FIRST DIVISION
G.R. No. 182737, March 02, 2016
SILICON PHILIPPINES, INC. (FORMERLY INTEL PHILIPPINES MANUFACTURING, INC.), Petitioner, v. COMMISSIONER OF INTERNAL REVENUE, Respondent.
D E C I S I O N
SERENO, C.J.:
Before us is a Petition for Review on Certiorari under Rule 45 of the Rules of Court assailing the Court of Tax Appeals (CTA) En Banc Decision1 dated 18 January 2008 and Resolution2 dated 30 April 2008 in CTA EB No. 298.
The CTA En Banc affirmed the CTA Second Division Decision3 dated 5 February 2007 and Resolution4 dated 29 June 2007 in CTA Case Nos. 6741, 6800 & 6841. That Decision denied the claim for tax refund or issuance of tax credit certificates corresponding to petitioner's excess/unutilized input value-added tax (VAT) for the 2nd, 3rd and 4th quarters of taxable year 2001. The CTA En Banc Resolution denied petitioner's motion for reconsideration.
In the Resolution dated 30 July 2008,44 we required respondent to comment on the petition. The Comment dated 21 January 200945 was filed by the Office of the Solicitor General as counsel.I.
[WHETHER] THE COURT OF TAX APPEALS ERRED IN DENYING [PETITIONER'S] CLAIM FOR REFUND OF ITS EXCESS / UNUTILIZED INPUT VAT DERIVED FROM IMPORTATION OF CAPITAL GOODS DUE TO ITS FAILURE TO PROVE THE EXISTENCE OF ZERO-RATED EXPORT SALES.II.
[WHETHER] THE COURT OF TAX APPEALS ERRED IN FINDING THAT [PETITIONER] FAILED TO COMPLY WITH THE REQUIREMENTS OF A VALID CLAIM FOR REFUND / TAX CREDIT OF INPUT VAT PAID ON ITS IMPORTATION OF CAPITAL GOODS.III.
[WHETHER] THE COURT OF TAX APPEALS ERRED IN RULING THAT [PETITIONER] FAILED TO PROVE THAT THE GOODS IMPORTED ARE CAPITAL GOODSIV.
[WHETHER] THE INPUT VAT ON THE ALLEGED NON-CAPITAL GOODS ARE STILL REFUNDABLE BECAUSE THEY ARE ATTRIBUTABLE TO THE ZERO RATED SALES OF [PETITIONER, A 100% EXPORT ENTERPRISE]43ChanRoblesVirtualawlibrary
SEC 112. Refunds or Tax Credits of Input Tax. —Under the foregoing provision, the administrative claim of a VAT-registered person for the issuance by respondent of tax credit certificates or the refund of input taxes paid on zero-rated sales or capital goods imported may be made within two years after the close of the taxable quarter when the sale or importation/purchase was made.
(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 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 volume of sales.
(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 [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.
(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. (Emphases supplied)
SECTION 7. Jurisdiction. — The CTA shall exercise:The judicial claim shall be filed within a period of 30 days after the receipt of respondent's decision or ruling or after the expiration of the 120-day period, whichever is sooner.49
a. Exclusive appellate jurisdiction to review by appeal, as herein provided:
1. Decisions of the Commissioner of Internal Revenue in cases involving disputed assessments, refunds of internal revenue taxes, fees or other charges, penalties in relation thereto, or other matters arising under the National Internal Revenue Code or other laws administered by the Bureau of Internal Revenue;
2. Inaction by the Commissioner of Internal Revenue in cases involving disputed assessments, refunds of internal revenue taxes, fees or other charges, penalties in relations thereto, or other matters arising under the National Internal Revenue Code or other laws administered by the Bureau of Internal Revenue, where the National Internal Revenue Code provides a specific period of action, in which case the inaction shall be deemed a denial; (Emphasis supplied)
The judicial claim for the 4th quarter of 2001, while filed within the period 10 December 2003 up to 6 October 2010, cannot find solace in BIR Ruling No. DA-489-03. The general interpretative rule allowed the premature filing of judicial claims by providing 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."52 The rule certainly did not allow the filing of a judicial claim long after the expiration of the 120+30 day period.53
Taxable Quarter of 2001 Administrative Claim Filed End of the 120-day Period End of the 30-day Period Judicial Claim Filed Number of Days Late 2nd 16 October 2001 13 February 2002 15 March 2002 30 July 2003 502 days 3rd 4 September 2002 2 January 2003 1 February 2003 20 October 2003 261 days 4th 4 September 2002 2 January 2003 1 February 2003 30 December 2003 332 days
Endnotes:
1Rollo, pp. 13-21. The Decision issued by the CTA En Banc was penned by Presiding Justice Ernesto D. Acosta, with Associate Justices Juanito C. Castañeda, Jr., Lovell R. Bautista, Erlinda P. Uy, Caesar A. Casanova and Olga Palanca-Enriquez concurring.
2 Id. at 42-45.
3 Id. at 165-189. The Decision issued by the CTA Second Division was penned by Associate Justice Olga Palanca-Enriquez, with Associate Justices Juanito C. Castañeda, Jr. and Erlinda P. Uy concurring.
4 CTA rollo (CTA Case No. 6741), pp. 417-418.
5Rollo, p. 13.
6 Id. at 152.
7 Id. at 150.
8 Id. at 14.
9 CTA Records (Vol. 9), Exhibit "E."
10 Id. at Exhibit "H."
11 Id. at Exhibit "I."
12Rollo, p. 157.
13 CTA Records; (Vol. 9), Exhibit "L."
14 Id. at Exhibit "Q."
15 Id. at Exhibit "R."
16 Id. at Exhibit "S."
17 P9,038,279.56 for the 2nd Quarter, plus P1,420,813.04 for the 3rd Quarter, plus P14,582,023.62 for the 4th Quarter, all of the year 2001.
18 CTA rollo (CTA Case No. 6741), pp. 1-11.
19 CTA rollo (CTA Case No. 6800), pp. 1-6.
20 CTA rollo (CTA Case No. 6841), pp. 1-5.
21Rollo, p. 15.
22 Id.
23 Id. at 165-189; CTA Case Nos. 6741, 6800 and 6841.
24 Id. at 178-179.cralawred
25 Sec. 106(A)(2)(a)(1) as enacted by R.A. 8424 reads:
SEC 106. Value-added Tax on Sale of Goods or Properties. —
(A) Rate and Base of Tax. — These shall be levied, assessed and collected on every sale, barter or exchange of goods or properties, a value-added tax equivalent to ten percent (10%) of the gross selling price or gross value in money of the goods or properties sold, bartered or exchanged, such tax to be paid by the seller or transferor.
x x x x
(2) The following sales by VAT-registered persons shall be subject to zero percent (0%) rate:
(a) Export Sales. — The term 'export sales' means:
(1) The sale and actual shipment of goods from the Philippines to a foreign country, irrespective of any shipping arrangement that may be agreed upon which may influence or determine the transfer of ownership of the goods so exported and paid for in acceptable foreign currency or its equivalent in goods or services, and accounted for in accordance with the rules and regulations of the Bangko Sentral ng Pilipinas (BSP);
26Rollo, p. 180.cralawred
27 Id.
28 P765,696,325.68 as zero-rated sales for the 2nd Quarter, plus P678,418,432.83 as zero-rated sales for the 3rd Quarter, plus P1,000,052,659.89 as zero-rated sales for the 4th Quarter, all of the year 2001.
29Rollo, p. 181.
30 Id. at 183.
31 Id. at 183-184.
32 Id. at 185.
33 Id. at 186.
34 Id. at 186-187.
35 Id. at 187.
36 Id. at 188.
37 CTA rollo (CTA Case No. 6741), pp. 417-418.
38Rollo, pp. 13-21; C.T.A. EB No. 298.
39 Id. at 17.cralawred
40 Id. at 18-19.
41 Id. at 19-20.
42 Id. at 42-45.
43 Id. at 56-57.
44 Id. at 278.
45 Id. at 302-317.
46 As amended by Section 10 of R.A. 9337, Section 112 now reads:
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 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 proportionately on the basis of the volume of sales: Provided, finally, That for a person making sales that are zero-rated under Section 108(B)(6), the input taxes shall be allocated ratably between his zero-rated and non-zero-rated sales.
(B) 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.
(C) 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) 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.
(D) 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.
47CIR v. Team Sual Corp., G.R. No. 205055, 18 July 2014, 730 SCRA 242.
48CIR v. Aichi Forging Company of Asia, Inc., G.R. No. 183421, 22 October 2014; Applied Food Ingredients Company, Inc. v. CIR, G.R. No. 184266, 11 November 2013, 709 SCRA 164.
49 Section 11 of R.A. 1125, as amended, provides:
SECTION 11. Who May Appeal; Mode of Appeal; Effect of Appeal. — Any party adversely affected by a decision, ruling or inaction of the Commissioner of Internal Revenue, the Commissioner of Customs, the Secretary of Finance, the Secretary of Trade and Industry or the Secretary of Agriculture or the Central Board of Assessment Appeals or the Regional Trial Courts may file an appeal with the CTA within thirty (30) days after the receipt of such decision or ruling or after the expiration of the period fixed by law for action as referred to in Section 7(a)(2) herein.
50 In CIR v. San Roque Power Corporation (G.R. Nos. 187485, 196113 & 197156, 12 February 2013, 690 SCRA 336), the Court applied the equitable principle of estoppel and ruled that judicial claims filed from the issuance of BIR Ruling No. DA-489-03 on 10 December 2003 up to its reversal in CIR v. Aichi Forging Company of Asia, Inc. (G.R. No. 184823, 646 SCRA 710) on 6 October 2010 need not wait for the lapse of the 120+30 day period.
51CIR v. San Roque Power Corporation, G.R. Nos. 187485, 196113 & 197156, 12 February 2013 690 SCRA 336.
52 Id. at 388.
53 Id. at 389.
54Calanza v. Paper Industries Corp. of the Philippines, 604 Phil. 304 (2009).
55Arevalo v. Benedicto, 157 Phil. 175 (1974).