The Supreme Court (SC) has invalidated a provision in the implementing rules and regulations (IRR) of Republic Act 9994 or the Expanded Senior Citizens Act of 2020 formulated by the Department of Social Welfare and Development (DSWD) which exempts non-profit, stock golf and country clubs from giving 20 percent senior citizens discount.
In a 13-page decision written by Associate Justice Jose Midas Marquez, the SC’s First Division clarified that only the sale of goods and services pertaining to the use of the clubs’ facilities and equipment is subject to the 20 percent senior citizen discount as mandated under Section 4 (a)(7) of R.A. 9994.
These include the use of golf carts and locker rentals.
The said provision specifically states that “senior citizens shall be entitled to the grant of 20 percent discount and exemption from the value-added tax (VAT), if application, on the sale of the following goods and services from all establishments, for the exclusive use and enjoyment or availment of senior citizens.”
According to the high court, Section 4(a)(7) does not apply to the payment of membership dues.
It pointed out that membership fees or dues do not involve the sale of a good or service.
“Such [membership] fees are paid for the privilege of membership, and not for the purchase of a good or service,” the SC said.
It also pointed out that Section 4(a)(7) does not give the DSWD the authority to come out with exceptions to the 20 percent senior citizens discount as what it did when it issued the assailed paragraph 2, Section 4, Article 7, Rule IV of R.A. 9994’s IRR.
The DSWD earlier stated that “non-profit, stock golf and country clubs which are not open to the general public, and are private and for exclusive membership only as duly proven by their official Securities and Exchange (SEC) registration, are not mandated to give the 20 percent senior citizens discount.
“While we agree with the DSWD that there are ‘matters which are entrusted to the sound discretion of the government agency entrusted with the regulation of activities coming under the special and technical training and knowledge of such agency,’ and that ‘the exercise of administrative discretion is a policy decision and a matter that is best discharged by the government agency concerned and not by the courts,’ such discretion may only be exercised within the parameters prescribed by the delegating law, and RA 9994 does not contemplate the creation of blanket exemptions to the 20% senior citizen discount by mere administrative fiat,” the SC said.
The Court ruled that the DSWD exceeded its delegated authority and the assailed IRR provision is an invalid administrative issuance.
“Sec. 4(a)(7), RA 9994, refers to recreation centers and does not provide an exemption for non-profit, stock golf and country clubs nor does the law, otherwise, authorize the DSWD or any other administrative agency to create such an exemption,” it said.
The decision arose from a complaint filed by Carlos Santos, Jr. before the Regional Trial Court (RTC) against the DSWD and Manila Southwoods.
Santos, a member of Manila Southwoods, asked the RTC to invalidate Rule IV, Article 7, Section 4 (2) of the Implementing Rules and Regulations (IRR) of Republic Act No. (RA) 9994 or the Expanded Senior Citizens Act of 2010.
Santos claims that this provision in the IRR is invalid for being contrary to the plain language of Section 4(a)(7) of R.A. 9994, which includes services in hotels and similar lodging establishments, restaurants, and recreation centers among the services covered by the 20 percent senior citizen discount.
The RTC ruled in favor of Santos, declaring the assailed IRR provision invalid and ordering Manila Southwoods to grant Santos the senior citizen discount for the exclusive use, utilization, and enjoyment or availment of the services of the club’s recreation centers.
DSWD and Manila Southwoods were thus prompted to go to the SC and seek the reversal of the RTC Decision.