Value Added Tax Cases

Cargill Philippines, Inc. v. CIR, G.R. No. 203774, March 11, 2015

Facts: A VAT-registered domestic corporation filed two administrative and judicial claims for refund of its unutilized input VAT from its export
sales. These claims were filed on different dates, to wit:
1. For the first claim, the administrative claim was filed on June 27, 2003 while the judicial claim was filed on June 30, 2003;
and
2. For the second claim, both administrative and judicial claims were filed on May 31, 2005.

In the judicial claims, the CIR asked that the claims be denied because the judicial claims were premature due to non-exhaustion of
administrative remedies.

Issue: Whether or not the judicial claims are premature?

Ruling: The first claim is premature while the second claim is not.

The observance of the 120-day period is a mandatory and jurisdictional requisite to the filing of a judicial claim for refund before the CTA.
As such, its non-observance would warrant the dismissal of the judicial claim for lack of jurisdiction. It was, delineated in Aichi that the two
(2)-year prescriptive period would only apply to administrative claims, and not to judicial claims. Accordingly, once the adminis trative
claim is filed within the two (2)-year prescriptive period, the taxpayer-claimant must wait for the lapse of the 120-day period and,
thereafter, he has a 30-day period within which to file his judicial claim before the CTA, even if said 120-day and 30-day periods would
exceed the aforementioned two (2)-year prescriptive period.

Nevertheless, there is a recognized exception to the mandatory and jurisdictional nature of the 120-day period. During the period
December 10, 2003 (when BIR Ruling No. DA-489-03 was issued) to October 6, 2010 (when the Aichi case was promulgated), taxpayers-
claimants need not observe the 120-day period before it could file a judicial claim for refund of excess input VAT before the CTA; but
before and after said window period, the mandatory and jurisdictional nature of the 120-day period remained in force.

Since the first judicial claim was filed before the exemption window period, it is prematurely filed. And since the second ju dicial claim was
filed within the exemption window period, it is not prematurely filed.

Nippon Express (Philippines) Corp. v. CIR, G.R. No. 185666, February 04, 2015

Facts:
Petitioner paid input taxes amounting to P31,846,253.57 and apportioning this amount with its total sales in accordance with Section 112 of
the 1997 Tax Code, as amended; the amount of total sales attributable to zero-rated sales would be P24,826,667.61. Under the premise that
it is entitled to a refund of the amount of P24,826,667.61, petitioner filed four separate applications for tax credit/refund with the One-Stop
Shop Inter-Agency Tax Credit and Duty Drawback Center of the Department of Finance (OSSAC-DOF) on September 24, 2001.
Receiving no resolution from OSSAC-DOF, petitioner filed the instant petition for review on April 24, 2002 pursuant to Section 112 in
relation to Section 229 of the 1997Tax Code, as amended.

Issue: Whether or not the CTA properly acquired jurisdiction over petitioner's claim, taking into consideration its timeliness.

Held: No. A taxpayer-claimant only had a limited period of thirty (30) days from the expiration of the one hundred twenty (120)-day period
of inaction of the CIR to file its judicial claim with the CTA, with the exception of claims made during the effectivity of B IR Ruling No. DA-489-
03 from 10 December 2003 to 5 October 2010. Failure to do so, the judicial claim shall prescribe or be considered as filed out of time.

Since petitioner's judicial claim for the aforementioned quarters for taxable year 2000 was filed before the CTA only on 24 April 2002, which
was way beyond the mandatory 120+30 days to seek judicial recourse, such non-compliance with the mandatory period of 30 days is fatal
to its refund claim on the ground of prescription. Upon the filing of the claim on 24 September 2001, the last day of the 120-day period is 22
January 2002. Thus, the last day of the 30-day period to judicially appeal said inaction is 21 February 2002.

Consequently, the CTA had no jurisdiction over the instant claim of petitioner as the petition was belatedly filed. If the co urt has no
jurisdiction over the nature of an action, its only jurisdiction is to dismiss the case. The court could not decide the case on the merits.

Rohm Apollo Semi-Conductor Philippines v. CIR, G.R. No. 168950, January 14, 2015

FACTS:
Rohm Apollo is a domestic corporation, registered with the SEC and the PEZA. It is also registered with the Bureau of Internal Revenue (BIR)
as a value-added taxpayer.
Sometime in June 2000, prior to the commencement of its operations on 1 September 2001, Rohm Apollo engaged the services of Shimizu
Contractors for the construction of a factory and made initial payments on July and August of the same year. Rohm Apollo treated the
payments as capital goods purchases and thus filed with the BIR an administrative claim for the refund or credit of accumulated unutilized
creditable input taxes on 11 December 2000. As the close of the taxable quarter when the purchases were made was 30 September 2000,
the administrative claim was filed well within the two-year prescriptive period.

(Section 112 (B), in relation to Section 112 (A) of the 1997 Tax Code sets a time frame for the filing of the application at two years
from the close of the taxable quarter when the purchase was made.)

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Pursuant to Section 112 (D) of the 1997 Tax Code, the Commissioner of Internal Revenue had a period of 120 days from the filing of the
application for a refund or credit on 11 December 2000, or until 10 April 2001, to act on the claim. The waiting period, however, lapsed
without any action by the CIR on the claim.
Instead of filing a judicial claim within 30 days from the lapse of the 120-day period on 10 April, or until 10 May 2001, Rohm Apollo filed a
Petition for Review with the CTA on 11 September 2002. The CTA division and en banc denied the petition.

ISSUE: WON the Petition was filed on time?

RULING:
The taxpayer's judicial claim for a refund/tax credit was filed beyond the prescriptive period.
Section 112 (D) of the 1997 Tax Code states the time requirements for filing a judicial claim for the refund or tax credit of input VAT. It speaks
of two periods: the period of 120 days, which serves as a waiting period to give time for the CIR to act on the administrative claim for a
refund or credit; and the period of 30 days, which refers to the period for filing a judicial claim with the CTA.

The landmark case of Commissioner of Internal Revenue v. San Roque Power Corporation 21 has interpreted Section 112 (D). The Court
held that the taxpayer can file an appeal in one of two ways: (1) file the judicial claim within 30 days after the Commissioner denies the
claim within the 120-day waiting period, or (2) file the judicial claim within 30 days from the expiration of the 120-day period if the
Commissioner does not act within that period.

The 30-day period was adopted precisely to do away with the old rule, so that under the VAT System the taxpayer will always have 30 days
to file the judicial claim even if the Commissioner acts only on the 120th day, or does not act at all during the 120-day period. With the 30-
day period always available to the taxpayer, the taxpayer can no longer file a judicial claim for refund or credit of input V AT without
waiting for the Commissioner to decide until the expiration of the 120-day period.

As a general rule, the 30-day period to appeal is both mandatory and jurisdictional. The only exception to the general rule is when BIR
Ruling No. DA-489-03 was still in force, that is, between 10 December 2003 and 5 October 2010, The BIR Ruling excused premature filing,
declaring that the taxpayer-claimant need not wait for the lapse of the 120-day period before it could seek judicial relief with the CTA by
way of Petition for Review.

A final note, the taxpayers are reminded that that when the 120-day period lapses and there is inaction on the part of the CIR, they must
no longer wait for it to come up with a decision thereafter. The CIR's inaction is the decision itself. It is already a denia l of the refund claim.
Thus, the taxpayer must file an appeal within 30 days from the lapse of the 120-day waiting period.

Fort Bonifacio Development Corporation v. CIR, et. al.

Consolidated cases of G.R. No. 175707, G.R. NO. 18003, G.R. No. 181092, November 19, 2014

FACTS:
The petition in G.R. No. 180035 "seeks to correct the unauthorized limitation of the term 'real properties' to 'improvements thereon' by
Revenue Regulations 7-95 and the error of the Court of Tax Appeals and Court of Appeals in sustaining the aforesaid Regulations."
The parties entered into a Stipulation of Facts, Documents, and Issue 14 before the CTA for each case. It was established before the CTA
that petitioner is engaged in the development and sale of real property. It is the owner of, and is developing and selling, parcels of land
within a "newtown" development area known as the Fort Bonifacio Global City.

In May 1996, petitioner commenced developing the Global City, and since October 1996, had been selling lots to interested buyers. 18 At
the time of acquisition, value-added tax (VAT) was not yet imposed on the sale of real properties. Republic Act No. 7716 (the Expanded
Value-Added Tax [E-VAT] Law), 19 which took effect on January 1, 1996, restructured the VAT system by further amending pertinent
provisions of the National Internal Revenue Code (NIRC). Section 100 of the old NIRC was so amended by including "real properties" in the
definition of the term "goods or properties," thereby subjecting the sale of "real properties" to VAT.

While prior to Republic Act No. 7716, real estate transactions were not subject to VAT, they became subject to VAT upon the effectivity of
said law. Thus, the sale of the parcels of land by petitioner became subject to a 10% VAT, and this was later increased to 12%, pursuant
to Republic Act No. 9337. 20 Petitioner afterwards became a VAT-registered taxpayer.

On the basis of Section 105 of the NIRC, 22 petitioner claims a transitional or presumptive input tax credit of 8% to the total value of the real
properties listed in its inventory. 23

ISSUES: The main issue before us now is whether or not petitioner is entitled to a refund.

HELD: YES. Thus, we find that petitioner is entitled to a refund.

To resolve the issue stated above, it is also necessary to determine:

1. Whether the transitional/presumptive input tax credit under Section 105 of the NIRC may be claimed only on the "improvements"
on real properties;

On its face, there is nothing in Section 105 of the Old NIRC that prohibits the inclusion of real properties, together with the improvements
thereon, in the beginning inventory of goods, materials and supplies, based on which inventory the transitional input tax credit is
computed.

Rep. Act No. 7716, which significantly is also known as the Expanded Value-Added Tax (EVAT) law, expanded the coverage of the VAT by
amending Section 100 of the Old NIRC in several respects, some of which we will enumerate. First, it made every sale, barter or exchange
of "goods or properties" subject to VAT. Second, it generally defined "goods or properties" as "all tangible and intangible o bjects which are
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capable of pecuniary estimation." Third, it included a non-exclusive enumeration of various objects that fall under the class "goods or
properties" subject to VAT, including "[r]eal properties held primarily for sale to customers or held for lease in the ordina ry course of trade or
business."

Rep. Act No. 7716 clarifies that it is the real properties "held primarily for sale to customers or held for lease in the ordinary course of trade or
business" that are subject to the VAT, and not when the real estate transactions are engaged in by persons who do not sell or lease
properties in the ordinary course of trade or business. It is clear that those regularly engaged in the real estate business are accor ded the
same treatment as the merchants of other goods or properties available in the market. In the same way that a milliner consi ders hats as his
goods and a rancher considers cattle as his goods, a real estate dealer holds real property, whether or not it contains impro vements, as his
goods.

By limiting the definition of goods to "improvements" in Section 4.105-1, the BIR not only contravened the definition of "goods" as provided in
the Old NIRC, but also the definition which the same revenue regulation itself has provided.

2. Whether there must have been previous payment of sales tax or value-added tax by petitioner on its land before it may claim the
input tax credit granted by Section 105 of the NIRC;

If indeed the transitional input tax credit is integrally related to previously paid sales taxes, the purported causal link b etween those two
would have been nonetheless extinguished long ago. Yet Congress has reenacted the transitional input tax credit several times; that fact
simply belies the absence of any relationship between such tax credit and the long-abolished sales taxes. Obviously then, the purpose
behind the transitional input tax credit is not confined to the transition from sales tax to VAT.

Section 105 states that the transitional input tax credits become available either to (1) a person who becomes liable to VAT; or (2) any
person who elects to be VAT-registered. The clear language of the law entitles new trades or businesses to avail of the tax credit once they
become VAT-registered. The transitional input tax credit, whether under the Old NIRC or the New NIRC, may be claimed by a newly-VAT
registered person such as when a business as it commences operations.

It is apparent that the transitional input tax credit operates to benefit newly VAT-registered persons, whether or not they previously paid
taxes in the acquisition of their beginning inventory of foods, materials and supplies. During that period of transition from non-VAT to VAT
status, the transitional input tax credit serves to alleviate the impact of the VAT on the taxpayer. At the very beginning, the VAT-registered
taxpayer is obliged to remit a significant portion of the income it derived from its sales as output VAT. The transitional input tax credit
mitigates this initial diminution of the taxpayer's income by affording the opportunity to offset the losses incurred through the remittance of
the output VAT at a stage when the person is yet unable to credit input VAT payments.

The Court has thus categorically ruled that prior payment of taxes is not required for a taxpayer to avail of the 8% transiti onal input tax
credit provided in Section 105 of the old NIRC and that petitioner is entitled to it, despite the fact that petitioner acquired the Global City
property under a tax-free transaction.

To require prior payment of taxes . . . is not only tantamount to judicial legislation but would also render nugatory the provision in Section
105 of the old NIRC that the transitional input tax credit shall be "8% of the value of [the beginning] inventory or the actual [VAT] paid on
such goods, materials and supplies, whichever is higher" because the actual VAT (now 12%) paid on the goods, materials, and supplies
would always be higher than the 8% (now 2%) of the beginning inventory which, following the view of Justice Carpio, would hav e to
exclude all goods, materials, and supplies where no taxes were paid. Clearly, limiting the value of the beginning inventory only to goods,
materials, and supplies, where prior taxes were paid, was not the intention of the law. Otherwise, it would have specifically stated that the
beginning inventory excludes goods, materials, and supplies where no taxes were paid.

CIR vs. Team Sual Corporation (Formerly Mirant Sual Corporation), G.R. No. 194105. February 5, 2014

Facts:
Team Sual Corporation (TSC), a VAT-registered corporation, is principally engaged in the business of power generation and the subsequent
sale thereof solely to National Power Corporation (NPC). The Commissioner of Internal Revenue (CIR) granted TSC's application for zero-
rating arising from its sale of power generation services to NPC for the taxable year 2000. TSC filed its VAT returns for the first, second, third,
and fourth quarters of such year.

On March 11, 2002, TSC filed with the BIR an administrative claim for refund, claiming that it is entitled to the unutilized input VAT in the
amount of more than P179m arising from its zero-rated sales to NPC for the taxable year 2000. On April 1, 2002, without awaiting the CIR's
resolution of its administrative claim for refund/tax credit, TSC filed a petition for review with the CTA seeking the refund or the issuance of a
tax credit certificate for the amount stated.

Issue: Should TSCs claim for tax credit/refund be granted.

Held: No. The claim should not be granted for failure to comply with the statutory and administrative procedures in claiming for ta x
credit/refund.

Rationale
Section 112 of the NIRC provides for the rules to be followed in claiming a refund/tax credit of unutilized input VAT, thus:

Any VAT-registered person, whose sales are zero-rated xxx within two years after the close of the taxable quarter when
the sales were made, apply for the issuance of a tax credit certificate or refund of creditable input tax due or paid
attributable to such sales xxx.

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 Xxx the Commissioner shall grant a refund or issue the tax credit certificate for creditable input taxes within one
hundred twenty days from the date of submission of complete documents in support of the application filed xxx. In
case of full or partial denial of the claim for tax refund or tax credit, or the failure on the part of the Commissioner to
act on the application within the period prescribed above, the taxpayer affected may , within thirty days from the
receipt of the decision denying the claim or after the expiration of the one hundred twenty -day period, appeal the
decision or the unacted claim with the Court of Tax Appeals.

A taxpayer-claimant may only file a petition for review with the CTA within 30 days from either: (1) the receipt of the decision of the CIR
denying, in full or in part, the claim for refund/tax credit; or (2) the lapse of the 120-day period given to the CIR to decide the claim for
refund/tax credit. The 120-day period that is given to the CIR within which to decide claims for refund/tax credit of unutilized input VAT
is mandatory and jurisdictional. The taxpayer-claimant must wait for the 120-day period to lapse, should there be no decision fully or
partially denying the claim, before a petition for review may be filed with the CTA. Otherwise, the petition would be rendered premature
and without a cause of action. Consequently, the CTA does not have the jurisdiction to take cognizance of a petition for review filed by the
taxpayer-claimant should there be no decision by the CIR on the claim for refund/tax credit or the 120-day period had not yet lapsed.

That the two-year prescriptive period within which to file a claim for refund/tax credit of unutilized input VAT is about to lapse is
inconsequential and would not justify the immediate filing of a petition for review with the CTA sans compliance with the 120-day
mandatory period. The 120-day mandatory period may extend beyond the two-year prescriptive period for filing a claim for refund/tax
credit. Consequently, the 30-day period given to the taxpayer-claimant likewise need not fall under the two-year prescriptive period. What
matters is that the administrative claim for refund/tax credit of unutilized input VAT is filed with the BIR within the two -year prescriptive
period.

TSC filed its administrative claim for refund/tax credit with the BIR on March 11, 2002, which is still w ithin the two-year prescriptive period.
However, without waiting for the CIR decision or the lapse of the 120-day period from the time it submitted its complete documents in
support of its claim, TSC filed a petition for review with the CTA on April 1, 2002 a mere 21 days after it filed its administrative claim with
the BIR. Clearly, TSC's petition for review with the CTA was prematurely filed; the CTA had no jurisdiction to take cognizanc e of TSC's petition
since there was no decision as yet by the CIR denying TSC's claim, fully or partially, and the 120-day period had not yet lapsed.

TSCs argument:
Nevertheless, TSC submits that the requirement to exhaust the 120-day period prior to filing the judicial claim with the CTA is a species of the
doctrine of exhaustion of administrative remedies; that the non-observance of the doctrine merely results in lack of cause of action, which
ground may be waived for failure to timely invoke the same. TSC claims that the issue of its non-compliance with the 120-day period, as a
ground to deny its claim, was already waived since the CIR did not raise it in the proceedings before the CTA.

SC held that this argument is untenable. A petition for review that is filed with the CTA without waiting for the 120-day mandatory
period renders the same void. The Court then pointed out that a person committing a void act cannot claim or acquire any righ t
from such void act.

TSCs argument:
In insisting that the 120-day period is not mandatory, TSC further points out that the BIR, under BIR Ruling No. DA-489-03 and Revenue
Memorandum Circular No. 49-03, had already laid down the rule that the taxpayer-claimant need not wait for the lapse of the 120-day
period before it could seek judicial relief with the CTA. As such, the TSC clai ms, its failure to comply with the 120-day mandatory period is
not cause to deny its judicial claim for refund/tax credit.

SC held that this assertion is also untenable. As to RMC No. 49-03, nowhere in the RMS was it stated that a taxpayer-claimant need
not wait for the lapse of the 120-day mandatory period before it can file its judicial claim with the CTA. RMC No. 49-03 only
authorized the BIR to continue the processing of a claim for refund/tax credit notwithstanding that the same had been appeale d
to the CTA. As to BIR Ruling No. DA-489-03, it states that the "taxpayer-claimant need not wait for the lapse of the 120-day period
before it could seek judicial relief with the CTA by way of Petition for Review. However, taxpayers can only rely on BIR Ruling
No. DA-489-03 from the time of its issuance on December 10, 2003 up to its reversal by this Court in Aichi case on October 6, 2010,
where it was held that the 120-day period is mandatory and jurisdictional.

TSC filed its judicial claim for refund/tax credit of its unutilized input VAT with the CTA on April 1, 2002 more than a year before
the issuance of BIR Ruling No. DA-489-03. Accordingly, TSC cannot benefit from the declaration laid down in such BIR Ruling.

CIR v. Toledo, Power, Inc., G.R. No. 183880, January 20, 2014

Facts:
- Toledo Power, Inc. (TPI) is engaged in the business of power generation and sale to the National Power Corp., Cebu Electric
Cooperative (CEBECO), Atlas Mining, etc. It is registered with the BIR as a VAT taxpayer.
- In this case, TPI filed two Quarterly VAT returns. The first for the 3rd Quarter of 2001 and the second, for the 4th Quarter of 2001.
- In both VAT returns, indicated therein are Excess input tax and Overpayment because TPI incurred and accumulated input VAT
from its domestic purchase of goods and services, which are attributable to its zero-rated sales of power generation services to
NPC, CEBECO, Atlas, etc. in the amount of P9,129,370.27. Said excess and unutilized input VAT was allegedly not utilized agai nst
any output VAT liability in the subsequent quarters nor carried over to the succeeding taxable quarters.
- On September 30, 20013, TPI filed an administrative claim for refund or unutilized input VAT for the 3 rd and 4th quarters of 2001.
- CIR did not ruled on the administrative claim.
- On October 24, 2003, TPI filed a Petition for Review for refund or issuance of a tax credit certificate in the amount of P5,9 09,588.96
for the 3rd Quarter of 2001 before the CTA.
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 - On January 22, 2004, TPI filed another Petition for Review for refund or issuance of a tax credit certificate in the amount of
P3,219,781.31 for the 4th Quarter of 2001 before the CTA.
- Both cases were consolidated and the CTA First Division partially granted TPI s refund claim or issuance of tax credit certi ficate
(TCC) up to P8,553,050.44 instead of the amount it prayed for P9,129,370.27.
- The CTA En Banc affirmed the First Divisions decision with the modification that TPI is entitled to a refund or issuance of a TCC in
the amount of P8,088,151.07.
-
Issues and Ruling of the SC:

1. Whether TPI complied with the 120+30 day rule under Sec. 112 (c) of the Tax Code.

Sec. 112 (a) of the Tax Code states that an administrative claim must be filed with the CIR within two (2) years after the close of
the taxable quarter when the zero-rated or effectively zero-rated sales were made.
Sec. 112 (c) of the Tax Code provides that the Commissioner shall grant a tax refund or issue the TCC within 120 days from th e
date of submission of complete documents in support of its application for refund.
If the commissioner
o Denies the claim for tax refund/credit fully OR
o Denies the claim for tax refund/credit partially OR
o Fails to act on the application within the 120 days
THEN the applicant can appeal the decision or the unacted claim with the Court of Tax Appeals on the following periods:
o For adverse decision appeal to CTA within 30 days from receipt of the decision
o For unacted claims after the 120-day period.
As decided in the CIR v. San Roque Power Corp. case, the SC confirmed the mandatory and jurisdictional nature of the 120+30
day rule. Filing a petition with the CTA without waiting for the 120-day mandatory and jurisdicitional period, will result in dismissal of
the petition for lack of jurisdiction.
In the same case of San Roque, the SC stated that the 120+30 mandatory and jurisdictional periods are not necessary when the
judicial claims are filed between December 10, 2003 and October 6, 2010.
o Note: Dec. 10, 2002 is the date of issuance of BIR Ruling No. DA-489-03 which states that taxpayer need not wait for the
120-day period to seek judicial relief)
o October 6, 2010 is the promulgation of the Aichi doctrine.
As applied in this case:
o TPI filed its administrative claim for refund of its unutilized input VAT on September 30, 2003. The CIR had 120 days or until
January 28, 2004 to decide TPIs claim. TPI could only file judicial claims after January 28, 2004.
o But, TPI filed judicial claims before the CTA for its third quarter claim on October 24, 2003 and the fourth quarter claim on
January 22, 2004. (Both filed before the lapse of the 120-day period.)
o The claim for refund on the third quarter is premature and must be dismissed.
o However, the claim for refund on the fourth quarter which was filed on January 22, 2004 falls within the ex ceptions in the
San Roque case.

2. Whether TPI sufficiently complied with the invoicing requirements under the Tax Code.

- Revenue Regulation No. 7-95 states that receipts or sales/commercial invoinces must show, among others, the word zero-rated
imprinted on the invoice covering zero-rated sales.
- SC said that the stamped words zero-rated on TPIs VAT invoices or official receipts support TPIs refund claim. The fact that it
was merely stamped and not printed is not important. It is sufficient compliance because is already distinguishes sales subject to
10% VAT from those sales subject to 0% vat and exempt sales. This will already enable the BIR to properly implement and enfor ce
the other VAT provisions of the code.

Dispositive:
- The CIR is ordered to refund or issue a TCC in favor of TPI only for the fourth quarter of 2001.

CBK Power Company Limited vs. CIR, G.R. No. 198729-30, January 15, 2014

Rule of law: The filing for refund or tax credit certificate must be made within two (2) years after the close of the taxable quarter when the
sales were made. The Commissioner of BIR must rule on the application for refund or tax credit certificate within 120 days af ter the filing of
the claim. In case of denial, the taxpayer should file petition for review wi th the court of tax appeals within 30 days from receipt of the
adverse decision or within the same period after the lapse of 120 days period in case of inaction of the CIR.

Facts:
Petitioner is engaged, among others, in the operation, maintenance, and management of the Kalayaan II pumped-storage hydroelectric
power plant, the new Caliraya Spillway, Caliraya, Botocan; and the Kalayaan I hydroelectric power plants and their related fa cilities
located in the Province of Laguna.6

On 29 December 2004, petitioner filed an Application for VAT Zero-Rate with the Bureau of Internal Revenue (BIR) in accordance with
Section 108(B)(3) of the National Internal Revenue Code (NIRC) of 1997, as amended. The application was duly approved by the BIR. Thus,
petitioners sale of electricity to the NPC from 1 January 2005 to 31 October 2005 was declared to be entitled to the benefit of effectively
zero-rated value added tax (VAT).7

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Petitioner filed its administrative claims for the issuance of tax credit certificates for its alleged unutilized input taxes on its purchase of
capital goods and alleged unutilized input taxes on its local purchases and/or importation of goods and services, other than capital goods,
pursuant to Sections 112(A) and (B) of the NIRC of 1997, as amended, with BIR Revenue District Office (RDO) No. 55 of Laguna, as follows:8

Period Date Of Filing

Covered

1st quarter of 30-Jun-05

2005

2nd quarter of 15-Sep-05

2005

3rd quarter of 28-Oct-05

2005

Alleging inaction of the Commissioner of Internal Revenue (CIR), petitioner filed a Petition for Review with the CTA on 18 April 2007.
CTA ruled that petitioners judicial claims for the three quarters of 2005 were belatedly filed.

ISSUE:
Whether or not the petitioner timely filed for judicial claim for tax credit certificate.

HELD:
No. Petitioner failed to observe the mandatory 120+30 days to file petition for review with the CTA due to CIRs inaction of the application
for refund. Refund must be filed within 30 days from receipt of CIRs denial of the application or within 30 days after the lapse of 120 days in
which the CIR must decide on the application. Hence, petition is denied.

In this case, the petitioner filed for administrative refund with the BIR on 2005 for the three quarters but it only filed Petition for Review with
the CTA on 18 April 2007 for alleged inaction of the CIR. Evidently, the period to file for petition for review with the CTA within 30 days after
the lapse of 120 days has not been complied with by the petitioner.

The pertinent provision of the NIRC at the time when petitioner filed its claim for refund provides:

SEC. 112. Refunds or Tax Credits of Input Tax. (A) Zero-rated or Effectively Zero-rated Sales. - Any VAT-registered person, whose
sales are zero-rated or effectively zero-rated may, within two (2) years after the close of the taxable quarter when the sales were
made, apply for the issuance of a tax credit certificate or refund of creditable input tax due or paid attributable to such s ales,
except transitional input tax, to the extent that such input tax has not been applied against output tax: Provided, however, That in
the case of zero-rated sales under Section 106(A)(2)(a)(1),(2) and (B) and Section 108 (B)(1) and (2), the acceptable foreign
currency exchange proceeds thereof had been duly accounted for in accordance with the rules and regulations of the Bangko
Sentral ng Pilipinas (BSP): Provided, further, That where the taxpayer is engaged in zero-rated or effectively zero-rated sale and
also in taxable or exempt sale of goods or properties or services, and the amount of creditable input tax due or paid cannot be
directly and entirely attributed to any one of the transactions, it shall be allocated proportionately on the basis of the vo lume of
sales.

(D) Period within which Refund or Tax Credit of Input Taxes shall be Made. - In proper cases, the Commissioner shall grant a refund
or issue the tax credit certificate for creditable input taxes within one hundred twenty (120) days from the date of s ubmission of
complete documents in support of the application filed in accordance with Subsections (A) and (B) hereof.

In case of full or partial denial of the claim for tax refund or tax credit, or the failure on the part of the Commissioner t o act on the
application within the period prescribed above, the taxpayer affected may, within thirty (30) days from the receipt of the de cision
denying the claim or after the expiration of the one hundred twenty day-period, appeal the decision or the claim which was not
acted upon with the Court of Tax Appeals.

Judicial Claim
Section 112(D) further provides that the CIR has to decide on an administrative claim within one hundred twenty (120) days fr om the date
of submission of complete documents in support thereof.

Bearing in mind that the burden to prove entitlement to a tax refund is on the taxpayer, it is presumed that in order to discharge its burden,
petitioner had attached complete supporting documents necessary to prove its entitlement to a refund in its application, absent any
evidence to the contrary.

Thereafter, the taxpayer affected by the CIRs decision or inaction may appeal to the CTA within 30 days from the receipt of the decision
or from the expiration of the 120-day period within which the claim has not been acted upon.

Considering further that the 30-day period to appeal to the CTA is dependent on the 120-day period, compliance with both periods is
jurisdictional. The period of 120 days is a prerequisite for the commencement of the 30-day period to appeal to the CTA.

6
It must be emphasized that this is not a case of premature filing of a judicial claim. Although petitioner did not file its j udicial claim with the
CTA prior to the expiration of the 120-day waiting period, it failed to observe the 30-day prescriptive period to appeal to the CTA counted
from the lapse of the 120-day period.

For failure of petitioner to comply with the 120+30 day mandatory and jurisdictional period, petitioner lost its right to cla im a refund or credit
of its alleged excess input VAT.

WHEREFORE, premises considered, the instant Petition is DENIED.

CIR vs. Mindanao II Geothermal Partnership, G.R. No. 191498, January 15, 2014

Facts:
Mindanao II is a partnership registered with the Securities and Exchange Commission. It is engaged in the business of power generation and
sale of electricity to the National Power Corporation (NAPOCOR) and is accredited by the Department of Energy.

On 6 October 2005, Mindanao II filed with the Bureau of Internal Revenue (BIR) an application for the refund or credit of accumulated
unutilized creditable input taxes. In support of the administrative claim for refund or credit, Mindanao II alleged, among ot hers, that it is
registered with the BIR as a value-added taxpayer and all its sales are zero-rated under the EPIRA law. It further stated that for the second,
third, and fourth quarters of taxable year 2004, it paid input VAT in the aggregate amount of P7,167,005.84, which were direc tly attributable
to the zero-rated sales. The input taxes had not been applied against output tax.

Pursuant to Section 112(D) of the 1997 Tax Code, the Commissioner of Internal Revenue (CIR) had a period of 120 days, or unti l 3 February
2006, to act on the claim. The administrative claim, however, remained unresolved on 3 February 2006 (more than 120 days).

Under the same provision, Mindanao II could treat the inaction of the CIR as a denial of its claim, in which case, the former would have 30
days to file an appeal to the CTA, that is, on 5 March 2006. Mindanao II, however, did not file an appeal within the 30-day period.

Apparently, Mindanao II believed that a judicial claim must be filed within the two-year prescriptive period provided under Section 112(A)
and that such time frame was to be reckoned from the filing of its Quarterly VAT Returns for the second, third, and fourth quarters of taxable
year 2004, that is, from 26 July 2004, 22 October 2004, and 25 January 2005, respectively. Thus, on 21 July 2006, Mindanao II , claiming
inaction on the part of the CIR and that the two-year prescriptive period was about to expire, filed a Petition for Review with the CTA
docketed as CTA Case No. 6133.

On 12 August 2008, the CTA Second Division rendered a Decision ordering the CIR to grant a refund or a tax credit certificate, but only in
the reduced amount of P6,791,845.24, representing unutilized input VAT incurred for the second, third and fourth quarters of taxable year
2004.

A Motion for Reconsideration was filed by CIR claiming that the last day of filing was 5 March 2006.

Meanwhile, on 12 September 2008, this Court promulgated CIR v. Mirant Pagbilao Corporation (Mirant). Mirant fixed the reckoni ng date of
the two-year prescriptive period for the application for refund or credit of unutilized input VAT at the close of the taxable quarter when the
relevant sales were made , as stated in Section 112(A).

As to the issue of compliance with the 30-day period for appeal to the CTA, the CTA En Banc held that this was a requirement only when
the CIR actually denies the taxpayers claim. But in cases of CIR inaction, the 30-day period is not a mandatory requirement; the judicial
claim is seasonably filed as long as it is filed after the lapse of the 120-day waiting period but within two years from the date of filing of the
return.

Issues:
The resolution of this case hinges on the question of compliance with the following time requirements for the grant of a clai m for refund or
credit of unutilized input VAT:
(1) the two-year prescriptive period for filing an application for refund or credit of unutilized input VAT; and
(2) the 120+30 day period for filing an appeal with the CTA.

Held:
Mindanao IIs application for refund was FILED ON TIME BUT its judicial claims were filed out of time.
1. It is untrue that both the admin and judicial claims must be filed within the two-year prescriptive period.

Both the CTA Second Division and CTA En Banc decisions held that the phrase "apply for the issuance of a tax credit certifica te or
refund" in Section 112(A) is construed to refer to both the administrative claim filed with the CIR and the judicial claim filed with the
CTA. This view, however, has no legal basis.

In Commissioner of Internal Revenue v. Aichi Forging Company of Asia, Inc. (Aichi), we dispelled the misconception that both the
administrative and judicial claims must be filed within the two-year prescriptive period:

There is nothing in Section 112 of the NIRC to support respondents view. Subsection (A) of the said provision states that " any VAT-
registered person, whose sales are zero-rated or effectively zero-rated may, within two years after the close of the taxable quarter
when the sales were made, apply for the issuance of a tax credit certificate or refund of creditable input tax due or paid
attributable to such sales." The phrase "within two (2) years x x x apply for the issuance of a tax credit certificate or refund" refers to
applications for refund/credit filed with the CIR and not to appeals made to the CTA. This is apparent in the first paragraph of

7
 subsection (D) of the same provision, which states that the CIR has "120 days from the submission of complete documents in
support of the application filed in accordance with Subsections (A) and (B)" within which to decide on the claim.

The message of Aichi is clear: it is only the administrative claim that must be filed within the two-year prescriptive period; the
judicial claim need not fall within the two-year prescriptive period.

2. Under Section 110(B) and Section 112(A), the prescriptive period for filing a judicial claim for "excess" input VAT is two years from
the close of the taxable quarter when the sale was made by the person legally liable to pay the output VAT. This prescriptive
period has no relation to the date of payment of the "excess" input VAT. The "excess" inpu t VAT may have been paid for more
than two years but this does not bar the filing of a judicial claim for "excess" VAT under Section 112(A), which has a differ ent
reckoning period from Section 229. Moreover, the person claiming the refund or credit of the input VAT is not the person who
legally paid the input VAT. Such person seeking the VAT refund or credit does not claim that the input VAT was "excessively"
collected from him, or that he paid an input VAT that is more than what is legally due. He is not the taxpayer who legally paid the
input VAT.

Two things are clear from the above quoted San Roque disquisitions. First, when it comes to recovery of unutilized input VAT,
Section 112, and not Section 229 of the 1997 Tax Code, is the governing law. Second, prior to 8 June 2007, the applicable rule is
neither Atlas nor Mirant, but Section 112(A).

The two year prescriptive-period is thus summarized in this timeline, viz

Before 8 June 2007 After 8 June 2007 After 12 Sept. 2008

Use Sec. 112 (A): Close of taxable Use Atlas case: Date of filing of return Use Mirant case: Close of taxable
quarter when the relevant sales were and payment of tax quarter when the relevant sales were
made made

In this case, Mindanao II filed its administrative claims for refund or credit for the second, third and fourth quarters of 2004 on 6
October 2005. The case thus falls within the first period as indicated in the above timeline. In other words, it is covered b y the rule
prior to the advent of either Atlas or Mirant.

Let us summarize the conclusions so far: (1) it is only the administrative claim (AGAIN, THIS IS THE ONE FILED BEFORE CIR, NOT THE
ONE FILED BEFORE CTA AS AN APPEAL EITHER BECAUSE OF REJECTION OR INACTION WITHIN 120 DAY PERIOD) that must be filed
within the two-year prescriptive period; and (2) the two-year prescriptive period begins to run from the close of the taxable
quarter when the relevant sales were made.

--THIS IS THE CRUCIAL PART: Notwithstanding the timely filing of the administrative claims, we find that the CTA En Banc erred in
holding that Mindanao IIs judicial claims were timely filed.

30-Day Period Also Applies to Appeals from Inaction. Thus, if CIR does not act within 120 days, it shall be considered a rejecti on of
the claim and the taxpayer has 30 days within which to file an appeal with the CTA.
Section 112(D) speaks of two periods: the period of 120 days, which serves as a waiting period to give time for the CIR to ac t on
the administrative claim for refund or credit, and the period of 30 days, which refers to the period for interposing an appeal with
the CTA. It is with the 30-day period that there is an issue in this case.
In this case, the facts are not up for debate. Mindanao II filed its administrative claim for refund or credit for the second, third, and
fourth quarters of 2004 on 6 October 2005. The CIR, therefore, had a period of 120 days, or until 3 February 2006, to act on the
claim. The CIR, however, failed to do so. Mindanao II then could treat the inaction as a denial and appeal it to the CTA within 30
days from 3 February 2006, or until 5 March 2006.
Mindanao II, however, filed a Petition for Review only on 21 July 2006, 138 days after the lapse of the 30 -day period on 5 March
2006. The judicial claim was therefore filed late.
We sum up the rules established by San Roque on the mandatory and jurisdictional nature of the 30-day period to appeal through
the following timeline:
Bearing in mind the foregoing rules for the timely filing of a judicial claim for refund or credit of unutilized input VAT, we rule on the
present case of Mindanao II as follows:
As mentioned above, Mindanao II filed its judicial claim with the CTA on 21 July 2006. This was after the issuance of BIR Ruling No.
DA-489-03 on 10 December 2003, but before its reversal on 5 October 2010. However, while the BIR ruling was in effect when
Mindanao II filed its judicial claim, the rule cannot be properly invoked. The BIR ruling, as discussed earlier, contemplates
premature filing. The situation of Mindanao II is one of late filing. To repeat, its judicial claim was filed on 21 July 2006 long after 5
March 2006, the last day of the 30-day period for appeal. In fact, it filed its judicial claim 138 days after the lapse of the 30-day
period.

SUMMARY OF THE RULES

SUMMARY OF RULES ON PRESCRIPTIVE PERIODS FOR CLAIMING REFUND OR CREDIT OF INPUT VAT

The lessons of this case may be summed up as follows:

A. Two-Year Prescriptive Period
1. It is only the administrative claim that must be filed within the two-year prescriptive period. (Aichi)
2. The proper reckoning date for the two-year prescriptive period is the close of the taxable quarter when the relevant sales were
made. (San Roque)

8
 3. The only other rule is the Atlas ruling, which applied only from 8 June 2007 to 12 September 2 008. Atlas states that the two-year
prescriptive period for filing a claim for tax refund or credit of unutilized input VAT payments should be counted from the d ate of
filing of the VAT return and payment of the tax. (San Roque)

B. 120+30 Day Period

1. The taxpayer can file an appeal in one of two ways: (1) file the judicial claim within thirty days after the Commissioner denies
the claim within the 120-day period, or (2) file the judicial claim within thirty days from the expiration of the 120-day period if the
Commissioner does not act within the 120-day period.
2. The 30-day period always applies, whether there is a denial or inaction on the part of the CIR.
3. As a general rule, the 3 0-day period to appeal is both mandatory and jurisdictional. (Aichi and San Roque)
4. As an exception to the general rule, premature filing is allowed only if filed between 10 December 2003 and 5 October 2010 ,
when BIR Ruling No. DA-489-03 was still in force. (San Roque)
5. Late filing is absolutely prohibited, even during the time when BIR Ruling No. DA-489-03 was in force. (San Roque)

Team Energy Corporation (formerly Mirant Pagbilao Corp.) vs. CIR, G.R. No. 190928, January 13, 2014

The taxpayer can file his administrative claim for refund or credit at any time within the two-year prescriptive period. What is only required
of him is to file his judicial claim within thirty (30) days after denial of his claim by respondent or after the expiration of the 120-day period
within which respondent can decide on its claim.

Facts:
Petitioner filed with the BIR its first to fourth quarterly value-added tax (VAT) returns for the calendar year 2002:
Quarter Date Filed

First April 25, 2002

Second July 23, 2002

Third October 25, 2002

Fourth January 27, 2003

Subsequently, on December 22, 2003, petitioner filed an administrative claim for refund of unutilized input VAT with Revenue District Office
No. 60, Lucena City, in the total amount of P79,918,002.95 for calendar year 2002.

However, due to respondents inaction, petitioner elevated its claim before the CTA First Division on April 22, 2004.
After the trial the CTA first division ruled that the Respondent is ORDERED TO REFUND OR ISSUE A TAX CREDIT CERTIFICATE to petitioner in the
reduced amount of P69,618,971.19, representing unutilized input value-added taxes paid by petitioner on its domestic purchases of goods
and services and importation of goods attributable to its effectively zero-rated sales of power generation services to the National Power
Corporation for the taxable year 2002.

The CTA En Banc reduced petitioners claim for refund of its excess or unutilized input VAT to P51,134,951.40 on the ground that petitioners
judicial claim for the first quarter of 2002 was filed beyond the two-year period.

Record shows that respondent filed its administrative claim for refund or issuance of a TCC on December 22, 2003, while the judicial claim
for refund was filed on April 22, 2004. Since respondent filed its judicial claim for refund for the four quarters of 2002, only on April 22, 2004,
twenty-two (22) days from March 31, 2004, the last day prescribed by the Mirant Case, respondent is barred from claiming refund of i ts
unutilized input taxes for the first quarter of 2002. Therefore, the claim for refund granted by the First Division of this C ourt in the amount
ofP69,618,971.19 should be reduced by deducting the portion of the claim corresponding to the first quarter that had already prescribed

Issue:
Whether or not petitioner timely filed its judicial claim for refund of input VAT for the firs t quarter of 2002.

Ruling:
Yes. The taxpayer can file his administrative claim for refund or issuance of tax credit certificate anytime within the two -year prescriptive
period. If he files his claim on the last day of the two-year prescriptive period, his claim is still filed on time. The Commissioner will then have
120 days from such filing to decide the claim. If the Commissioner decides the claim on the 120th day or does not decide it o n that day,
the taxpayer still has 30 days to file his judicial claim with the CTA.

There are three compelling reasons why the 30-day period need not necessarily fall within the two-year prescriptive period, as long as the
administrative claim is filed within the two-year prescriptive period.

First, Section 112 (A) clearly, plainly and unequivocally provides that the taxpayer "may, within two (2) years after the close of the taxable
quarter when the sales were made, apply for the issuance of a tax credit certificate or refund of the creditable input tax du e or paid to
such sales." In short, the law states that the taxpayer may apply with the Commissioner for a refund or credit "within two (2) years," which
means at anytime within two years.

Second, Section 112 (C) provides that the Commissioner shall decide the application for refund or credit "within one hundred twenty (120)
days from the date of submission of complete documents in support of the application filed in accordance with Subsection (A). " The
reference in Section 112 (C) of the submission of documents "in support of the application filed in accordance with Subsection (A)" means
that the application in Section 112 (A) is the administrative claim that the Commissioner must decide within the 120-day period. In short, the
9
two-year prescriptive period in Section 112 (A) refers to the period within which the taxpayer can file an administrative claim for tax refund
or credit. Stated otherwise, the two-year prescriptive period does not refer to the filing of the judicial claim with the CTA but to the filing of
the administrative claim with the Commissioner. As held in Aichi, the "phrase within two years x x x apply for the issuance of a tax credit or
refund" refers to applications for refund/credit with the CIR and not to appeals made to the CTA."
Third, if the 30-day period, or any part of it, is required to fall within the two-year prescriptive period (equivalent to 730 days), then the
taxpayer must file his administrative claim for refund or credit within the first 610 days of the two-year prescriptive period.
The theory that the 30-day period must fall within the two-year prescriptive period adds a condition that is not found in the law. It results in
truncating 120 days from the 730 days that the law grants the taxpayer for filing his administrative claim with the Commiss ioner. This Court
cannot interpret a law to defeat, wholly or even partly, a remedy that the law expressly grants in clear, plain and unequivocal language.
Section 112 (A) and (C) must be interpreted according to its clear, plain and unequivocal language. The taxpayer can file his
administrative claim for refund or credit at any time within the two-year prescriptive period. If he files his claim on the last day of the two-
year prescriptive period, his claim is still filed on time. The Commissioner will have 120 days from such filing to decide the claim. If the
Commissioner decides the claim on the 120th day, or does not decide it on that day, the taxpayer still has 30 days to file hi s judicial claim
with the CTA.

Fort Bonifacio Development Corporation v. CIR, et. al., G.R. No. 173425, January 22, 2013

FACTS:
Petitioner Fort Bonifacio Development Corporation (FBDC) is a duly registered domestic corporation engaged in the development and sale
of real property. On February 8, 1995, by virtue of RA 7227 and Executive Order No. 40, dated December 8, 1992, petitioner purchased
from the national government a portion of the Fort Bonifacio reservation, now known as the Fort Bonifacio Global City (Global City).

On January 1, 1996, RA 7716 restructured the Value-Added Tax (VAT) system by amending certain provisions of the old National Internal
Revenue Code (NIRC). RA 7716 extended the coverage of VAT to real properties held primarily for sale to customers or held for lease in the
ordinary course of trade or business.

On September 19, 1996, petitioner submitted to the Bureau of Internal Revenue (BIR) Revenue District No. 44, Taguig and Pater os, an
inventory of all its real properties, the book value of which aggregated 71,227,503,200.

Based on this value, petitioner claimed that it is entitled to a transitional input tax credit of 5,698,200,256, pursuant to Section 105 of the
old NIRC. In October 1996, petitioner started selling Global City lots to interested buyers. For the first quarter of 1997, petitioner generated a
total amount of 3,685,356,539.50 from its sales and lease of lots, on which the output VAT payable was 368,535,653.95.

Petitioner paid the output VAT by making cash payments to the BIR totalling 359,652,009.47 and crediting its unutilized input tax credit on
purchases of goods and services of 8,883,644.48.

Realizing that its transitional input tax credit was not applied in computing its output VAT for the first quarter of 1997, p etitioner on November
17, 1998 filed with the BIR a claim for refund of the amount of 359,652,009.47 erroneously paid as output VAT for the said period.

CTA Ruling:
On October 12, 2000, the CTA denied petitioners claim for refund. According to the CTA, "the benefit of transitional input tax credit comes
with the condition that business taxes should have been paid first." In this case, since petitioner acquired the Global City property under a
VAT-free sale transaction, it cannot avail of the transitional input tax credit. The CTA likewise pointed out that under Revenue Regulations
No. (RR) 7-95, implementing Section 105 of the old NIRC, the 8% transitional input tax credit should be based on the value of the
improvements on land such as buildings, roads, drainage system and other similar structures, constructed on or after January 1, 1998, and
not on the book value of the real property.

CA Ruling
Aggrieved, petitioner filed a Petition for Review under Rule 43 of the Rules of Court before the CA. On July 7, 2006, the CA affirmed the
decision of the CTA. The CA agreed that petitioner is not entitled to the 8% transitional input tax credit since it did not p ay any VAT when it
purchased the Global City property.The CA opined that transitional input tax credit is allowed only when business taxes have been paid
and passed-on as part of the purchase price. In arriving at this conclusion, the CA relied heavily on the historical background of transitional
input tax credit.

ISSUE:
Whether petitioner is entitled to a refund of 359,652,009.47 erroneously paid as output VAT for the first quarter of 1997

DECISION:
Transitional input tax credit; Prior payment of taxes is not a prerequisite before a taxpayer could avail of the transitional input tax credit. To
reiterate, prior payment of taxes is not necessary before a taxpayer could avail of the 8% transitional input tax credit. This position is solidly
supported by law and jurisprudence;

First. Section 105 of the old National Internal Revenue Code (NIRC) clearly provides that for a taxpayer to avail of the 8% transitional input
tax credit, all that is required from the taxpayer is to file a beginning inventory with the Bureau of Internal Revenue (BIR) . It was never
mentioned in Section 105 that prior payment of taxes is a requirement.

Second. Since the law (Section 105 of the NIRC) does not provide for prior payment of taxes, to require it now would be tanta mount to
judicial legislation which, to state the obvious, is not allowed.

Third. A transitional input tax credit is not a tax refund per se but a tax credit. Logically, prior payment of taxes is not required before a
taxpayer could avail of transitional input tax credit. Tax credit is not synonymous to tax refund. Tax refund is defined as the money that a
10
taxpayer overpaid and is thus returned by the taxing authority. Tax credit, on the other hand, is an amount subtracted directly from ones
total tax liability. It is any amount given to a taxpayer as a subsidy, a refund, or an incentive to encourage investment.

WHEREFORE, the petition is hereby GRANTED. The assailed Decision dated July 7, 2006 of the Court of Appeals REVERSED and SET ASIDE.
Respondent Commissioner of Internal Revenue is ordered to refund to petitioner Fort Bonifacio Development Corporation the amo unt of
359,652,009.47 paid as output VAT for the first quarter of 1997 in light of the transitional input tax credit available to petitioner for the said
quarter, or in the alternative, to issue a tax credit certificate corresponding to such amount.

CIR v. San Roque, G.R. No. 187485, February 12, 2013

The Cases
G.R. No. 187485 is a petition for review assailing the decision and resolution promulgated by the CTA EB affirming the decisi on and
resolution of CTA 2nd Division. The CTA 2nd Division ordered the CIR to refund or issue a tax credit to San Roque Power Corporation (San
Roque) for unutilized input value-added tax (VAT) on purchases of capital goods and services for the taxable year 2001.

G.R. No. 196113 is a petition for review assailing the Decision and the Resolution promulgated by the CTA EB reversing the decision and
resolution of the CTA Second Division and granted the CIRs petition for review. The CTA EB dismissed, for having been prematurely filed,
Taganito Mining Corporations (Taganito) judicial claim for tax refund or credit.

G.R. No. 197156 is a petition for review assailing the decision and resolution promulgated by the CTA EB affirming the decisi onand resolution
of the CTA 2nd Division in denying, due to prescription, Philex Mining Corporations (Philex) judicial claim for tax refund or credit.
SC resolvedto consolidate G.R. No. 197156 with G.R. No. 196113 and with G.R. No. 187485.

FACTS:

CIR vs. San Roque; G.R. No. 187485

San Roque is a domestic corporation duly organized under Philippine laws with principal office at Brgy San Roque, San Manuel,
Pangasinan. It was incorporated in 1997 to design, construct, erect, assemble, own, commission and operate power-generating
plant facilities pursuant to and under contract with the government.
AS a seller of services it is duly registered with BIR and BOI on a preferred pioneer status.
On October 1997, San Roque entered into a Power Purchase Agreement (PPA) with National Power Corporation (NPC) to
generate additional power and energy for Luzon Power Grid by developing hydro-potential on the Agno River
The PPA provides, among others, that San Roque shall be responsible for the design, construction and commissioning of the
Power Station and shall operate and maintain the same, subject to NPC instructions.
During the cooperation period of 25 years commencing from the completion date of the power station, NPC will take and pay for
all electricity available from the power station.
On the construction and development of the San Roque multi-purpose project which comprises of the dam, spillway and power
plant, allegedly incurred, excess input VAT in the amount of 559, 709, 337.54 for taxable year 2001 which it declared in its quarterly
VAT returns filed for the same year.
However, on Mar 28 2003, it amended its VAT returns for the year 2001 sand increased its input VAT to the amount of
560,200,283.14. San Roque filed with BIR for refund of such amount.
CIRs inaction prompted San Roque to file petition for review before CTA
CTA Division:
o Initially denied claim because San Roque failed to show recorded zero-rated or effectively zero-rated sales; and
required it to show the ff. requirements to be entitled for refund:
Vat registered entity
Its input taxes claimed were paid on capital goods duly supported by VAT invoices
Did not offset or apply the claimed input VAT on capital goods against any output VAT liability and
Filed within 2 year prescriptive period.
o San Roque only complied with 1st, third and fourth requirements. Partially granted refund reduced to 483M.
CTA En Banc:
o Commissioner filed before EN Banc to pray for denial of refund in its entirety.
the claim for refund with the BIR and the subsequent appeal to the Court of Tax Appeals must be filed within
the two-year period
The Supreme Court held in the case of Atlas Consolidated Mining and Development Corporation vs.
Commissioner of Internal Revenue that the two-year prescriptive period for filing a claim for input tax is
reckoned from the date of the filing of the quarterly VAT return and payment of the tax due. If the said period is
about to expire but the BIR has not yet acted on the application for refund, the taxpayer may interpose a
petition for review with this Court within the two year period.
Lastly, it is apparent from the following provisions of Revenue Memorandum Circular No. 49-03 dated August 18,
2003, that [the CIR] knows that claims for VAT refund or tax credit filed with the Court [of Tax Appeals] can
proceed simultaneously with the ones filed with the BIR and that taxpayers need not wait for the lapse of the
subject 120-day period
o CTA dismissed petition.
Hence, CIRs present petition.

11
CIR v. Dash Engineering, G.R. No. 184145, December 11, 2013

Topic: Mandatory compliance with filing period for claims for refund (120+30)

Dash Engineering (Dash) is a VAT-registered Corporation, and listed as an ecozone IT export enterprise in PEZA. It filed its monthly and
quarterly value-added tax (VAT) returns for the period from January 1, 2003 to June 30, 2003. On August 9, 2004, it filed a claim for tax credit
or refund in the amount of P2,149,684.88 representing unutilized input VAT attributable to its zero-rated sales. Since CIR didnt act on this,
Dash filed a petition for review with the CTA on May 5, 2005. The CTA partially granted this in the reduced amount of P1147683.78.

CIRs Argument: Dash failed to comply with the 30-day period referred to in Sec. 112 (C) of the NIRC. CIR had 120 days from Aug. 9, 2004
(the day Dash claimed for administrative refund) within which to act on the claim (aka, until Dec. 7, 2004). Dash then had only 30 days from
the lapse of this period (aka, until Jan 6, 2005) to file a petition for review with the CTA. Dash only filed the petition on May 5, 2005. This was
jurisdictional, and failure to comply bars an appeal.

Issue:
1. WON Dashs claim for refund was filed within the prescriptive period under the Tax Code. NEGATIVE

Held: Dashs Judicial claim for refund must be denied for having been filed late.

Ratio: CIR is correct in its assertion that compliance with the periods is jurisdictional and mandatory.
Dashs judicial claim for refund must be denied for having been filed late. Although Dash filed its administrative claim with the BIR on August
9, 2004 before the expiration of the two-year period in Section 112 (A), it undoubtedly failed to comply with the 120+30-day period in
Section 112 (D) (now subparagraph C) which requires that upon the inaction of the CIR for 120 days after the submission of the documents
in support of the claim, the taxpayer has to file its judicial claim within 30 days after the lapse of the said period. The 120 days granted to
the CIR to decide the case ended on December 7, 2004. Thus, Dash had 30 days therefrom, or until January 6, 2005, to file a petition for
review with the CTA. Unfortunately, DEPI only sought judicial relief on May 5, 2005 when it belatedly filed its petition to the CTA, despite
having had ample time to file the same, almost four months after the period allowed by law. As a consequence of DEPI's late filing, the CTA
did not properly acquire jurisdiction over the claim.

Taxes are the lifeblood of the government, and, consequently, tax laws must be faithfully and strictly implemented as they are not intended
to be liberally construed.
==============================================================================

Relevant provisions (as cited in the case):

Section 112 (A) provides for a two-year period for filing a claim for refund, to wit:
Sec. 112.Refunds or Tax Credits of Input Tax. ( A ) Zero-rated or Effectively Zero-rated Sales . A n y VAT- r e g is t e r e d person, whose
sales are zero-rated or effectively zero-rated may, within two (2) years after the close of the taxable quarter when the sales were made,
apply for the issuance of a tax credit certificate or refund of creditable input tax due or paid attributable to such sales, except transitional
input tax, to the extent that such input tax has not been applied against output tax
xxx xxx xxx
Section 112 (D) (now subparagraph C) of the NIRC provides that: Sec. 112.Refunds or Tax Credits of Input Tax.
xxx xxx xx
(D)Period within which Refund or Tax Credit of Input Taxes shall be Made. In proper cases, the Commissioner shall grant a refund or issue
the tax credit certificate for creditable input taxes within one hundred twenty (120) days from the date of submission of complete
documents in support of the application filed in accordance with Subsections (A) and (B) hereof.

In case of full or partial denial of the claim for tax refund or tax credit, or the failure on the part of the Commissioner to act on the
application within the period prescribed above, the taxpayer affected may, within thirty (30) days from the receipt of the decision denying
the claim or after the expiration of the one hundred twenty day-period, appeal the decision or the unacted claim with the Court of Tax
Appeals. (emphasis supplied)

Taganito Mining Corp. v. CI; G.R. No. 196113

Taganito Mining Corp is a corporation duly organized and existing under and by virtue of Phil. Laws. It is duly registered with SEC
with primary purpose:
o To carry on the business, for itself and for others, of mining lode and/or placer mining, developing, exploiting, extracting,
milling, concentrating, converting, smelting, treating, refining, preparing for market, manufacturing, buying, selling,
exchanging, shipping, transporting, and otherwise producing and dealing in nickel, chromite, cobalt, gold, silver,
copper, lead, zinc, brass, iron, steel, limestone, and all kinds of ores, metals and their by-products
Taganito is a VAT registered entity and is also registered with BOI as an exporter of beneficiated nickel.
Taganito filed all its monthly VAT declarations and VAT returns for the period of Jan 1 December 2005. Taganito reported zero-
rated sales amounting to 1,446,854,034; input VAY on its domestic purchases and importations of goods and services amounting
to 2, 314,730 and input VAT on its domestic purchases and importations amounting to 6,050,933.95.
On Nov 14, 2005 filed with CIR claiming a tax refund of its supposed input VAT amounting to 8M period covering Jan 1 -Dec 2004
and also Jan 1-Dec 2005.
As the statutory period within which to file claim for refund is about to lapse without CIRs action, they filed th e instant petition for
review on Feb 17 2007.
CTA Division: Partially granted Taganitos claim. Taganito was able to comply with requirements under Sec 112 (A) of RA 8242, to
be entitled for refund or credit of input VAT attributable to zero-rated sales.
CTA 2nd division:

12
 o Finally, records show that [Taganitos] administrative claim filed on November 14, 2006, which was amended on
November 29, 2006, and the Petition for Review filed with this Court on February 14, 2007 are well within the two -year
prescriptive period, reckoned from March 31, 2005, June 30, 2005, September 30, 2005, and December 31, 2005,
respectively, the close of each taxable quarter covering the period January 1, 2005 to December 31, 2005.
o In fine, [Taganito] sufficiently proved that it is entitled to a tax credit certificate in the amount of 8,249,883.33
representing unutilized input VAT for the four taxable quarters of 2005.
CTA en banc:
o Granted Petition of CIR. CTA EB declared that Sec 112 (A) and (B) set forth the 2 year prescriptive period for filing for tax
refund or credit claim. Applied Aichi Doctrine.
o The CTA EB also relied on this Courts rulings in the cases of Commissioner of Internal Revenue v. Aichi Forging Company
of Asia, Inc. (Aichi)30 and Commisioner of Internal Revenue v. Mirant Pagbilao Corporation (Mirant) Both Aichi and
Mirant ruled that the two-year prescriptive period to file a refund for input VAT arising from zero-rated sales should be
reckoned from the close of the taxable quarter when the sales were made.
o Aichi further emphasized that the failure to await the decision of the Commissioner or the lapse of 120-day period
prescribed in Section 112(D) amounts to a premature filing.
o The CTA EB found that Taganito filed its administrative claim on 14 November 2006, which was well within the period
prescribed under Section 112(A) and (B) of the 1997 Tax Code. However, the CTA EB found that Taganitos judicial claim
was prematurely filed. Taganito filed its Petition for Review before the CTA Second Division on 14 February 2007. The
judicial claim was filed after the lapse of only 92 days from the filing of its administrative claim before the CIR, in violation
of the 120-day period prescribed in Section 112(D) of the 1997 Tax Code.
Hence, Taganitos present petition.

Philex Mining Corp vs. CIR GR no. 197156

Philex is a corporation duly organized and existing under the laws of the Republic of the Philippines, which is principally engaged
in the mining business, which includes the exploration and operation of mine properties and commercial production and
marketing of mine products
On Oct 21, 2005, filed its original VAT return for 3 rd quarter of taxable year 2005 and amended VAT return for the same quarter on
Dec 1, 2005.
On March 20, 2006, [Philex] filed its claim for refund/tax credit of the amount of 23,956,732.44 with the One Stop Shop Center of
the Department of Finance.
CTA Division:
o The CTA Second Division ruled that the two-year prescriptive period specified in Section 112(A) of RA 8424, as amended,
applies not only to the filing of the administrative claim with the BIR, but also to the filing of the judicial claim with the
CTA. Since Philexs claim covered the 3rd quarter of 2005, its administrative claim filed on 20 March 2006 was timely filed,
while its judicial claim filed on 17 October 2007 was filed late and therefore barred by prescription. Philex prayed for
reversal.
CTA En Banc:
o Denied Philex and Affirmed CTA divisions decision.
o In this case, while there is no dispute that [Philexs] administrative claim for refund was filed within the two -year
prescriptive period; however, as to its judicial claim for refund/credit, records show that on March 20, 2006, [Philex]
applied the administrative claim for refund of unutilized input VAT
o From March 20, 2006, which is also presumably the date [Philex] submitted supporting documents, together with the
aforesaid application for refund, the CIR has 120 days, or until July 18, 2006, within which to decide the claim.
o Within 30 days from the lapse of the 120-day period, or from July 19, 2006 until August 17, 2006, [Philex] should have
elevated its claim for refund to the CTA. However, [Philex] filed its Petition for Review only on October 17, 2007, which is
426 days way beyond the 30- day period prescribed by law
Hence, Philex present petition.

ISSUE: WON the 3 companies filed their claim for refund were timely filed

RULING:

For ready reference, the ff provisions of the Tax Code that are applicable to the present case are in the last pages.

I. APPLICATION OF THE 120+30 DAY PERIODS

A. For CIR vs. San Roque Corp

On 10 April 2003, a mere 13 days after it filed its amended administrative claim with the Commissioner on 28 March 2003, San Roque
filed a Petition for Review with the CTA docketed as CTA Case No. 6647. From this we gather 2 facts: 1) San Roque did not wai t for the
120-day period to lapse before filing judicial claim; 2) San Roque filed its judicial claim more than 4 years before Atlas Doctrine (June
2007).
Clearly, San Roque failed to comply with the 120-day waiting period, the time expressly given by law to the Commissioner to decide
whether to grant or deny San Roques application for tax refund or credit. It is indisputable that compliance with the 120-day waiting
period is mandatory and jurisdictional.

13
 Failure to comply with the 120-day waiting period violates a mandatory provision of law. It violates the doctrine of exhaustion of
administrative remedies and renders the petition premature and thus without a cause of action, with the effect that the CTA d oes not
acquire jurisdiction over the taxpayers petition.
The charter of the CTA expressly provides that its jurisdiction is to review on appeal decisions of the commissioner of inte rnal revenue in
cases involving: refunds of internal revenue taxes. Then a taxpayer prematurely files a judicial claim for tax refund or credit with the
CTA without waiting for CIR decision, there is no decision of the CIR to review and thus the CTA had no jurisdiction, there fore. San
Roques failure to comply with the 120-day mandatory period renders its petition for review with the CTA void.
This Court cannot disregard mandatory and jurisdictional conditions mandated by law simply because the Commissioner chose not to
contest the numerical correctness of the claim for tax refund or credit of the taxpayer. Non-compliance with mandatory periods, non-
observance of prescriptive periods, and non-adherence to exhaustion of administrative remedies bar a taxpayers claim for tax refund
or credit, whether or not the Commissioner questions the numerical correctness of the claim of the taxpa yer.
San Roque cannot also use Atlas Doctrine as an excuse because this case existed 4 years before the Atlas case. The Atlas coun ts the 2
years prescriptive period from the date of payment of the output VAT, which means within 20 days after the close of t he taxable
quarter. The output VAT at the time must be paid at the time of filing of the quarterly tax returns, which were to be filed within 20 days
ff the end of each quarter. Whether the Atlas doctrine (and later Mirant) is applied to San Roque is immaterial because what is the
issue in the present case is San Roques non-compliance with the 120-day period, a mandatory period the Atlas or the Mirant doctrine
is applied.
In San Roques case, it filed its petition with the CTA a mere 13 days after it filed its administrative claim with the Commissioner.
Indisputably, San Roque knowingly violated the mandatory 120-day period, and it cannot blame anyone but itself.
Sec 112 (c) is plain and clear. As this law states, the taxpayer may, if he wishes, appeal the decision of the Commissioner to the CTA
within 30 days from receipt of the Commissioners decision, or if the Commissioner does not act on the taxpayers claim withi n the 120-
day period, the taxpayer may appeal to the CTA within 30 days from the expiration of the 120-day period.

B. Taganito Mining Corp Case

Like San Roque, Taganito also filed its petition for review with the CTA without waiting for the 120-day period to lapse. Also, like San
Roque, Taganito filed its judicial claim before the promulgation of Atlas doctrine. Similarly situated as San Roque both cannot claim
being misled, misguided or confused by the Atlas doctrine.
HOWEVER, Taganito can invoke BIR Ruling No. DA-489-0357 dated 10 Dec 2003, which expressly ruled that the taxpayer-claimant
need not wait for the lapse of the 120-day period beforeit could seek judicial relief with the CTA by way of petition for review.
Taganito filed its judicial claim after the issuance of BIR ruling but before the adoption of the Aichi doctrine. Thus, Taganito is deemed
to have filed its judicial claim on time.

C. PHILEX Mining Corp case

Philex timely filed its administrative claim on Mar 20 2006, within the 2 year prescriptive period. Even if the 2 year prescr iptive period is
computed from the date of payment of the output VAT under Sec 229, Philex, still filed its claim on time. Thus, the Atlas doctrine is
immaterial in this case.
The commissioner had until 17 Jul 2006, the last day of the 120-day period, to decide Philexs claim. Since the commissioner did not act
on Philexs claim on or before July 17 2006, Philex had until August 17 2006, the last day of the 30-day period, to filed its judicial claim.
However, Philex filed its Petition for Review with CTA only on October 17, 2007, or 426 days after the last day of filing.
In short, Philex was late by one year and 61 days in filing its judicial claim.
AS the CTA EB correctly found:
o Evidently, the Petition for Review in C.T.A. Case No. 7687 was filed 426 days late. Thus, the Petition for Review in C.T.A. Case
No. 7687 should have been dismissed on the ground that the Petition for Review was filed way beyond the 30-day prescribed
period; thus, no jurisdiction was acquired by the CTA Division; x x x58 (Emphasis supplied)
Unlike in San Roque and Taganito, Philex case is not one of premature filing but of late filinf. Philex did not file any petition with the CTA
within the 120-day period. Philex did not also file any petition with the CTA within the 30 days after the 120-day period, in fact 426 days
after the lapse of the 120-day period.
In any event, whether governed by jurisprudence before, during, or after the Atlas case, Philex's judicial claim will have to be rejected
because of late filing. Whether the two-year prescriptive period is counted from the date of payment of the output VAT following the
Atlas doctrine, or from the close of the taxable quarter when the sales attributable to the input VAT were made following the Mirant
and Aichi doctrines, Philex's judicial claim was indisputably filed late.
The Atlas doctrine cannot save Philex from the late filing of judicial claim. The inaction of CIR was deemed a denial. Philex had 30 days
from the expiration of 120-day period. And it failed to do so.

II. PRESCRIPTIVE PERIODS UNDER SEC 112 (A) AND (C)

Taxpayer may within 2 years after the close of the taxable quarter when the sales are made, apply for the issuance of tax credit
certificate or refund of the creditable input tax due or paid to such sales. In short, the law states that the taxpayer may apply with the
Commissioner for a refund or credit within 2 years, which meant at anytime within 2 years.
The two-year prescriptive period does not refer to the filing of judicial claim with the CTA but the filing of the CTA but to the filing of the
administrative claim with the commissioner refund/ credit with the CIR and not to appeals made to the CTA.
The commissioner will have 120 days from such filing to decide the claim. If the commissioner decides the claim on the 120 th day, or
does not decide it on that day, the taxpayer has 30 days to file his judicial claim with the CTA.
The 30-day period was adopted precisely to do away with the old rule, so that under the VAT System the taxpayer will always have 30
days to file the judicial claim even if the Commissioner acts only on the 120th day, or does not act at all during the 120-day period .
14
 With the 30-day period always available to the taxpayer, the taxpayer can no longer file a judicial claim for refund or credit of input
VAT without waiting for the Commissioner to decide until the expiration of the 120-day period.

III. RMC 49-03

What is important, as far as the present cases are concerned, is that the mere filing by a taxpayer of a judicial claim with the CTA before
the expiration of the 120-day period cannot operate to divest the Commissioner of his jurisdiction to decide an administrative claim within
the 120-day mandatory period, unless the Commissioner has clearly given cause for equitable estoppel to apply as expressly recognized in
Section 246 of the Tax Code.

IV. BIR RULING no. DA-489-03 dated 10 Dec 2003

Provides a valid claim for equitable estoppel under the Tax Code. BIR ruling expressly states that the taxpayer-claimant need not wait for
lapse of the 120-day period before it could seek judicial relief with the CTA by way of petition for review. Prior to this, BIR held that 120 day
period is mandatory and jurisdictional.

It is still mandatory and jurisdictional but there are 2 exceptions to this rule:
1. The first exception is if the Commissioner, through a specific ruling, misleads a particular taxpayer to prematurely file a judicial
claim with the CTA. Such specific ruling is applicable only to such particular taxpayer.
2. The second exception is where the Commissioner, through a general interpretative rule issued under Section 4 of the Tax Code,
misleads all taxpayers into filing prematurely judicial claims with the CTA.
NOTE: However, this was reversed by AICHI on Oct 6 2010.
San Roque cannot benefit from the BIR ruling because it filed its judicial claim prematurely, before the issuance of this BIR ruling.
Taganito, filed after the issuance of BIR ruling hence, it can claim benefit thereof.
Philex was very late. It was not premature at all.

Section 112 (D) of the 1997 Tax Code is clear, unequivocal, and categorical that the Commissioner has 120 days to act on an
administrative claim. The taxpayer can file the judicial claim (1) only within thirty days after the Commissioner partially o r fully denies the
claim within the 120-day period, or (2) only within thirty days from the expiration of the 120-day period if the Commissioner does not act
within the 120-day period.

By reasons stated above, the court:

1. GRANTS petition of CIR re: San Roque
2. GRANTS Taganitos petition for refund or credit
3. DENIES Philex Mining Corporation.

Applicable provisions:
Section 105:

Persons Liable. Any person who, in the course of trade or business, sells, barters, exchanges, leases goods or properties, renders services,
and any person who imports goods shall be subject to the value-added tax (VAT) imposed in Sections 106 to 108 of this Code.

The value-added tax is an indirect tax and the amount of tax may be shifted or passed on to the buyer, transferee or lessee of the good s,
properties or services. This rule shall likewise apply to existing contracts of sale or lease of goods, properties or services at the time of the
effectivity of Republic Act No. 7716.
-------
Section 110(B):

Sec. 110. Tax Credits.

(B) Excess Output or Input Tax. If at the end of any taxable quarter the output tax exceeds the input tax, the excess shall be paid by the
VAT-registered person. If the input tax exceeds the output tax, the excess shall be carried over to the succeeding quarter or qua rters:
[Provided, That the input tax inclusive of input VAT carried over from the previous quarter that may be credited in every quarter shall not
exceed seventy percent (70%) of the output VAT:]43 Provided, however, That any input tax attributable to zero-rated sales by a VAT-
registered person may at his option be refunded or credited against other internal revenue taxes, subject to the provisions of Section 112.

Section 112:44

Sec. 112. Refunds or Tax Credits of Input Tax.

(A) Zero-Rated or Effectively Zero-Rated Sales. Any VAT-registered person, whose sales are zero-rated or effectively zero-rated may, within
two (2) years after the close of the taxable quarter when the sales were made, apply for the issuance of a tax credit certifi cate or refund of
creditable input tax due or paid attributable to such sales, except transitional input tax, to the extent that such input tax has not been
applied against output tax: Provided, however, That in the case of zero-rated sales under Section 106(A)(2) (a)(1), (2) and (B) and Section
108(B)(1) and (2), the acceptable foreign currency exchange proceeds thereof had been duly accounted for in accordance with the
rules and regulations of the Bangko Sentral ng Pilipinas (BSP): Provided, further, That where the taxpayer is engaged in zero -rated or
effectively zero-rated sale and also in taxable or exempt sale of goods or properties or services, and the amount of creditable input tax
due or paid cannot be directly and entirely attributed to any one of the transactions, it shall be allocated proportionat ely on the basis of
the volume of sales.
15
(B) Capital Goods.- A VAT registered person may apply for the issuance of a tax credit certificate or refund of input taxes paid on capital
goods imported or locally purchased, to the extent that such input taxes have not been applied against output taxes. The application may
be made only within two (2) years after the close of the taxable quarter when the importation or purchase was made.

(C) Cancellation of VAT Registration. A person whose registration has been cancelled due to retirement from or cessation of business, or
due to changes in or cessation of status under Section 106(C) of this Code may, within two (2) years from the date of cancellation, apply
for the issuance of a tax credit certificate for any unused input tax which may be used in payment of his other internal revenue taxes

(D) Period within which Refund or Tax Credit of Input Taxes shall be Made. In proper cases, the Commissioner shall grant a refund or issue
the tax credit certificate for creditable input taxes within one hundred twenty (120) days from the date of submission of complete
documents in support of the application filed in accordance with Subsection (A) and (B) hereof.

In case of full or partial denial of the claim for tax refund or tax credit, or the failure on the part of the Commissioner to act on the
application within the period prescribed above, the taxpayer affected may, within thirty (30) days from the receipt of the de cision denying
the claim or after the expiration of the one hundred twenty day-period, appeal the decision or the unacted claim with the Court of Tax
Appeals.

(E) Manner of Giving Refund. Refunds shall be made upon warrants drawn by the Commissioner or by his duly authorized representative
without the necessity of being countersigned by the Chairman, Commission on Audit, the provisions of the Administrative Code of 1987 to
the contrary notwithstanding: Provided, that refunds under this paragraph shall be subject to post audit by the Commission on Audit.

Section 229:

Recovery of Tax Erroneously or Illegally Collected. No suit or proceeding shall be maintained in any court for the recovery of any national
internal revenue tax hereafter alleged to have been erroneously or illegally assessed or collected, or of any penalty claimed to have been
collected without authority, or of any sum alleged to have been excessively or in any manner wrongfully collected, until a cl aim for refund
or credit has been duly filed with the Commissioner; but such suit or proceeding may be maintained, whether or not such tax, penalty, or
sum has been paid under protest or duress.

In any case, no such suit or proceeding shall be filed after the expiration of two (2) years from the date of payment of the tax or penalty
regardless of any supervening cause that may arise after payment: Provided, however, That the Commissioner may, even without a written
claim therefor, refund or credit any tax, where on the face of the return upon which payment was made, such payment appears clearly to
have been erroneously paid.

Accenture, Inc. vs. CIR, G.R. No. 190102, July 11, 2012

Facts:
Accenture, Inc. (Accenture) is a corporation, which is VAT registered, engaged in the business of providing management consul ting
services, business strategies development, and selling and/or licensing of software. Majority of its clientele are foreign corporations.

In its VAT Returns for the year 2002, a total of Php 35M of input VAT remained unapplied or unclaimed. In 2004, therefore, Ac centure filed
with the Department of Finance (DOF) an administrative claim for the refund or the issuance of a Tax Credit Certificate (TCC). Because of
the DOFs inaction, Accenture filed a Petition for Review with the Court of Tax Appeals (CTA), praying for the issuance of a TCC in the
amount of Php 35M.

The Commissioner of Internal Revenue (CIR), opposed to the petition, arguing that Accenture was not entitled to a refund or a TCC,
because the transactions, from which the excess input VAT was claimed, did not involve buyers who are doing business outside the
Philippines. Hence, the transactions were not subject to 0% VAT, but at least exempt. Accenture argued that its clients need not be doing
business outside the Philippines since the law applicable should be the un-amended Tax Code of 1997, not the provisions inserted by RA
9337. However, even if the latter law is applicable, still Accenture was able to prove that its clients were doing business o utside the
Philippines. He proves that his clients were doing business outside the Philippines by presenting receipts whi ch purport that the clients were
foreign corporations and that these receipts are zero-rated VAT receipts.

The CTA Division denied the petition, which denial was affirmed by the CTA En Banc. The motion for reconsideration having been denied,
Accenture filed a Petition for Review with the Supreme Court (SC), insisting on the same theories.

Issues:
1. Should the clients of Accenture be doing business outside the Philippines, for it to be able to avail of zero-rate VAT?
2. If so, are the clients of Accenture doing business outside the Philippines under the evidence presented?

Ruling and Discussion:

1. Yes, the clients of Accenture must be doing business outside the Philippines.

Sec. 102 (B) has two paragraphs. The first provides that the processing, manufacturing or repacking of goods, which are
subsequently exported, for other persons doing business outside the Philippines is subject to 0% VAT and that it must be paid in
foreign currency and in accordance with the Bangko Sentral ng Pilipinas (BSP) rules. The second provides merely provides the
latter requirement.

However, the Court ruled in Burmeister case that the clear and logical import of the Tax Code, prior to its amendment, is that it
requires that services which are not processing, manufacturing or repacking of goods must also be to persons or entities doing
16
 business outside the Philippines, in addition to the requirement that it be paid in foreign currency and accounted for in
accordance with the BSP rules. Even though only the first paragraph which states that the buyer should be doing outside the
Philippines, the Court ruled that the second paragraph would be then rendered ineffective, if the same requirement is not
deemed as imposed in the second paragraph, because then the forced exaction of taxes would be at the mercy of the
contracting parties who could just stipulate that the contract be paid in foreign currency.

Later on, RA 9337, which took effect in 2005, inserted in the second paragraph the requirement that the persons whom a
Philippine corporation transacts with or sells services to must be doing business outside the Philippines.

Accenture argues that the requirement cannot be made applicable to these 2002 transactions. Neither can the Burmeister
decision be made applicable to it, because this present case was already filed at the time when the decision in Burmeister case
promulgated. The Court, however, retorted that the ruling is applicable, being merely an interpretation of a statute and which
expresses the contemporaneous legislative intent. Thus, the ruling is deemed to have effect as of the time of the effectivity of the
law interpreted, that is, the un-amended 1997 Tax Code.

Also, the fact that Congress deemed it proper to amend the Tax Code, by placing specifically in the law that the buyer of the
services or goods must be doing business outside the Philippines, affirms the Courts reasoning and interpretation of the un -
amended 1997 Tax Code provision.

2. No, Accenture failed to prove that its clients are doing business outside the Philippines.

Among the pieces of evidence presented are the receipts which purport that the clients are foreign corporations, that their c lients
have not established any branch in the Philippines as per Securities and Exchange Commissions (SEC) records, and which are said to
be 0% VAT receipts. However, the Court concluded that these pieces of evidence, at most, merely established the fact of the
transactions and that these clients are foreign corporations. Using 0% VAT receipts is not a conclusive evidence of the fact that the
transaction is really zero-rated; otherwise, the determination which transaction is 0% VAT or not is left at the discretion of the persons
transacting and not anymore on the law.

There is no specific criterion as to what constitutes doing business in the Philippines, at that time. Each case must be decided
according to its peculiar circumstances. Thus, having failed to prove that their clients are doing business outside the Phili ppines and
having the burden of proving and establishing that its transactions belong to the zero-rated ones it being in same nature of an
exemption, which is construed strictly against the taxpayer or the one claiming exemption Accentures claim for tax refund for input
VAT in 2002 is denied.

Western Mindanao Power Corp. vs. CIR, G.R. No. 181136, June 13, 2012

Facts:
Petitioner WMPC is a domestic corporation engaged in the production and sale of electricity. It is registered with the Bureau of
Internal Revenue (BIR) as a VAT taxpayer.
Petitioner alleges that it sells electricity solely to the National Power Corporation (NPC), which is in turn exempt from the payment
of all forms of taxes, duties, fees and imposts, pursuant to Section 13 of RA No. 6395 (An Act Revising the Charter of the Na tional
Power Corporation). In view thereof and pursuant to Section 108(B) (3) of the NIRC, petitioners power generation services to NPC
is zero-rated.
Under Section 112(A) of the NIRC, a VAT-registered taxpayer may, within two years after the close of the taxable quarter, apply for
the issuance of a tax credit or refund of creditable input tax due or paid and attributable to zero-rated or effectively zero-rated
sales.
WMPC filed with the Commissioner of Internal Revenue (CIR) applications for a tax credit certificate of its i nput VAT covering the
taxable 3 rd and 4th quarters of 1999 (amounting to 3,675,026.67) and all the taxable quarters of 2000 (amounting to
5,649,256.81).
Noting that the CIR was not acting on its application, and fearing that its claim would soon be barred by prescription, WMPC filed
with the Court of Tax Appeals (CTA) in Division a Petition for Review, seeking refund/tax credit certificates for the total a mount of
9,324,283.30.
The CIR filed its Comment on the CTA Petition, arguing that WMPC was not enti tled to the latters claim for a tax refund in view of
its failure to comply with the invoicing requirements under Section 113 of the NIRC in relation to Section 4.108-1 of RR 7-95, which
provides:
SECTION 4.108-1. Invoicing Requirements All VAT-registered persons shall, for every sale or lease of goods or properties or
services, issue duly registered receipts or sales or commercial invoices which must show:
xxx
5. the word zero rated imprinted on the invoice covering zero-rated sales; and
xxx
Only VAT-registered persons are required to print their TIN followed by the word VAT in their invoice or receipts and this
shall be considered as a VAT Invoice. All purchases covered by invoices other than VAT Invoice shall not give rise to any
input tax.
xxx
WMPC countered that the invoicing and accounting requirements laid down in RR 7-95 were merely compliance
requirements, which were not indispensable to establish the claim for refund of excess and unutilized input VAT. Also, Section
113 of the NIRC prevailing at the time the sales transactions were made did not expressly state that failure to comply with all
the invoicing requirements would result in the disallowance of a tax credit refund. The express requirement that the term zero-
rated sale shall be written or printed prominently on the VAT invoice or official receipt for sales subject to zero percent (0%)
17
 VAT appeared in Section 113 of the NIRC only after it was amended by Section 11 of R.A. 9337. This amendment cannot be
applied retroactively, considering that it took effect long after petitioner filed its claim for a tax refund, and considering
further that the RR 7-95 is punitive in nature. Further, since there was no statutory requirement for imprinting the phrase zero-
rated on official receipts prior to the amendment, the RR 7-95 constituted undue expansion of the scope of the legislation it
sought to implement.
CTA Second Division dismissed the Petition. It held that while petitioner submitted in evidence its Quarterly VAT Returns for the
periods applied for, the same do not reflect any zero-rated or effectively zero-rated sales allegedly incurred during said
periods. The spaces provided for such amounts were left blank, which only shows that there existed no zero -rated or
effectively zero-rated sales for the 3rd and 4th quarters of 1999 and the four quarters of 2000. Moreover, it found that petitioners
VAT Invoices and Official Receipts did not contain on their face the phrase zero-rated, contrary to Section 4.108-1 of RR 7-95.
WMPC appealed to the CTA En Banc, which held that the receipts and evidence presented by petitioner failed to fully
substantiate the existence of the latters effectively zero-rated sales to NPC for the 3 rd and 4thquarters of taxable year 1999
and the four quarters of taxable year 2000. The CTA En Banc noted that petitioners Official Receipts and VAT Invoices did not
have the word zero-rated imprinted/stamped thereon, contrary to the clear mandate of Section 4.108-1 of RR 7-95.

Issue: Whether the claim of petitioner for a refund or tax credit on input tax must be dismissed on the ground that the latters Official
Receipts do not contain the phrase zero-rated

Ruling:
Being a derogation of the sovereign authority, a statute granting tax exemption is strictly construed against the person or entity
claiming the exemption. When based on such statute, a claim for tax refund partakes of the nature of an exemption. Hence, the
same rule of strict interpretation against the taxpayer-claimant applies to the claim.
A taxpayer engaged in zero-rated or effectively zero-rated sale may apply for the issuance of a tax credit certificate, or refund of
creditable input tax due or paid, attributable to the sale.
Section 112. Refunds or Tax Credits of Input Tax.
(A) Zero-rated or Effectively Zero-rated Sales. - any VAT-registered person, whose sales are zero-rated or effectively zero-
rated may, within two (2) years after the close of the taxable quarter when the sales were made, apply for the
issuance of a tax credit certificate or refund of creditable input tax due or paid attributable to such sales, except
transitional input tax, to the extent that such input tax has not been applied against output tax: Provided, however,
That in the case of zero-rated sales under Section 106(A)(2)(a)(1), (2) and (B) and Section 108 (B)(1) and (2), the
acceptable foreign currency exchange proceeds thereof had been duly accounted for in accordance with the
rules and regulations of the Bangko Sentral ng Pilipinas (BSP): Provided, further, That where the taxpayer is engaged
in zero-rated or effectively zero-rated sale and also in taxable or exempt sale of goods of properties or services, and
the amount of creditable input tax due or paid cannot be directly and entirely attributed to any one of the
transactions, it shall be allocated proportionately on the basis of the volume of sales.
In a claim for tax refund or tax credit, the applicant must prove not only entitlement to the grant of the claim under substantive
law. It must also show satisfaction of all the documentary and evidentiary requirements for an administrative claim for a refund or
tax credit.
The mere fact that petitioners application for zero-rating has been approved by the CIR does not, by itself, justify the grant of a
refund or tax credit. The taxpayer claiming the refund must further comply with the invoicing and accounting requirements
mandated by the NIRC, as well as by revenue regulations implementing them.
Under the NIRC, a creditable input tax should be evidenced by a VAT invoice or official receipt, which may only be considered as
such when it complies with the requirements of RR 7-95, particularly Section 4.108-1. This section requires, among others, that (i)f
the sale is subject to zero percent (0%) value-added tax, the term zero-rated sale shall be written or printed prominently on the
invoice or receipt.
Court has consistently held as fatal the failure to print the word zero-rated on the VAT invoices or official receipts in claims for a
refund or credit of input VAT on zero-rated sales, even if the claims were made prior to the effectivity of R.A. 9337.
DENIED

Silicon Phil., Inc. vs. CIR, G.R. No. 172378, January 17, 2011

FACTS:
Petitioner Silicon Philippines, Inc. is engaged in the business of designing, developing, manufacturing and exporting advance and
largescale integrated circuit components or "IC's." It is registered with the BIR as a VAT taxpayer. It filed with CIR, an ap plication for
credit/refund of unutilized input VAT. Because of Respondents inaction, Petitioner filed a Petition for Review with the Court of Tax Appeals
Division. It alleged that it generated and recorded zero-rated export sales paid to it in acceptable foreign currency and accounted for in
accordance with the rules and regulations of the BSP.

The CTA Division partially granted Silicon's claim for refund of unutilized input VAT on capital goods but did not allow the deductions for
training materials, office supplies, and other similar items as they were not considered as capital goods. With regard to the claim for
credit/refund of input VAT attributable to its zero-rated export sales, the CTA Division denied the same because Silicon failed to present an
Authority to Print (ATP) from the BIR; neither did it print on its export sales invoices the ATP and the word "zero-rated." Petitioner elevated the
case to the CTA En Banc which denied the Petition for lack of merit.

ISSUE:
1. WON there a need to show that Silicon secured an ATP from the BIR and to indicate the same in its export sales invoices; and to
print the word "zero-rated" in its export sales invoices. -YES

18
 2. WON the supplies (i.e. training materials, office supplies, etc.) are classified as capital goods. NO.

HELD:
1. In a claim for credit/refund of input VAT attributable to zero-rated sales, Section 112 (A) of the NIRC lays down four requisites: (a)
the taxpayer must be VAT-registered; (b) the taxpayer must be engaged in sales which are zero-rated or effectively zero-rated;
(c) the claim must be filed within two years after the close of the taxable quarter when such sales were made; and (d) the
creditable input tax due or paid must be attributable to such sales, except the transitional input tax, to the extent that su ch input
tax has not been applied against the output tax.

To prove that the claimant is engaged in sales which are zero-rated or effectively zero-rated, duly registered invoices or receipts
evidencing zero-rated sales must be presented. However, since the ATP is not indicated in the invoices or receipts, the only way to verify
whether the invoices or receipts are duly registered is by requiring the claimant to present its ATP from the BIR. Without this pro of, the
invoices or receipts would have no probative value for the purpose of refund. Similarly, failure to print the word "zero -rated" on the sales
invoices or receipts covering zero-rated sales is fatal to a claim for credit/refund of input VAT on zero-rated sales.

In this case, petitioner failed to present its ATP and to print the word "zero-rated" on its export sales invoices.

2. To claim a refund of input VAT on capital goods, Section 112 (B) 56 of the NIRC requires that: (a) the claimant must be a VA T
registered person; (b) the input taxes claimed must have been paid on capital goods; (c) the input taxes must not have been
applied against any output tax liability; and (d) the administrative claim for refund must have been filed within two (2) years af ter
the close of the taxable quarter when the importation or purchase was made.

The term "Capital goods or properties" refers to those goods or properties with estimated useful life greater that one year and which are
treated as depreciable assets, used directly or indirectly in the production or sale of taxable goods or services. Based on t his definition, the
Court finds that the items reflected in petitioner's Summary of Importation of Goods are not capital goods.

Renato V. Diaz, et al. vs. Secretary of Finance, et al., G.R. No. 193007, July 19, 2011

FACTS:
BIR attempted during the administration of President Gloria Macapagal-Arroyo to impose VAT on toll fees. This was temporary suspended.
Upon President Benigno C. Aquino III's assumption of office in 2010, the BIR revived the idea and would impose the challenged tax on toll
fees beginning August 16, 2010 unless judicially enjoined.

Petitioner Diazs contention:

when it enacted the NIRC, Congress did not intend to include toll fees within the meaning of "sale of services" that are subject to
VAT;
that a toll fee is a "user's tax," not a sale of services;
amount to a tax on public service; and
VAT was never factored into the formula for computing toll fees, its imposition would violate the non-impairment clause of
the constitution.

Respondent through OSGs answer:

NIRC imposes VAT on all kinds of services of franchise grantees, including tollway operations.
petitioners have no right to invoke the non-impairment of contracts clause since they clearly have no personal interest in existing
toll operating agreements (TOAs) between the government and tollway operators
the non-inclusion of VAT in the parametric formula for computing toll rates cannot exempt tollway operators from VAT.
it cannot be claimed that the rights of tollway operators to a reasonable rate of return will be impaired by the VAT since this is
imposed on top of the toll rate.

Petitioners reply:
tollway operators cannot be regarded as franchise grantees under the NIRC since they do not hold legislative franchises.
the BIR intends to collect the VAT by rounding off the toll rate and putting any excess collection in an escrow account. But this
would be illegal since only the Congress can modify VAT rates and authorize its disbursement.
BIR Revenue Memorandum Circular 63-2010 (BIR RMC 63-2010), which directs toll companies to record an accumulated input VAT
of zero balance in their books as of August 16, 2010, contravenes Section 111 of the NIRC which grants entities that first become
liable to VAT a transitional input tax credit of 2% on beginning inventory. For this reason, the VAT on toll fees cannot be
implemented.

ISSUES:
1. Whether or not the government is unlawfully expanding VAT coverage by including tollway operators and tollway operations in
the terms "franchise grantees" and "sale of services" under Section 108 of the Code; and
2. Whether or not the imposition of VAT on tollway operators
a. amounts to a tax on tax and not a tax on services;
b. will impair the tollway operators' right to a reasonable return of investment under their TOAs; and
c. is not administratively feasible and cannot be implemented.

RULING:
1. NO. Tollway operations is included as franchise grantees and as sale of service

19
 Not only do tollway operators come under the broad term "all kinds of services," they also come under the specific class
described in Section 108 as "all other franchise grantees" who are subject to VAT, "except those under Section 119 of this Code."

Tollway operators are franchise grantees and they do not belong to exceptions (the low-income radio and/or television
broadcasting companies with gross annual incomes of less than P10 million and gas and water utilities) that Section 119 spares
from the payment of VAT.

The word "franchise" broadly covers government grants of a special right to do an act or series of acts of public concern. Nothing
in Section 108 indicates that the "franchise grantees" it speaks of are those who hold legislative franchises. It has been broadly
construed as referring, not only to authorizations that Congress directly issues in the form of a special law, but also to those granted
by administrative agencies to which the power to grant franchises has been delegated by Congress.

APPLICABLE LAW:

VAT is levied, assessed, and collected, according to Section 108, on the gross receipts derived from the sale or exchange of services as well
as from the use or lease of properties. The third paragraph of Section 108 defines "sale or exchange of services" as follows:
The phrase 'sale or exchange of services' means the performance of all kinds of services in the Philippines for others for
a fee, remuneration or consideration, including
xxx
; services of franchise grantees of electric utilities, telephone and telegraph, radio and television broadcasting and all
other franchise grantees except those under Section 119 of this Code and xxx

2.
a. Not a tax on tax

VAT on tollway operations cannot be deemed a tax on tax due to the nature of VAT as an indirect tax.

In indirect taxation, a distinction is made between the liability for the tax and burden of the tax. The seller who is liable for the VAT
may shift or pass on the amount of VAT it paid on goods, properties or services to the buyer. In such a case, what is transfe rred is
not the seller's liability but merely the burden of the VAT.

VAT on tollway operations is not really a tax on the tollway user, but on the tollway operator. Under Section 105 of the Code, VAT is
imposed on any person who, in the course of trade or business, sells or renders services for a fee. In other words, the seller of
services, who in this case is the tollway operator, is the person liable for VAT. The latter merely shifts the burden of VAT to the
tollway user as part of the toll fees.
Nor toll fees were deemed as a "user's tax." VAT is assessed against the tollway operator's gross receipts and not necessarily on the
toll fees. Although the tollway operator may shift the VAT burden to the tollway user, it will not make the latter directly liable for the
VAT. The shifted VAT burden simply becomes part of the toll fees that one has to pay in order to use the tollways.

What the government seeks to tax here are fees collected from tollways that are constructed, maintained, and operated by
private tollway operators at their own expense under the build, operate, and transfer scheme that the government has adopted
for expressways.

A tax is imposed under the taxing power of the government principally for the purpose of raising revenues to fund public
expenditures. Toll fees, on the other hand, are collected by private tollway operators as reimbursement for the costs and
expenses incurred in the construction, maintenance and operation of the tollways, as well as to assure them a reasonable marg in
of income.

b. Not necessarily impair tollways reasonable rate of recovery

This is purely speculative. Equally presumptuous is her assertion that a stipulation in the TOAs known as the Material Adverse
Grantor Action will be activated if VAT is thus imposed. The Court cannot rule on matters that are manifestly conjectural. Neither
can it prohibit the State from exercising its sovereign taxing power based on uncertain, prophetic grounds.

c. Cannot rule upon the matter

The Court cannot preempt the BIR's discretion on the matter, absent any clear violation of law or the Constitution.

The Court cannot prematurely declare as illegal, BIR RMC 63-2010 which directs toll companies to record an accumulated input
VAT of zero balance in their books as of August 16, 2010, the date when the VAT imposition was supposed to take effect.

The tollway operators agreed to waive the 2% transitional input VAT, in exchange for cancellation of their past due VAT liabilities.
Notably, the right to claim the 2% transitional input VAT belongs to the tollway operators who have not questioned the circular's
validity.

Any declaration by the Court that the manner of its implementation is illegal or unconstitutional would be premature. Besides, any
concern about how the VAT on tollway operations will be enforced must first be addressed to the BIR on whom the task of
implementing tax laws primarily and exclusively rests.

Administrative feasibility is one of the canons of a sound tax system. It simply means that the tax system should be capable of
being effectively administered and enforced with the least inconvenience to the taxpayer.
20
TO SUM UP PRINCIPLES APPLIED:

CIR did not usurp legislative prerogative or expand the VAT law's coverage when she sought to impose VAT on tollway operations.
Section 108 (A) of the Code clearly states that services of all other franchise grantees are subject to VAT, except as may be
provided under Section 119 of the Code. Tollway operators are not among the franchise grantees subject to franchise tax under
the latter provision. Neither are their services among the VAT-exempt transactions under Section 109 of the Code.

Tax exemptions must be justified by clear statutory grant and based on language in the law too plain to be mistaken. But as the
law is written, no such exemption obtains for tollway operators. The Court is thus duty-bound to simply apply the law as it is found.

Lastly, the grant of tax exemption is a matter of legislative policy that is within the exclusive prerogative of Congress. The Court's
role is to merely uphold this legislative policy, as reflected first and foremost in the language of the tax statute.

Congress has given the term "services" an all-encompassing meaning. The listing of specific services are intended to illustrate how
pervasive and broad is the VAT's reach rather than establish concrete limits to its application. Thus, every activity that can be
imagined as a form of "service" rendered for a fee should be deemed included unless some provision of law especially excludes
it.

Section 108 subjects to VAT "all kinds of services" rendered for a fee "regardless of whether or not the performance thereof calls for
the exercise or use of the physical or mental faculties."

KEPCO Phils. V. CIR, G.R. No. 179961, 31 January 2011

FACTS:
KEPCO is a domestic corporation and is a valud added tax registered taxpayer engaged int he production and sale of electricity as an
independent power producer. Kepco filed with the CIR an applicaiton for effective zero-rating of its sales of electricity to the NPC.

Kepco alleged that for the year 1999, it incurred input VAT of P10, 527, 202. 54 on its domestic purchases of goods and services that were
used in its production and sale of electricity to NPC for the same period.

Thereafter, Kepco filed a petition for review before the CTA. The CTA rendered a decision denying Kepcos claim for refund for failure to
properly substantiate its effectively zero-rated sales for the taxable year 1999. Kepco filed an appeal via petition for review before the CTA
En banc which dismissed the petition for failure of Kepco to imprint the words zero-rated on its official receipts which results in non-
entitlement to the benefit of VAT zero-rating and dneial of its claim for refund of input tax. Hence, the petition.

ISSUE
whether or not the failure of KEPCO to imprint the words zero-rated on its vat official receipts justifies an outright denial of its claim for
refund of untutilized input tax credits

DECISION
No. There is no doubt that NPC is an entity with a special charter and exempt from payment of all forms of taxes, including VAT. As such,
services rendered by any VAT-registered person/entity, like Kepco, to NPC are effectively subject to zero percent (0%) rate.
For the effective zero rating of such services, however, the VAT-registered taxpayer must comply with invoicing requirements under the
NIRC

Section 4.108-1.Invoicing Requirements. All VAT-registered persons shall, for every sale or lease of goods or properties or services, issue
duly registered receipts or sales or commercial invoices which must show:
1.The name, TIN and address of seller; 2.Date of transaction;
3.Quantity, unit cost and description of merchandise or nature of service;
4.The name, TIN, business style, if any, and address of the VAT- registered purchaser, customer or client;
5.The word "zero-rated" imprinted on the invoice covering zero-rated sales;
6.The invoice value or consideration.

Indeed, it is the duty of Kepco to comply with the requirements, including the imprinting of the words "zero-rated" in its VAT official receipts
and invoices in order for its sales of electricity to NPC to qualify for zero-rating. It must be emphasized that the requirement of imprinting the
word "zero-rated" on the invoices or receipts is mandatory.

The appearance of the word "zero-rated" on the face of invoices covering zero-rated sales prevents buyers from falsely claiming input VAT
from their purchases when no VAT was actually paid. If, absent such word, a successful claim for input VAT is made, the government would
be refunding money it did not collect. Further, the printing of the word "zero-rated" on the invoice helps segregate sales that are subject to
10% (now 12%) VAT from those sales that are zero-rated so that the BIR may properly implement and enforce the provision of the NIRC on
VAT.

KEPCO cites the Intel case to support its claim for refund. In the Intel case, the claim for tax refund or issuance of a tax credit certificate was
denied due to the taxpayer's failure to reflect or indicate in the sales invoices the BIR authority to print. The Court held that the BIR authority
to print was not one of the items required by law or BIR regulation to be indicated or reflected in the invoices or receipts, hence, the BIR
erred in denying the claim for refund. In the present case, however, the principal ground for the denial was the absence of the word "zero-
rated" on the invoices, in clear violation of the invoicing requirements.

21
Regarding Kepco's contention, that non-compliance with the requirement of invoicing would only subject the non-complying taxpayer to
penalties of fine and imprisonment and not to the outright denial of the claim for tax refund or credit, must likewise fail. Section 264
categorically provides for penalties in case of "Failure or Refusal to Issue Receipts or Sales or Commercial Invoices, Violations related to the
Printing of such Receipts or Invoices and Other Violations," but not to penalties for failure to comply with the requirement of invoicing.
Actions for tax refund, as in this case, are in the nature of a claim for exemption and the law is construed in strictissimi juris against the
taxpayer.

CIR v. Aichi Forging, G.R. No. 184823, October 6, 2010

Facts:
Respondent Aichi Forging Company of Asia, Inc., a VAT registered entity, is engaged in the manufacturing, producing, and processing of
steel and its by-products.

On September 30, 2004, respondent filed a claim for refund/credit of input VAT in relation to its zero-rated sales for the period of July 1, 2002
to September 30, 2002 in the total amount of P3,891,123.82 with the petitioner CIR, through the Department of Finance (DOF) O ne-Stop
Shop.

On even date, respondent filed a Petition for Review 7 with the CTA for the refund/credit of the same input VAT. The CTA 2nd Division
partially granted respondents claim for refund/credit.

Petitioner filed a Motion for Partial Reconsideration, insisting that the administrative and the judicial claims were filed beyond the two-year
period to claim a tax refund/credit provided for under Sections 112(A) and 229 of the NIRC. He reasoned that since the year 2004 was a
leap year, the filing of the claim for tax refund/credit on September 30, 2004 was beyond the two-year period, which expired on
September 29, 2004. He cited as basis Article 13 of the Civil Code, which provides that when the law speaks of a year, it is equivalent to 365
days. In addition, petitioner argued that the simultaneous filing of the administrative and the judicial claims contravenes Sections 112 and
229 of the NIRC. According to the petitioner, a prior filing of an administrative claim is a condition precedent before a judicial claim can
be filed.

The CTA denied the MPR thus the case was elevated to the CTA En Banc for review. The decision was affirmed. Thus the case was elevated
to the Supreme Court.

Respondent contends that the non-observance of the 120-day period given to the CIR to act on the claim for tax refund/credit in Section
112(D) is not fatal because what is important is that both claims are filed within the two-year prescriptive period. In support thereof,
respondent cited Commissioner of Internal Revenue v. Victorias Milling Co., Inc. [130 Phil 12 (1968)] where it was ruled that if the CIR takes
time in deciding the claim, and the period of two years is about to end, the suit or proceeding must be started in the CTA before the end of
the two-year period without awaiting the decision of the CIR.

Issues:
1. Whether or not the claim for refund was filed within the prescribed period.
2. Whether or not the simultaneous filing of the administrative and the judicial claims contravenes Section 229 of the NIRC, which
requires the prior filing of an administrative claim, and violates the doctrine of exhaustion of administrative remedies.

Ruling:

1. Yes. As ruled in the case of Commissioner of Internal Revenue v. Mirant Pagbilao Corporation (G.R. No. 172129, September 12, 2008), the
two-year period should be reckoned from the close of the taxable quarter when the sales were made.

In Commissioner of Internal Revenue v. Primetown Property Group, Inc (G.R. No. 162155, August 28, 2007, 531 SCRA 436), we said that as
between the Civil Code, which provides that a year is equivalent to 365 days, and the Administrative Code of 1987, which stat es that a
year is composed of 12 calendar months, it is the latter that must prevail being the more recent law, following the legal maxim, Lex
posteriori derogat priori.

Thus, applying this to the present case, the two-year period to file a claim for tax refund/credit for the period July 1, 2002 to September 30,
2002 expired on September 30, 2004. Hence, respondents administrative claim was timely filed.

2. Yes. We find the filing of the judicial claim with the CTA premature.

Section 112(D) of the NIRC clearly provides that the CIR has 120 days, from the date of the submission of the comple te documents in
support of the application [for tax refund/credit], within which to grant or deny the claim. In case of full or partial deni al by the CIR, the
taxpayers recourse is to file an appeal before the CTA within 30 days from receipt of the decision of the CIR. However, if after the 120-day
period the CIR fails to act on the application for tax refund/credit, the remedy of the taxpayer is to appeal the inaction of the CIR to CTA
within 30 days.

Subsection (A) of Section 112 of the NIRC states that any VAT-registered person, whose sales are zero-rated or effectively zero-rated may,
within two years after the close of the taxable quarter when the sales were made, apply for the issuance of a tax credit certificate or
refund of creditable input tax due or paid attributable to such sales. The phrase within two (2) years x x x apply for the issuance of a tax
credit certificate or refund refers to applications for refund/credit filed with the CIR and not to appeals made to the CTA.

The case of Commissioner of Internal Revenue v. Victorias Milling, Co., Inc. is inapplicable as the tax provision involved in that case is
Section 306, now Section 229 of the NIRC. Section 229 does not apply to refunds/credits of input VAT.
22
The premature filing of respondents claim for refund/credit of input VAT before the CTA warrants a dismissal inasmuch as no jurisdiction was
acquired by the CTA.

CIR vs. Sony Phil., Inc., G.R. No. 178697, November 17, 2010

Principle: There must be a sale, barter or exchange of goods or properties before any VAT may be levied. Mere dole out is not considered
as a sale, barter or exchange. So, no VAT can be levied.

Facts:
CIR issued LOA authorizing certain revenue officers to examine Sonys books of accounts and other accounting records regarding revenue
taxes for the period 1997 and unverified prior years.

A preliminary assessment for 1997 deficiency taxes and penalties was issued by the CIR which Sony protested. The CIR issued f inal
assessment notices, the formal letter of demand and the details of discrepancies; these contain the deficiency taxes and penalties for late
remittance of internal revenue taxes.

It sought re-evaluation from the assessment, but after the lapse of the period; it, then, filed a petition for review to CTA.

CTA ruled that the deficiency VAT assessment is disallowed because the subsidized advertising expense paid by Sony which was duly
covered by a VAT invoice resulted in an input VAT credit.

CIR contended that Sonys advertising expense could not be considered as an input VAT credit because the same was eventually
reimbursed by Sony International Singapore (SIS). Since Sonys advertising expense was reimbursed by SIS, the former never incurred any
advertising expense. As a result, Sony is not entitled to a tax credit.

Issue:
a) Whether or not the subsidy made by Sony Singapore in favor of Sony Philippines is a sale, barter, exchange of goods or properties
subject to VAT.
b) Whether or not the advertising expense incurred by Sony Philippines is a legitimate business expense that would result into a n input
VAT credit.

Ruling:
a) No, it is not subject to VAT. It is because there was no such sale, barter or exchange in the subsidy given by Sony Singapore to
Sony Philippines. It was but a dole out by Sony Singapore and not in payment for goods or properties sold, bartered or exchanged
by Sony Philippines.
b) Yes, it is because an advertising expense duly covered by a VAT invoice is a legitimate business expense that would result in to an
input VAT credit.

Panasonic Communications Imaging Corp. of the Phil. vs. CIR, G.R. No. 178090, February 8, 2010

FACTS:
Panasonic Communications Imaging Corporation of the Philippines is a registered value-added tax enterprise.
From April 1 to September 30, 1998 and from October 1, 1998 to March 31, 1999, Panasonic generated export sales amounting to
a total of US$24,678,964.93.
Believing that these export sales were zero-rated for VAT under Section 106(A)(2)(a)(1) of the 1997 National Internal Revenue
Code, Panasonic paid input VAT attributable to its zero-rated sales.
Claiming that the input VAT it paid remained unutilized or unapplied, on March 12, 1999 and July 20, 1999 petitioner Panasonic
filed with the Bureau of Internal Revenue two separate applications for refund or tax credit of what it paid. BIR did not act on it so
Panasonic filed a petition for review in the CTA.
CTA:
While petitioner Panasonics export sales were subject to 0% VAT under Section 106(A)(2)(a)(1) of the 1997 NIRC, the same did not
qualify for zero-rating because the word zero-rated was not printed on Panasonics export invoices. This omission violates the
invoicing requirement.
ISSUE:
Whether or not the CTA correctly denied petitioners claim for refund of the VAT it paid as a zero-rated taxpayer on the ground
that its sales invoices did not state on their faces that its sales were zero-rated.
HELD:
The VAT is a tax on consumption, an indirect tax that the provider of goods or services may pass on to his customers. Under the
VAT method of taxation, which is invoice-based, an entity can subtract from the VAT charged on its sales or outputs the VAT it
paid on its purchases, inputs and imports. The difference in tax shown on invoices passed and invoices received is the tax paid to
the government. In case the tax on invoices received exceeds that on invoices passed, a tax refund may be claimed.
Under the 1997 NIRC, if at the end of a taxable quarter the seller charges output taxes equal to the input taxes that his sup pliers
passed on to him, no payment is required of him. It is when his output taxes exceed his input taxes that he has to pay the excess to
the BIR. If the input taxes exceed the output taxes, however, the excess payment shall be carried over to the succeeding quar ter

23
 or quarters. Should the input taxes result from zero-rated or effectively zero-rated transactions or from the acquisition of capital
goods, any excess over the output taxes shall instead be refunded to the taxpayer.
Zero-rated transactions generally refer to the export sale of goods and services. The tax rate in this case is set at zero. When
applied to the tax base or the selling price of the goods or services sold such zero rate results in no tax chargeable agains t the
foreign buyer or customer. But, although the seller in such transactions charges no output tax, he can claim a refund of the VAT
that his suppliers charged him. The seller thus enjoys automatic zero rating, which allows him to recover the input taxes he paid
relating to the export sales, making him internationally competitive.
For the effective zero rating of such transactions, the taxpayer has to be VAT-registered and must comply with invoicing
requirements.
CIR ruled under Revenue Memorandum Circular (RMC) 42-2003 that the taxpayers failure to comply with invoicing requirements
will result in the disallowance of his claim for refund.
When R.A. 9337 amended the 1997 NIRC on November 1, 2005, it made this particular revenue regulation a part of the tax code.
This conversion from regulation to law did not diminish the binding force of such regulation with respect to acts committed prior to
the enactment of that law.
The printing of the word zero-rated on the invoice helps segregate sales that are subject to 10% (now 12%) VAT from those sales
that are zero-rated.
Unable to submit the proper invoices, petitioner Panasonic has been unable to substantiate its claim for refund.

CIR v Prime Holdings, G.R. No. 183505, February 26, 2010

FACTS:
The Bureau of Internal Revenue both sent Preliminary Assessment Notices (PAN) to SM Prime Holdings and First Asia, corporatio ns
both engaged in the business of operating cinema houses, for non-payment of VAT. The CIR in particular sent four PANs to First
Asia for non-payment of VAT for four taxable years. Both corporation filed a letter-protest before the BIR but was subsequently
denied, forcing them to file a Petition for Review before the CTA where the sole issue was whether gross receipts derived from
admission tickets by cinema/theater operators or proprietors are subject to VAT.
CTA First Division ruled for SM Prime holdings and First Asia, declaring that the activity of showing cinematographic films is not a
service covered by VAT under the NIRC of 1997. The CTA First Division held that the House of Representatives resolved that there
should only be one business tax applicable to theaters and movie houses, which is the 30% amusement tax imposed by cities and
provinces under the LGC of 1991.
CIR appealed to the CTA En Banc but the latter dismissed the appeal and reiterated that the exhibition or showing of motion
pictures, films, or movies is instead subject to amusement tax under the LGC of 1991 and not VAT.
CIR challenged the case before the SC.

ISSUE: WON the gross receipts derived by operators or proprietors of cinema/theater houses from admission tickets are subject to VAT.

HELD:
No. Historically, the activity of showing motion pictures, films or movies by cinema/theater operators or proprietors has always be en
considered as a form of entertainment subject to amusement tax. Prior to the Local Tax Code, all forms of amusement tax were imposed
by the national government. When the Local Tax Code was enacted, amusement tax on admission tickets from theaters, cinematogr aphs,
concert halls, circuses and other places of amusements were transferred to the local government. Under the NIRC of 1977, the national
government imposed amusement tax only on proprietors, lessees or operators of cabarets, day and night clubs, Jai-Alai and race tracks.
The VAT law was enacted to replace the tax on original and subsequent sales tax and percentage tax on certa in services. When the VAT
law was implemented, it exempted persons subject to amusement tax under the NIRC from the coverage of VAT. When the Local Tax
Code was repealed by the LGC of 1991, the local government continued to impose amusement tax on admissio n tickets from theaters,
cinematographs, concert halls, circuses and other places of amusements. Amendments to the VAT law have been consistent in exe mpting
persons subject to amusement tax under the NIRC from the coverage of VAT. Only lessors or distributors of cinematographic films are
included in the coverage of VAT.

Tambunting Pawnshop, Inc. v. CIR, G.R. No. 179085, 21 January 2010

FACTS:
Respondent Commissioner of Internal Revenue assessed petitioner Tambunting Pawnshop for deficiency Value -Added Tax for the taxable
year 1999. Petitioner questioned such assessment and argued that pawnshops are not subject to Value Added Tax pursuant to Section 108
of the National Internal Revenue Code.

ISSUE: Whether pawnshops are in involved in "sale or exchange of services" under the general provision therefore subjecting it to VA T and
justifying the assessments made for the taxable year 1999.

RULING OF THE SUPREME COURT

The petition is IN PART meritorious.

WHY PARTLY MERITORIOUS

(1) Pawnshops were once treated as non-VATable non-bank financial intermediaries. Subsequently, they were made VATable and
subject to 10% VAT. Ultimately (AT PRESENT), they are back to being non-VATable non-bank financial intermediaries.

24
 (2) HOWEVER, even during the period when they were considered VATable, the levy, assessment and collection of such VAT were
deferred until December 31, 2002.
REMEMBER: The assessments in question pertain to the taxable year 1999.

DISCUSSION OF THE COURT

Historical background of how pawnshops are treated in relation to VAT:
(1) In 1977, pawnshops were considered as non-bank financial intermediaries subject to 5% tax on gross receipts.

(2) In 1994, with the passage of the Expanded Value-Added Tax Law, pawnshops were made subject to the 10% VAT imposed on
banks and non-bank financial intermediaries and financial institutions under Section 102 of the Tax Code of 1977 (now Section 108
of the Tax Code of 1997) BUT the levy, collection and assessment of the 10% VAT were made effective January 1, 1998.

(3) R.A. No. 8424 or the Tax Reform Act of 1997 likewise imposed a 10% VAT under Section 108 BUT the levy, collection and assessment
thereof were again DEFERRED until December 31, 1999.

(4) The levy, collection and assessment of the 10% VAT was FURTHER DEFERRED by R.A. No. 8761 until December 31, 2000, and by R.A.
No. 9010, until December 31, 2002.

(5) With no further deferments given by law, THE LEVY, COLLECTION AND ASSESSMENT OF THE 10% VAT on banks, non-bank financial
intermediaries, finance companies, and other financial intermediaries not performing quasi-banking functions WERE FINALLY MADE
EFFECTIVE BEGINNING JANUARY 1, 2003.

Finally, with the enactment of R.A. No. 9238 in 2004, the services of banks, non- bank financial intermediaries, finance companies, and other
financial intermediaries not performing quasi-banking functions were specifically exempted from VAT, and the 0% to 5% percentage tax on
gross receipts on other non-bank financial intermediaries was re-imposed under Section 122 of the Tax Code of 1997.

IN RELATION TO THE QUESTIONED ASSESSMENTS

At the time of the disputed assessment, that is, for the year 2000, pawnshops were not subject to 10% VAT under the general
provision on "sale or exchange of services" as defined under Section 108 (A) of the Tax Code of 1997, which states: "'sale or
exchange of services' means the performance of all kinds of services in the Philippines for others for a fee, remuneration or
consideration..."
INSTEAD, due to the specific nature of its business, PAWNSHOPS WERE THEN SUBJECT TO 10% VAT UNDER THE CATEGORY OF
NON-BANK FINANCIAL INTERMEDIARIES.

Since petitioner is a non-bank financial intermediary, it is subject to 10% VAT for the tax years 1996 to 2002; HOWEVER, with the levy,
assessment and collection of VAT from non-bank financial intermediaries BEING SPECIFICALLY DEFERRED by law, then petitioner is
not liable for VAT during these tax years.

But with the full implementation of the VAT system on non-bank financial intermediaries starting January 1, 2003, petitioner is liable
for 10% VAT for said tax year.

Beginning 2004 up to the present, by virtue of R.A. No. 9238, petitioner is no longer liable for VAT but it is subject to percentage tax
on gross receipts from 0% to 5%, as the case may be.

In light of the foregoing ruling, since the imposition of VAT on pawnshops, which are non-bank financial intermediaries, was deferred for the
tax years 1996 to 2002, petitioner is not liable for VAT for the tax year 1999.

CIR vs. Court of Appeals, et al., G.R. No. 125355, March 30, 2000

SYNOPSIS: Commonwealth Management and Services Corporation (COMASERCO, for brevity), is a corporation duly organized and existing
under the laws of the Philippines. It is an affiliate of Philippine American Life Insurance Co. (PhilamLife), organized by th e letter to perform
collection, consultative and other technical services, including functioning as an integral auditor, of Philamlife and its other affiliates.

On January 24, 1992, the BIR issued an assessment to private respondent COMASERCO for deficiency value-added tax (VAT) amounting to
P351,851.01, for taxable year 1988.

COMASERCOs annual corporate income tax return ending December 31, 1988 indicated a net loss in its operation in the amount o f
P6,077.00

On February 10, 1992, COMASERCO filed with the BIR, a letter-protest objecting to the latters finding of deficiency VAT. On August 20, 1992,
the Commissioner of Internal Revenue sent a collection letter to COMASERCO demanding payment of the deficiency VAT

On September 29, 1992, COMASERCO filed with the Court of Tax Appeals a petition for review contesting the Commissioners assessment.
COMASERCO asserted that the services it rendered to Philamlife and its affiliates, relating to collection, consultative and o ther technical
assistance, including functioning as an internal auditor, were on a no-profit, reimbursement-of-cost-only basis. It averred that it was not

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engaged in the business of providing services to Philamlife and its affiliates. COMASERCO was established to ensure operation al orderliness
and administrative efficiency of Philamlife and its affiliates, and not in the sales of service. COMASERCO stressed that it was not profit-
motivated, thus not engaged in business. In fact, it did not generate profit but suffered a net loss in taxable year 1988. CO MASERCO
averred that since it was not engaged in business, it was not liable to pay VAT.

On June 22, 1995, the CTA rendered decision in favor of the CIR.

On July 26, 1995, respondent filed with the Court of Appeals, petition for review of the decision of the Court of Appeals.

After due proceedings, on May 13, 1996, the Court of Appeals rendered decision reversing that of the Court of Tax Appeals.
The CA anchored its decision on the ratiocination in another tax case involving the same parties, where it was held that COMASERCO was
not liable to pay fixed and contractors tax for services rendered to Philamlife and its affiliates. The CA, in that case, reasoned that
COMASERCO was not engaged in business of providing services to Philamlife and its affiliates. In the same manner, the Court o f Appeals
held that COMASERCO was not liable to pay VAT for it was not engaged in the business of selling service.

On July 16, 1996, the Commissioner of Internal Revenue filed with this Court a petition for review on certiorari assailing the decision of the
Court of Appeals.

Petitioner Commissioner on Internal Revenue aver that to engage in business and to engage in the sale of services are two different
things. Petitioner maintains that the services rendered by COMASERCO to Philamlife and its affiliates, for a f ee or consideration, are subject
to VAT. VAT is a tax on value added by the performance of the service. It is immaterial whether profit is derived from rendering the service.

ISSUE: Whether COMASERCO was engaged in the sale of services, and thus liable to pay VAT thereon.

DISPOSITION: The Court GRANTS the petition and REVERSES the decision of the Court of Appeals in CA-G.R. SP No. 37930

RULING: (1) Contrary to COMASERCOs contention, R.A. 7716, the Expanded VAT Law (EVAT) clarifies that even a non-stock, non-profit,
organization or government entity, is liable to pay VAT on the sale of goods or service. On May 28, 1994, Congress enacted RA 7716, the
Expanded VAT Law (EVAT), amending among other sections Section 99 of the Tax Code. On January 1, 1998, R epublic Act 8424, the
National Internal Revenue Code of 1997, took effect. The amended law provides that:

SEC. 105. Persons Liable. Any person who, in the course of trade or business, sells, barters. Exchanges, leases goods or properties,
renders services, and nay person who imports goods shall be subject to the value-added tax (VAT) imposed in Sections 106 and
108 of this Code.

The value-added tax is an indirect tar and the amount of tax may be shifted or passed on to the buyer, transferee or lessee of
the good, properties or services. This rule shall likewise apply to existing sale or lease of goods, properties or services a t the time of
the effectivity of Republic Act No. 7716.

The phrase in the course of trade or business means the regular conduct or pursuit of a commercial or an economic activity,
including transactions incidental thereto, by any person regardless of whether or not the person engaged there in is a nonsto ck.
Nonprofit organization (irrespective of the disposition of its net income andw whether or not it sells exclusively to members of their
guests), or government entity.

The rule on regularity, to the contrary notwithstanding, services as defined in this Code rendered in the Philippines by nonresident
foreign persons shall be considered as being rendered in the course of trade or business.

Contrary to COMASERCOs contention the above provision clarifies that even a non-stock, non-profit, organization or government entity, is
liable to pay VAT on the sale of goods or services. VAT is a tax on transactions, imposed at every stage of the distribution process on the
sale, barter, exchange of goods, or property, and on the performance of services, even in the absence of profit attributable thereto. The
term in the course of business requires the regular conduct or pursuit of a commercial or an activity, regardless of whether or not the
entity is profit-oriented.

(2) In the course of Trade or Business, defined. The definition of the term in the course of trade or business incorporated in the present
laws applies to all transactions even to those made prior to its enactment. Executive Order No. 273 stated that any person wh o, in the
course of trade or business, sells, barters or exchanges goods or services, was already liable to pay VAT. The present law merely stresses that
even a nonstock, nonprofit organization or government entity is liable to pay VAT for the sale of goods and services.

(3) Sales of Services, defined. Section 108 of the NIRC of 1997 defines the phrase sale of services as the performance of all kinds of
services for others for a fee, remuneration or consideration. It includes the supply of technical advice, assistance or ser vices rendered in
connection with technical management or administration of any scientific, industrial or commercial undertaking or project.

(4) A domestic corporation that provided technical, research, management and technical assistance to its affiliated companies and
received payments on a reimbursement-of-cost basis, without any intention of realizing profit, was subject to VAT on services rendered.
On February 5, 1998, the Commissioner of Internal Revenue issued BIR Ruling No. 010-9812 emphasizing that a domestic corporation that
provided technical, research, management and technical assistance to its affiliated companies and received payments on a
reimbursement-of-cost basis, without any intention of realizing profit, was subject to VAT on services rendered. In fact, even if such
corporation was organized without any intention of realizing profit, any income or profit generated by the entity in th e conduct of its
activities was subject to income tax.

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Hence, it is immaterial whether the primary purpose of a corporation indicates that it receives payments for services rendered to its affiliates
on a reimbursement-on-cost basis only, without realizing profit, for purposes of determining liability of VAT on services rendered. As long as
the entity provides service for a fee, remuneration or consideration, then the service rendered is subject to VAT.

Lacking Cases:
CIR vs. Burmeister and Wain Scandinavian Contractor Mindanao, Inc., G.R. No. 153205, January 22, 2007
CIR v. American Express International, Inc., G.R. No. 152609, 29 June 2005
Philippine Phosphate Fertilizer v. CIR, G.R. No. 141873, 28 June 2005
CIR v. Cebu Toyo Corporation, G.R. No. 149073, 17 February 2005
Contex Corp. vs. Commissioner of Internal Revenue, G.R. No. 151135, July 2, 2004
Atlas Consolidated Mining v. CIR, G.R. No. 134467, November 17, 1999

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