hotel room accommodations, food and
    other personal expenses). By arrangement, the foreign tour agency entrusts to TS the fund for hotel
    room accommodation, which in turn paid by the latter to the local hotel when billed. TS General
    Manager stated that the payment through them “is only an act of accommodation on (its) part” and
    “the agent abroad instead of sending several telexes and saving on bank charges they take the option to
    send the money to (TS) to be held in trust to be endorsed to the hotel.”’

    CIR assessed private respondent for deficiency 3% contractor’s tax as independent contractor including
    the entrusted hotel room charges in its gross receipts from services for years 1974-1976 plus
    compromise penalty. CIR caused the issuance of a warrant of distraint and levy, and had TS’ bank
    deposits garnished.

    Issue: W/N amounts received by a local tourist and travel agency included in a package fee from tourists
    or foreign tour agencies, intended or earmarked for hotel accommodations form part of gross receipts
    subject to 3% contractor’s tax

    Held: No. Gross receipts subject to tax under the Tax Code do not include monies or receipts entrusted
    to the taxpayer which do not belong to them and do not redound to the taxpayer’s benefit; and it is not
    necessary that there must be a law or regulation which would exempt such monies or receipts within
    the meaning of gross receipts under the Tax Code. Parenthetically, the room charges entrusted by the
    foreign travel agencies to the private respondents do not form part of its gross receipts within the
    definition of the Tax Code. The said receipts never belonged to the private respondent. The private
    respondent never benefited from their payment to the local hotels. This arrangement was only to
    accommodate the foreign travel agencies.

    You might also like