MACONDRY & CO., INC. DEMANDANTE Y APELANTE CONTRA, EL ADMINISTRADOK DE RENTAS INTEENAS, DEMANDADO Y APELADO.

Se trata de una apelacidn interpuesta por la demandante contra una
decision del Juzgado de Primera Instancia de Manila que sobreseyo su
demanda.

En la vista de la causa ambas partes sometieron un convenio de hechos, cuya parte esencial es la siguiente:

“3. During the first and second quarters of 1946, plaintiff received from its customers as ‘port charges’ P87,075.60.

“4. The so-called ‘port charges’ were separately itemized and billed against plaintiff’s customers.

“5. The corresponding sales, tax on the costs, insurance and freight were duly paid by the plaintiff to the defendant.

“6. On August 16, 1946, the defendant wrote the plaintiff advising that
the said ‘port charges’ formed a part of the purchase price of the
goods and as such plaintiff must pay 3 1/2 % additional sales tax.plus
25% surcharge and P50.00 as a compromise, or a total of P3,859.58, copy
of said letter being as follows:

I have the honor to advise that
upon investigation conducted by an agent of this office it was
ascertained that you failed to pay the full amount of percentage tax
from you for the first and second quarters of 1946, in violation of
section 186 of the National Internal Revenue Code, in view of the fact
that port charges collected from your customers as forming part of the
selling price of the articles sold by you, were not declared for
taxation.

It is informed in this connection that ‘gross
selling price’ or ‘gross value in money’ of the articles sold,
bartered, exchanged, or transferred, as the term is used in sections
184, 185 and 186 of the said Code is the total account of money or its
equivalent which the purchaser pays to the vendor to receive or get the
goods. As port charges were collected from your customers, the same
should have been declared for the purposes of the 3 1/2 % tax. There
is, therefore due from you the sum of P3,809.58 computed as follows:

‘Demand is, therefore, made upon you to pay the said sum of P3.809.58 -within ten (10) days from your receipt of this letter.

Please be further advised that your failure to pay the full amount of
percentage tax in violation of section 186 of the National Internal
Revenue Code is penalized under section 209 of the same Code, which
violation however, be settled extrajudicially by the payment of the sum
of P50 as compromise, in addition to the amount of P3,809.58 due from
you.

“7. On September 2, 1946, plaintiff answered the defendant as follows:

We have your letter of the 16th
ultimo demanding payment of the amount of P3,859.58 as alleged
additional sales tax, surcharge and compromise due to the government.

Our books show that the amount collected by us for port charges on
which the additional tax is assessed amounted to P87,069.60 and not P87,069.60 as stated in your communication and, therefore, the basic
computation of the tax is Incorrect.

When we paid
the sales tax we considered, and still, that under the terms of our
sales contracts port charges are not a part of the selling prices, so
that we excluded them in figuring out our liability. As stated in our
letter to you of August 8, 1946, these were merely payments incurred by
us in taking the goods from the piers and delivering the articles to
our customers. Before the arrival of our goods from the United States,
contracts were made with our customers whereby they agreed to buy the
articles C. I. F. Manila. Naturally, all port charges are for their
account. As these charges were paid,by us merely for the convenience
of the customers, and were repaid by them, we believe that these
amounts should not be included in the selling prices. Had we let the
buyers take delivery of their purchases from the piers and they engaged
another firm to do the job of getting the goods for them, we should not
be liable for the additional tax now demanded by you. As the case now
stands, just because we happened to do a favor for our customers we
stand to lose and be penalized in accordance with your ruling.

We hereby reiterate our previous request to exclude the port charges in the computation of the sales tax payable by us.

“8. On January 29, 1947, defendant insisted in
collecting the sum of P3,809.58, plus the amount of P50 and surcharge
writing the following letter:

With further reference to your
pending internal revenue case, and in answer to your letter of
September 2, 1946, I have the honor to inform you that the correct
amount of port charges is P87,075.60 as previously communicated to you.
This discrepancy was a result of a clerical error by the investigating
agent.

Relative to the question raised in the third
paragraph of your letter of September 2, 1946, you are further advised
that, in the opinion of this office, the port charges and other
expenses incurred in connection with the importation and delivery of
merchandise sold to your customers are part of the gross selling price
subject to the sales tax. The word ‘price’ signifies the sum stipulated
as1 the equivalent of the thing sold and also every incident taken into
consideration for the fixing of the price, , put to the debit of the
vendee and agreed to by him. (Ynchausti & Co., vs. Cromwell, 20
Phil., 245). Inasmuch as you undertook the clearing of the goods from
the Bureau of Customs and delivered them to your customers and for
which services you changed your customers including port charges and
all other expenses, all said expenses are part of the gross selling
price.

In view of the foregoing, you are again requested
to pay the amount of P3,809.58 within five-(5) days from your receipt
of this letter, and to compromise your violation of the National
Internal Revenue Code mentioned in our letter to you of August 16,
1946, by the payment of the sum of P50.00 in addition to the tax and
surcharge due from you.

En apelacion, el Secretario de Hacienda desestimo la contention de
la demandante. Para evitar ulteriores raultas, ella pag6 en 22 de marzo
de 1947, el impuesto bajo el recibo No. J-37042, y en mayo del mismo
aflo presento su demanda pidiendo la devolution de la cantidad pagada.

La cuestion a resolver es si lo que la demandante llama “port
charges” cobrados por ella de sus parroquianos, constituyen parte del
precio de venta bruta. “Port charges” o gastos de puerto son las
cantidades que la demandante cobro de sus parroquianos por valor de los
sellos doeumentales quo se adhiricron a los conocimientos de embarque y
gastos de transportation desde el “pier” hasta su casa de las
mercancias vendidas a ellos.

La demandante contiende que los gastos de puerto no son parte del
precio de venta bruta de las mercancias, por la razon de que las vendio
bajo un contrato C. I. F. Manila; que el precio de las mismas, de
acuerdo con tal convenio, es una cantidad igual a su costo, seguro y
flete hasta el puerto de Manila,

En los contratos C. I. F. el comprador paga solamente el costo de
la mercaneia y los gastos de seguro y flete. (38 Jur. Fil., 639.)

Dichas letras signiflcan “cost, insurance and freight charges.” (55 C. J., 227.)

Esta clase de contrato se celebra generalmente entre el fabricante
y sus compradores directos. Es que quiere facilitar la venta de sus
productos, sin intervention de un comerciante revendedor. Pero un
comerciante que se dedica al negocio de compra y venta—importa efectos
y los revende—no ha de hacer esto a menos que quiera negociar sin
ganancia. El que negocia espera obtener un margen razonable de
beneficio.

Si el importador, demos por caso, revende un automovil a su
parroquiano bajo un contrato c. i. f.,

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¿que ganaria? Absolutamente
nada, a menos que aiiada al costo de adquisicion su ganancia razonable
mas los gastos de seguro y flete. El costo, en este caso, es el de
reventa. Si la demandante ha tenido semejante contrato son sus
parroquianos, no queda, sin embargo, librado de costear los gastos del
puerto, porque la importacion no termina sino “cuando los derechos que
gravan las mercaneias han sido satiafechos o asegurados en un puerto
habilitado y coneedido el permiso legal de salida, y en el caso de
estar las mercaneias exentas de derechos, cuando estas hayan salido
legalmente de la jurisdiction de la aduana.” (Go Cheng Tee contra
Meer, como Admor. de Eentas lnternas, 87 Phil., 18.) Corren a cuenta,
por tanto, del importador los gastos indispensables desde el “pier”
hasta la entrega de la mercancia, como los “port charges.”

En Gee Coal Company vs. Department of Finance, se declaro que el
flete es parte del “selling price”. Parte de la decision dice asi:

“Appellee conducts a retail coal business in
Chicago. It buys f.o.b. the mines and ships it by rail to its yard in
Chicago. It pays the mining company for the coal and the railroads
their freight charges. It then sells the coal to consumers.

* * * * * * *

“Appellee contends that under the terms of the act
it properly excluded from the amount of its gross receipts’, in
computing its tax, amount paid by customers to reimburse it for such
freight charges. If this contention is sound, the. ruling of the
superior court is correct. If, on the other hand, appellant’s
contention is correct that such .freight charges are a part of the sale
price of the coal, although made a separate item in billing customers,
that ruling was erroneous, and the judgment of the trial court should
be reversed.

* * * * * * *

“The question before,us is whether the cliarges
paid by appellee for freight on coal shipped from themine to its
Chicago yard constitute a part of the selling price to its customers.
The answer must be in the affirmative.” (102 A, L. E. 766)

Y en el asunto de State vs. Menefee Motor Co., se discutio la extension del “gross sales”. La decision dice en parte:

“Defendant is a retail dealer engaged in the sale of automobiles.

“Under section 8 of Act 205 of 1924 it is required of retail dealers
that they pay a license tax predicated upon annual gross sales.

* * * * * * *

“The agreed statement of fact on which this rule
was submitte shows: ‘That in selling cars to its customers, the
defendant adds a profit fixed by the manufacturer to the f.o.b. price,
and also divides the freight charged by the manufacturer and paid by
the defendant company so as to prorate it equally to each car and adds
said proration to the customer’s bill.’

“It is argued that
thus, in the case of each sale, the amount paid by the customer
includes freight money, in which defendant is in no way interested, but
which it merely collects from the customer to reimburse it for the
amount already remitted to the manufacturer.

“The contention
is ingenious, but, if sound, would enable all dealers, who sell in one
city goods manufactured in another, or who transport from one point in
one city to another point in tha same city goods for sale, to deduct
for license tax purposes the freight or transportation charges and thus
reduce the amount on which is based the license tax.

“Why
could not a grocer, who receives a carload of flour, apportion to each
barrel or to each sack of flour its. pro rata of the total freight, and
then, for the purpose of determining his gross sales for license tax
purposes, deduct the entire freight paid. Why could not every retail
dealer adopt the same method? “

“That defendant sets up on
its books a special account, in which it keeps a record, of the freight
paid and balances the amount paid to the manufacturer by the amounts
paid by the customers, is merely a convenient method of bookkeeping,
and cannot be permitted to interfere with the legal situation which
actually exists where a retailer sells to a customer an article for a
gross price, which gross price is made up of many component parts, such
as amount paid to manufacturer, pro rata of salary of clerks, pro rata
of rents, etc. Why should the retailer not deduct the salaries of his
clerks and the rent of his building; as well as the freight paid? All
go to make us the price which must be charged the purchaser.

“When the Legislature based license taxes due by retailers on gross
sales, it evidenced an intention to adopt, as the basis for the tax,
the total amount paid by the purchasers, without considering the
component parts making up the total sale price and without deducting
therefrom any of those items.” (139 Southern Reporter 61)

El articulo 186 del Codigo Nacional de Rentas Internas es del tenor siguiente:

“SEC. 186. Percentage tax on sales of other articles.—There, is levied, assessed, and collected once only on every original sale, * * * a tax equivalent to three and one-half per centum of the gross selling price or gross value in money of the articles so sold, * * *.”

La palabra “precio”—dijo este Tribunal en Ynchausti y Cia. contra
Cromwell—significa la cantidad estipulada como equivalente de la cosa
vendida y tambien cualquiera circunstaneia accidental considerada en
relaeion con la fljacion del precio cargado al comprador y aceptado por
el (20 Jur. Fil., 353).

“Price. The sum stipulated as the equivalent of the
thing sold, and also every incident taken into consideration for the
fixing of the price to the debit of the vendee, and agreed to by him.”
(Corpus Juris, Vol. 49, p. 1345).

Al revender sus jnercancias importadas el comerciante, cobra una
cantidad que le restituye el costo, los gastos de seguro y flete, otros
gastos incidentales necesarios como los “port charges”, la parte
alfcuota en los jfastos del establecimiento, sueldo del personal,
alumbrado y ventilacion, ganancia razonable, impuesto, etc. Tbdo eso es
el precio de venta bruta, “gross selling price”.

Los :’port charges” o gastoa de puerto estan sujetos, por tanto, al
impuesto previsto por el Artieulo 186 del Codigo Nacional de Rentas
Internas, como parte del precio.

Se conflrma la decision. apelada con costas contra la apelante.

Paras, Pres., Feria, Bengzon, Padilla, Tuason y Jugo, MM., estan eonformes.

REYES, J., 

I concur. But in doing so I must not be understood as
subscribing to the theory apparently entertained by the majority that a
“C. I. F.” sale is, as a general rule, made by a manufacturer and never
by an importer who is on business for profit—a notion born of. the
mistaken belief that the letter “C” in the abbreviated expression
refers to cost of manufacturer. I may add that the law involved in this
case assesses the sales tax on the basis of “the gross selling price or
gross value in money of the articles * * * Sold.” And it is obvious
that the gross value in money of the imported articles sold here would
include the cost of importation of which insurance, freight and port
charges form an important item.