CIR v SM Prime Holdings, Inc.; G.R. No. 183505; 26 Feb 2010; 613 SCRA 774
FACTS: Respondents SM Prime Holdings, Inc. (SM Prime) and First Asia Realty Development Corporation (First Asia) are domestic corporations engaged in the business of operating cinema houses, among others. On various years, the BIR issued a Preliminary Assessment Notice (PAN) for deficiency VAT on cinema ticket sales against SM Prime (for taxable year 2000) and First Asia (for taxable years 1999, 2000, 2002 and 2003). ISSUE(S): Whether or not the gross receipts derived by operators or proprietors of cinema/theater houses from admission tickets are subject to VAT. HELD: NO. When the VAT law was implemented, it exempted persons subject to…