Manila: The Court of Tax Appeals (CTA) has granted a petition filed by the Bangko Sentral ng Pilipinas (BSP) seeking a refund for documentary stamp taxes (DST) amounting to PHP24,684, which it paid in connection with the foreclosure of mortgaged properties of the Rural Bank of San Miguel.

According to Philippines News Agency, the CTA Special First Division, in a nine-page decision made public on Friday, explained that under its charter, BSP is authorized to grant emergency loans and advances to banks secured by real estate mortgage. The court further clarified that if BSP is deemed to be the highest bidder in foreclosure sales of unpaid loans, it may acquire real properties as part of its business operations, which qualifies for a DST exemption.

The court noted that the consolidation of title of real properties acquired by BSP is an intrinsic part of its business conduct. The assessment and collection of the DST were deemed erroneous, given the explicit legal language that exempts all contracts, deeds, documents, and transactions related to BSP's business from DST.

The BSP had foreclosed on the mortgaged properties of the Rural Bank of San Miguel after the bank defaulted on its emergency loan with the central bank. Although BSP paid the capital gains tax, the Bureau of Internal Revenue assessed an additional PHP24,684 as DST. BSP paid this amount under protest, which led to the filing of the suit.