M.E. Holding Corp. v. Commissioner of Internal Revenue

[C.T.A. CASE NO. 5604. April 25, 2000.] M.E. HOLDING CORPORATION , petitioner , vs . COMMISSIONER OF INTERNAL REVENUE , respondent . D E C I S I O N Before Us for consideration is petitioner's claim for refund of alleged overpaid income tax arising from its interpretation that the 20% sales discount granted to senior citizens under Republic Act (R.A.) 7432 should be treated as tax credit instead of a deduction from gross income as declared by the respondent in Revenue Regulations No. 2-94 and BIR Ruling No. 67-95, in the total amount of P392,226.00 for the calendar year ended December 31, 1995. The facts of the case are simple. Petitioner is a corporation duly organized and existing under the laws of the Philippines (Exh. A). It is engaged in the business of retailing pharmaceutical products under the business style of "MERCURY DRUG" (Exh. G). It is duly licensed by the Bureau of Food and Drugs to operate a drugstore with proper permits and licenses from the local government unit of Baguio City, and other government agencies (Exhs. B, B-1, C, D, E, and F). For the year 1995, petitioner granted 20% sales discounts to qualified senior citizens on their purchases of medicines pursuant to R.A. 7432, otherwise known as "An Act To Maximize The Contribution Of Senior Citizens To Nation Building, Grant Benefits And Special Privileges And For Other Purposes". Petitioner treated these discounts as a deduction from its gross income in compliance with Revenue Regulations No. 2-94 issued by the respondent which implemented the aforesaid law. On April 15, 1996, petitioner filed its 1995 Corporation Annual Income Tax Return and claimed among others, as a deduction the amount of P603,424.00, representing the 20% sales discounts granted by the petitioner to senior citizens on their purchases of medicines (Exhs. M, M-a and M-2). This final adjustment return was filed by petitioner under protest considering that these discounts were claimed as mere deductions instead of as tax credit (Exh. N). Unconvinced with the interpretation of the respondent regarding R.A. 7432, particularly Section 4(a) thereof, petitioner on December 27, 1996, filed a letter claim for tax refund or credit with the Appellate Division of the Bureau of Internal Revenue.(Exh. O). The request for tax refund or credit represents the alleged overpaid income tax arising from respondent's erroneous interpretation that the 20% sales discounts given to senior citizens on their purchases of medicines should be treated by petitioner as a deduction from its gross income for income tax purposes or from gross sales for value-added tax or other percentage tax purposes rather than as a tax credit. In the said letter-request for refund, petitioner treated the 20% sales discounts in complete disagreement with respondent's view, that is, as a tax credit rather than as a mere deduction. cdll On April 7, 1998, petitioner lodged its appeal with this Court in order to toll the running of the two-year prescriptive period to file a claim for refund pursuant to Section 230 of the Tax Code, as amended. In its petition for review, petitioner argues that the 20% sales discount granted to senior citizens should be treated as tax credit because Section 4 of R.A. 7432 provides in clear and unequivocal language that discounts granted to senior citizens may be claimed as TAX CREDIT. It further asseverates that Section 2(i) of Revenue Regulations No. 2-94 which is a mere administrative regulation, cannot modify or alter the clear mandate of said law. Petitioner believes that Section 2(i) of Revenue Regulations No. 2-94 is illegal, void and without effect for being inconsistent with the statute it seeks to implement. cdlex Respondent, on the other hand, submits "that the provision under Republic Act 7432, which states that the 20% sales discounts on purchases of medicines by senior citizens to be treated as tax credit is a misnomer as it runs counter to the solemn duty of the government to collect taxes." Respondent adds "that it is likewise important to note that the legal provision in question employs the word "may", implying that the availability of the remedy of tax credit is not absolute and mandatory and it does not confer an absolute right on the taxpayer to avail of the tax credit scheme if it so chooses, neither does it impose a duty on the part of the government to sit back and allow an important facet of tax collection to be at the sole control and discretion of the taxpayer ( BIR Ruling 067-95, dated April 11, 1995 )." Lastly, respondent contends that "in Statutory Construction, the principle that the contemporaneous construction of a statute by executive officers of the government whose duty is to execute it is entitled to great respect and should ordinarily control the construction is so firmly embedded in our jurisprudence that no authorities need be cited to support it ( Phil. Association of Free Labor Unions vs. Bureau of Labor Relations, 72 SCRA 396 )." cdll Thus, the issues to be resolved by this Court are as follows: 1. The proper interpretation of Section 4(a) of Republic Act No. 7432, insofar as the treatment of the 20% sales discount granted to qualified senior citizens on their purchases of medicines; 2. The validity of Revenue Regulations No. 2-94 implementing the aforesaid law which treats the 20% sales discounts as deduction from gross income for income tax purposes and from gross sales for value-added tax or other percentage tax purposes; and 3. Whether or not petitioner was able to prove with substantial evidence its claim for refund. We find all the legal issues in favor of petitioner. In fact, We have already ruled on these similar issues in a number, of cases ( Tropical Hut Food Market, Inc. vs. Commissioner of Internal Revenue, CTA Case No. 5312, May 28, 1999, Elmas Drug Corporation vs. Commissioner of Internal Revenue, CTA Case NO. 5311, August 27, 1998 ; Trinity Franchising & Management Corporation vs. The Commissioner of Internal Revenue, CTA Case No. 5313, August 18, 1998; M.E. Holding Corporation vs. Commissioner of Internal Revenue, CTA Case No. 5314, August 17, 1998; Baliuag Drug Corporation vs. Commissioner of Internal Revenue, CTA Case No. 5365, May 13, 1998, Del Rosario Corporation vs. Commissioner of Internal Revenue, CTA Case No. 5357, April 6, 1998; and Sto. Rosario Drug Corporation vs. Commissioner of Internal Revenue, CTA Case No. 5367, February 16, 1998 ) wherein it was held: After a painstaking scrutiny of the attending facts, the issues involved, the respective argumentation of the parties and the applicable jurisprudence, laws and regulations in point, this Court hereby rules in favor of the petitioner. llcd For easy reference, the pertinent provisions of law and regulations in question are hereby reproduced, to wit: A) Section 4 of the Republic Act No. 7432: "SECTION 4. Privileges for the Senior Citizens . The Senior citizens shall be entitled to the following: a) the grant of twenty percent (20%) discount from all establishments relative to utilization of transportation services, hotels and similar lodging establishments, restaurants and recreation centers and purchase of medicines anywhere in the country: Provided, That private establishments may claim the cost as tax credit...."(emphasis supplied) B) Section 2 (i) of RR No. 2-94 i. Tax Credit refers to the amount representing the 20% discount granted to a qualified senior citizen by all establishments relative to their utilization of transportation services, hotels and similar lodging establishments, restaurants, drugstores, recreation centers, theaters, cinema houses, concert halls, circuses, carnivals and other similar places of culture, leisure and amusement, which discount shall be deducted by the said establishments from their gross income for income tax purposes and from their gross sales for value-added tax or other percentage tax purposes." (emphasis supplied) A cursory review of the wordings of Section 4 of Republic Act No. 7432 would reveal that the law literally intended the cost of the 20% discount to be claimed as tax credit by private establishments. We could not see any plausible reason for the respondent to interpret the phrase in a different way. The discount being available for tax credit as stated in the law cannot be made incoherent to mean that such discount be utilized instead as a deduction from gross income and from gross sales what is provided in RR No. 2-94. LibLex To be valid, an administrative regulation must not be in contravention but should conform to the standards that the law prescribes. (Tayug Rural Bank vs. Central Bank, 146 SCRA 120) Its promulgation must be authorized by the legislature. (Philippine Administrative Law, Cruz, 1994 ed., p. 32) xxx xxx xxx In declaring that the provisions of RA 7432 prevail over Revenue Regulations No. 2-94, it is important to point out that the cost of the 20% discount shall not be treated as deduction from the gross income of the petitioner nor deducted from its gross sales for VAT or other percentage tax purposes. The benefit that can be derived by taxpayers is the privilege of claiming these discounts as tax credit and no longer as deductions as what other taxpayers have done. They cannot avail of tax credit and claim said discounts as deductions at the same time because this would be tantamount to granting them benefits that are already disproportionate to the obligations imposed upon them by virtue of said law. This is to make clear for both the taxpayers and respondent that the tax credit privilege takes the place of claiming these discounts as deductions pursuant to this Court's stand that Section 2(1) of Revenue Regulations No. 2-94 is null and void and it is Section 4(a) of RA 7432 that will apply in cases of this nature (Del Rosario Drug Corporation vs. Commissioner of Internal Revenue, C.T.A. Case No. 5357, dated April 6, 1998, supra ). cdlex The aforecited ruling has already been affirmed by the Court of Appeals in the case entitled Commissioner of Internal Revenue vs. Elmas Drug Corporation, CA-G.R. SP No. 49946, dated October 19, 1999 . Pertinent portions of the said decision are quoted hereunder, thus: (W)here the law is very clear, there is no room for interpretation. Section 4 of Republic Act 7432 clearly provides that the cost of the 20% discount may be claimed by respondent as tax credit and there is nothing more to interpret. The Court of Tax Appeals in its decision dated August 27 1998 correctly ruled that the direct cost or the cost of sales of the 20% discount given to senior citizens is deductible as tax credit. (Emphasis supplied). Having settled the legal issues involved in the case at bar, We are now tasked to resolve the factual issue of whether or not petitioner is entitled to the claim for refund of overpaid income tax for the year 1995 based on the evidence submitted during trial. It is apparent from the records of the case that the present claim for refund was seasonably filed within the reglementary period of two years from the date of payment of the tax pursuant to Section 230 of the Tax Code, as amended. The letter claim for refund was filed with the respondent on December 26, 1996, and the petition for review with this Court was filed on April 7, 1998. The two-year period commences on April 15, 1996, the time when petitioner filed its 1995 final adjustment return (Commissioner of Internal Revenue vs. TMX Sales, Inc. et al., G.R. No. 837736, dated January 15, 1992). In order to prove that it is entitled to the claim for refund, petitioner engaged the services of Vicente E. Reyes And Associates, an independent auditing firm, pursuant to CTA Circular 1-95, as amended, to examine the voluminous documents supporting the alleged 20% sales discount in the amount of P603,424.00 granted to qualified senior citizens. In its report, dated February 8, 1999, the independent auditor, Mr. Rene Amby Reyes noted the following: (Exh. V, V-1 to V-3) cdll III. Findings Based on the aforementioned procedures, we ascertained that: a) the details appearing in the cash slips agree with the details per 1995 Summary of Sales and Discounts to Senior Citizens; b) the cash slips on file are duplicate and triplicate original copies; c) the 20% sales discounts were properly computed; d) the sales discounts given to senior citizens for the year 1995 are summarized as follows: Discounts given wherein the required details for the issuance of cash slips are complete 604,083.73 ========= This amount of P604,083.73 as found by the independent auditor is more than the P603,424.00 claimed by petitioner in its petition for review. However, the full amount of P604,083.73 as verified by Mr. Reyes is not properly supported by proper documents. A meticulous scrutiny of the evidence on record together with that of the certification issued by Vicente E. Reyes And Associates reveals that: 1. Not all the cash slips supporting the Summary of Sales and Discounts to Senior Citizens were presented; 2. Some of the cash slips offered in evidence were not admitted by the Court in its Resolution, dated September 3, 1999; 3. There is a minor footing error; and 4. Some of the cash slips were not properly inputted. These observations by the Court will reduce petitioner's claimed 20% sales discount to P362,574.57 only, details of which are enumerated hereunder: Summary Summation Substantiated Disallowances Page Per Page By Evidence Made by the Court REMARKS No. 1 P3,122.40 P- P3,122.40 No supporting documents and not offered 2 3,301.22 - 3,301.22 No supporting documents and not offered 3 3,326.30 - 3,326.30 No supporting documents and not offered 4 4,012.24 3,971.14 41.10 No supporting documents and not offered 5 4,221.36 4,221.36 - - 6 4,342.07 4,342.07 - - 7 4,660.80 4,660.80 - - 8 2,849.21 2,849.21 - - 9 4,037.66 4,037.66 - - 10 4,558.03 4,558.03 - - 11 3,207.77 3,207.77 - - 12 4,338.34 4,338.34 - - 13 4,925.59 4,831.59 94.00 Exh. Q-130901 not admitted 14 3,817.22 3,817.22 - - 15 5,682.66 5,643.99 38.67 Exh. Q-130100 no supporting document 16 3,932.52 3,932.52 - - 17 4,711.27 4,709.27 2.00 Overstatement in Exh. Q-131765 18 4,853.99 4,853.99 - - 19 3,898.24 3,898.24 - - 20 4,609.43 4,609.43 - - 21 3,836.89 3,836.89 - - 22 4,299.37 4,299.37 - - 23 4,676.73 4,676.73 - - 24 4,157.46 4,157.46 - - 1 4,187.16 4,187.16 - - 26 4,879.64 4,879.64 - - 27 3,862.72 3,862.72 - - 28 5,263.28 5,263.28 - - 29 4,877.08 4,877.08 - - 30 513.25 512.45 0.80 Error in summation (footing) 31 2,743.97 - 2,743.97 No supporting documents and not offered 32 2,994.72 - 2,994.72 No supporting documents and not offered 33 2,498.91 - 2,498.91 No supporting documents and not offered 34 3,600.91 - 3,600.91 No supporting documents and not offered 35 3,253.18 - 3,253.18 No supporting documents and not offered 36 3,689.29 - 3,689.29 No supporting documents and not offered 37 3,069.59 - 3,069.59 No supporting documents and not offered 38 4,172.98 - 4,172.98 No supporting documents and not offered 39 4,178.33 - 4,178.33 No supporting documents and not offered 40 3,861.20 795.50 3,065.70 No supporting documents and not offered 41 4,369.50 4,369.50 - - 42 4,299.96 4,293.73 6.23 Exh. Q-211887 no supporting document 43 3,254.25 3,187.90 66.35 Exh. Q-212213 no supporting document 44 3,719.27 3,719.27 - - 45 3,250.21 3,250.21 - - 46 3,274.99 2,549.30 725.69 Exhs Q-212786, and Exhs. Q-216101 to Q-216114 no sporting documents 47 3,813.96 - 3,813.96 No supporting documents and not offered 48 3,683.41 - 3,683.41 No supporting documents and not offered 49 2,735.55 - 2,735.55 No supporting documents and not offered 50 3,936.31 - 3,936.31 No supporting documents and not offered 51 3,857.89 - 3,857.89 No supporting documents and not offered 52 4,162.57 - 4,162.57 No supporting documents and not offered 53 3,432.03 - 3,432.03 No supporting documents and not offered 54 2,971.85 2,334.38 637.47 Double Exhs. Q-217650 to Q-217657; Exh. Q-217503 not admitted 55 3,994.40 3,994.40 - - 56 3,139.35 3,139.35 - - 57 1,486.23 1,486.23 - - 58 4,122.04 4,122.04 - - 59 3,231.00 3,231.00 - - 60 3,048.32 3,048.32 - - 61 2,844.51 2,844.51 - - 62 3,168.79 3,168.79 - - 63 5,039.31 5,039.31 - - 64 5,559.79 5,559.79 - - 65 4,058.29 4,058.29 - - 66 4,545.61 4,545.61 - - 67 3,880.31 3,880.31 - - 68 3,776.20 3,751.89 24.31 Exh. Q-238101 no supporting document 69 4,774.95 - 4,774.95 No supporting documents and not offered 70 3,777.10 - 3,777.10 No supporting documents and not offered 71 3,922.64 - 3,922.64 No supporting documents and not offered 72 3,978.32 - 3,978.32 No supporting documents and not offered 73 3,654.95 - 3,654.95 No supporting documents and not offered 74 4,698.78 - 4,698.78 No supporting documents and not offered 75 4,264.24 - 4,264.24 No supporting documents and not offered 76 4,470.55 - 4,470.55 No supporting documents and not offered 77 3,790.32 - 3,790.32 No supporting documents and not offered 78 4,383.29 - 4,383.29 No supporting documents and not offered 79 3,765.83 - 3,765.83 No supporting documents and not offered 80 4,110.65 - 4,110.65 No supporting documents and not offered 81 3,947.85 - 3,947.85 No supporting documents and not offered 82 3,718.98 - 3,718.98 No supporting documents and not offered 83 2,145.73 - 2,145.73 No supporting documents and not offered 84 4,666.64 - 4,666.64 No supporting documents and not offered 85 3,486.50 - 3,486.50 No supporting documents and not offered 86 3,640.05 - 3,640.05 No supporting documents and not offered 87 4,321.68 - 4,321.68 No supporting documents and not offered 88 4,262.50 - 4,262.50 No supporting documents and not offered 89 3,389.70 - 3,389.70 No supporting documents and not offered 90 5,109.56 - 5,109.56 No supporting documents and not offered 91 5,570.03 - 5,570.03 No supporting documents and not offered 92 4,319.01 - 4,319.01 No supporting documents and not offered 93 4,930.30 - 4,930.30 No supporting documents and not offered 94 4,659.00 - 4,659.00 No supporting documents and not offered 95 4,743.42 - 4,743.42 No supporting documents and not offered 96 4,457.21 - 4,457.21 No supporting documents and not offered 97 3,923.01 - 3,923.01 No supporting documents and not offered 98 4,298.38 - 4,298.38 No supporting documents and not offered 99 4,842.22 - 4,842.22 No supporting documents and not offered 100 5,339.82 - 5,339.82 No supporting documents and not offered 101 4,781.36 3,673.52 1,107.84 Exhs. Q-239690 to Q-239700 no supporting documents 102 4,977.04 4,977.04 - - 103 4,446.23 4,446.23 - - 104 6,479.42 6,479.42 - - 105 4,468.59 4,468.59 - - 106 5,968.27 5,968.27 - - 107 4,892.04 4,892.04 - - 108 4,415.02 4,415.02 - - 109 3,478.33 3,478.33 - - 110 4,209.96 4,209.96 - - 111 4,286.26 4,286.26 - - 112 4,584.86 4,584.86 - - 113 5,321.63 5,321.63 - - 114 498.58 498.58 - - 115 5,333.08 4,810.18 522.90 Exh. Q-237401 not admitted 116 5,237.51 5,186.56 50.95 Exh. Q-237402 not admitted 117 5,312.22 5,312.22 - - 118 4,419.94 4,119.54 300.40 Exh. Q-237501 not admitted 119 3,991.50 3,991.50 - - 120 4,035.94 4,035.94 - - 121 4,352.34 4,352.34 - - 122 4,976.36 4,976.36 - - -1 4,469.22 4,469.22 - - 124 4,794.97 4,794.97 - - 125 4,628.68 4,628.68 - - 126 4,494.16 4,494.16 - - 127 4,412.12 4,412.12 - - 128 5,790.55 4,306.88 1,483.67 Double Exhs. Q-238010 to Q-238023 129 4,484.09 4,484.09 - - 130 4,827.54 4,827.54 - - 131 3,789.55 3,789.55 - - 132 3,943.06 3,943.06, - - 133 4,609.15 4,365.25 243.90 Exh. Q-236300 not admitted 134 5,105.14 5,105.14 - - 135 4,294.97 3,740.72 554.25 Exhs. Q-246401 to Q-246407 not admitted 136 6,076.20 6,076.20 - - 137 3,832.63 3,832.63 - - 138 3,988.79 3,988.79 - - 139 3,921.96 3,426.14 495.82 Exhs. Q-236601 to Q-236610 no supporting documents 140 6,485.87 - 6,485.87 No supporting documents and not offered 141 5,754.61 - 5,754.61 No supporting documents and not offered 142 6,396.41 - 6,396.41 No supporting documents and not offered 143 5,227.47 - 5,227.47 No supporting documents and not offered 144 4,463.04 - 4,463.04 No supporting documents and not offered 145 2,622.71 - 2,622.71 No supporting documents and not offered Total P603,923.46 P362,574.57 P241,348.89 ========== =========== =========== Hence, petitioner is only entitled to a lesser amount of P122,195.74, computed as follows: Net Sales P94,724,284.00 Add: 20% Discount to Senior Citizens (Per Petitioner's Summary) 603,923.46 Gross Sales P95,328,207.46 Less: Cost of Sales Merchandise Inventory, beg. P9,519,210.00 Add Purchases 87,288,988.00 Total Goods Available for Sales P96,808,198.00 Less: Merchandise Inventory, End 9,469,349.00 87,338,849.00 Gross Income P7,989,358.46 Less: Operating Expenses 17,006,032.00 Net Operating Loss P9,016,673.54 Add: Miscellaneous Income 43,489,663.00 Net Income P34,472,989.46 Less: Interest Income Subject to Final Tax 22,242,227.00 Net Taxable Income P12,230,762.46 =========== Tax Due (P12,230,762.46 x 35%) P4,280,766.86 Less: 1) Tax Credit Cost of 20% Discounts with supporting documents 1 [(P87,338,849/P95,328,207.46) x P362,574.57] P333,568.60 2) Income Tax Payment for the Year 4,069,394.00 Total P4,402,962.60 Amount Refundable P122,195.74 =========== WHEREFORE, in view of the foregoing, petitioner's claim for refund is hereby partially GRANTED. Respondent is hereby ORDERED to REFUND in favor of petitioner the amount of P122,195.74, representing overpaid income tax the year 1995. SO ORDERED. (SGD.) ERNESTO D. ACOSTA Presiding Judge I CONCUR: (SGD.) RAMON O. DE VEYRA Associate Judge Separate Opinions The majority opinion granted the amount of P122,195.74 as tax credit based on Section 4 of Republic Act No. 7432. The amount of P122,195.74 was the result of the formula adopted by the majority where the cost of the 20% discount was added back to the net sales resulting to a gross sales of P95,328,207.46. prcd I am of the opinion that the amount to be refunded to Petitioner should be P334,293.75 based on the following formula: Sales Net of 20% Sales Discounts to Senior Citizens P94,724,284.00 Less: Cost of Goods Sold 87,338,849.00 Gross Profits P7,385,435.00 Less: Operating Expenses 17,006,032.00 Net Operating Loss (P9,620,597.00) Add: Miscellaneous Income Schedule 2, ITR P6,422,142.00 Schedule 3, ITR 14,825,294.00 21,247,436.00 Net Taxable Income Subject to 35% Tax P11,626,839.00 =========== Corporate Income Tax Due P4,069,394.00 Less: Payments made Section E(b)(1) P2,417,914.62 Section E(c) 1,083,616.54 Payment per final ITR 567,862.84 Approved Cost of the 20% Sales Discount 334,293.75 P4,403,687.75 Tax Credit per return representing the cost of 20% Sales Discount P334,293.75 =========== Amount of 20% Sales discount per books P603,923.46 Less: Amount per audit by the Court's technical staff 241,348.89 Allowable 20% sales discounts P362,574.57 =========== Cost thereof = P87,338,849.00/P94,724,284.00 = 92.2% x P362,574.57 = P334,293.75 =========== Amount of Tax Credit claimed per Petition for Review P392,226.00 =========== The amount of tax credit (cost) as determined by the Court of P334,293.75 should prevail and not the amount of the claim of P392,226.00. Under Section 4 of Republic Act No. 7432, the senior citizens are entitled to the following: "(a) the grant of twenty percent (20%) discount from all establishments relative to the utilization of transportation services, hotels and similar lodging establishment, restaurants and recreation centers and purchase of medicines anywhere in the country: Provided, That private establishments may claim the cost as tax credit ; LexLib (b) a minimum of twenty percent (20%) discount on admission fees charged by theaters, cinema houses and concert halls, circuses, carnivals and other similar places of culture, leisure, and amusement; xxx xxx xxx Section 4(a) refers to private establishments which are engaged in businesses requiring the use of inventories and purchases of goods as a necessary requirement in order to determine clearly the income of any such taxpayers, (Section 35, Tax Code, as amended by P.D. No. 1994). Under sub-section (a) of Section 4, the private establishments granting the 20% sales discount to senior citizens can directly deduct the 20% sales discount from the gross sales. However, in order to countervail the effect in the reduction of sales income, the same Section 4(a) allows the private establishments to use the cost of the 20% sales discounts as tax credit. The said cost of the 20% sales discounts can be determined by the following formula, thus: cdll Cost of Goods sold divided by Sales net of 20% sales discount equals the percentage rate of the Cost of Goods Sold multiplied by 20% sales discounts net of disallowed amounts by the Court's technical staff. However, for private establishments granting the 20% sales discounts to senior citizens classified under Section 4(b), the same are directly deductible on the gross sales made to senior citizens as is done under Section 4(a). The only difference is that the private establishments are not allowed to tax credit the cost of the 20% sales discounts. In addition to the above legal provision is Section 100(d)(3) of the 1995 Tax Code which provides, thus: Sales Return, allowances and sales discounts the value of goods sold and subsequently returned or for which allowances were granted by a VAT-registered person may be deducted from the gross sales or receipts for the quarter in which a refund is made or a credit memorandum or refund is issued. Sales discounts granted and indicated in the invoice at the time of sale may be excluded from the gross sales within the same quarter . (emphasis ours). WHEREFORE, in view of the foregoing, I disagree with the opinion of the majority and hold that Petitioner is entitled to the amount of P334,293.75 as Tax Credit. (SGD.) AMANCIO Q. SAGA Associate Judge Footnotes 1. Computation based on the latest decision of the Court of Appeals in the case entitled Commissioner of Internal Revenue vs. Elmas Drug Corporation, CA-G.R. SP No. 49946, dated October 19, 1999, supra .