The senior citizen discount is indeed such joy and invaluable assistance to our senior citizens. Every time I dine out with my family, the senior citizens readily bring out their cards when we ask for the bill. And with that, the magic 20 percent discount appears on the bill for the portion they ordered.

Whenever I exit the car park of a mall and the car paying in front of me takes some time because the driver is applying for his senior citizen discount, I smile.

I see a benefit our government has granted which instantly translates to good savings for our elderly. As they say, a peso saved is a peso earned.

And this undoubtedly is a huge help to our seniors especially since most of them are already retired. But we have to be mindful that this discount does not apply to everything. There are certain cases where it may not be applicable.

In one case, a member of an exclusive golf club asked that the 20 percent senior citizen discount be applied to his association dues, locker fees, and the like.

While he won in the trial court, the Supreme Court modified the decision in this way.

“The 20 percent senior citizen discount under Sec. 4(a), RA 9994, expressly applies to ‘the sale of the [enumerated] goods and services.’ The plain language of the law thus requires the sale of a good or service for the 20 percent discount to apply. Absent the sale of a good or a service, the 20 percent senior citizen discount does not apply.

To require a ‘sale of service’ before the 20 percent senior citizen discount may apply is simply not ‘semantic quibbling.’ In Association of Non-Profit Clubs, Inc. v. Bureau of Internal Revenue, the Court held:

x x x membership fees, assessment dues, and the like are not subject to VAT because in collecting such fees, the club is not selling its service to the members. Conversely, the members are not buying services from the club when dues are paid; hence, there is no economic or commercial activity to speak of as these dues are devoted to the operations/maintenance of the facilities of the organization. As such, there could be no “sale, barter or exchange of goods or properties, or sale of a service” to speak of, which would then be subject to [value-added tax (VAT)] under the 1997 NIRC. (Emphasis and underscoring supplied)

The Court reiterated this ruling in Commissioner of Internal Revenue v. Federation of Golf Clubs of the Philippines, Inc., where it held:

As to the value-added tax or VAT, the Court interpreted that RMC No. 35-2012 erroneously included the gross receipts of recreational clubs on membership fees, assessment dues, and the like as subject to VAT because Section 105 of the 1997 NIRC specified the taxability of only those which deal with the “sale, barter or exchange of goods or properties, or sale of service.”

In collecting such fees from their members, recreational clubs are not selling any kind of service, in the same way that the members are not procuring service from them.

Thus, “there could be no sale, barter or exchange of goods or properties, or sale of a service to speak of, which would then be subject to VAT under the 1997 NIRC.” (Emphasis supplied)