Commissioner of Internal Revenue v. Hongkong and Shanghai Banking Corp. Ltd.-Phil. Branches

SPECIAL FIFTH DIVISION [CA-G.R. SP NO. 79294. October 9, 2015.] COMMISSIONER OF INTERNAL REVENUE , petitioner , vs. HONGKONG AND SHANGHAI BANKING CORPORATION LIMITED-PHILIPPINE BRANCHES , respondent. DECISION CRUZ, S. C. , J p : Before Us is a Petition for Review filed under Rule 43 of the Rules of Court which assails the Decision 1 of the Court of Tax Appeals (CTA) dated June 4, 2003 in CTA Case No. 6234. The antecedent facts as summarized by the CTA: "This case involves a claim for refund or issuance of tax credit certificate in the amount of P31,873,800.60, allegedly representing erroneously paid documentary stamp tax (DST) for the period January 1, 1999 to August 31, 1999. Petitioner is a corporation duly organized and existing under and by virtue of the laws of Hongkong with principal office address at The Enterprise Center, Tower I, 6766 Ayala Avenue corner Paseo de Roxas, Makati City. It is authorized by the Securities and Exchange Commission to engage in business in the Philippines and is registered with the Bureau of Internal Revenue with Taxpayer's Identification Number 047-000-504-444. Petitioner performs, among others, custodial services on behalf of its investor-clients, corporate or individual, resident or non-resident, with respect to the latter's passive investments in the Philippines, majority of which are investments in shares of stock in domestic corporations. As the custodian bank, petitioner (herein respondent) acts as their collection/payment agent with respect to dividends and other income derived from their investments. The investor-clients maintain Philippine peso and/or foreign currency accounts with petitioner. In the management of their funds maintained in the said peso and/or foreign currency accounts, e.g. , transfer and/or disbursement of funds or payment for reinvestment, said investor-clients give instructions to petitioner from outside of the Philippines via electronic messages. These electronic messages instructions are standard forms known in the banking industry as SWIFT MT 100, MT 199, MT 200, MT 202, MT 299, MT 521, MT 599, MT 999, hexagon and/or manual telex. In case of purchase of shares of stock and other investment in securities, the investor-clients send electronic messages from abroad to petitioner in the form of SWIFT MT 100, MT 199, MT 200, MT 202, MT 299, MT 521, MT 599, MT 999, hexagon and/or manual telex, instructing the latter to debit their local or foreign currency account and to pay the purchase price upon receipt of the securities. According to petitioner, it pays DST for these electronic instructions/advices received from abroad at the rate of P0.30 on each P200.00 based on the settlement price appearing on the face of the said instructions/advices pursuant to Section 181 of the Tax Code. For the period January to August 1999, petitioner allegedly paid DST in the total amount of P31,873,700.60, broken down as follows: Date of Purchase Amount January 1999 P3,005,488.50 February 1999 P3,271,372.70 March 1999 P3,729,977.50 April 1999 P4,593,642.80 May 1999 P6,127,458.30 June 1999 P3,647,897.80 July 1999 P4,725,596.40 August 1999 P2,772,366.60 Total P31,873,800.60 ============ On August 23, 1999, the BIR issued BIR Ruling No. 132-99, stating that instructions/advices from abroad on the management of funds located in the Philippines which do not involve transfer of funds from abroad are not subject to DST. On the basis of this ruling, petitioner filed with the BIR on December 14, 2000 an administrative claim for refund in the amount of P31,873,800.60 representing erroneously paid DST on the electronic instructions it received from its investor-clients abroad for the period January to August 1999 (Annex L, Petition for Review) . CAIHTE On February 9, 2001, petitioner filed the instant petition for review in order to suspend the running of the two-year prescriptive period under the law for claiming a refund." 2 On June 4, 2003, the CTA issued the assailed Decision, the dispositive portion of which states: "WHEREFORE, in view of the foregoing, the instant petition is hereby PARTIALLY GRANTED . Respondent (Bureau of Internal Revenue) is ORDERED to REFUND , or in the alternative, ISSUE A TAX CREDIT CERTIFICATE in favor of the petitioner in the amount of P25,921,462.41 representing erroneously paid documentary stamp tax for the period January to August 1999. SO ORDERED. " 3 The Bureau of Internal Revenue (BIR) filed a Motion for Reconsideration of the CTA Decision on the ground that the subject electronic messages met the conditions for taxability under Section 181 of the Tax Code, as amended; and that BIR Ruling No. 132-99, the BIR issuance relied upon by Hongkong and Shanghai Banking Corporation Limited-Philippine Branches (HSBC) which states that electronic messages are not subject to documentary stamp tax, is an erroneous interpretation of Section 181 of the Tax Code, as amended. In its Resolution dated September 1, 2003, the CTA denied BIR's motion. Aggrieved by the CTA's Decision, herein petitioner BIR filed the instant petition before this Court on September 30, 2003 and the same was raffled to the Office of the late Justice Edgardo F. Sundiam. However, said office was gutted by fire and the rollo of the instant petition was one of those that got burned and destroyed. The parties were, thus, directed to submit all pertinent pleadings related to the case. On April 7, 2015, HSBC filed a Motion to Admit stating that it has tried to locate the entire set of documents listed in Our Resolution dated February 24, 2015, however, it was not completely successful in doing so. A Compliance was likewise submitted by HSBC on even date to which the following documents relative to the reconstitution of the case were attached: (1) Petition for Review dated September 30, 2003 as Annex "A"; (2) Substitution of Counsel dated October 30, 2003 as Annex "B"; (3) Comment (to Petition for Review) with annexes as Annex "C"; (4) Respondent's Memorandum dated March 17, 2004 as Annex "D"; (5) Entry of Appearance dated January 29, 2007 as Annex "E"; and (6) Motion to Withdraw Appearance dated March 16, 2007 as Annex "F". Meanwhile, in its Compliance, the Office of the Solicitor General (OSG) stated that it was only able to locate the Motion to Withdraw Appearance filed by HSBC's former counsel, Atty. Jose German M. Liccup. The instant petition raised the following issues: I. THE COURT OF TAX APPEALS ERRED WHEN IT FAILED TO RULE THAT ELECTRONIC MESSAGES MEET THE CONDITIONS FOR TAXABILITY UNDER SECTION 181 OF THE TAX CODE, AS AMENDED. II. THE COURT OF TAX APPEALS ERRED IN HOLDING THAT BIR RULING NO. 132-99 DATED AUGUST 23, 1999 IS APPLICABLE TO THE INSTANT PETITION. In its Decision, the CTA ratiocinated in this wise: "The case at bar is not one of first impression. The court had already settled the legal issue in favor of petitioner in the cases of Hongkong Shanghai Banking Corporation Limited-Philippine Branches vs. Commissioner of Internal Revenue , CTA Cases Nos. 6009 and 5951, promulgated on May 2, 2002 and December 18, 2002, respectively, involving the same parties and issues, where we held that the 'electronic message instructions' which have been subjected to DST are similar to the 'electronic message instructions' mentioned in BIR Ruling 132-99. For easy reference, pertinent portion of the earlier decision is reproduced hereunder: BIR Ruling No. 132-99 '. . . this office hereby holds that the instruction made through an electronic message by a non-resident payor-client to debit his local or foreign currency account maintained in the Philippines and to pay a certain named recipient also residing in the Philippines is not the transaction contemplated under Section 181 of the 1997 Tax Code. Such being the cases, such electronic instruction purporting to draw funds from a local account intended to be paid to a named recipient in the Philippines is not subject to documentary stamp tax imposed under the foregoing Section.' DETACa Section 181 of the 1997 Tax Code, on the other hand, provides: ' Section 181. Stamp Tax Upon Acceptance of Bills of Exchange and Others. Upon any acceptance or payment of any bill of exchange or order for the payment of money purporting to be drawn in a foreign country but payable in the Philippines, there shall be collected a documentary stamp tax of Thirty centavos (P.30) on each Two hundred pesos (P200), or fractional part thereof, of the face value of any such bill of exchange, or order, or the Philippine equivalent of such value, if expressed in foreign currency.' In the aforesaid case, this court upheld the arguments of herein petitioner that these electronic messages are not the transactions contemplated in Section 181 of NIRC, thus: 'The instruction made through an electronic message by a non-resident investor-client, which is to debit his local or foreign currency account in the Philippines and pay a certain named recipient also residing in the Philippines is not the transaction contemplated in Section 181 of the Code. In this case, the withdrawal and payment shall be made in cash. It is parallel to an automatic bank transfer of local funds from a savings account to a checking account maintained by a depositor in one bank. The act of debiting the account is not subject to the documentary stamp tax under Section 181. Neither is the transaction subject to the documentary stamp tax under Section 180 of the same Code. These electronic message instructions cannot be considered negotiable instruments as they lack the essential feature of negotiability, which is, the ability to be transferred. (Words and Phrases) These instructions are considered as mere memoranda and entered as such in the books of accounts of the local bank, and the actual debiting of the payor's local or foreign currency account in the Philippines is the actual transaction that should be properly entered as such.' (Emphasis supplied) Having settled the legal controversy, we now proceed to the factual aspect of the case. To bolster its claim for refund, petitioner presented the following exhibits: 1. Documentary stamp purchases report for the year 1999 (Exhibit A) ; 2. Documentary Stamp Tax Declarations, official receipts and various documents relating to petitioner's purchase of DST for they year 1999 (Exhibits B, C, and D, inclusive of submarkings) ; 3. Various Monthly Information Returns for DST [consolidated and internal] paid for the year 1999 (Exhibits E, F, G, H, I, J, K, L, M, N, O, P, Q, R, S, and T, inclusive of submarkings) ; 4. Samples of Swift MT 100, MT 599, 521, Telex and Hexagon (Exhibits U, V, W, X and Y) ; 5. DST Process Flowchart (Exhibit Z) ; 6. Independent CPA report with amendment (Exhibits AA, AA-1, EE, and EE-1) ; 7. Various supporting documents examined by the independent CPA (Exhibit BB) ; 8. Schedule of DST payments for the months of January to August 1999 (Exhibit CC) ; and 9. Statement of History (Exhibit DD) . Based on the above evidence, petitioner was able to prove that it had paid DST for the electronic instructions/advices of its clients-investors abroad. The DST payments for the electronic instructions/advices which under BIR Ruling No. 132-99 and our previous decisions on the matter should not be subjected to DST were included in the Monthly Information Returns of DST for the months of January to August 1999 (Exhibits E, F, G, H, I, J, K, L, M, N, O, P, Q, R, S, and T, inclusive of submarkings). aDSIHc However, not all of the amount claimed by petitioner can be granted. In the report of the commissioned independent CPA, the following findings were noted: Based on our review and validation, the amount of claim for refund that we determined to be substantiated by supporting documents is P22,522,541.41 broken down as follows: Amount Particulars Reference Settlements Operations Total Amount of the Claim Exhibit AA-6 P18,725,045.81 P3,827,495.60 P22,552,541.41 supported by original copies of the SWIFT message instructions and other documentation (e.g., customer receipts or statements of accounts or securities order form) The amount validated above can be further increased, however, if the Honorable Judges will allow the Bank to claim the DST paid on the following: 1. DST paid on similar transactions covered by SWIFT messages/instructions ( i.e. , message type MT 199, EBS 100, SWT 599 telex, or HEX) other than those types ( i.e. , SWIFT MT 100 or MT 202 and/or MT 521) mentioned in BIR Ruling No. 132-99. The message types covered in the Ruling represent payment instructions which follow SWIFT format specifications and authorizations. The other message types, not included in the Ruling, are likewise payment instructions but make use of a free format message. These DST amount to: Amount Reference Settlements Operations Total Exception B P3,246,598.90 P122,322.10 P3,368,921.00 (Exhibit AA-7) 2. DST paid on transactions that were validated against original copies of message instructions and customer receipts or statements of accounts. The photocopies of said documents were not provided since the original copies thereof were misplaced as a result of the Bank's transfer of office location. These DST amounts to: Amount Reference Settlements Operations Total Exception G P- P479,412.10 P479,412.10 (Exhibit AA-7) xxx xxx xxx On the other hand, we were not able to verify the following amounts noted below, details of which are presented in the attached exhibits: Amount Particulars Reference Settlements Operations Total Copies of the message Exception A P1,243,544.70 P1,407,810.50 P2,651,355.20 instructions (SWIFT (Exhibit AA-7) messages) and customer receipt or statement of account or securities order form are not available. The message instructions Exception C 269,101.50 2,665.60 271,767.10 are not available. (Exhibit AA-7) The supporting customer Exception D 1,308,588.40 168,200.10 1,476,788.50 receipt or statement of (Exhibit AA-7) account or securities order form are not available The customer account Exception E - 7,379.40 7,379.40 number per DST schedule (Exhibit AA-7) and supporting document do not match The account debited was a Exception F - 319,572.90 319,572.90 suspense account (Exhibit AA-7) DST Usage without Exhibit AA-6 - 746,062.99 746,062.99 Supporting documents TOTAL P2,821,234.60 P2,651,691.49 P5,472,926.09 ============ ============ ============ The above findings were based on audit procedures which we consider sufficient to establish the veracity of petitioner's claim for refund. Hence, the court adopts the aforequoted report of the independent CPA but nonetheless disallows the refund of the DST paid on transactions with misplaced original documents in the amount of P479,412.10. The court also allows the refund of DST paid on similar transactions covered by SWIFT messages/instructions ( i.e. , message type MT 199, EBS 100, SWT 599, telex or HEX) other than those types ( i.e. , SWIFT MT 100 or MT202 and/or MT 521) mentioned in BIR Ruling No. 132-99 in the amount of P3,368,921.00. The court grants the refund thereof because they are likewise payment instructions similar to that of payment instructions covered in the ruling. The only difference is that the message types covered in the ruling are payment instructions which follow SWIFT format specifications and authorizations whereas the other message types not included in the ruling make use of a free format message. ETHIDa In sum, petitioner is entitled to the claim for refund of erroneously paid DST in a reduced amount of P25,921,462.41, computed as follows: Total Amount Claimed P31,873,800.60 Less: Disallowances P5,472,926.09 a) Exceptions noted b) DST paid on transactions with misplaced original documentation 479,412.10 5,952,338.19 Amount Refundable P25,921,462.41" 4 ============== Petitioner disputes the CTA's decision and argues that the electronic messages sent to HSBC by its investor-clients from abroad are subject to documentary stamp tax pursuant to Section 181 of the Tax Code, as amended. The BIR explained that in general, documentary stamp taxes (DST) are levied on the exercise by persons of certain privileges conferred by law for the creation, revision or termination of specific legal relationships through the execution of specific instruments. The DST must be paid upon the issuance of the said instruments without regard to the kind of contract which gave rise to them. The BIR maintains that a DST is in the nature of an excise tax or a tax on a privilege, opportunity or facility offered at exchanges for the transaction of the business. Thus, the BIR insists that the CTA's interpretation of said provision in this case is not supported by jurisprudence and is contrary to the provisions of the Tax Code and the very nature of the DST. Petitioner, citing Sections 50 and 51 of Revenue Regulations No. 26 issued on March 26, 1924, claims that mere cabled instruction to a foreign correspondent to pay money is subject to DST. As such, the BIR clarifies that the act which is subject to DST in the instant case is the act of the investor-clients ordering HSBC via electronic message to pay certain recipients in the Philippines and not HSBC's act of debiting the account of the investor-clients. Although Sections 50 and 51 speak of imposing DST on any telegraphic transfer of a local bank to its correspondent bank abroad to pay money, BIR contends that the reverse should also hold true simply put, ordering the payment of money from one non-resident drawee to a Philippine-based drawer by way of electronic transfer is the operative act that makes the transaction subject to DST. The BIR also points out that an actual transfer of funds need not transpire for the transaction to be taxable. The mere act of drawing a bill of exchange in the foreign country, and not the transfer of funds from abroad, is taxable. The BIR notes that Section 181 of the Tax Code, as amended, imposes a tax on the acceptance or payment of any bill of exchange or order for payment this means that an order for payment that is not a bill of exchange is nevertheless a taxable document so long as it falls within the definition of an order for payment. The BIR finally posits that HSBC's reliance on BIR Ruling No. 132-99 is misplaced. Said ruling was issued by then Commissioner of Internal Revenue Beethoven L. Rualo to the effect that an electronic instruction purporting to draw funds from a local account intended to be paid to a named recipient in the Philippines is not subject to DST. However, said ruling was issued in favor of Citibank and Standard Chartered Bank based on facts and representations specific to them. HSBC, not being a party to the transactions, cannot invoke said ruling. Petitioner's contentions are untenable. PROCEDURAL MATTERS It is worthy to state that jurisdiction over appeals of cases from the CTA has been removed from this Court upon the enactment of Republic Act No. 9282 (R.A. 9282) or "An Act Expanding the Jurisdiction of the Court of Tax Appeals (CTA), Elevating its Rank to the Level of a Collegiate Court with Special Jurisdiction and Enlarging its Membership, Amending for the Purpose Certain Sections of Republic Act No. 1125, as Amended, Otherwise Known as the Law Creating the Court of Tax Appeals, and for Other Purposes", the pertinent provisions of which state that: "SECTION 1. Section 1 of Republic Act No. 1125, as amended, is hereby further amended to read as follows: 'SECTION 1. Court; Justices; Qualifications; Salary; Tenure. There is hereby created a Court of Tax Appeals (CTA) which shall be of the same level as the Court of Appeals, possessing all the inherent powers of a Court of Justice, and shall consist of a Presiding Justice and five (5) Associate Justices. . . . cSEDTC xxx xxx xxx' SECTION 11. Section 18 of the same Act is hereby amended as follows: 'SEC. 18. Appeal to the Court of Tax Appeals En Banc. No civil proceeding involving matters arising under the National Internal Revenue Code, the Tariff and Customs Code or the Local Government Code shall be maintained, except as herein provided, until and unless an appeal has been previously filed with the CTA and disposed of in accordance with the provisions of this Act. A party adversely affected by a resolution of a Division of the CTA on a motion for reconsideration or new trial, may file a petition for review with the CTA en banc. "SECTION 1. Court; Justices; Qualifications; Salary; Tenure. There is hereby created a Court of Tax Appeals (CTA) which shall be of the same level as the Court of Appeals, possessing all the inherent powers of a Court of Justice, and shall consist of a Presiding Justice and five (5) Associate Justices." xxx xxx xxx SECTION 12. Section 19 of the same Act is hereby amended as follows: 'SEC. 19. Review by Certiorari . A party adversely affected by a decision or ruling of the CTA en banc may file with the Supreme Court a verified petition for review on certiorari pursuant to Rule 45 of the 1997 Rules of Civil Procedure.' xxx xxx xxx" RA 9282 effectively divested this Court of the power to review any decision or order promulgated by the CTA from the time said law took effect, by making the latter a same level court as the former. However, despite the enactment of said law and the prolonged period of deciding on the matters raised before Us, We are not precluded from exercising appellate jurisdiction over CTA Case No. 6234 as We have acquired jurisdiction over this case before RA 9282 took effect. It is a cardinal principle in remedial law that the jurisdiction of a court over the subject matter of an action is determined by the law in force at the time of the filing of the complaint and the allegations of the complaint. 5 Jurisdiction is determined exclusively by the Constitution and the law and cannot be conferred by the voluntary act or agreement of the parties. It cannot also be acquired through or waived, enlarged or diminished by their act or omission, nor conferred by the acquiescence of the court. It is neither for the court nor the parties to violate or disregard the rule, this matter being legislative in character. 6 The nature of an action, as well as which court or body has jurisdiction over it, is determined based on the allegations contained in the complaint of the plaintiff, irrespective of whether or not the plaintiff is entitled to recover upon all or some of the claims asserted therein. The averments in the complaint and the character of the relief sought are the ones to be consulted. Once vested by the allegations in the complaint, jurisdiction also remains vested irrespective of whether or not the plaintiff is entitled to recover upon all or some of the claims asserted therein. 7 We hereby clarify that Our taking cognizance over the appeal from CTA Case No. 6234 is in order. SUBSTANTIVE MATTERS In Hongkong and Shanghai Banking Corporation Limited-Philippine Branches v. Commissioner of Internal Revenue , 8 a case which involves the same opposing parties and incidents similar to those raised in the present case, the Supreme Court has made a final determination that the electronic messages received by HSBC from its investor-clients abroad instructing HSBC to debit the latter's local and foreign currency accounts and to pay the purchase price of shares of stock or investment in securities do not properly qualify as either presentment for acceptance or presentment for payment. There being neither presentment for acceptance nor presentment for payment, then there was no acceptance or payment that could have been subjected to DST to speak of. 9 In the aforecited case, the Supreme Court exhaustively discussed and addressed similar issues raised by herein petitioner, viz. : "The Court agrees with the CTA that the DST under Section 181 of the Tax Code is levied on the acceptance or payment of 'a bill of exchange purporting to be drawn in a foreign country but payable in the Philippines' and that 'a bill of exchange is an unconditional order in writing addressed by one person to another, signed by the person giving it, requiring the person to whom it is addressed to pay on demand or at a fixed or determinable future time a sum certain in money to order or to bearer.' A bill of exchange is one of two general forms of negotiable instruments under the Negotiable Instruments Law. The Court further agrees with the CTA that the electronic messages of HSBC's investor-clients containing instructions to debit their respective local or foreign currency accounts in the Philippines and pay a certain named recipient also residing in the Philippines is not the transaction contemplated under Section 181 of the Tax Code as such instructions are 'parallel to an automatic bank transfer of local funds from a savings account to a checking account maintained by a depositor in one bank.' The Court favorably adopts the finding of the CTA that the electronic messages 'cannot be considered negotiable instruments as they lack the feature of negotiability, which, is the ability to be transferred' and that the said electronic messages are 'mere memoranda' of the transaction consisting of the 'actual debiting of the [investor-client-] payor's local or foreign currency account in the Philippines' and 'entered as such in the books of account of the local bank,' HSBC. SDAaTC More fundamentally, the instructions given through electronic messages that are subjected to DST in these cases are not negotiable instruments as they do not comply with the requisites of negotiability under Section 1 of the Negotiable Instruments Law, which provides: Sec. 1. Form of negotiable instruments . An instrument to be negotiable must conform to the following requirements: (a) It must be in writing and signed by the maker or drawer; (b) Must contain an unconditional promise or order to pay a sum certain in money; (c) Must be payable on demand, or at a fixed or determinable future time; (d) Must be payable to order or to bearer; and (e) Where the instrument is addressed to a drawee, he must be named or otherwise indicated therein with reasonable certainty. The electronic messages are not signed by the investor-clients as supposed drawers of a bill of exchange; they do not contain an unconditional order to pay a sum certain in money as the payment is supposed to come from a specific fund or account of the investor-clients; and, they are not payable to order or bearer but to a specifically designated third party. Thus, the electronic messages are not bills of exchange. As there was no bill of exchange or order for the payment drawn abroad and made payable here in the Philippines, there could have been no acceptance or payment that will trigger the imposition of the DST under Section 181 of the Tax Code. Section 181 of the 1997 Tax Code, which governs HSBC's claim for tax refund for taxable year 1998 subject of G.R. No. 167728, provides: SEC. 181. Stamp Tax Upon Acceptance of Bills of Exchange and Others. Upon any acceptance or payment of any bill of exchange or order for the payment of money purporting to be drawn in a foreign country but payable in the Philippines , there shall be collected a documentary stamp tax of Thirty centavos (P0.30) on each Two hundred pesos (P200), or fractional part thereof, of the face value of any such bill of exchange, or order, or the Philippine equivalent of such value, if expressed in foreign currency. (Emphasis supplied.) Section 230 of the 1977 Tax Code, as amended, which governs HSBC's claim for tax refund for DST paid during the period September to December 1997 and subject of G.R. No. 166018, is worded exactly the same as its counterpart provision in the 1997 Tax Code quoted above. The origin of the above provision is Section 117 of the Tax Code of 1904, which provided: SECTION 117. The acceptor or acceptors of any bill of exchange or order for the payment of any sum of money drawn or purporting to be drawn in any foreign country but payable in the Philippine Islands , shall, before paying or accepting the same, place thereupon a stamp in payment of the tax upon such document in the same manner as is required in this Act for the stamping of inland bills of exchange or promissory notes, and no bill of exchange shall be paid nor negotiated until such stamp shall have been affixed thereto. (Emphasis supplied.) It then became Section 30 (h) of the 1914 Tax Code: SEC. 30. Stamp tax upon documents and papers . Upon documents, instruments, and papers, and upon acceptances, assignments, sales, and transfers of the obligation, right, or property incident thereto documentary taxes for and in respect of the transaction so had or accomplished shall be paid as hereinafter prescribed, by the persons making, signing, issuing, accepting, or transferring the same, and at the time such act is done or transaction had: xxx xxx xxx (h) Upon any acceptance or payment upon acceptance of any bill of exchange or order for the payment of money purporting to be drawn in a foreign country but payable in the Philippine Islands , on each two hundred pesos, or fractional part thereof, of the face value of any such bill of exchange or order, or the Philippine equivalent of such value, if expressed in foreign currency, two centavos[.] (Emphasis supplied.) acEHCD It was implemented by Section 46 in relation to Section 39 of Revenue Regulations No. 26, as amended: SEC. 39. A Bill of Exchange is one that 'denotes checks, drafts, and all other kinds of orders for the payment of money, payable at sight or on demand, or after a specific period after sight or from a stated date.' SEC. 46. Bill of Exchange, etc. When any bill of exchange or order for the payment of money drawn in a foreign country but payable in this country whether at sight or on demand or after a specified period after sight or from a stated date, is presented for acceptance or payment , there must be affixed upon acceptance or payment of documentary stamp equal to P0.02 for each P200 or fractional part thereof. (Emphasis supplied.) It took its present form in Section 218 of the Tax Code of 1939, which provided: SEC. 218. Stamp Tax Upon Acceptance of Bills of Exchange and Others. Upon any acceptance or payment of any bill of exchange or order for the payment of money purporting to be drawn in a foreign country but payable in the Philippines , there shall be collected a documentary stamp tax of four centavos on each two hundred pesos, or fractional part thereof, of the face value of any such bill of exchange or order, or the Philippine equivalent of such value, if expressed in foreign currency. (Emphasis supplied.) It then became Section 230 of the 1977 Tax Code, as amended by Presidential Decree Nos. 1457 and 1959, which, as stated earlier, was worded exactly as Section 181 of the current Tax Code: SEC. 230. Stamp tax upon acceptance of bills of exchange and others. Upon any acceptance or payment of any bill of exchange or order for the payment of money purporting to be drawn in a foreign country but payable in the Philippines , there shall be collected a documentary stamp tax of thirty centavos on each two hundred pesos, or fractional part thereof, of the face value of any such bill of exchange, or order, or the Philippine equivalent of such value, if expressed in foreign currency. (Emphasis supplied.) The pertinent provision of the present Tax Code has therefore remained substantially the same for the past one hundred years. The identical text and common history of Section 230 of the 1977 Tax Code, as amended, and the 1997 Tax Code, as amended, show that the law imposes DST on either (a) the acceptance or (b) the payment of a foreign bill of exchange or order for the payment of money that was drawn abroad but payable in the Philippines. DST is an excise tax on the exercise of a right or privilege to transfer obligations, rights or properties incident thereto. Under Section 173 of the 1997 Tax Code, the persons primarily liable for the payment of the DST are those (1) making, (2) signing, (3) issuing, (4) accepting, or (5) transferring the taxable documents, instruments or papers. In general, DST is levied on the exercise by persons of certain privileges conferred by law for the creation, revision, or termination of specific legal relationships through the execution of specific instruments. Examples of such privileges, the exercise of which, as effected through the issuance of particular documents, are subject to the payment of DST are leases of lands, mortgages, pledges and trusts, and conveyances of real property. As stated above, Section 230 of the 1977 Tax Code, as amended, now Section 181 of the 1997 Tax Code, levies DST on either (a) the acceptance or (b) the payment of a foreign bill of exchange or order for the payment of money that was drawn abroad but payable in the Philippines. In other words, it levies DST as an excise tax on the privilege of the drawee to accept or pay a bill of exchange or order for the payment of money, which has been drawn abroad but payable in the Philippines, and on the corresponding privilege of the drawer to have acceptance of or payment for the bill of exchange or order for the payment of money which it has drawn abroad but payable in the Philippines. Acceptance applies only to bills of exchange. Acceptance of a bill of exchange has a very definite meaning in law. In particular, Section 132 of the Negotiable Instruments Law provides: Sec. 132. Acceptance; how made, by and so forth. The acceptance of a bill [of exchange] is the signification by the drawee of his assent to the order of the drawer. The acceptance must be in writing and signed by the drawee. It must not express that the drawee will perform his promise by any other means than the payment of money. SDHTEC Under the law, therefore, what is accepted is a bill of exchange, and the acceptance of a bill of exchange is both the manifestation of the drawee's consent to the drawer's order to pay money and the expression of the drawee's promise to pay. It is 'the act by which the drawee manifests his consent to comply with the request contained in the bill of exchange directed to him and it contemplates an engagement or promise to pay.' Once the drawee accepts, he becomes an acceptor. As acceptor, he engages to pay the bill of exchange according to the tenor of his acceptance. Acceptance is made upon presentment of the bill of exchange, or within 24 hours after such presentment. Presentment for acceptance is the production or exhibition of the bill of exchange to the drawee for the purpose of obtaining his acceptance. Presentment for acceptance is necessary only in the instances where the law requires it. In the instances where presentment for acceptance is not necessary, the holder of the bill of exchange can proceed directly to presentment for payment. Presentment for payment is the presentation of the instrument to the person primarily liable for the purpose of demanding and obtaining payment thereof. Thus, whether it be presentment for acceptance or presentment for payment, the negotiable instrument has to be produced and shown to the drawee for acceptance or to the acceptor for payment. Revenue Regulations No. 26 recognizes that the acceptance or payment (of bills of exchange or orders for the payment of money that have been drawn abroad but payable in the Philippines) that is subjected to DST under Section 181 of the 1997 Tax Code is done after presentment for acceptance or presentment for payment, respectively. In other words, the acceptance or payment of the subject bill of exchange or order for the payment of money is done when there is presentment either for acceptance or for payment of the bill of exchange or order for the payment of money. Applying the above concepts to the matter subjected to DST in these cases, the electronic messages received by HSBC from its investor-clients abroad instructing the former to debit the latter's local and foreign currency accounts and to pay the purchase price of shares of stock or investment in securities do not properly qualify as either presentment for acceptance or presentment for payment. There being neither presentment for acceptance nor presentment for payment, then there was no acceptance or payment that could have been subjected to DST to speak of. Indeed, there had been no acceptance of a bill of exchange or order for the payment of money on the part of HSBC. To reiterate, there was no bill of exchange or order for the payment drawn abroad and made payable here in the Philippines. Thus, there was no acceptance as the electronic messages did not constitute the written and signed manifestation of HSBC to a drawer's order to pay money. As HSBC could not have been an acceptor, then it could not have made any payment of a bill of exchange or order for the payment of money drawn abroad but payable here in the Philippines. In other words, HSBC could not have been held liable for DST under Section 230 of the 1977 Tax Code, as amended, and Section 181 of the 1997 Tax Code as it is not 'a person making, signing, issuing, accepting, or, transferring' the taxable instruments under the said provision. Thus, HSBC erroneously paid DST on the said electronic messages for which it is entitled to a tax refund." As regards the issue raised by the BIR that BIR Ruling No. 132-99, being issued in favor of Citibank and Standard Chartered, may only be invoked by these parties, is utterly misplaced. It bears stressing that interpretations of administrative agencies in charge of enforcing a law (such as rulings issued by the BIR) are entitled to great weight and consideration by the courts, unless such interpretations are in a sharp conflict with the governing statute or the Constitution and other laws. 10 A BIR Ruling is recognized as a general interpretative rule issued by the Commissioner of Internal Revenue under Section 4 11 of the Tax Code, as amended, thus, it is applicable to all taxpayers. 12 Thus, a taxpayer such as HSBC, may invoke BIR Ruling No. 132-99 although it was issued in favor of another taxpayer. WHEREFORE , in view of the foregoing, the petition is hereby DENIED . The Decision of the Court of Tax Appeals (CTA) dated June 4, 2003 in CTA Case No. 6234 is hereby AFFIRMED. SO ORDERED. Reyes, Jr. and Paredes, * JJ., concur. Footnotes * Acting Junior Member vice J. Ramon Paul Hernando who is on leave (Decision Writing Week) per Office Order No. 421-15-ABR dated October 2, 2015. 1. Penned by Presiding Judge Ernesto D. Acosta with the concurrence of Associate Judge Lovell R. Bautista and Juanito C. Castaeda, Jr., Rollo , pp. 69-84. 2. Rollo , pp. 69-71. 3. Rollo , pp. 77-78. 4. Rollo , pp. 72-77. 5. Department of Agrarian Reform v. Trinidad Valley Realty & Development Corp. , G.R. Nos. 173386, 174162 & 183191, February 11, 2014 citing DAR v. Paramount Holdings Equities, Inc. , G.R. No. 176838, June 13, 2013. 6. Department of Agrarian Reform v. Trinidad Valley Realty & Development Corp., supra citing G.R. No. 165676, November 22, 2010. 7. Department of Agrarian Reform v. Trinidad Valley Realty & Development Corp., supra citing Padlan v. Dinglasan , G.R. No. 180321, March 20, 2013. 8. G.R. Nos. 166018 & 167728, June 4, 2014. 9. Id. 10. Dumaguete Cathedral Credit Cooperative v. Commissioner of Internal Revenue , G.R. No. 182722, January 22, 2010. 11. 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. The power to decide disputed assessments, refunds of internal revenue taxes, fees or other charges, penalties imposed in relation thereto, or other matter 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. 12. Visayas Geothermal Power Co. v. Commissioner of Internal Revenue , G.R. No. 197525, June 4, 2014.