G.R. No. 230112 - GLOBAL MEDICAL CENTER OF LAGUNA, INC., VS. ROSS SYSTEMS INTERNATIONAL, INC..[G.R. No. 230119, May 11, 2021]ROSS SYSTEMS INTERNATIONAL, INC., VS. GLOBAL MEDICAL CENTER OF LAGUNA, INC..D E C I S I O N - Supreme Court E-Library

Ruling

WHEREFORE , the appeal is PARTIALLY GRANTED . The Final Award dated [May 10, 2016] issued by the Construction Industry Arbitration Commission (CIAC) in CIAC Case No. 20-2015 is AFFIRMED with MODIFICATION in that [RSII] is still entitled to the payment of the amount of [P]1,088,214.83, which represents the balance after deducting from [P]8,131,474.83 (at 78.84% work accomplishment) the 2% CWT on Progress Billing[s] Nos. 1 to 15 in the amount of [P]3,941,769.00 and the payment already made to RSII in the amount of [P]3,101,491.00. [41] In affirming the CIAC's award, the CA ruled that the amount of P3,815,996.50, equivalent to the 2% CWT on Progress Billings Nos. 1 to 14 was already remitted to the BIR, [42] and it would be unjust to require GMCLI, as the withholding agent, to effectively shoulder the amount of tax which RSII had the legal duty to pay. [43] With respect to granting RSII's entitlement to P1,088,214.83, the CA reasoned thus: [RSII] is still, however, entitled to collect the amount of P1,088,214.83. To recall, [GMCLI] initially evaluated [RSII]'s accomplishment at 78.84% and computed the amount due to [RSII] at [P]7,043,260.00. Subtracted from this amount was the 2% CWT on the amount of [P]197,088,497.01, equivalent to [P]3,941,769,00, which [GMCLI] already remitted to the BIR. Thus, [GMCLI] paid [RSII] the amount of [P]3,101,491.00. [RSII] accepted [GMCLI]'s evaluation of its work accomplishment at 78.84% but argued that the amount due for Progress Billing No. 15 was [P]8,131,474.83, and not [P]7,043,260.00, and computed the amount it is still entitled to collect from [GMCLI] as follows: Submitted billing at 78.84% Accomplishment P8,131,474,83. Less: 2% withholding tax for Progressive Billing No. 15 P145,204.91 P7,986,269.92 Less: Payment made to [RSII] P3,101,491.00 Amount due / collectible P4,884,778.92 The CIAC ruled that there is no issue on the [RSII]'s computation since [GMCLI] did not contest the same. This said, [RSII] is still entitled to the amount of P1,088,214.83, which is computed as follows: Submitted billing at 78.84% Accomplishment P8,131,474,830 Less: Payment made to [RSII] P3,101,491.00 2% withholding tax for Progressive Billing[s] Nos. 1 to 15 P3,941,769.00 Amount due / collectible P1,088,214.83 [44] Both RSII's Motion for Partial Reconsideration and GMCLI's Motion for Reconsideration were denied through the CA's Resolution [45] dated February 21, 2017. Hence the separate, now consolidated, petitions filed by GMCLI and RSII before the Court. On the one hand, GMCLI prays that the assailed Decision be partially modified and the CIAC arbitral award be reinstated in toto . [46] On the other, RSII claims that it is entitled not only to the balance of P1,088,214.83, but to the amount of P3,815,996.50, equivalent to the allegedly improperly withheld 2% CWT, or that, in the alternative, GMCLI should be ordered to issue BIR Form 2307 (Certificate of Creditable Tax Withheld at Source) in favor of RSII. [47] Issues The parties