Professional Documents
Culture Documents
SECOND DIVISION
Members:
DECISION
CASTANEDA, JR., J.:
The instant Petition for Review was filed by Philex Mining Corporation
on February 7, 2011 to seek the refund of its alleged excess and unutilized
input value-added taxes (VAT) for the third quarter of 2008 in the amount of
organized under Philippine laws, with principal office at 27 Brixton St. , Pasig
marketing of mine products , consisting principally of gold bullion and copper }1?-
DECISION
CT A CASE NO . 8228
Page 2 of27
Form No. 2303 (as of January 31 , 1997). Petitioner likewise had its
creditable taxes under the National Internal Revenue Code (NIRC) . She
holds office at the BIR National Office Building , Diliman , Quezon City.
Petitioner filed its Original Quarterly VAT Return for the third quarter of
Return for the third quarter of 2008 on August 20, 2010 , which reflected total
P190 ,297 ,383 .34 with input VAT of P22 ,835 ,686 .00 2 , and purchases of
as amended , it is entitled to the refund of the total excess and unutilized input
VAT in the amount of P23 ,964 ,007 .07 paid or incurred during the third quarter
of 2008 . Thus, petitioner filed a claim for refund or tax credit in the amount of
P23 ,964 ,007 .07 as per Application No. 62463 with the One-Stop-Shop Center ~
1
Pars. I and 3, Summary of Facts Admitted, Stipu lation of Facts and Issues, docket, p. 53
2
Exhibit " M- 12"
DEC ISION
CT A CASE NO. 8228
Page 3 of27
prompting petitioner to file the instant Petition for Review on February 7, 2011 .
1. Paid by petitioner;
requiring both parties and their counsels to be present at the pre-trial and to
file with the Court and serve on the adverse party their pre-trial briefs. In J*-
5
Docket, p. 32
DEC ISION
CT A CASE NO. 8228
Page 5 of27
considered the pre-trial terminated and the parties were ordered to proceed
with the trial on the merits, presenting only evidence not covered by their
Stipulation of Facts.
During the hearing on June 22 , 2011 , the Court granted petitioner's motion to
ICPA. 11 On July 22 , 2011 , Mr. Alba submitted his Report dated July 21 , 2011
to the Court.12
to support its claim for refund . On October 12, 2011 , petitioner formally
offered before the Court the testimony of its witness, Ms. Eileen C. Rodriguez,
6
Docket, pp. 33 to 36
7
Docket, pp. 37 to 39
8
Docket, pp. 53 to 54
9
Docket, p. 60
10
Docket, pp. 47 to 48
11
Mi nutes of the June 22, 20 I I Hearing, docket, p. 62
12
Exhibit "D"
13
Docket, pp. 69 to 72
DEC ISION
CT A CASE NO. 8228
Page 6 of 27
evidence , except for Exhibit "B-1", which was denied admission for not being
respondent's counsel , respondent was given a period of thirty (30) days from
memorandum . The Court also gave petitioner a period of twenty (20) days
The case was submitted for decision on April 3, 2012 16 , taking into
The sole issue stipulated by the parties for this Court's resolution is
whether or not petitioner is entitled to the refund or tax credit of the alleged
excess and unutilized input taxes in the total amount of P23 ,964 ,007 .07 for
the legal basis for its entitlement to the refund of its excess and unutilized
input VAT for the third quarter of 2008 , which are attributable to its zero-rated
sales . r
14
Docket, pp. 78 to 79
15
Minutes of the January 30, 20 12 Hearing, docket, p. 85 ; Reso lution dated Jan uary 30, 2012, docket,
p. 87
16
Reso lution dated April 3, 20 12, docket, p. 11 7
17
Docket, pp. 9 1 to 106
18
Docket, pp. 107 to I 16
19
Statement of the Issues, Stipu lation of Facts and Iss ues, docket, p. 54
DEC ISION
CT A CASE NO . 8228
Page 7 of27
sales:
Before delving into the merits and substantiation of petitioner's claim for
refund of excess and unutilized input VAT in the amount of P23 ,964 ,007.07,
the Court will resolve first petitioner's compliance with the fifth requirement
pertaining to prescription .
The Court noted that the parties have stipulated that the filing of
petitioner's administrative claim for refund with the OSSC of the DOF on
that the taxpayer's application for refund or tax credit of unutilized or excess
creditable input VAT arising from its domestic purchases of goods and
zero-rated sales , must be made within two years after the close of the taxable
elucidated that:
20
Par. 5, Summary of Facts Adm itted, Stipu lation of Facts and Issues, docket, p. 54
21
G.R. No. 172129, September 12, 2008
DEC ISION
CTA CASE NO. 8228
Page 9 of27
for the filing of an administrative claim for refund or tax credit of input VAT
attributable to zero-rated sales shall be reckoned from the close of the taxable
September 2008. Petitioner had until September 30 , 2010 within which to file Jv
DECISION
CT A CASE NO. 8228
Page IOof27
its administrative claim for refund or tax credit. Petitioner filed its claim for
2
refund or tax credit with the OSSC of the DOF on September 22, 201 0?
administrative claim for refund of its unutilized input VAT attributable to its
claim for refund of input VAT generated for the third quarter of 2008 was
Based on the above-quoted provision , the taxpayer has thirty (30) days
from its receipt of the decision denying the claim for refund or issuance of tax
credit certificate or after the expiration of the one hundred twenty (120)-day)e._
22
Exhibit "N"
DEC ISION
CTA CASE NO. 8228
Page II of27
Company of Asia, Inc., (Aichi case) 23 , the High Tribunal applied the provision
Section 112(0) prior to its amendment by Republic Act (RA) No. 9337 , and
ruled that:
Commissioner before the lapse of the 120-day period ; and (2) when no
decision is made after the 120-day period . In both instances, the taxpayer
has 30 days within which to file an appeal with the CTA. Likewise , the Aichi
case emphasized that the 120-day period mentioned in Section 112(C) of the
In this case, petitioner filed its administrative claim for refund or tax
credit with the OSSC of the DOF on September 22 , 2010 . Petitioner alleges
that the supporting documents for said claim for refund or tax credit were
likewise filed on the same date. 24 Hence, the Court shall reckon the 120-day
period from the filing of petitioner's administrative claim for refund or tax credit
2011 within which to act on the administrative claim for refund or tax credit. In
case of inaction on the part of respondent, which was what actually transpired
in this case , petitioner had thirty (30) days from January 20 , 2011 or until
February 19, 2011 within which to seek judicial relief. Accordingly, the instant
Petition for Review, which was filed on February 7, 2011 , was timely filed by
petitioner.
The Court shall now address the merits of petitioner's claim for refund ,
his Report 25 dated July 21 , 2011 that petitioner had zero-rated sales
Return for the third quarter of 2008, the particulars of which were described in
24
Par. I 0, Statement of Facts, Petition for Rev iew, docket, p. 9
25
Exhibit "D"
DEC ISION
CT A CASE NO . 8228
Page 14 of27
Particulars Amount
Provisional billings for direct export sales of copper to Japan US$53,236,667 .00
Adjustments to previous quarters ' _Qrovisional billings 19,068,936.001
TOTAL US$44, 167,731 .00
Pan Pacific Copper Co., Ltd. of Tokyo, Japan are VAT zero-rated pursuant to
present:
On the other hand , to substantiate its export sales for the third quarter
of taxable year 2008 and that the foreign exchange proceeds thereof were
duly accounted for in accordance with the rules and regulations of the Bangko
Sentral ng Pilipinas (BSP) , petitioner proffered its Long Term Gold and
Tokyo, Japan 27 , provisional and final sales invoices28 , bills of lading 29 , export
Agreement with Pan Pacific Copper Co ., Ltd . of Tokyo , Japan 33 , for the period
covering the third quarter of 2008 , petitioner actually shipped mineral products
to Pan Pacific Copper Co. , Ltd. of Tokyo , Japan and generated export sales
documents such as provisional and final sales invoices 35 , bills of lading 36 and
export declarations 37 .
While the Court noted that the final invoices submitted by petitioner
bear dates much later than the dates of shipment indicated in the bills of Jlc-
26
Par. 3, Summary of Facts Adm itted , Stip ul ation of Facts and Issues, docket, p. 53
27
Exhibit " 8"
28
Exhibits "E- 1-b" to " E-11-b" and " E-1 -c" to "E-1 1-c"
29
Exhibits "E- 1-a" to " E-1 1-a"
30
Exhibits "E-1" to " E-1 I"
31
Exhib its " F- 1" to " F-4"
32
Exhibits "F- 1-a" to "F-4-b"
33
Exhibit " 8"
34
Exhibit " E"
35
Exhib its "E-1-b" to E- 11 -b"· Exh ibits E-1-c" to " E-11-c"
36
Exhibits " E- 1-a" to " E- 1 1-a':
37
Exhibits "E-1 " to " E-ll"
DECIS ION
CTA CASE NO . 8228
Page 16 of27
lad ing and provisional invoices , petitioner's witness , Ms. Eileen C. Rodriguez,
two invoices to the buyer. First, a Provisional Invoice covering ninety percent
petitioner and its foreign buyer have reached an agreement rega rding the final
settlement weights , assays and quotations and the final price of the shipment.
This procedure is clearly laid down under Clause 9 of petitioner's Long Term
Gold and Copper Concentrates Sales Agreement with Pan Pacific Copper
In view thereof, the Court holds that the actual shipment date of the
As borne by the records of this case , the bills of lading 39 covering the
export sales of US$53,236 ,667 .00 were all dated within the third quarter of
2008 . Accordingly, said bills of lading , together with the provisional and final
sales invoices 40 and export declarations41 , are deemed sufficient to prove that
there were actual export sales and actual shipment of goods from the
Philippines to a foreign country. The Court noted , however, that out of the
total export sales of US$53 ,236 ,667 .00 , the amount of US$402 ,906 .00 was )k-
38
Exhibit "A"
39
Exhibits "E- 1-a" to "E-11-a"
40
Exhibits "E-1-b" to E- 11 -b" ; Exhibits E-1 -c" to " E-11-c"
41
Exhibits "E-1 " to "E- l l"
DEC ISION
CT A CASE NO . 8228
Page 17 of27
supported by provisional 42 and final invoices43 which were not duly registered
with the BIR as there was no BIR Permit number reflected thereon and also
the wo rd "VAT" after petitioner's TIN was not imprinted in said provisional and
final invoices. These are clear violations of the invoicing requi rements under
Sections 11344 , 237 45 and 238 46 of the NIRC of 1997, as amended , and as
export sales in the amount of US$52,833 ,761 .00 (US$53,236 ,667 .00 less
the foreign currency proceeds derived from said export sales were inwardly
remitted and accounted for in accordance with the rules and regulations of the
banks .
The Court also found that the adjustments to correct billings for
previous quarter's shipments in the amount of negative US$9 ,068 ,936 .00 was
In fine , petitioner's export sales in the amount of US$43 ,764 ,825 .00
(US$52 ,833 ,761 .00 plus negative US$9,068 ,936 .00) with peso equivalent of
P2 ,033 ,915 ,074 .05 , as computed below, qualify for VAT-zero rating :
After having resolved that petitioner's export sales for the third quarter
of 2008 in the amount of US$43,764 ,825 .00 with peso value equivalent ofjk--
48
Exhibit " 0 ", pp. 2 to 3
49
Exhib its " F-1 " to " F-4"
50
Ex hibits " F- 1-a" to " F-4-b"
51
Exhibits "E- 1-b" to E-1 1-b"· Exhibits E-1-c" to "E- 11 -c"
52
Exhib its "E-1 -a" to "E-1 1-a,',
53
Exhibits " E- 1" to " E- 1 I"
DECISION
CT A CASE NO . 8228
Page 19 of 27
P2 ,033 ,915 ,074.05 qualify for VAT zero-rating , the Court shall now proceed to
of services and input VAT of P22 ,835 ,686 .00 on importations of goods, or a
its Schedule of Input Taxes on Importations of Goods 54 and the related Import
July 21 , 2011 , including the supporting documents submitted to the Court, the
following input VAT in the total amount of P2 ,202,420 .94 should be disallowed
from petitioner's claim for failure to meet the substantiation requirements jk--
54
Exhibits "G" and " H"
55
Exhi bits "G-1 -a to G-50-a" and " H- I"
56
Exhi bits "G- 1 to G-50" and "1- 1 to 1-9"
57
Exh ibit "K"
58
Exhi bits " K-1 " to " K-80"
59
Exh ibit "D"
DEC ISION
CT A CASE NO . 8228
Page 20 of27
Exhibit
Findings No. Input VAT
1. Input VAT on importation of goods supported by originaiiEIRDs without machine
validation
AlA Engineering Ltd Ahmedabad H-1 Php 1,373,156.00
Sub-total 1,373,156.00
2. Input VAT on importation of goods supported by original BCORs not dated/dated
outside the period of claim.
Normet Corp. - Entry No. 89330692 1-1 (2/2) 362.00
AlA Engineering Ltd Ahmedabad - Entry No.
887911 75 1-2 1,961 .00
Crushing and Mining Equip Pty Ltd - Entry
No.8933077 1 1-3 1,012.00
Normet Corp. - Entry No. 89446 1-4 1,488.00
Sub-total 4,823.00
3. Overclaimed Input VAT on importation of goods supported by original BCORs
AlA Engineering Ltd Ahmedabad - Entry No.
91295547 1-6 300.00
Sub-total 300.00
4. Input VAT on importation of goods supported by Bank OR, the input VAT of
which cannot be ascertained
Fuji Trading Co. Ltd 1-9 72,759.00
Sub-total 72,759.00
5. Input VAT on importation of goods without supporting documents
Normet Corporation 90,281 .00
Nasaco International Ltd 1,919.00
BASF South East Asia Pteltd. 153,485.00
Sub-total 245,685.00
6. Overclaimed Input VAT on domestic purchases of services
International Container Terminal K-43 468.93
Sub-total 468.93
60
SEC. 4. 1 I 0-8. Substantiation of Input Tax Credits. -
(a) Input taxes for the importation of goods or the domesti c purchase of goods, properties or serv ices
is made in the course of trade or business, whether such input taxes shall be credited agai nst zero-
rated sa le, non zero-rated sa les, or subj ected to the 5% Fi nal Withho lding VAT, mu st be
substanti ated and supported by the fo ll ow ing docum ents, and must be reported in the informati on
returns required to be submitted to the Bureau:
( 1) For the importation of goods - import entry or other equi valent document showi ng actua l
payment of VAT on the imported goods.
(2) For the domestic purchase of goods and properties - invo ice show ing the informati on required
under Sees. I 13 and 23 7 of th e Tax Code.
(3) XXX
(4) For the purchase of services - offi c ia l rece ipt showing the informati on required under Sees. 11 3
and 237 of th e Tax Code.
DEC ISION
CT A CASE NO. 8228
Page 2 1 of27
P21 ,761 ,586 .13 (P23 ,964 ,007.07 less P2 ,202 ,420.94) represents petitioner's
valid input tax which is attributable to its zero-rated sales for the third quarter
of2008 . ~
DEC ISION
CT A CASE NO . 8228
Page 23 of27
Anent the third requisite , the Court noted that petitioner had sales
subject to 12% VAT during the third quarter of 2008 in the amount of
P28 ,241 ,602 .50 61 , with corresponding output VAT liability of P3 ,388 ,992 .30 62 .
Thus , it cannot be said that petitioner's input taxes for the third quarter of
sales subject to 12% VAT and zero-rated sales during the third quarter of
2008 , the input VAT incurred during said quarter, which cannot be directly and
P21 ,761 ,586 .13 shall be applied against petitioner's reported output VAT
liability of P3 ,388 ,992 .30 . Consequently, only the remaining input VAT of
P18 ,372 ,593 .83 can be attributed to the entire zero-rated sales declared by
petitioner in the amount of P2 ,052 ,639,622 .52 and furthermore , only the inputjc-
61
Line I SA, Exhibit " M- 12"
62
Line 158, Exhibit " M-12"
DECISION
CT A CASE NO. 8228
Page 24 of27
VAT of P18 ,204 ,995 .72 is attributable to the substantiated zero-rated sales of
Returns 53 from the third quarter of 2008 to the second quarter of 2010 ,
petitioner was able to prove that the input VAT of P18,204 ,995 .72 was not
applied against any output VAT in the succeeding quarters. Even though
petitioner carried over the claimed unutilized input VAT for the third quarter of
taxable year 2008 to the succeeding fourth quarter of 2008 until the second
Claimed" 64 from the total available input tax of P263 ,409 ,376 .51 in the
second quarter of 2010 . In other words , the subject claim no longer formed
part of the excess input VAT of P233 ,504 ,51 0.38 65 as of the second quarter of
2010 . llz-
63
Exhibits " M-12" to " M-1 9"
64
Exhibit "M- 19" line 23 0
65
Exh ibit " M- 19": line 29
DEC ISION
CTA CASE NO. 8228
Page 25 of27
filed its claim for refund with the OSSC of the DOF on September 22 , 2010 ,
petitioner failed to prove with certainty that it complied with the requirement to
Respondent avers that failure on the part of petitioner to prove the submission
Respondent also contends that petitioner failed to prove that it fully met
Settled is the rule that in a judicial claim for VAT, the alleged non-
judicial claim . This means that it will not bar this Court from receiving ,
evaluating , and appreciating evidence submitted before it. Once the claim for
subject to the Rules of Court. The question of whether or not the evidence
with the invoicing and accounting requirements under RR No. 16-2005 , the
which were meticulously reviewed by the Court. In sum , the Court finds
petitioner entitled to a refund in the reduced amount of P18 ,204 ,995 .72, Je:--
66
Commissioner of Internal Revenue vs. Toledo Power Company, CT A EB Case No. 589, January 12,
20 I I citi ng Conso li dated Cases of CE Luzon Geothermal Power Company, Inc. vs. Commissioner of
Internal Revenue, CT A EB No . 553 and Commissioner of Internal Revenue vs. CE Luzon
Geothermal Power Company, Inc., CTA EB No. 554, July 20, 2010, Commissioner of Internal
Revenue vs. San Roque Power Corporation, CT A EB No . 523, Apri l 15, 20 I 0; CT A EB No . 4 74,
September I, 2009; Commissioner of Internal Revenue vs. Visayas Geothermal Power Company,
Inc., CTA EB Case No . 282 (CTA Case Nos . 6790 & 6838), November 20, 2007, citing Jideco
Manufacturing Corporation vs. Commissioner of Internal Revenue, CT A Case No . 6552, September
16,2004
67
Exhibits " K-1 " to "K-80"
68
Exhibits " G-1-a" to " G-50-a" and " H- I"
69
Exhibits " G-1 " to "G-50 and " 1- 1" to "1-9"
DECISION
CT A CASE NO. 8228
Page 27 of27
Philex Mining Corporation , representing excess and unutilized input VAT from
SO ORDERED.
Q_.,a---e~C!.~~~ \).._
~UANITO C. CASTANEDA, JfC"
Associate Justice
WE CONCUR:
CERTIFICATION
consultation before the case was assigned to the writer of the opinion of the
Court.
Q _ ~~C-~~Q-.
caUANITO C. CASTANEDA(J'R.
Acting Presidin~ Justice
Chairperson , 2n Division