Vat Refunds (Compilation)

MONTERO // 3A TAX DIGESTS
AGATEP ALARCON ARCAINA AUSTRIA BAADERA BANTA BELLO BUGAY CARAAN COLOQUIO CUALOPING DE LUIS DIPLOMA FAJARDO GO GUZMAN
LAYNO LIM, J. LIM, Q. LUNA OCAMPO ONG PASCUAL REYES ROCILLO TRIAS TUAZON VANSLEMBROUCK VILLARIN, L. VILLARIN, P. VILLARIVERA
VAT REFUNDS
Made. - In proper cases, the Commissioner shall grant a refund or issue

the tax credit certificate for creditable input taxes within one hundred
SECTION 112. Refunds or Tax Credits of Input Tax.
twenty (120) days from the date of submission of complete documents in
(A) Zero-rated or Effectively Zero-rated Sales. - Any VAT-registered
support of the application filed in accordance with Subsections (A) hereof.
person, whose sales are zero-rated or effectively zero-rated may, within
In case of full or partial denial of the claim for tax refund or tax credit, or
two (2) years after the close of the taxable quarter when the sales were
the failure on the part of the Commissioner to act on the application within
made, apply for the issuance of a tax credit certificate or refund of
the period prescribed above, the taxpayer affected may, within thirty (30)
creditable input tax due or paid attributable to such sales, except
days from the receipt of the decision denying the claim or after the
transitional input tax, to the extent that such input tax has not been applied
expiration of the one hundred twenty day-period, appeal the decision or
against output tax: Provided, however, That in the case of zero-rated sales
the unacted claim with the Court of Tax Appeals.
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
(D) Manner of Giving Refund. - Refunds shall be made upon warrants
accounted for in accordance with the rules and regulations of the Bangko
drawn by the Commissioner or by his duly authorized representative
Sentral ng Pilipinas (BSP): Provided, further, That where the taxpayer is
without the necessity of being countersigned by the Chairman,
engaged in zero-rated or effectively zero-rated sale and also in taxable or
Commission on audit, the provisions of the Administrative Code of 1987 to
exempt sale of goods of properties or services, and the amount of
the contrary notwithstanding: Provided, That refunds under this paragraph
creditable input tax due or paid cannot be directly and entirely attributed to
shall be subject to post audit by the Commission on Audit.
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
Section 112. Refunds or Tax Credits of Input Tax. -
sales that are zero-rated under Section 108(B) (6), the input taxes shall be
(A) Zero-rated or Effectively Zero-rated Sales.
allocated ratably between his zero-rated and non-zero-rated sales.
Any VAT-registered person,
(B) Cancellation of VAT Registration. - A person whose registration has
Whose sales are zero-rated or
Effectively zero-rated
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
May, within two (2) years
a tax credit certificate for any unused input tax which may be used in
After the close of the taxable quarter when the sales were
made,
payment of his other internal revenue taxes.

Apply for the issuance of a
(C) Period within which Refund or Tax Credit of Input Taxes shall be
Tax credit certificate or

Refund of creditable input tax

o
Due or paid attributable to such sales,
May, within two (2) years from the date of cancellation,
Apply for the issuance of a tax credit certificate
Except transitional input tax,

o
For any unused input tax which may be used in

payment of his other internal revenue taxes.
To the extent that such input tax has not been

applied against output tax:
(C) Period within which Refund or Tax Credit of Input Taxes shall
be Made.
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),
In proper cases, the Commissioner shall
The acceptable foreign currency exchange proceeds thereof

o
Had been duly accounted for in accordance with the rules
Grant a refund or
Issue the tax credit certificate
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.
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) hereof.
In case of
Provided, finally,
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,
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.
The taxpayer affected may,
Within thirty (30) days from the receipt of the decision denying the
claim or
(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
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
Mitsubishi. On Aug 25, 1998 when MPC filed its 2 nd quarter tax
return, it stated an input VAT of PhP 148,003,047.62, which included
Without the necessity of being countersigned by
PhP 135,993,570 supported by OR No. 0189. On December 20,
The Chairman,
1999 it filed for an administrative claim for refund for unutilized input
Commission on audit,
VAT for the amount of P148,003,047.62. BIR Commissioner did not

grant his claim as these were not supported by documents. With
The provisions of the Administrative Code of 1987 to the contrary
regard to OR No. 0189, it is of doubtful veracity as it is dated at 1998
notwithstanding:
but pertains to purchases rendered for the years 1993 to 1996. It
Provided, that refunds under this paragraph
shall also be denied for the reason that it has prescribed from the 2
Shall be subject to post audit by the Commission on Audit.
year period to claim for refund from the date of purchase.
CIR v. MIRANT (Alarcon)
Issue: WON MPC can claim for creditable VAT refund for the amount of
[GR. No. 172129; September 12, 2008]
P148, 003, 047.62? No, only P10, 733, 969
BIR Rulings overturned; Peace bonds are deposit substitutes

Held:
No. Petition Partly granted. CTA employed the services of SGV and
Recit-Ready:
findings of such firm with regard to the amounts unsupported by
Facts: MPC is engaged in generation of power which it sells to National
documentary evidence shall be relied upon. With regard to the
Power Corportaion (NPC). Under Sec 13 of RA 6935, NPC is
amount supported by OR No. 0189, Sec 110 of the NIRC provides
exempt from all taxes, direct or indirect. Upon the belief that its sale
that the a VAT invoice or an Official Receipt is the best evidence to
to NPC of power was zero rated for tax purposes, MPC applied for
prove such payment of VAT. However, the petition should be denied
effective zero rating for the Build, Operate, Transfer scheme of its
as the claim for refund has prescribed. The prescription period for
Pagbilao Power station. MPC acquired goods and services from
claims of refund are to be reckoned from the end of the quarter from
Mitsubishi Japan for the construction of its plant amounting to P
where the purchases were made and not when such tax was
135,993,570 for the years 1993-1996. With its belief to be zero-
actually paid as claim by MPC, as such tax was not erroneously
rated, it opted not to pay the VAT component of its billings from
paid.
Mitsubishi. This caused Mitsubishi to advance payments for the VAT

components as this serves as their output VAT which is essential in
the determination of their VAT payments. It was only on April 14,
Facts:
Mirant Pagbilao Corporation (MPC) is domestic firm engaged in the
1998 that MPC paid Mitsubishi for its VAT component for purchases
generation of power which it sells to National Power Corporation
for 1993-1996, such was evidenced by OR No. 0189 issued by
(NPC).

MPC was formerly Southern Energy Quezon, Inc. and also
VAT component of the progress billings from Mitsubishi for the
formerly Hopewell (Phil.)Corp

For the construction of its electrical and mechanical equipment
period covering April 1993 to September 1996for the E & M
Equipment Erection Portion of MPCs contract with Mitsubishi.

o This prompted Mitsubishi to advance the VAT component
portion of its Pagbilao, Quezon plant from the years1993-1996, MPC
exempt from all taxes.

o In Maceda v Macaraig, it was ruled that this exemption
as this serves as its output VAT which is essential for the
secured the services of Mitsubishi Corporation (Mitsubishi) of Japan.

Under Section 13 of RA 6935, the revised charter of NPC, NPC is
component for the progress billings from April 1993 to September
covered both direct and indirect taxes.

MPC on the belief that its sale of power generation services to NPC
is, pursuant to Sec. 108(B)(3) of the Tax Code, 1 zero-rated for VAT
purposes, filed on December 1, 1997 with Revenue District Office
1996, and for which Mitsubishi issued Official Receipt (OR) No.
reflected an input VAT of PhP 148,003,047.62, which included
Rating.
o This application covered the construction and operation of
PhP 135,993,570 supported by OR No. 0189.

o Pursuant to procedure in RR-7-95, MPC filed on December
its Pagbilao power station under a Build, Operate, and
application in the form of a request for ruling with the VAT Review
20, 1999 an administrative claim for refund of unutilized
under Sec. 229 of the National Internal Revenue Code (NIRC), MPC
went to the CTA via a petition for review, docketed as CTA Case No.
052-99 stating that the supply of electricity by Hopewell
6133.
o
Phil. (MPC) to the NPC, shall be subject to the zero percent

(0%) VAT, pursuant to Section 108 (B) (3) of the National
Philippines by VAT-registered persons shall be subject to zero- percent rate: x x x (3)

Services rendered to persons whose exemption under special laws x x x effectively subjects
the supply of such services to zero percent (0%) rate.
Answering the petition, BIR Commissioner citing KumaiGumi Co. Ltd. V CIR asserted that MPCs claim for refund
Internal Revenue Code of 1997.

Consistent with its belief to be zero-rated, MPC opted not to pay the
Transactions Subject to Zero Percent (%) Rate.The following services performed in the
input VAT in the amount of PhP 148,003,047.62.

BIR Commissioner failed to act on its claim for refund (MPC) and
obviously to forestall the running of the two-year prescriptive period
Committee at the BIR national office on January 28, 1999.

o May 13, 1999, CIR Commissioner issued VAT Ruling No.
0189 in the aggregate amount of PhP 135,993,570.

On August 25, 1998, MPC, while awaiting approval of its application,
filed its quarterly VAT return for the second quarter of 1998 where it
(RDO) No. 60 in Lucena City an Application for Effective Zero
Transfer scheme.
Not getting any response from the BIR district office, MPC refiled its
determination of its VAT payment.

It was only on April 14, 1998 that MPC paid Mitsubishi the VAT
cannot be granted for this main reason: MPCs sale of

electricity to NPC is not zero-rated for its failure to secure
an approved application for zero-rating.

March 18, 2003- Court of Tax Appeals granted MPCs claim for input
VAT refund or credit, but only for the amount of PhP
10,766,939.48.
o To provide support to the CTA in verifying and analyzing

documents and figures and entries contained therein, the
Mitsubishi (Manila) when the invoices which the VAT were
Sycip Gorres & Velayo (SGV), an independent auditing firm,
originally billed came from Mitsubishi Japan.
was commissioned.
3.
Exchange rate in OR No. 0189 was pegged at P26.203=$1

or the exchange rate in 1993 to 1996, when on April 14,
1998, the date when OR No. 0189 was issued, the rate was
already P38 to $1
4.
MPC failed to present its VAT returns for 2 nd and 3rd quarter
of 1995, when such was necessary to determine whether
the amount in OR No. 0189 was not previously refunded or
credited;
5.
No other documents proving the said input VAT payment

were presented other than OR No. 0189
CTA: We agree with the above SGV findings that out of the
remaining taxes of P136,246,017.45, the amount of
P252,477.45 was not supported by any document and
should therefore be outrightly disallowed.
o As to the claimed input tax of P135,993,570.00
(P136,246,017.45 less P252,477.45) on purchases
of services from Mitsubishi Corpora- tion, Japan,
BIR Commissioner argues against the sufficiency of OR No. 0189 to
the same is found to be of doubtful veracity.
prove unutilized input payment by MPC. He states that BIR can
While it is true that said amount is substantiated
require additional evidence to prove and ascertain payment of
by a VAT official receipt with Serial No. 0189
credible input VAT, or that the claim was filed on time or not
dated April 14, 1998 x x x, it must be observed,
previously refunded:
however, that said VAT allegedly paid pertains
1.
OR No. 0189 covers purchases from MPC to Mitsubishi
to the services which were rendered for the
from 1993 to 1996 however MPCs claim for refund was
period 1993 to 1996. x x x
filed on Dec 20, 1999, clearly way beyond the 2 year

prescriptive period in Sec 112 of NIRC
2.
MPC failed to explain why OR No. 0189 was issued by
CA rendered its assailed decision modifying that of the CTA decision

by granting most of MPCs claims for tax refund or credit.

CA agreed with the CTA on MPCs entitlement to :

(1) a zero- rating for VAT purposes for its sales and
services to tax-exempt NPC; and

(2) a refund or tax credit for its unutilized input VAT
for the second quarter of 1998.

Their disagreement, however, centered on the issue of
proper documentation, particularly the evidentiary value
of OR No. 0189.
CA upheld the disallowance of PhP 1,242,538.14
representing zero-rated input VAT claims supported
only by photocopies of VAT OR/Invoice, and mere
brokers computations.
CA allowed MPCs
refund
claim
of
of
goods
and/or
services
Held/Ratio: Petition partly GRANTED.

1. YES. A claim for tax refund may be based on a statute granting tax
exemption, or, the result of legislative grace, in which case, the claim is to be
construed strictissimi juris against the taxpayer; On the other hand, as in
this case, a tax refund may be predicated on tax refund provisions
allowing a refund of erroneous or excess payment of tax, on which
case it is founded on the principle of solutio indebiti, a basic postulate
that no one should unjustly enrich himself at the expense of another;
from
case.
said
claim
since
the
OR
OR No. 0189 issued only on April 14, 1998 clearly reflects the
belated payment of MPC of input VAT. This is supported by a bank
Mitsubishi supported by OR No. 0189. CTA erred in

disallowing
A claim for tax refund proper, as here, necessitates only the

preponderance-of-evidence threshold like in any ordinary civil
PhP
135,993,570 representing input VAT payments for

purchases
No.
statement evidencing payment to Mitsubishi Japan with the amount
from
of P135,993, 570 and a May 12, 1995 letter from Mitsubishi where it
Mitsubishi was the best evidence for the
apprised MPC of the advances Mitsubishi made for the VAT
payment of input VAT by MPC to Mitsubishi as
payments, i.e., MPCs creditable input VAT, and for which it was
required under Sec. 110(A)(1)(b) of the NIRC.

must be viewed as conclusive proof of the
holding MPC accountable for interest therefor.

o
payment of input VAT
used P26.203=$1 exchange rate in OR No. 0189 for the

VAT payments it advanced in 1993-1996
Issues:
1)
Whether or not respondent [MPC] is entitled to the refund of its
presumably paid on April 14, 1998, the date appearing
[PhP] 146,760,509.48.- No, only 10,766,939.48

Whether or not MPC is entitled to a refund or a TCC for the
alleged unutilized input VAT of PhP 135,993,570 covered by OR
No. 0189 which sufficiently proves payment of the input VAT.
While no available records indicate when the actually

payment for creditable input VAT was made, it is
input VAT payments made from 1993 to 1996 amounting to

2)
Based from the letter, it is understandable why Mitsubishi
in OR No. 0189.
Undoubtedly, OR No. 0189 by itself proves payment of MPC of its

creditable input VAT relative to its purchases payment from
Mitsubishi.

Sec. 110(A)(1)(B) of the NIRC pertinently provides:
against output tax: x x x. (Emphasis ours.)
Section 110. Tax Credits.A. Creditable Input Tax.
Unutilized input Value Added Tax (VAT) payments not otherwise used for any
(1) Any input tax evidenced by a VAT invoice or official
internal revenue tax due the taxpayer must be claimed within two years
receipt issued in accordance with Section 113 hereof on
reckoned from the close of the taxable quarter when the relevant sales were
the following transactions shall be creditable against the
made pertaining to the input Value Added Tax (VAT) regardless of whether
output tax:
said tax was paid or notthe reckoning frame would always be the end
(a) Purchase or importation of goods: xxxx
of the quarter when the pertinent sales or transaction was made,
(b) Purchase of services on which a value-
regardless when the input VAT was paid.
added tax has been actually paid.
MPC cannot avail itself of the provisions of either Sec. 204(C) or 229
The law considers a duly-executed Value Added Tax (VAT) invoice or
of the NIRC which, for the purpose of refund, prescribes a different
Official Receipt referred to in Section 110(A)(1)(B) of the National
starting point for the two-year prescriptive limit for the filing of a claim
Internal Revenue Code as sufficient evidence to support a claim for
therefor.
o Secs. 204(C) and 229 respectively provide: x x x Notably,
input tax credit.

o And any doubt as to what OR No. 0189 was for or tended to
the above provisions also set a two-year prescriptive period,
prove should reasonably be put to rest by the SGV report on
reckoned from date of payment of the tax or penalty, for the
which the CTA notably placed much reliance.

Matter of nonpayment of MPC of the interest demanded by
filing of a claim of refund or tax credit. Notably too, both
Mitsubishi in the letter, does not invalidate the authenticity of
payment or illegal collection of internal revenue taxes.
provisions apply only to instances of erroneous
payment of VAT in OR No. 0189 as the interest is a matter

between MPC and Mitsubishi.
2. No, The claim for refund or tax credit for the creditable input VAT payment
MPCs creditable input VAT not erroneously paid

o
wholly-tax exempt client, resulting in a zero-rated or
made by MPC embodied in OR No. 0189 was filed beyond the period
effectively zero-rated transaction, does not deprive the
provided by law for such claim.
taxpayer of its right to a refund for any unutilized creditable
Sec. 112(A) of the NIRC pertinently reads:
input VAT, albeit the erroneous, illegal, or wrongful
(A) Zero-rated or Effectively Zero-rated Sales.Any VAT-registered
payment angle does not enter the equation.
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
Fact that the subsequent sale or transaction involves a
Zero-rated transactions generally refer to the export sale

of goods and supply of services. The tax rate is set at
zero. When applied to the tax base, such rate obviously
results in no tax charge- able against the purchaser. The

seller of such transactions charges no output tax, but
CIR assailed the Decision on 2 grounds and claimed that: (1) the 2-
can claim a refund of or a tax credit certificate for the
year period lapsed on September 29, 2004 because 2004 was a
VAT previously charged by suppliers.
leap year and under the Civil Code, there are 365 days in a year
Should the input taxes result from zero-rated or effectively
and; (2) the judicial claim was premature
zero-rated transactions or from the acquisition of capital

goods, any excess over the output taxes shall instead be
Issue: WON the administrative and judicial claims were filed on time
refunded to the taxpayer or credited against other internal
administrative YES; judicial - PREMATURE
revenue taxes.
Held:
Hence Sec 112 A not Sec 204 (c) and 209 of the NIRC is controlling in this
1.
In ruling for the CIR, the Court said that:

While there is conflict between the Administrative Code (1 year = 12
case, prescriptive period for a claim for refund shall commence from
months) and the Civil Code (1 year = 365 days), what will prevail in
the end of the quarter of the sale of goods or serves and not the date of
this case is the Administrative Code since leap year or not, there will
payment of the tax. MPCs claim for refund is denied for such has
always be 12 months in a year. SO following this, September 30,
prescribed.
2004 is when the prescriptive period expires.

2.
Section 112, and not Section 114 applies as to the reckoning point of
CIR v. AICHI FORGING (Arcaina)
the prescriptive period. (more on this on the detailed digest, please
[GR. No. 184823; October 6, 2010]
check). But Section 112 provides that
Prescriptive period
Counting of prescriptive period begins from sale/transaction and not from
commences from the close of the taxable quarter when the sales
payment of tax.
were made and not from the time the input VAT was paid nor
from the time the official receipt was issued. (so emphasis on
Recit-Ready:
Facts: Aichi Forging Company is engaged in the manufacturing, producing
3.
was prematurely filed because it is mandated under Section 112(D)
and processing of steel and its by-products. It is a registered VAT
that claimant must wait for 120 days within which the CIR will decide
entity. On September 30, 2004, it filed a claim for refund/credit of
on the administrative claim before filing with the CTA. In this case,
input VAT for the period of July 1 September 30, 2002 with the CIR
Aichi violated the provision when it simultaneously filed the
(under Section 112). On the same day, it filed a Petition for Review
administrative and judicial claims.
for the same refund with the CTA division. CIR assailed the CTA
division decision granting the refund. The CTA En Banc affirmed the
refund and said that in fact and in law, Aichi still has until October 25,
2004 (25 days after the close of taxable quarter or from October 25,
2002, applying Section 114).
TRANSACTION, and not payment of tax.

Although the administrative claim was filed on time, the judicial claim
Facts:

Aichi Forging Company of Asia (Aichi), a Philippine Corporation, is
Taxpayer engaged in sales which are zero-rated or effectively zero-
o
o
rated substantiated so complied with

the taxpayer is VAT-registered substantiated so complied with
the claim must be filed within two years after the close of the taxable
engaged in the manufacturing, producing and processing of steel and its

by-products.
o Its registered as a VAT entity and its products such as close
impression die steel forgings and tool and dies, are registered with
quarter when such sales were made complied with (as per the 2
the BOI.
On September 30, 2004, Aichi filed a claim for refund/credit of input VAT
year prescriptive period since the filing was made on September 30,
for July 1, 2002 to September 30, 2002 (P3,891,123.82) with the CIR. It
is September 30, 2002)

the creditable input tax due or paid must be attributable to such
2004, to be counted from the closing of the period applied for which
filed a Petition for Review with the CTA for the same refund/credit on the
tax has not been applied against the output tax some claims are
rated sales (P131,791,399). And it paid this amount.

For said period, it incurred and paid input VAT amounting to
P3,912,088.14 from purchases and importation attributable to
baseless and not substantiated.

Effectively: CTA Division granted the refund for P3,239,119.25
because Aichi substantially proved that it was entitled to the same.

CIR sought for reconsideration, insisting that the judicial and admin
its zero-rated sales.

BUT it only claimed P3,891,123.82 with the CIR (so theres a
claims were filed beyond the 2-year period, kasi raw leap year yung
difference of around less than P100K)

CIRs side:
o Claim for refund is subject to administrative investigation by the
September 30. He cited Art. 13 of the Civil Code.

o He added that a prior filing of an administrative claim is a
o
o
Bureau
Aichi must prove it paid VAT input taxes for the period
Aichi must prove that its sales are export sales under Sections
106(A)(2)(a) and 108(B)(1).

Must prove that the claim was filed with the 2-year prescriptive
period under Section 229

In an action for refund, the burden of proof is on the taxpayer to
establish its right to refund, and failure to sustain the burden is
sales, except the transitional input tax, to the extent that such input
same date.
Aichis allegations before the CTA:
o From July 1 September 30, 2002: it generated and recorded zeroo
fatal to the claim of refund

o Claims for refund are construed strictly against the claimant.
CTA partially granted the claim for credit, citing Section 112. Why partial
only? Check the following elements for refund:
2004 SO the 2-year period expired on September 29, and not
condition precedent before a judicial claim can be filed.

o This motion for partial reconsideration was denied.
CIR filed petition before the En Banc, and this was likewise denied. It
affirmed the Division Decision but ruled that the reckoning point for the
prescriptive period is 25 days after the close of each taxable
quarter. (In this case, October 25, 2002 is the reckoning point so the
filing of a claim prescribes on October 25, 2004) This is based from
Section 114.
Issue:
Whether Aichi Forgings judicial and administrative claims were filed
within the 2-year prescriptive period provided in Sections 112(A) and

229 of the NIRC for administrative claim, YES; but judicial claim was
o Applying such in the case at hand, the 2-year period to file for a tax
PREMATURE.
refund/credit for the July 1-September 30, 2002 period expired on

September 30, 2004.
Held/Ratio: Petition GRANTED. The assailed July 30, 2008 Decision and
the October 6, 2008 Resolution of the Court of Tax Appeals are hereby
3) Judicial claim PREMATURE. Aichi filed in violation of Section
REVERSED and SET ASIDE. The Court of Tax Appeals Second Division is
112(D)
DIRECTED to dismiss CTA Case No. 7065 for having been prematurely filed.
simultaneously.
o
when
it
filed
its
administrative
and
judicial
claims
SEC. 112. Refunds or Tax Credits of Input Tax. x x x x (D) Period
1) First, Section 112 (A) and NOT Section 114 is the applicable
within which Refund or Tax Credit of Input Taxes shall be Made.In
provision in determining the start of the 2-year period for claiming a
proper cases, the Commissioner shall grant a refund or issue the tax
refund/credit of unutilized input VAT. Court reiterates Mirant ruling.

4. That Section 204(C) and 229 are inapplicable as both provisions
credit certificate for creditable input taxes submission of complete
apply only to instances of erroneous payment or illegal collection of
Subsections (A) and (B) hereof. In case of full or partial denial of
5.
documents in support of the application filed in accordance with
internal revenue taxes.

SEC 112(A): Prescriptive period commences from the close of the
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
taxable quarter when the sales were made and not from the time the
6.
prescribed above, the taxpayer affected may, within thirty (30)
input VAT was paid nor from the time the official receipt was issued.
Thus, when a zero-rated VAT taxpayer pays its input VAT a year after
days from the receipt of the decision denying the claim or after
the expiration of the one hundred twenty day-period, appeal the
the pertinent transaction, said taxpayer only has a year to file a

claim for refund or tax credit of the unutilized creditable input
VAT. So reckoning frame is: end of the quarter when the
lapse of the 120-day period because it filed the claims
pertinent sales or transaction was made, regardless when the

input VAT was paid.
2) Admin claim TIMELY FILED. The Administrative Code which
provides that a year is composed of 12 calendar months, must
prevail over the Civil Code which provides that a year is 365 days.
(Primetown Property Group case)
o Under this case, it was ruled that leap year or not, the months will
always be equal to 12 months.
decision or the unacted claim with the Court of Tax Appeals.

In this case, Aichi did not wait for the decision of the CIR or the
simultaneously.
Aichis assertion that the non-observance of this rule is not fatal has
no legal basis. What Section 112 refers to when it says that the filing
may be made within 2 years after the close of the taxable quarter
when the sales were made, is the period to apply for the issuance of
the tax credit certificate/refund WITH THE CIR, and not appeals
made to the CTA.
WESTERN MINDANAO v. CIR (Austria)

[GR. No. 181136; June 13, 2012]
Corporation (WMPC) did not contain the phrase "zero-rated," as required

under Revenue Regulations No. 7 95 (RR 795).
If you liked it, then you shoulda put a [stamp] on it oh oh oh
Petitioner WMPC is a domestic corporation engaged in the

production and sale of electricity [to the NPC].
Recit-Ready:
Facts: This case is about the denial of the CTA En Banc of the Petition
Petitioner alleges that it sells electricity solely to the National
for refund of unutilized input Value Added Tax (VAT) of petitioner
Power Corporation (NPC), which is in turn exempt from the
Western Mindanao Power Corporation (WMPC), a seller of
payment of all forms of taxes, duties, fees and imposts,
electricity to NAPOCOR (exempted entity), on the ground that the
pursuant to Section 132 of Republic Act (R.A.) No. 6395 (An Act
Official Receipts of petitioner did not contain the phrase "zero--
Revising the Charter of the National Power Corporation).
rated," as required under Revenue Regulations No. 7-95 (RR 7--
In view thereof and pursuant to Section 108(B) (3) of the

National Internal Revenue Code (NIRC), petitioner's power
95).
generation services to NPC is zero-rated.

Issue: Whether the CTA En Banc seriously erred in dismissing the claim
Under Section 112(A) of the NIRC, 4 a VAT-registered taxpayer may,
of petitioner for a refund or tax credit on input tax on the ground
within two years after the close of the taxable quarter, apply for the
that the latter's Official Receipts do not contain the phrase zero--
issuance of a tax credit or refund of creditable input tax due or paid and
rated.
attributable to zero-rated or effectively zero-rated sales.

o
Held:
Hence, on 20 June 2000 and 13 June 2001, WMPC filed with
NO. The CTA En Banc did not err in dismissing the claim for
the Commissioner of Internal Revenue (CIR) applications for a
tax credit for failing to meet the documentary and evidentiary
tax credit certificate of its input VAT covering the taxable 3rd
requirements. The Supreme Court has consistently held as
and 4th quarters of 1999 (amounting to P3,675,026.67) and all
fatal the failure to print the word "zero-rated" on the Value-
the taxable quarters of 2000 (amounting to P5,649,256.81)
Added Tax (VAT) invoices or official receipts in claims for a

refund or credit of input VAT on zero-rated sales.
CTA Division: Noting that the CIR was not acting on its application, AND
fearing that its claim would soon be barred by prescription, WMPC on 28
September 2001 filed with the Court of Tax Appeals (CTA) in Division a
Facts:
This is a petition for review of CTA En Bancs Resolution denying the

Petition for refund of unutilized input Value Added Tax (VAT) on the
ground that the Official Receipts of petitioner Western Mindanao Power
Petition for Review docketed as C.T.A. Case No. 6335, seeking

refund/tax credit certificates for the total amount of P9,324,283.30.
o
CIR Comment: WMPC was not entitled to the latter's 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 4.1081 of RR 795 (see no.5 the word zero rated

imprinted on the invoice covering zero rated sales.
o
prominently" on the VAT invoice or official
receipt for sales subject to zero percent (0%)
WMPC: countered that
VATappeared in Section 113 of the NIRC
the invoicing and accounting requirements laid down in
only after it was amended by Section 11 of
RR 795 were merely "compliance requirements," which
R.A. 9337.8
were not indispensable to establish the claim for refund
of excess and unutilized input VAT.
considering that it took effect only on 1 July 2005, or
Also, Section 113 of the NIRC prevailing at the time the
long after petitioner filed its claim for a tax refund, and
sales transactions were made did not expressly state
considering further that the RR 795 is punitive in
that failure to comply with all the invoicing requirements
nature.
would result in the disallowance of a tax credit refund.
This amendment cannot be applied retroactively
Further, since there was no statutory requirement for
The express requirementthat "the term 'zero
imprinting the phrase "zero-rated" on official receipts
rated
prior to 1 July 2005, the RR 795 constituted undue
sale'
shall
be
written
or
printed
expansion of the scope of the legislation it sought to
SECTION 4.1081. Invoicing Requirements.All VAT registered persons shall, for every
implement.
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
Petitioner moved for reconsideration, but the motion was denied
transaction; 3. quantity, unit cost and description of merchandise or nature of service; 4. the
CTA Second Division Decision: On 1 September 2006, the CTA Second
name, TIN, business style, if any, and address of the VAT registered purchaser, customer or
Division dismissed the Petition. It held that:
client; 5. the word "zero rated" imprinted on the invoice covering zero rated sales; and
6. the invoice value or consideration. In the case of sale of real property subject to VAT and
while petitioner submitted in evidence its Quarterly VAT Returns

for the periods applied for, "the same do not reflect any zero--
where the zonal or market value is higher than the actual consideration, the VAT shall be
separately indicated in the invoice or receipt.
rated or effectively zero-rated sales allegedly incurred during
Only VAT-registered persons are required to print their TIN followed by the word
said periods. The spaces provided for such amounts were left
"VAT" in their invoice or receipts and this shall be considered as a "VAT Invoice." All
blank, which only shows that there existed no zero rated or
purchases covered by invoices other than "VAT" Invoice" shall not give rise to any
effectively zero-rated sales for the 3rd and 4th quarters of 1999
input tax.
and the four quarters of 2000."
If the taxable person is also engaged in exempt operations, he should issue separate
invoices or receipts for the taxable and exempt operations. A "VAT Invoice" shall be issued
Moreover, it found that petitioner's VAT Invoices and Official
only for sales of goods, properties or services subject to VAT imposed in Sections 100 and
Receipts did not contain on their face the phrase "zero-rated,"
102 of the Code. The invoice or receipt shall be prepared at least in duplicate, the original to
contrary to Section 4.1081 of RR 795.
be given to the buyer and the duplicate to be retained by the seller as part of his accounting
records." (Underscoring supplied.)
CTA En Banc Decision: dismissing the appeal and affirming the CTA
ruling.

In addition, the CTA En Banc noted that petitioner's Official
Refunds or Tax Credits of Input Tax. (A) Zerorated or Effectively Zero-
Receipts and VAT Invoices did not have the word "zero-rated"
imprinted/stamped thereon, contrary to the clear mandate of
invoice or official receipt, which may only be considered as such when it
Section 4.1081 of RR 795.

o
rated Sales.)
Under the NIRC, a creditable input tax should be evidenced by a VAT
complies with the requirements of RR 795, particularly Section 4.1081.
o This section requires, among others, that "(i)f the sale
Dissenting of Justice Ernesto Acosta; the absence of the term

"zero-rated" in an invoice or official receipt does not affect its
is subject to zero percent (0%) value-added tax, the
admissibility or competency as evidence in support of a refund
term 'zero-rated sale' shall be written or printed
claim. Also, assuming that stamping the term "zero-rated" on an

invoice or official receipt is a requirement of the current NIRC,
the denial of a refund claim is not the imposable penalty for
failure to comply with that requirement.
WMPC filed a Motion for Reconsideration, which was denied by the CTA
En Banc
Issue/s: Whether the CTA En Banc seriously erred in dismissing the claim of
petitioner for a refund or tax credit on input tax on the ground that the latter's
prominently on the invoice or receipt.

We are not persuaded by petitioner's argument that RR 7-95 constitutes
undue expansion of the scope of the legislation it seeks to implement on
the ground that the statutory requirement for imprinting the phrase "zero
rated" on VAT official receipts appears only in Republic Act No. 9337.
This law took effect on 1 July 2005, or long after petitioner had filed its
claim for a refund.
o RR 795, which took effect on 1 January 1996, proceeds
from the rulemaking authority granted to the Secretary of
Official Receipts do not contain the phrase zero-rated NO, receipts should
Finance by the NIRC for the efficient enforcement of the
contain zero-rated
Held/Ratio: Petition DENIED.
Philippines v. Commissioner of Internal Revenue: The

provision is "reasonable and is in accord with the efficient
NO. The CTA En Banc did not err in dismissing the claim for tax credit
collection of VAT from the covered sales of goods and
for failing to meet the documentary and evidentiary requirements. The

Supreme Court has consistently held as fatal the failure to print the
word "zero-rated" on the Value-Added Tax (VAT) invoices or official
receipts in claims for a refund or credit of input VAT on zero-rated sales
In the present case, petitioner's claim for a refund or tax credit of input
VAT is anchored on Section 112(A) of the NIRC (see codal: Section 112.
same Tax Code and its amendments

In Panasonic Communications Imaging Corporation of the
services.
In Kepco Philippines Revenue Corporation v. Commissioner
of Internal: the subsequent incorporation of Section 4.1081
of RR 795 in Section 113 (B) (2) (c) of R.A. 9337 actually
confirmed the validity of the imprinting requirement on VAT
invoices or official receiptsa case falling under the
principle
of
legislative
approval
of
administrative
interpretation by reenactment this Court has consistently

held as fatal the failure to print the word "zero-rated" on the
Being a derogation of the sovereign authority, a statute granting tax
VAT invoices or official receipts in claims for a refund or
exemption is strictly construed against the person or entity claiming
credit of input VAT on zero-rated sales, even if the claims
the exemption.
o When based on such statute, a claim for tax refund
were made prior to the effectivity of R.A. 9337.20

In addition, it is notable that the CTA Second Division and the CTA En
Banc, including Presiding Justice Acosta in his Concurring and
taxpayer-claimant applies to the claim.
Dissenting Opinion, both found that petitioner failed to sufficiently

substantiate the existence of its effectively zero-rated sales to NPC
for the 3rd and 4th quarters of taxable year 1999, as well as all four
COMMISSIONER OF INTERNAL REVENUE v. SAN ROQUE
quarters of taxable year 2000

It must also be noted that the CTA is a highly specialized court
(BAADERA)
dedicated exclusively to the study and consideration of revenue--
The 120+30 day rule//two-year judicial claim rule//operative fact rule case
related problems, in which it has necessarily developed an expertise.

Hence, its factual findings, when supported by substantial evidence, will
not be disturbed on appeal.

A taxpayer engaged in zero-rated or effectively zero rated sale may
apply for the issuance of a tax credit certificate, or refund of
partakes of the nature of an exemption.

Hence, the same rule of strict interpretation against the
creditable input tax due or paid, attributable to the sale

Requirements: 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.
o Hence, the mere fact that petitioner's application for zero-rating has
been approved by the CIR does not, by itself, justify the grant of a
o
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.
[GR. No. 187485; February 12, 2013]
Recit-Ready:
Facts: This case consists of three cases filed by San Roque, Taganito,
and Philex for their tax refund. San Roques claim was granted by
the court citing Atlas and RMC 49-03 wherein both claimed that a
taxpayer may file a judicial claim before the lapse of the 120 days.
Thus, the judicial claim of San Roque is valid despite it being filed
13 days after the administrative claim was filed. In Taganito, the
court denied the refund since Taganito filed the judicial claim just
92 days after its administrative claim. The court cited Mirant and
Aichi claiming the periods are mandatory. One Justice dissented
to the decision claiming the contrary. Philex on the other hand
only filed the case for a judicial claim after CIRs inaction for two
years on their administrative claim. The court denied the refund
since the claim was filed beyond the two-year prescription period
and that Philex should have filed their claim after the lapse of 120
days. The court stated in the DIVISION level that judicial claims
should be filed within the two-year prescription. At the En Banc

level, the court similarly affirmed the denial but added that the law
7) WON existing jurisprudence does not distinguish as to the filing dates
gives the taxpayer only 30 days after the lapse of 120 days to file
of administrative and judicial claims as long as they are made within
their claim. Philex filed their claim 426 days after the lapse of 30
the two-year period.

NO
8) WON Section 4.106-2(c) of Revenue Regulations No. 7-95 allows
days so denied.
Issue/s:
1) WON a taxpayer could file a judicial claim without having to wait the
decision on their administrative claim. In short, can the taxpayer file a
judicial claim without waiting for the lapse of 120 days? Also, does the
Atlas doctrine still apply?
NO with the exception of Philex and as for Atlas, it is not applicable
2) WON the 30-day period for judicial appeal falls within the two-year
period for prescription of the refund.
NO
3) WON the word excess mentioned under Section 229 is similar to
excess under 110(B) and 112(A) for purposes of counting the
reckoning period and the prescription period of refund.
NO
4) WON the Atlas doctrine allows the filing of judicial claims despite the
premature filing of judicial claims.

NO
Held:
1) NO with exception with Philex. San Roque must wait for the 120 days
as the requirement is mandated by law and that no decision can
result without the lapse of 120 days therefore CTA cannot also acquire
jurisdiction. For Philex, the court allowed to file ahead of 120 days
citing BIR Ruling No. DA-489-03. Philex was really late in filing.
2) NO. Careful scrutiny of the Code reveals that the two-year period only
refers to administrative claims and not judicial claims.
3) NO. Section 229s term "excessively collected occurs when the
person liable for the tax actually pays more than what is legally due.
lapse of 120 days and whether Section 112(C)s use of may allows
The prescriptive period is reckoned from the date the person liable for
the filing of judicial claim before the 120 day lapse.

NO
5) WON Revenue Memorandum Circular No. 49-03 (RMC 49-03) allows
the tax pays the tax. Alternatively, under Section 110(B) and Section
112(A), the prescriptive period for filing a judicial claim for "excess"
the filing of claims before the lapse of 120 days.

NO
6) WON BIR Ruling No. DA-489-03 is an exception to the mandatory 120
when the sale was made by the person legally liable to pay the
day rule.
YES but only from 10 December 2003 up to its reversal by this Court
in Aichi on 6 October 2010. (Take note: Operative Fact question
according to reviewers)
input VAT is two years from the close of the TAXABLE QUARTER,
output VAT. Aside from the reckoning date, it is important also to know
this since under Section 229, tax can be claimed as a credit or refund
while Sections 110(B) and Section 112(A) require first that the
taxpayer must have an output VAT to which input tax would be
attributed to (with the exception of course of zero-rated transactions)

with the Government of the Philippines or any of its subdivision,
4) NO. Atlas doctrine has nothing to do with 120+30 days and whatever
its doctrine was, it was abandoned last June 2007 with the
pronouncement in Mirant. May refers to the choice of the taxpayer on
National Power Corporation ("NPC") to develop hydro-potential of the
whether they would like to file an appeal or not
Lower Agno River and generate additional power and energy for the
5) NO. The RMC 49-03 clarifies that the filing of judicial claims does not
divest the CIR of his jurisdiction to decide on administrative claims
Roque allegedly incurred, excess input VAT in the amount of
in Aichi on 6 October 2010. BIR Ruling No. DA-489-03 is a general
559,709,337.54 for taxable year 2001. On March 28, 2003 it then filed
interpretative rule and the Commissioner cannot then question the
with BIR for a refund.

o CIRs inaction though prompted San Roque to file a Petition
CTAs jurisdiction and equitable estoppel has set in.
that compliance with the 120-day mandatory period is inconsequential
Luzon Power Grid, by building the San Roque Multi-Purpose Project.

On the construction and development of the San Roque Multi- Purpose
Project which comprises of the dam, spillway and power plant, San
6) YES from 10 December 2003 up to its reversal by this Court
7) NO. None of these five cases mention, cite, discuss, rule or even hint
instrumentality or agency.
San Roque entered into a Power Purchase Agreement ("PPA") with the
for Review with CTA on April 10, 2003. (13 days)

CTA denied the petition for lack of recorded zero-rated or effectively zerorated sales; failure to submit documents specifically identifying the
as long as the administrative and judicial claims are filed within the
purchased goods/services related to the claimed input VAT.

o CTA required San Roque to prove the existence of Sec. 112
two-year prescriptive period.
(B) of RA 8424 namely:

(1) it is a VAT-registered entity;
(2) its input taxes claimed were paid on capital
8) NO. Section 4.106-2(c) of Revenue Regulations No. 7-95 did not allow
premature filing of judicial claims. Even assuming the contrary, Section
4.106-2(c), a mere administrative issuance, becomes inconsistent with
goods duly supported by VAT invoices and/or
Section 112(D), a later law. Obviously, the later law prevails over a
prior inconsistent administrative issuance
payments on capital goods against any output VAT
Facts:
G.R. No. 187485
CIR v. San Roque Power Corporation (San Roque)
official receipts;
(3) it did not offset or apply the claimed input VAT
liability; and
(4) its claim for refund was filed within the two-year
prescriptive period
CTA Second Division reversed the decision and found that San Roque
San Roque is a domestic corporation whose function is to design,
construct, erect, assemble, own, commission and operate power-
complied with the first, third, and fourth requirements.

San Roque filed a Motion for New Trial and/or Reconsideration
generating plants and related facilities pursuant to and under contract

CTA Second Division found legal basis to partially grant San Roques
provision. The respondent is also covered by the two (2)
claim. The CTA Second Division ordered the Commissioner to REFUND

or issue a tax credit in favor of San Roque in the amount of
year prescriptive period.

In the case of Atlas Consolidated Mining and Development
483,797,599.65
o The amount represents San Roques unutilized input VAT
Corporation vs. Commissioner of Internal Revenue (Atlas)
on its purchases of capital goods and services for the
tax is reckoned from the date of the filing of the
taxable year 2001. (Compared to the 1
decision, court
quarterly VAT return and payment of the tax due. If the
managed to amend their decision since they hired now an
said period is about to expire but the BIR has not yet
independent CPA to do the computation WOW!)

The court reasoned that the deduction from the total
acted on the application for refund, the taxpayer may
amount asked by San Roque was based on the discrepancy

of evidence it presented. The receipts and invoices
two year period.

In Gibbs, the court held that if the two-year period
contradicted the amount that is reflected in its books.
is about to expire but no reply yet has been given
Further
Also, San Roques claim for refund or tax credit of its
by BIR, the taxpayer may start the petition to Court
unutilized input VAT for the last quarter of 2001 was denied
period without awaiting the decision of the
st
the two-year prescriptive period for filing a claim for input
interpose a petition for review with this Court within the
of Tax Appeals before the end of the two-year
as well since there is no record of sales that would relate to
zero-rated or effectively zero-rated transaction.

CIR appealed but was still denied by CTA En Banc reasoning:
o It is true that Section 112(D) 3 of the abovementioned
not bound to wait indefinitely for no reason for

whatever action respondent (herein petitioner) may
provision applies to the present case. However, what the

petitioner failed to consider is Section 112(A) 4 of the same
3
SECTION 112(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.
4
SECTION 112 (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
Collector.
This Court ruled in several cases that the Court is
take.
Also, A-17 of Revenue Memorandum Circular No.
42-2003 states: In cases where the taxpayer has
filed a "Petition for Review" with the Court of
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.

Tax Appeals involving a claim for refund/TCC
Taganito filed all its Monthly VAT Declarations and Quarterly Vat Returns
that is pending at the administrative agency
for the period January 1, 2005. Taganito reported zero-rated sales
(Bureau of Internal Revenue or OSS-DOF), the
amounting to P1,446,854,034.68; input VAT on its domestic purchases
administrative agency and the tax court may
and importations of goods (other than capital goods) and services
act on the case separately.
amounting to P2,314,730.43; and input VAT on its domestic purchases

and importations of capital goods amounting to P6,050,933.95. This
Lastly, it is apparent from the following provisions of Revenue
amounted to P8,365,664.38
o November 14, 2006, Taganito filed for a tax credit/refund of
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
VAT is about to lapse without action on the part of the CIR, Taganito filed
that taxpayers need not wait for the lapse of the subject 120-day period
(This pronouncement is important for the fifth issue)
G.R. No. 196113

Taganito Mining Corporation v. CIR (Taganito)
Taganito Mining Corporation, is a corporation whose business is to carry
on the business, for itself and for others, of mining lode and/or placer
mining,
developing,
converting,
smelting,
exploiting,
treating,
extracting,
refining,
milling,
preparing
concentrating,
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 and which by-products thereof of every kind
and description and by whatsoever process the same can be or may
hereafter be produced and generally and without limit as to amount, to
buy, sell, locate, exchange, lease, acquire and deal in lands, mines, and
mineral rights and claims and to conduct all business appertaining thereto
o (In short, they buy, sell, and/or produce ores or business
related thereto)
its supposed input VAT amounting to 8,365,664.38

As the statutory period within which to file a claim for refund for said input
the instant Petition for Review on February 17, 2007.(less than 3 months)
Taganito sent a letter January 1, 2005 to December 31, 2005.
On March 2007, CIR replied and ruled:
o The court has no jurisdiction over the entertain the instant
petition for review for failure on the part of Taganito to
comply with the provision of Section 112 (D) of the 1997
Tax Code which provides
(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 (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 cases of full or partial denial 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
Company of Asia, Inc. (Aichi) and Commisioner of Internal
the decision denying the claim or after the
Revenue v. Mirant Pagbilao Corporation (Mirant).

The cases ruled that the two-year prescriptive
expiration
of
the
one
hundred
twenty
dayperiod, appeal the decision or the unacted
period to file a refund for input VAT arising from
claim with the Court of Tax Appeals.

CIR claimed that the 120 days has already passed.
close of the taxable quarter when the sales
zero-rated sales should be reckoned from the
Taganito filed the administrative claim on November 14,

2006 and subsequently the petition for review, herein
await the decision of the Commissioner or the
petition, was filed last February 14, 2007.

CTA ruled that Taganito complied with the requirements of Section 112(A)
lapse of 120-day period prescribed in Section
of RA 8424, as amended, to be entitled to a tax refund or credit of input

VAT attributable to zero-rated or effectively zero-rated sales.
o Records show that Taganitos administrative claim filed on
November 14, 2006, which was amended on November 29,
filed. Taganito filed its Petition for Review before the CTA
2006, and the Petition for Review filed with this Court on
Second Division on 14 February 2007. The judicial claim
February 14, 2007 are well within the two-year prescriptive
was filed after the lapse of only 92 days from the filing of its
period, reckoned from March 31, 2005, June 30, 2005,
administrative claim before the CIR, in violation of the 120-
September 30, 2005, and December 31, 2005, respectively,
day period prescribed in Section 112(D) of the 1997 Tax
January 1, 2005 to December 31, 2005.

Commissioner filed a Reconsideration.
CTA En Banc reversed the decision and denied the refund to Taganito
claiming:
o
The CTA EB declared that Section 112(A) and (B) of the

1997 Tax Code both set forth the reckoning of the two-year
prescriptive period for filing a claim for tax refund or credit
over input VAT to be the close of the taxable quarter when
112(D) amounts to a premature filing.

Although the administrative claim was filed on time, the CTA
EB found that Taganitos judicial claim was prematurely
the close of each taxable quarter covering the period
were made.
Aichi further emphasized that the failure to
the sales were made.

The CTA EB also relied on this Courts rulings in the cases
of Commissioner of Internal Revenue v. Aichi Forging
Code.
Associate Justice Bautista dissented to the decision claiming that the
taxpayer has a right to file before the lapse of 120 days.

CTA En Banc denied the MR.
G.R. No. 197156

Philex Mining Corporation v. CIR (Philex)
Philex is a corporation engaged in the mining business, which includes

the exploration and operation of mine properties and commercial
production and marketing of mine products

Philex filed its Original VAT Return for the third quarter of taxable year
2005 and Amended VAT Return for the same quarter on December 1,
2005.

On March 20, 2006, Philex filed its claim for refund/tax
a judicial claim without waiting for the lapse of 120 days? Also, does
credit of the amount of 23,956,732.44

Due to CIRs failure to act on such claim, on October 17, 2007, pursuant
the Atlas doctrine still apply?

NO with the exception of Philex and as for Atlas, it is not applicable
2) WON the 30-day period for judicial appeal falls within the two-year
to Sections 112 and 229 of the NIRC of 1997, as amended, Philex filed a
Petition for Review.

CTA Division ruled:
o Philexs claim prescribed. 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. (So
o
petition for review should be within the two-years)

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.
MR was denied
CTA En Banc AFFIRMED:
o Records show that an administrative claim was filed on
March 20, 2006. The CIR has 120 days, or until July 18,
2006, within which to decide the claim. 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 in this case,
Philex filed its Petition for Review only on October 17, 2007,
which is 426 days way beyond the 30- day period
prescribed by law.
Issues:
1) WON a taxpayer could file a judicial claim without having to wait the
decision on their administrative claim. In short, can the taxpayer file
period for prescription of the refund.

NO
3) WON the word excess mentioned under Section 229 is similar to
excess under 110(B) and 112(A) for purposes of counting the
reckoning period and the prescription period of refund.
NO
4) WON the Atlas doctrine allows the filing of judicial claims despite
the lapse of 120 days and whether Section 112(C)s use of may
allows the filing of judicial claim before the 120 day lapse.
NO
5) WON Revenue Memorandum Circular No. 49-03 (RMC 49-03) allows
the filing of claims before the lapse of 120 days.
NO
6) WON BIR Ruling No. DA-489-03 is an exception to the mandatory 120
day rule.
YES but only from 10 December 2003 up to its reversal by this Court
in Aichi on 6 October 2010. (Take note: Operative Fact question
according to reviewers)
7) WON existing jurisprudence does not distinguish as to the filing
dates of administrative and judicial claims as long as they are made
within the two-year period.
NO
8) WON Section 4.106-2(c) of Revenue Regulations No. 7-95 allows
premature filing of judicial claims.
NO
Held/Ratio: WHEREFORE, the Court hereby (1) GRANTS the petition of the
Commissioner of Internal Revenue in G.R. No. 187485 to DENY the

cause of action, with the effect that the CTA does not
P483,797,599.65 tax refund or credit claim of San Roque Power Corporation;

(2) GRANTS the petition of Taganito Mining Corporation in G.R. No. 196113
for a tax refund or credit of P8,365,664.38; and (3)DENIES the petition of
acquire jurisdiction over the taxpayers petition.

CTA expressly provides that its jurisdiction is to review
Philex Mining Corporation in G.R. No. 197156 for a tax refund or credit of
on appeal "decisions for refunds of taxes. Without
P23,956,732.44..
waiting for the period, there can be no decision that

could be reviewed by CTA. The charter of the CTA also
1)
NO with exception with Philex. San Roque must wait for the 120
expressly provides that if the Commissioner fails to
days as the requirement is mandated by law and that no decision
decide within "a specific period" required by law, such
can result without the lapse of 120 days therefore CTA cannot also
acquire jurisdiction. For Philex, the court allowed to file ahead of
120 days citing BIR Ruling No. DA-489-03. Philex was really late in
filing.
"inaction shall be deemed a denial"

San Roque cannot also claim being misled, misguided or confused by
the Atlas doctrine because San Roque filed its petition for review
with
the
than
four
years
before Atlas was
date of payment of the output VAT, not from the close of
day period to lapse before filing its judicial claim. Also, San Roque
more
two-year prescriptive period should be counted from the
Base from records, San Roque did not wait for first wait for the 120filed
CTA
promulgated.
O
In any event, the Atlas doctrine merely stated that the
SAN ROQUE
O
its
judicial
claim
more
than
four
the taxable quarter.

In Atlas the petitioner there filed their tax return
(4)
years BEFORE the Atlas doctrine was promulgated.

Clearly, San Roque failed to comply with the 120-day waiting period,
after the close of quarter (e.g. Quarter closed

on 30 June 1990, Atlas only paid on 20 July
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 ends on 20 July 1992 or two years after
period is mandatory and jurisdictional.

O
This waiting period has been in our statute books
1990)
The court ruled that the two-year prescriptive
for more than fifteen (15) years before San Roque
the filing of return.

The Atlas doctrine does not interpret, expressly or
filed its judicial claim. In the past, it was only 60 days.

Failure to comply with the 120-day waiting period
impliedly, the 120+30 day periods.

Atlas doctrine cannot be invoked by anyone to
disregard compliance with the 30-day mandatory
violates a mandatory provision of law. It violates the

doctrine of exhaustion of administrative remedies
and renders the petition premature and thus without a
and jurisdictional period.

Atlas is immaterial

O
At the time San Roque filed its petition for review with the CTA,
lapse of the 120-day period. In any event, whether governed by
the 120+30 day mandatory periods were already in the law.
jurisprudence before, during, or after the Atlas case, Philexs
Section 112(C) expressly grants the Commissioner 120 days

within which to decide the taxpayers claim.
judicial claim will have to be rejected because of late filing.

The Atlas doctrine cannot save Philex (so immaterial) from the late
filing of its judicial claim. The inaction of the Commissioner on
Philexs claim during the 120-day period is, by express provision of
TAGANITO
O
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 four
months
(4)
before the
promulgation of the Atlas doctrine.

HOWEVER UNLIKE SAN ROQUE it invoked BIR Ruling No. DA-489-
035 but before the adoption of the Aichi doctrine (explained later).
Thus Taganitos refund is valid.
PHILEX
O
To recall, the Commissioner had until 17 July 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 17 July 2006, Philex had until 17
August 2006, the last day of the 30-day period, to file its judicial
claim. The CTA EB held that 17 August 2006 was indeed the last
day for Philex to file its judicial claim.

However, Philex filed its Petition for Review with the CTA only on 17
law, "deemed a denial" of Philexs claim.

2) NO. Careful scrutiny of the Code reveals that the two-year period
only refers to administrative claims and not judicial claims.
o 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 due or paid to
such sales.
o
within two years whether it would be on the last or first.

o 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)."
o The highlighted part above means that the provision
ONLY REFERS TO ADMINISTRATIVE CLAIMS.
In Aichi, the words clearly refer to refund or
October 2007, or four hundred twenty-six (426) days after the last day
of filing. In short, Philex was late by one year and 61 days in filing
O
its judicial claim.

Compared to the previous two cases, Philex filed its judicial claim long
after the expiration of the 120-day period, in fact 426 days after the
BIR RULING NO. DA-489-03 - 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.
"Within two (2) years," which means at anytime
credit not appeal to CTA.

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.

o 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
o The input VAT is not "excessively" collected as understood under
the first 610 days of the two-year prescriptive period.

o The theory that the 30-day period must fall within the two-year
Section 2296 because at the time the input VAT is collected the
amount paid is correct and proper.
o To recall, an input VAT is a tax liability of, and legally
prescriptive period adds a condition that is not found in the law.

o The taxpayer can file his administrative claim for refund or credit
paid by, a VAT-registered seller. The second VAT-
at anytime within the two-year prescriptive period.
registered person, who is not legally liable for the input

VAT, is the one who applies the input VAT as credit for
3) NO. Section 229s term "excessively collected occurs when the
his own output VAT. If the input VAT is in fact
person liable for the tax actually pays more than what is legally due.
"excessively" collected as understood under Section
The prescriptive period is reckoned from the date the person liable
229, then it is the first VAT-registered person - the
for the tax pays the tax. Alternatively, under Section 110(B) and
taxpayer who is legally liable and who is deemed to have
Section 112(A), the prescriptive period for filing a judicial claim for
"excess" input VAT is two years from the close of the TAXABLE
legally paid for the input VAT.

o The person legally liable for the input VAT cannot claim that he
QUARTER, when the sale was made by the person legally liable to
overpaid the input VAT by the mere existence of an "excess" input
pay the output VAT. Aside from the reckoning date, it is important
VAT. The term "excess" input VAT simply means that the input
also to know this since under Section 229, tax can be claimed as a
VAT available as credit exceeds the output VAT, not that the input
credit or refund while Sections 110(B) and Section 112(A) require
VAT is excessively collected because it is more than what is
first that the taxpayer must have an output VAT to which input tax
legally due.
would be attributed to (with the exception of course of zero-rated

transactions).
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 claim 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.

o Under Section 229, the prescriptive period for filing a judicial claim for
Thus, a non zero-rated VAT-registered taxpayer who has
refund is two years.

o The prescriptive period is reckoned from the date the
no output VAT because he has no sales cannot claim a
person liable for the tax pays the tax.

This means the date when the taxpayer pays
VAT System. (Exception is if you are zero-rated)

o The said unused input VAT is then NOT excess.
o The VAT System does not allow such refund or credit.
more
than
he
should
have
under
the
assessment.
Taxpayer here is the person legally
tax refund or credit of his unused input VAT under the
Such "excess" input VAT is not an "excessively"
liable to pay the tax and NOT the
collected tax under Section 229.

o As the Court held in Mirant, Section 229 should "apply only to
person to whom the tax is passed
instances of erroneous payment or illegal collection of internal
on as part of the purchase price.

o Under Section 110(B) and Section 112(A), the prescriptive period for
revenue taxes." Erroneous or wrongful payment includes excessive
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
due.
o Any suggestion that the "excess" input VAT under the VAT System is
liable to pay the output VAT. This prescriptive period has no relation to
an "excessively" collected tax under Section 229 may lead taxpayers
the date of payment of the "excess" input VAT. The "excess" input VAT
to file a claim for refund or credit for such "excess" input VAT under
may have been paid for more than two years but this does not bar the
Section 229 as an ordinary tax refund or credit outside of the VAT
filing of a judicial claim for "excess" VAT under Section 112(A), which
System.
has a different reckoning period from Section 229.

o The person claiming the refund or credit of the input VAT
is not the person who legally paid the input VAT.
o To recall, under Section 110(B), a taxpayer can apply his input VAT
only against his output VAT. The only exception is when the taxpayer
is expressly "zero-rated or effectively zero-rated" under the law, like
companies generating power through renewable sources of energy.
payment because they all refer to payment of taxes not legally
Under Section 229, mere payment of a tax beyond what

is legally due can be claimed as a refund or credit.
There is no requirement under Section 229 for an output
VAT or subsequent sale of goods, properties, or services
using materials subject to input VAT.
4) NO. Atlas doctrine has nothing to do with 120+30 days and whatever
its doctrine was, it was abandoned last June 2007 with the
SECTION 110. (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 quarters. Any input tax attributable to the purchase of capital goods or to zerorated 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.
pronouncement in Mirant. May refers to the choice of the taxpayer

on whether they would like to file an appeal or not.
o The Atlas doctrine, which held that claims for refund or credit of input
VAT must comply with the two-year prescriptive period under Section

229, should be effective only from its promulgation on 8 June

2007 until its abandonment on 12 September 2008 in Mirant.
o Reckoning period is the date of payment of the output
5) NO. The RMC 49-03 clarifies that the filing of judicial claims does not
divest the CIR of his jurisdiction to decide on administrative claims.
o There is nothing in RMC 49-03 8 that states, expressly or impliedly, that
VAT
Any payment of output VAT BEFORE Atlas follows the
a judicial claim with the CTA. RMC 49-03 merely authorizes the BIR to
verba legis rule of Section 112(A).

Payment AFTER Atlas also follows the verba legis rule
of Mirant doctrine, which is basically Section 112(A).

o As mentioned, Atlas has no application when it comes to the 120+30
has filed its judicial claim.

o PURPOSE: The internal administrative evaluation of the
the taxpayer need not wait for the 120-day period to expire before filing
continue processing the administrative claim even after the taxpayer
day periods. The 120+30 day rule was first raised in Aichi, which
taxpayers claim must necessarily continue to enable the
adopted the verba legis rule in holding that the 120+30 day periods
BIR to oppose intelligently the judicial claim or, if the
are mandatory and jurisdictional.

o This means that a judicial claim can only be filed after
facts and the law warrant otherwise, for the BIR to

concede to the judicial claim, resulting in the termination
the lapse of said periods.

o When Section 112(C) states that "the taxpayer affected may, within
of the judicial proceedings.

o The expiration of the 120-day period cannot operate to divest the
thirty (30) days from receipt of the decision denying the claim or after
Commissioner of his jurisdiction to decide an administrative
the expiration of the one hundred twenty-day period, appeal the
claim
decision or the unacted claim with the Court of Tax Appeals," the law
120-day
mandatory
period,
unless the
apply as expressly recognized in Section 246 of the Tax Code.
uses the word "may." The word "may" simply means that the
6) YES from 10 December 2003 up to its reversal by this Court

in Aichi on 6 October 2010. BIR Ruling No. DA-489-03 is a general
expiration of the 120 days, the taxpayer can file immediately a petition
interpretative rule and the Commissioner cannot then question the
for review. Now, the VAT system adopts a 30 day rule after the 120
CTAs jurisdiction and equitable estoppel has set in.
days.
o
the
Commissioner has clearly given cause for equitable estoppel to
does not make the 120+30 day periods optional just because the law
taxpayer may or may not appeal.
o The old rule when it comes to judicial appeals is that before the
within
PURPOSE: 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.
RMC 49-03 - In cases where the taxpayer has filed a Petition for Review with the Court
of Tax Appeals involving a claim for refund/TCC that is pending at the administrative agency
(either the Bureau of Internal Revenue or the One- Stop Shop Inter-Agency Tax Credit and
Duty Drawback Center of the Department of Finance), the administrative agency and the
court may act on the case separately.

o To recall, BIR Ruling No. DA-489-03 expressly states that the
"taxpayer-claimant need not wait for the lapse of the 120-day
original jurisdiction to interpret tax laws,
period before it could seek judicial relief with the CTA by way of
taxpayers acting in good faith should not be
Petition for Review."

o There is no dispute that the 120-day period is mandatory and
jurisdictional. There are, however, two exceptions to this rule.
o The first exception is if the Commissioner, through a
made
to
suffer
for
adhering
to
general
interpretative rules of the Commissioner

o BIR Ruling No. DA-489-03 is a general interpretative rule because it
was a response to a query made, not by a particular taxpayer, but by a
specific ruling, misleads a particular taxpayer to
government agency tasked with processing tax refunds and credits,
prematurely file a judicial claim with the CTA.

Such specific ruling is applicable only to such
that is, the One Stop Shop Inter-Agency Tax Credit and Drawback
particular taxpayer.
Second exception is where the Commissioner, through a
general interpretative rule issued under its power in
Section 4 of the Tax Code (power of the Commissioner
to interpret laws relating to tax and issue regulations),
misleads all taxpayers into filing prematurely judicial
claims with the CTA.
Commissioner cannot then question the CTAs
jurisdiction and equitable estoppel has set in as
Center of the Department of Finance.

o Thus, all taxpayers can rely on BIR Ruling No. DA-489-03 from the
time of its issuance on 10 December 2003 up to its reversal by this
Court in Aichi on 6 October 2010, where this Court held that the
120+30 day periods are mandatory and jurisdictional.
o However, BIR Ruling No. DA-489-03 cannot be given retroactive effect
for four reasons:
o First, it is admittedly an erroneous interpretation of the
o
expressly authorized under Section 246 of the

Tax Code .
o
the correct interpretation of the law;

Third, prior to its issuance, no taxpayer can claim that it
was misled by the BIR into filing a judicial claim
Sec. 246. Non-Retroactivity of Rulings. Any revocation, modification or reversal of any
of the rules and regulations promulgated in accordance with the preceding Sections or
any of the rulings or circulars promulgated by the Commissioner shall not be given
retroactive application if the revocation, modification or reversal will be prejudicial to
the taxpayers, except in the following cases:
(a) Where the taxpayer deliberately misstates or omits material facts from his return or any
document required of him by the Bureau of Internal Revenue;
(b) Where the facts subsequently gathered by the Bureau of Internal Revenue are materially
different from the facts on which the ruling is based; or
(c) Where the taxpayer acted in bad faith.
law;
Second, prior to its issuance, the BIR held that the 120day period was mandatory and jurisdictional, which is
Since the Commissioner has exclusive and
prematurely; and
Fourth, a claim for tax refund or credit, like a claim for
tax exemption, is strictly construed against the taxpayer.

o Given its non-retroactivity, San Roque, cannot benefit from BIR Ruling
No. DA-489-03 because it filed its judicial claim prematurely on 10
April 2003, BEFORE the issuance of BIR Ruling No. DA-489-03 on 10
December 2003.

o Taganito, however, filed its judicial claim with the CTA on 14 February
8) NO. Section 4.106-2(c) of Revenue Regulations No. 7-95 did not
2007, AFTER the issuance of BIR Ruling No. DA-489-03 on 10
allow premature filing of judicial claims. Even assuming the
December 2003.
o Philexs situation is not a case of premature filing of its judicial claim
contrary, Section 4.106-2(c), a mere administrative issuance,
but of late filing, indeed very late filing.
becomes inconsistent with Section 112(D), a later law. Obviously,

the later law prevails over a prior inconsistent administrative
7) NO. None of these five cases mention, cite, discuss, rule or even
issuance.
o (This issue is pertinent since San Roque claims that the case is one
hint that compliance with the 120-day mandatory period is
under the 1977 Tax Code which was amended by Section 4.106-2(c)
inconsequential as long as the administrative and judicial claims are
of Revenue Regulations No. 7-95. San Roque assumes that the old
filed within the two-year prescriptive period.

o In CIR v. Toshiba Information Equipment (Phils.), Inc., the issue was
law allows premature filing)

o Section 4.106-2(c) of Revenue Regulations No. 7-95, by its own
whether any output VAT was actually passed on to Toshiba that it
express terms, applies only if the taxpayer files the judicial claim
could claim as input VAT subject to tax credit or refund.

o In Intel Technology Philippines, Inc. v. CIR, the Court stated: "The
"after" the lapse of the 60-day period, a period with which San Roque
issues to be resolved in the instant case are (1) whether the absence
of the BIR authority to print or the absence of the TIN-V in petitioners
mandatory and jurisdictional.

o Under the 1977 Tax Code (Yes, the OLD pa cinite ng court just to
export sales invoices operates to forfeit its entitlement to a tax
prove na luma na yung mandatory periods even before we had the
refund/credit of its unutilized input VAT attributable to its zero-rated
120 days!)
o
sales; and (2) whether petitioners failure to indicate "TIN-V" in its

sales invoices automatically invalidates its claim for a tax credit
failed to comply. Under Section 4.106-2(c), the 60-day period is still
(d) Period within which refund or tax credit of input tax

shall be made - In proper cases, the Commissioner shall
certification..
o In AT&T Communications Services Philippines, Inc. v. CIR, the Court
grant a refund or issue the tax credit for creditable input
denied the claim for lack of substantiation given that "valid VAT
submission of complete documents in support of the
official receipts, and not mere sale invoices, should have been
application filed in accordance with subparagraphs (a)
submitted.
o In CIR v. Ironcon Builders and Development Corporation was about
and (b) hereof. In case of full or partial denial of the
the issue on the validity for refund of excess creditable VAT withheld.
o In CIR v. Cebu Toyo Corporation, the issue was whether Cebu Toyo
part of the Commissioner to act on the application
was exempt or subject to VAT.
taxes within
sixty
(60)
days from
the
date
of
claim for tax refund or tax credit, or the failure on the

within the period prescribed above, the taxpayer
affected may, within thirty (30) days from receipt of
the decision denying the claim
or after the

expiration of the sixty-day period, appeal the
the 1997 Tax Code, not the 1977 Tax Code. Since San Roque filed its
decision or the unacted claim with the Court of Tax
judicial claim before the expiration of the 120-day mandatory and
Appeals.
o Revenue Regulations No. 7-95 (1996)
o However, if no action
jurisdictional period, San Roques claim cannot prosper.

o San Roque cannot also invoke Section 4.106-2(c), which
tax
expressly provides that the taxpayer can only file the
credit/refund has been taken by the Commissioner
judicial claim "after" the lapse of the 60-day period from
of
the filing of the administrative claim. San Roque filed
Internal
period from
on
the
claim
Revenue after
the
the
submission
date
of
sixty
for
(60)
day
of
the
its judicial claim just 13 days after filing its
application but before the lapse of the two (2) year

period from the date of filing of the VAT return for
the taxable quarter, the taxpayer may appeal to the
Court of Tax Appeals.
o Base from above, Revenue Regulations No. 7-95 (1996) did not
allow the filing of claims before the lapse of 60 days.
o Section 4.106-2(c) itself expressly states that if, "after
the sixty (60) day period,"
o Even assuming the contrary, Section 4.106-2(c), a mere administrative
issuance, becomes inconsistent with Section 112(D), a later law.
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 or fully denies
the claim within the 120- day period, or (2) only within thirty days
administrative claim.
*Did not include the Dissenting Opinions so that the case wont be too long.
Dissenters: (1) CJ MARIA LOURDES P. A. SERENO, (2) PRESBITERO J.
VELASCO, JR., (3) JOSE C. MENDOZA, and (4) ESTELA M. PERLASBERNABE
NIPPON EXPRESS CORPORATION v. COMMISSIONER OF

INTERNAL REVENUE (Banta)
[GR. No. 196907; March 13, 2013]
Matuto kang maghintay. 120 days lang naman (ang kailangang mag-lapse).
Hindi yung lilipat ka agad sa iba.
Recit-Ready:
Facts: Petitioner Nippon Philippines filed an administrative claim for
from the expiration of the 120- day period if the Commissioner does
refund with the BIR, representing excess input tax attributable to
not act within the 120-day period.

o There can be no dispute that upon effectivity of the 1997 Tax Code on
its effectively zero-rated sales in 2001. The day after it filed in the
BIR, and while its claim was still pending review, it already filed a
1 January 1998, or more than five years before San Roque filed its
petition for review with the CTA, requesting for the issuance of a
administrative claim on 28 March 2003, the law has been clear: the
tax credit certificate.
120- day period is mandatory and jurisdictional. San Roques claim,

having been filed administratively on 28 March 2003, is governed by
The subsequent rulings of the lower courts are as follows:

CTA First Division: denied petitioner for insufficiency of
claim with the CTA would not only make such petition premature,
evidence
but would also result in the non-acquisition by the CTA of
Upon MR: reversed
jurisdiction to hear the said case.
CTA En Banc: reversed the CTA Amended Decision and
The Court however took into consideration the issuance by the BIR of
denied petitioners claim for lack of merit
Ruling No. DA- 489-03, which expressly stated that the taxpayer need
CTA reversed its decision and affirmed the final decision
not wait for the lapse of the 120-day period before seeking judicial
of the First Division
relief. Because taxpayers cannot be faulted for relying on this
Upon MR by the CIR: the CTA did another reversal and
declaration by the BIR, the Court deemed it reasonable to allow
held that the CTA has no jurisdiction over the petition for
taxpayers to file its judicial claim even before the expiration of the
review because it was filed before the lapse of the 120-
120-day period.
day period accorded to the CIR
SO AGAIN, GENERAL RULE (as laid down by San Roque case):
Issues:
judicial claims filed from January 1, 1998 until the present should
1) WON the CTA has jurisdiction over the instant case

NO
2) WON the petitioners VAT invoices are insufficient proof to
strictly adhere to the 120+30-day period referred to in Section 112

of the NIRC. EXCEPTION: period from December 10, 2003 until
October 6, 2010, during which, judicial claims may be filed even before
support its zero-rated sales

No need to discuss
the expiration of the 120-day period granted to the CIR to decide on

the claim for refund.
Held:
1) NO. Petition is without merit. A simple reading of Section 112(D)
reveals that the taxpayer may appeal the denial or the inaction of
the CIR only within thirty (30) days from receipt of the decision
denying the claim or the expiration of the 120-day period given to
the CIR to decide the claim.
Contrary to petitioners position, the 120+30-day period is indeed
mandatory and jurisdictional from the time of effectivity of R.A. No.
8424, as recently ruled in CIR V. SAN ROQUE POWER CORPORATION.
Thus, the failure to observe the said period before filing a judicial
2) Having thus concluded, the Court sees no need to discuss other

issues which may have been raised in the petition.
Facts:
Petitioner NIPPON EXPRESS (PHILIPPINES) CORPORATION is a

corporation duly organized and registered with the Securities and
Exchange Commission
o Also, it is a VAT-registered entity with the Large Taxpayer District
o
of the BIR
2001: it regularly filed its amended quarterly VAT returns

April 24, 2003: petitioner filed an administrative claim for refund of
P20,345,824.29 representing excess input tax attributable to its effectively
affirmed the initially struck down Amended Decision of the First Division
o In light of the case of AT&T COMMUNICATIONS SERVICES
zero-rated sales in 2001

April 25, 2003: pending review by the BIR, petitioner filed a petition for
PHILIPPINES, INC. V. COMMISSIONER
OF INTERNAL
REVENUE, where
review with the CTA, requesting for the issuance of a tax credit certificate
it was ruled that Section 113 does not distinguish between a
in the amount of P20,345,824.29

o CTA First Division: denied the petition for insufficiency of
sales invoice and an official receipt, the CTA found petitioners
evidence
Upon MR, CTA First Division: reversed its decision and ordered
of tax credit certificate representing its excess or unutilized input
respondent CIR to issue a tax credit certificate in favor of
sales invoices to be acceptable proof for the refund or issuance
VAT
CIR then filed a motion for reconsideration, arguing that a sales receipt
petitioner, representing excess or unutilized input tax for the
and a sales invoice are not the same, and that the CTA has no jurisdiction
second-fourth quarters of 2001

As to the TIMELINESS OF THE CLAIM:
CTA First Division recognizes that the claim was
over the petition for review because it was filed before the lapse of the
120-day period accorded to the CIR
o CTA granted CIRs MR and once again reversed its decision,
premature because pursuant to Section 112(D) of the

NIRC, petitioner should have made its appeal with the
(sellers proof of sale) and a VAT receipt (buyers best evidence
denying the claim, OR after the expiration of the 120-day
of payment) should not be confused as referring to the same
period without action from the CIR

However, since the CIR did not register any objection
thing
deemed waived
June 11, 2010: CTA En Banc reversed and set aside the Amended
Decision and Resolution of the First Division; denied petitioners claim for
Issues:
1) WON the CTA has jurisdiction over the instant case
NO
2) WON the petitioners VAT invoices are insufficient proof to support
lack of merit
o According to the CTA En Banc:
The sales invoices issued by petitioner were insufficient
dismissing the petition for lack of jurisdiction

Also, KEPCO PHILIPPINES CORPORATION V. CIR: a VAT invoice
CTA 30 days from the receipt of the decision of the CIR
with regard to the timeliness of the claim, it has been
September 22, 2010: CTA En Banc reversed its own decision, and
its zero-rated sales

No need to discuss
to establish its zero-rated sale of services;

Without the proper VAT official receipts issued to tis
Held/Ratio: The Court finds the petition WITHOUT MERIT.
clients, the payments received by petitioner could not
1)
qualify for zero-rating for VAT purposes
NO. Petitioner is mistaken. A simple reading of Section 112(D)

reveals that the taxpayer may appeal the denial or the inaction of

the CIR only within thirty (30) days from receipt of the decision
acquisition by the CTA of jurisdiction to hear the said
denying the claim or the expiration of the 120-day period given to

the CIR to decide the claim.
O Petitioner contends that:
Non-exhaustion of remedies is not a jurisdictional defect;
CIR failed to seasonably object therefore, it is deemed
waived;
It cannot
be
faulted
for
relying
on
prevailing
petitioner complied with the said time frame may be breached at any
stage, even on appeal
Jurisdiction cannot be waived because it is conferred by law
and is not dependent on the consent or objection or the acts
CTA
jurisprudence requiring that both administrative and judicial
claims for refund be filed within the two (2) years from the
O
case
Because the 120+30 day period is jurisdictional, the issue of whether
or omissions of the parties or any one of them

The Court however took into consideration the issuance by the BIR of
Ruling No. DA- 489-03, which expressly stated that the taxpayer need
date of the filing of the return and the payment of the tax due
Section 112(D) (now Subpar. 6) of the NIRC is clear:
not wait for the lapse of the 120-day period before seeking judicial
relief
(D) Period within which Refund or Tax Credit of Input Taxes shall be Made. In
Because taxpayers cannot be faulted for relying on this

declaration by the BIR, the Court deemed it reasonable to
proper cases, the Commissioner shall grant a refund or issue the tax credit
allow taxpayers to file its judicial claim even before the
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.
expiration of the 120-day period

This exception is to be observed from December 10, 2003
until its REVERSAL by AICHI in October 6, 2010
In the case of AICHI, the Court made a definitive
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
statement that the failure of a taxpayer to wait for 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
decision of the CIR or the lapse of the 120-day
of the one hundred twenty day-period, appeal the decision or the unacted
period will render the filing of the judicial claim with
claim with the Court of Tax Appeals. (Emphasis Supplied)

O
Contrary to petitioners position, the 120+30-day period is indeed

mandatory and jurisdictional from the time of effectivity of R.A. No.
8424, as recently ruled in CIR V. SAN ROQUE POWER CORPORATION
Thus, failure to observe the said period before filing a
judicial claim with the CTA would not only make such
petition premature, but would also result in the non-
the CTA premature

SO AGAIN, GENERAL RULE (as laid down by San Roque case):
judicial claims filed from January 1, 1998 until the present should
strictly adhere to the 120+30-day period referred to in Section 112
of the NIRC
EXCEPTION: period from December 10, 2003 until October

6, 2010, during which, judicial claims may be filed even
before the expiration of the 120-day period granted to the CIR
to decide on the claim for refund

disallowed on the ground that the use of said business name by petitioner
2) Having thus concluded, the Court sees no need to discuss other issues
was never approved by the Securities and Exchange Commission (SEC).
which may have been raised in the petition.

BWC filed its Petition for review with the CTA En Banc. However, the CTA
BONIFACIO WATERS v. CIR (Bello)
En Banc, affirmed in toto the assailed Decision and Resolution of the CTA
[GR. No. 175142; July 22, 2013
Second Division
Taxpayers must show satisfaction of all the documentary and evidentiary

requirements before an administrative claim for refund or tax credit will be
Issue: WON the CTA En Banc erred in not granting petitioners claim
granted
for refund or issuance of a tax credit certificate in the amount

of P65,642,814.65? NO! (hindi siya nagkamali)
Recit-Ready:
Facts: Bonifacio Water Corporation (BWC) is a domestic corporation
Held:
WHEREFORE, premises considered, the instant petition is
engaged in the collection, purification and distribution of water. BWC duly
DENIED. The Court of Tax Appeals En Banc Decision dated June
filed with the BIR its quarterly VAT returns for the year 1999-2000.
26, 2006, and Resolution dated October 19, 2006, are hereby
AFFIRMED.
For said period, BWC alleges that its input VAT included, among others,
input
VAT
paid
on
purchases
of
capital
goods
amounting
to P65,642,814.65.
NO! The requisite that the receipt be issued showing the name, business
style, if any, and address of the purchaser, customer or client is precise so
that when the books of accounts are subjected to a tax audit examination,
These purchases supposedly pertain to payment to contractors in
all entries therein could be shown as adequately supported and
connection with the construction of petitioners Sewage Treatment Plant,
proven as legitimate business transactions. The absence of official
Water and Waste System, and Water Treatment Plant. Hence, BWC filed a
receipts issued in the taxpayers name is tantamount to non-
claim for refund amounting P65,642,814.65 representing unutilized input
compliance with the substantiation requirements provided by law.
VAT on capital goods purchased for the period beginning the 4th quarter of
1999 up to the 4th quarter of 2000.
Thus, the change of petitioners name to "Bonifacio GDE Water
The next day, petitioner filed its Petition for Review with the Court of Tax
and the issuance of official receipts under that name which were
Appeals (CTA) and rendered a Decision partially granting petitioners claim

for refund in the reduced amount of P40,875,208.64 on the basis that the
official receipts under the name "Bonifacio GDE Water Corporation" were
Corporation," being unauthorized and without approval of the SEC,

presented to support petitioners claim for tax refund, cannot be
used to allow the grant of tax refund or issuance of a tax credit
certificate in petitioners favor. The absence of official receipts issued in

its name is tantamount to noncompliance with the substantiation
of P40,875,208.64. (Partially granting lang so hindi buong 65k yung allow
requirements provided by law and, hence, the CTA En Bancs partial grant
na refund)
of its refund on that ground should be upheld.
CTA Second Division held that an examination of the various official receipts
presented by petitioner, to support its purchases for capital goods, shows
Facts:
Bonifacio Water Corporation (BWC) is a domestic corporation engaged in

the collection, purification and distribution of water. It is registered with the
official receipts under the name "Bonifacio GDE Water Corporation" were
with VAT Registration/Taxpayer Identification No. 201-403-657-000.

BWC duly filed with the BIR its quarterly VAT returns for the 4th
was never approved by the Securities and Exchange Commission (SEC).
2000, and 4th quarter of 2000, declaring the following information:

For said period, BWC alleges that its input VAT included, among
others, input VAT paid on purchases of capital goods amounting
to P65,642,814.65. These purchases supposedly pertain to payment to
contractors in connection with the construction of petitioners Sewage
Treatment Plant, Water and Waste System, and Water Treatment Plant.
On January 22, 2002, petitioner filed with Revenue District Office No. 44
Pateros and Taguig, Revenue Region No. 8 of the BIR,
an
administrative claim for refund or issuance of a tax credit certificate

in the amount of P65,642,814.65 representing unutilized input VAT
on capital goods purchased for the period beginning the 4th quarter
overhead, cannot be considered as capital goods. Further, it ruled that the
Bureau of Internal Revenue (BIR) as a value-added tax (VAT) taxpayer,
quarter of 1999, 1st quarter of 2000, 2nd quarter of 2000, 3rd quarter of
that some of its purchases, such as rental, management fees and direct
disallowed on the ground that the use of said business name by petitioner
(Ito yung wherefore ni CTA Second Division, medyo important yung decision
niya lalo na yung hindi approve yung new alleged business name ni BWC)
BWC thereafter filed its petition for review with the CTA En Banc arguing
that it has presented substantial evidence that proves its input VAT on
purchases of capital goods from the 4th quarter of 1999 to the 4th quarter
of 2000, as well as the fact that petitioner and "Bonifacio GDE
Corporation" are one and the same entity. (Dahil hindi siya makuntento sa
45k, nag appeal siya sa CTA En Banc
In a Decision dated June 26, 2006, the CTA En Banc affirmed in toto the
assailed Decision and Resolution of the CTA Second Division.
of 1999 up to the 4th quarter of 2000. (In short, ito basis niya to claim
Issue:
refund or issuance of tax credit)

The next day, petitioner filed its Petition for Review with the Court of Tax
WON the CTA En Banc erred in not granting petitioners claim for
refund or issuance of a tax credit certificate in the amount
Appeals (CTA), to toll the running of the two-year prescriptive period.
of P65,642,814.65?
NO
(Dahil alam niya mag prescribe na, nagfile sa CTA galing niya eh) On
March 29, 2005, the CTA Second Division rendered a Decision partially
granting petitioners claim for refund in the reduced amount
You may opt not to read this part:

PETITIONERs ARGUMENTS
1.
That Non-compliance with the

invoicing requirements under
RESPONDENTs ARGUMENTS
A.
that the instant petition raises

purely questions of fact which is

2.
the 1997 Tax Code does not
not allowed under Rule 45 of the
inter alia, that the input taxes
authority and to be construed
automatically
the
Rules of Court. He highlights the
claimed as refund were duly
strictissimi juris against the entity
denial of a claim for refund or
result
fact that the issue of whether or
supported by valid VAT invoices
claiming the exemption.
tax credit when the same is
not petitioner was able to present
supported
substantial
substantial evidence to prove and
and/or receipts.
that the CTA imposed an overly
evidence. It contends that the
support its claim for tax refund or
strict standard of evidence in
CTA En Banc erred in sustaining
tax credit calls for this Court to
disallowing petitioners invoices
the ruling that petitioner is not
review
the
bearing the name "Bonifacio GDE
entitled to a refund of the input
evidence to enable it to determine
Water Corporation." It claims that
VAT evidenced by official receipts
and resolve the issues raised by
the denial of the claim in its
in the name of "Bonifacio GDE
petitioner.
entirety based purely on technical
by
in
Water Corporation.
that the CTA erred in failing to
and
evaluate
all
4.
grounds
deprives
that the CTA En Banc committed
petitioner of a right granted by law
properly apply the definition of
no error in not applying the rules
and
capital goods and insists that
regarding
deprivation of its property.
services
the
since no judicial admission was
construction and installation of
made by or was attributable to
capital assets and goods should
respondent,
be included in the cost of capital
pleadings or in the course of the
goods
trial proceedings. He argues that
incurred
for
in
purposes
B.
of
judicial
admissions,
either
admission
in
made
the
by
constitutes
an
undue
Held/Ratio: WHEREFORE, premises considered, the instant petition is

DENIED. The Court of Tax Appeals En Banc Decision dated June 26, 2006,
and Resolution dated October 19, 2006, are hereby AFFIRMED.
determining the proper amount of
the
refundable input VAT.
subordinate BIR official in support
NO. The change of name to Bonifacio GDE Corporation being
of the course of action which he
unauthorized and without approval from the Securities and Exchange
had proposed or submitted for

approval by his superior cannot by
any stretch of imagination be
considered an admission, much
Commission, petitioner cannot now seek for a refund of input taxes,

which are supported by receipts under that name. (Pwede ka naman
bigyan ng refund eh, yung receipt mo lang sa iba na nakapangalan)
less a judicial admission, of the

3.
unduly
that
respondent
made
an
C.
latter.
that the CTA En Banc did not err
"informal judicial admission" and
in using stricter rules of evidence
partially recognized its claims for
in cases involving claims for tax
excess input VAT on purchases of
refund or tax credit as the same
capital
goods
are
District
No.
memorandum
when
44
Revenue
issued
acknowledging,
in
the
nature
of
tax
exemptions and are regarded as

in
derogation
of
sovereign
The requisite that the receipt be issued showing the name, business
style, if any, and address of the purchaser, customer or client is
precise so that when the books of accounts are subjected to a tax
audit examination, all entries therein could be shown as
adequately supported and proven as legitimate business
transactions. The absence of official receipts issued in the

taxpayers name is tantamount to non-compliance with the
substantiation requirements provided by law and, hence, the CTA En
substantiation requirements provided by law.

Petitioner cannot raise the argument that, "non-compliance with the
Bancs partial grant of its refund on that ground should be upheld.
invoicing requirements under the 1997 NIRC, as amended, does not

automatically result in the denial of a claim for refund or tax credit
when the same is supported by substantial evidence" and that, "In civil
cases, such as claims for refund, strict compliance with technical rules
O
of evidence is not required.

Moreover, a mere preponderance of evidence will suffice to
Also, petitioners allegation that some of the disallowed input taxespaid on

services related to the construction of petitioners Waste Water Treatment
and Water Sewerage Distribution Networks, should be included as part of its
capital goods, must fail.
o
goods since "capital goods" is defined as: "Capital goods or
instant petition. Taxpayers claiming for a refund or tax credit
properties" refer to goods or properties with estimated useful life
certificate must comply with the strict and mandatory invoicing
greater than one year and which are treated as depreciable assets
and accounting requirements provided under the 1997 NIRC, as
under Section 29(f), used directly or indirectly in the production or
amended, and its implementing rules and regulations. Rules and
sale of taxable goods or services.

o
Had petitioner intended the aforementioned itemized expenses
ignored or to be taken for granted, but are strictly adhered to for they
to be part of Property, Plant & Equipment, then it should have
are developed from the law itself.

From the foregoing, it is clear that petitioner must show satisfaction of
recorded the same to the foregoing specific accounts. Except
all the documentary and evidentiary requirements before an
do not fall within the definition of capital goods pursuant to Section
administrative claim for refund or tax credit will be granted. Perforce,
4.106-1(b) of Revenue Regulations No. 7-95.
the taxpayer claiming the refund must comply with the invoicing and
for the account "Construction in Progress," the other expense items
accounting requirements mandated by the Tax Code, as well as the

O
Only real accounts provided above are to be considered as capital
justify the grant of a claim," in addition to its first ground in the
regulations with regard to procedures are implemented not to be
OTHERS (you may opt not to read this)
aside the conclusions reached by the CT A which, by the very
revenue regulations implementing them.

Thus, the change of petitioners name to "Bonifacio GDE Water
nature of its function of being dedicated exclusively to the

resolution of tax problems, has accordingly developed an
Corporation," being unauthorized and without approval of the
expertise on the subject, unless there has been an abuse or
SEC, and the issuance of official receipts under that name which
were presented to support petitioners claim for tax refund,
cannot be used to allow the grant of tax refund or issuance of a
tax credit certificate in petitioners favor. The absence of official
receipts issued in its name is tantamount to noncompliance with the
As a final point, it is doctrinal that the Court will not lightly set
improvident exercise of authority.

o
In fact, in Barcelon, Roxas Securities, Inc. v. Commissioner of

Internal Revenue, this Court held that it accords the findings of fact
by the CT A with the highest respect. It ruled that factual findings
made by the CTA can only be disturbed on appeal if they are

supported by substantial evidence or there is a showing of gross
prescriptive periods under the Tax Code.
error or abuse on the part of the Tax Court. In the absence of any
clear and convincing proof to the contrary, this Court must presume
o
Held:
The claims of respondent GST Philippines, Inc. for refund or tax
that the CT A rendered a decision which is valid in every respect.
credit for unutilized excess input VAT for the four quarters of
In the present case, no cogent reason exists for this Court to deviate
taxable year 2004, as well as the first quarter of taxable year
from this well-entrenched principle, since the CT A En Bane neither
2005 are hereby DENIED for being filed beyond the prescriptive
abused its authority nor committed gross error in partially denying
period, while the claims for refund for the second and third
petitioner's refund claim.
quarters of taxable year 2005 are GRANTED. Accordingly, the

Commissioner of Internal Revenue is ordered to refund or, in the
CIR v. GST PHILIPPINES, INC. (Bugay)
alternative, to issue a tax credit certificate to respondent GST
[GR. No. 190872; October 17, 2013]
Philippines, Inc. corresponding only to the amount representing
120 + 30- day period mandatory and jurisdictional
unutilized excess input VAT for the second and third quarters of
taxable year 2005 out of the total amount of P27,369,114.36
awarded by the CTA.
Recit-Ready:
Facts: Respondent GST is a VAT registered domestic corporation
primarily engaged in steel and iron products. During taxable years
Facts:
2004-2005, GST filed claimed for unutilized excess input VAT
GST is a corporation duly organized and existing under the laws of the
attributable to its zero rated sales. For failure of CIR to act on its
Philippines, and primarily engaged in the business of manufacturing,
administrative claims, GST filed for a petition for review before the
processing, selling, and dealing in all kinds of iron, steel or other metals.
o Duly registered VAT enterprise, which deals with companies
CTA. The CTA granted the petition. CIR filed an MR but was
denied. In a petition for review before the CTA En Banc, CIR
raised that the appeal before the CTA was filed beyond the
registered with:
The Board
administrative and judicial claims are filed within the two-year

prescriptive period; and that compliance with the 120-day and 30day periods under Section 112 (D) of the Tax Code is not
mandatory.
Issue: WON GSTs action for refund has complied with the
Investments
(BOI),
whose
manufactured products are 100% exported to
reglementary period. GST asserts that under Section 112 (A) of

the Tax Code, the prescriptive period is complied with if both the
of
foreign countries; and

The Philippine Economic Zone Authority (PEZA)
Sales made by a VAT-registered person to
a PEZA-registered entity are considered
exports to a foreign country subject to a
zero rate.

During the taxable year, GST filed Quarterly VAT returns showing its
zero-rated sales:
Period
1st Quarter 2004
2nd Q. 2004
3rd Q. 2004
Date of Filing
April 16, 2004
July 15, 2004
October
15,
Zero-Rated Sales
P 77,687,420.54
53, 737,063.05
74,280,682.00
4 Q. 2004
2004
January
104,633,604.23
1st Q. 2005
2005
April 25, 2005
37,742,969.02
2nd Q. 2005
3rd Q. 2005
July 19, 2005

October
26,
56,133,761.00
51,147,677.60
th
11,
2005
Claiming unutilized excess input VAT in the total amount of
P32,722,109.68 attributable to the foregoing zero-rated
sales, GST filed before the BIR separate claims for refund.
Period
Date of Filing Admin. Claim
for Refund
1st Quarter 2004
June 9, 2004
nd
2 Q. 2004
August 12, 2004
3rd Q. 2004
February 18, 2005
th
4 Q. 2004
February 18, 2005
1st Q. 2005
May 11, 2005
nd
2 Q. 2005
November 18, 2005
rd
3 Q. 2005
November 18, 2005
For failure of the CIR to act on it administrative claims, GST filed a
petition for review before the CTA on March 17, 2006.
Issue:
WON GSTs action for refund has complied with the prescriptive
periods under the Tax Code. No and Yes.
Held/Ratio: Petition is PARTLY GRANTED. The Decision dated October 30,
2009 of the Court of Tax Appeals En Banc in C.T.A. EB No. 484, affirming
the Decision dated January 27, 2009 of the CTA First Division in C.T.A. Case
No. 7419, is AFFIRMED with10 MODIFICATION. The claims of respondent
10
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: . . . . (Emphasis supplied)
xxx xxx xxx
(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

GST Philippines, Inc. for refund or tax credit for unutilized excess input
30-day period always available to the taxpayer, the taxpayer
VAT for the four quarters of taxable year 2004, as well as the first
can no longer file a judicial claim for refund or tax credit of
quarter of taxable year 2005 are hereby DENIED for being filed beyond
unutilized excess input VAT without waiting for the
the prescriptive period, while the claims for refund for the second and
Commissioner to decide until the expiration of the 120-day
third quarters of taxable year 2005 are GRANTED.
period.
Failure to comply with the 120-day waiting
period
violates
doctrine
of
exhaustion
of
Refund or tax credit of unutilized excess input VAT has been
administrative remedies and renders the petition
allowed as early as in the Original VAT Law EO 273. Since
premature and thus without a cause of action, with the
GST's claims for refund covered the periods before the
effect that the CTA does not acquire jurisdiction over
effectivity of RA 9337, the old provision on VAT refund,
the
specifically Section 112, as amended by RA 8424, shall apply.

The claims filed for the four quarters of taxable year 2004, as well as
the taxpayer's petition.

In CIR v. San Roque Power Corporation, the Court held that
BIR Ruling No. DA-489-03 dated December 10, 2003
the first quarter of taxable year 2005, had already prescribed. While
provided a valid claim for equitable estoppel under Section
those of the second and third quarters of taxable year 2005 were
246 of the Tax Code. BIR Ruling No. DA-489-03 expressly
prematurely filed.
The Court held in Cir v. Aichi Forging Company of Asia, Inc., that the
states that the taxpayer-claimant need not wait for the
two-year prescriptive period applies only to administrative claims and
relief with the CTA by way of Petition for Review.

There are two exceptions to this rule:
First, if the Commissioner, through a
not to judicial claims. Further, it ruled that the 120-day and 30-day
periods are mandatory.
o The second paragraph of Section 112(D) [now Section
lapse of the 120-day period before it could seek judicial
specific
misleads
particular
taxpayer to prematurely file a judicial claim
decision is issued by the CIR before the lapse of the
with the CTA. Such specific ruling is
120-day period; and (2) when no decision is made after
applicable only to such particular taxpayer.

Second, where the Commissioner, through
the 120-day period. In both instances, the taxpayer has

o
ruling,
112(C)] of the NIRC envisions two scenarios: (1) when a
30 days within which to file an appeal with the CTA.

The taxpayer will always have 30 days to file the judicial
a general interpretative rule issued under
claim even if the Commissioner acts only on the 120th day,
taxpayer into filing prematurely judicial
or does not act at all during the 120-day period. With the
claims with the CTA.

In these cases, the Commissioner cannot be
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)
Section 4 of the Tax Code, misleads all
allowed to later on question the CTAs assumption

of jurisdiction over such claim since equitable
The Court further emphasized that tax refunds partake of the nature of
estoppel has set in as expressly authorized under
tax exemptions which are a derogation of the power of taxation of the
Section 246 of the Tax Code.

BIR Ruling No. DA-489-03 was classified in San Roque as a
State. Consequently, they are construed strictly against a taxpayer and
general interpretative rule having been made in response to a
entitlement to a refund, but also its compliance with the prescribed
query by a government agency tasked with processing tax refunds
liberally in favor of the State. Thus, a taxpayer must prove not only its
procedures.
and credits the One Stop Shop Inter-Agency Tax Credit and
Drawback Center of the Department of Finance.
o Therefore, GST can benefit from BIR Ruling No. DA-489-03
with respect to its claims for refund of unutilized excess
input VAT for the second and third quarters of taxable year
2005, which were filed before the CIR on November 18,
2005, but elevated to the CTA on March 17, 2006 before
the expiration of the 120-day period. BIR Ruling No. DA489-03 effectively shielded the filing of GSTs judicial claim
from the vice of prematurity.
Taxable Period
1st Q. 2004
2nd Q. 2004
3rd Q. 2004
4th Q. 2004
1st Q. 2005
2nd Q. 2005
3rd Q. 2005
It can be observed from
Remarks
Filed Late
Filed Late
Filed Late
Filed Late
Filed Late
Prematurely Filed
Prematurely Filed
the Courts application
Action on Claim
DENY
DENY
DENY
DENY
DENY
GRANT
GRANT
of the 120+ 30-day
CIR v. MINDANAO II GEOTHERMAL PARTNERSHIP (Caraan)

[GR. No. 191498; January 15, 2014]
Taxpayer may file his application for refund/tax credit within 2 years from the
close of the taxable quarter when the relevant sales were made.
CIR has 120 days after the application is filed to act on it.
Upon denial of the claim/inaction of the CIR after 120 days, the taxpayer has
30 days to appeal to the CTA
Recit-Ready:
Facts: Mindanao II is engaged in the business of power generation and
sale of electricity to NAPOCOR. It filed its Quarterly VAT Returns
for the 2nd-4th Quarters of 2004 then filed an application for the
refund/credit of accumulated unutilized creditable input taxes on
October 6, 2005. Pursuant to Section 112(D) of the 1997 Tax
Code, the CIR had 120 days (or until February 3, 2006) to act on
such application; however, this remained unresolved.
period to GSTs claims, the 120-day period is uniformly reckoned
Such inaction from the CIR can be treated as a denial of the claim
from the date of the filing of the administrative claims.

The reckoning date of the 120-day period commenced
for refund/tax credit; thus, the provision states that the taxpayer
simultaneously with the filing of the administrative claims when
the CTA within 30 days because it believed that the prescriptive
GST was presumed to have attached the relevant document to
period was two years to file an appeal.
support its applications for refund or tax credit.
has 30 days to appeal to the CTA. Mindanao II did not appeal to

Issues:
attributable to the zero-rated sales and the input taxes had
1) WON Mindanao II filed its claim on time by relying on the two-year

prescriptive period for filing an application for refund or credit of
unutilized input VAT
2) WON Mindanao II filed its appeal to the CTA on time by relying on the
not been applied against output tax

Pursuant to Section 112(D) of the 1997 Tax Code, petitioner CIR had a
period of 120 days (or February 3, 2006) to act on the claim of Mindanao
II; however, it remained unresolved.
o Under the same provision; Mindanao II could treat such
two-year period as well
inaction as a denial of its claim, and thus, it can file an
Held:
1) YES. The claim for refund / tax credit can be filed with the CIR within
two years from the close of the taxable quarter when the relevant
sales were made. (So Mindanao II had two years from the close of the
appeal to the CTA after 30 days (or March 5, 2006)

o But Mindanao II did not file an appeal within such period
Mindanao II believed that the judicial claim (the appeal to the CTA) must
be filed within two years and so it filed its Petition for Review to the CTA
2nd, 3rd, and 4th quarters of 2004 to file its claim to the CIR. But it filed
on July 21, 2006.

o While this was pending, the SC promulgated Atlas
early naman, so yeah)

2) NO. (Dito na nagkamali and nawalan si Mindanao II) When the CIR
Consolidated Mining and Development Corporation v. CIR
failed to act on Mindanao IIs application within 120 days, Mindanao II
(Atlas) and held that the two-year prescriptive period for
only had a period of 30 days to appeal to the CTA. It did not have the
the filing of a claim for an input VAT refund or credit is to be
full two-year period as the two-year period is only for when the
reckoned from the date of filing of the corresponding
taxpayer could file his claim for refund/tax credit.
Facts:
Respondent Mindanao II is a partnership engaged in the business of

power generation and sale of electricity to the National Power Corporation
quarterly VAT return and payment of the tax.

The CTA rendered its decision and ordered CIR to grant the refund or tax
credit certificate to Mindanao II.
o It ruled that Mindanao II complied with the twin requisites of
(NAPOCOR). It filed its Quarterly VAT Returns for the second, third, and
It paid input VAT of P7,167,005.84, which were directly
fourth quarters of 2004 on the dates below:

o 2nd Quarter: 26 July 2004
o 3rd Quarter: 22 October 2004
o 4th Quarter: 25 January 2005
(October 6, 2005) Mindanao II filed with BIR its application for the refund
or credit of accumulated unutilized creditable input taxes. It alleged that:
o It was registered with the BIR as a value-added taxpayer
and all its sales are zero-rated under the EPIRA law; and
the EPIRA Law:

It is a generation company; and
It derived sales from power generation
It also ruled that Mindanao II satisfied the requirements for
refund/tax credit under Section 112 of the Tax Code:
There must be zero-rated or effectively zero-rated
sales;
Input taxes must have been incurred or paid;

The creditable input tax due or paid must be
Issue/s:
attributable to zero-rated sales or effectively zero-
1)
rated sales;
The input VAT payments must not have been
applied against any output liability; and

The claim must be filed within the two-year
WON Mindanao II filed its claim on time by relying on the two-year

prescriptive period for filing an application for refund or credit of
unutilized input VAT

YES
2) WON Mindanao II filed its appeal to the CTA on time by relying on
the two-year period as well
NO
prescriptive period
CIR filed a Motion for Partial Consideration, arguing that the prescriptive
period lapsed on March 5, 2006, or 30 days after, and not two years. They
relied on Section 112(D) of the 1997 Tax Code.
o While this was pending, the SC then promulgated CIR v.
Mirant Pagbilao Corporation (Mirant). Mirant fixed the
Held/Ratio: We deny Mindanao IIs claim for refund or credit of unutilized

input VAT on the ground that its judicial claims were filed out of time, even as
we hold that its application for refund was filed on time.
reckoning 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
1)
YES. The two-year period within which to file a claim is correct.

Mindanao IIs application for refund was filed on time; however, its
judicial claim was filed out of time. This is why the Court ruled that it is
were made, as stated in Section 112(A)

CTA denied CIRs Motion for Partial Consideration and stood by its
reliance to Atlas.
CIR elevated the case to the CTA En Banc and was denied.
o The CTA En Banc said that Mirant cannot be applied to the
not entitled to refund/credit of unutilized input VAT.

The Court emphasized two points:
It is only the administrative claim that must be filed within the
two-year prescriptive period; the judicial claim need not fall
present case because such cannot be applied retroactively

to Mindanao II who relied on Atlas and acted on the faith
o
thereof.
The CTA En Banc also ruled that the 30-day prescriptive
within the two-year prescriptive period; and

The reckoning date of the two-year period is the close of the
Taxable Quarter when the relevant sales were made

So, a taxpayer has two years from the close of the taxable quarter
period that CIR was pushing only applies if CIR actually
when the relevant sales were made to apply for a refund/tax credit to
denied the claim. But in cases of CIR inaction (as in the
the CIR
present case), 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.
2) NO. The 30-Day Period to Appeal is mandatory and jurisdictional.

o So this is the real timeline:

When a taxpayer files his claim for refund / tax credit, he has
The 30-day period always applies, whether there is a denial

or inaction on the part of the CIR.
As a general rule, the 30-day period to appeal is both
mandatory and jurisdictional.
As an exception to the general rule, premature filing is
up to two years from the close of the taxable quarter when the
relevant sales were made to apply to the CIR.

The CIR, upon such application, has 120 days to resolve the
matter.
If the CIR denies the claim / does not act on it (which is
allowed only if filed between 10 December 2003 and 5
equivalent to denying the claim), the taxpayer has 30 days to
October 2010, when BIR Ruling No. DA-489-03 was still in
appeal to the CTA.

Mindanao II should have filed its appeal to the CTA after 30 days from
force [but now, its not, so it does not apply in the case
the lapse of the 120-day period within which the CTA was supposed to
act on its claim.
o The Court also had its own summary, as follows:
o A. Two-Year Prescriptive Period
It is only the administrative claim that must be filed within the
two-year prescriptive period.

The proper reckoning date for the two-year prescriptive period
is the close of the taxable quarter when the relevant sales
were made.
The only other rule is the Atlas ruling, which applied only from
8 June 2007 to 12 September 2008. Atlas states that the twoyear prescriptive period for filing a claim for tax refund or
credit of unutilized input VAT payments should be counted
from the date of filing of the VAT return and payment of the
tax.
o B. 120+30 Day Period
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.
anymore]

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MONTERO // 3A TAX DIGESTS

Made. - In proper cases, the Commissioner shall grant a refund or issue

SECTION 112. Refunds or Tax Credits of Input Tax.

twenty (120) days from the date of submission of complete documents in

(A) Zero-rated or Effectively Zero-rated Sales. - Any VAT-registered

support of the application filed in accordance with Subsections (A) hereof.

person, whose sales are zero-rated or effectively zero-rated may, within

made, apply for the issuance of a tax credit certificate or refund of

creditable input tax due or paid attributable to such sales, except

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

Sentral ng Pilipinas (BSP): Provided, further, That where the taxpayer is

without the necessity of being countersigned by the Chairman,

engaged in zero-rated or effectively zero-rated sale and also in taxable or

Commission on audit, the provisions of the Administrative Code of 1987 to

exempt sale of goods of properties or services, and the amount of

the contrary notwithstanding: Provided, That refunds under this paragraph

shall be subject to post audit by the Commission on Audit.

any one of the transactions, it shall be allocated proportionately on the

Section 112. Refunds or Tax Credits of Input Tax. -

(A) Zero-rated or Effectively Zero-rated Sales.

allocated ratably between his zero-rated and non-zero-rated sales.

Any VAT-registered person,

(B) Cancellation of VAT Registration. - A person whose registration has

Whose sales are zero-rated or

been cancelled due to retirement from or cessation of business, or due to

May, within two (2) years

payment of his other internal revenue taxes.

Tax credit certificate or

MONTERO // 3A TAX DIGESTS

Refund of creditable input tax

Due or paid attributable to such sales,

May, within two (2) years from the date of cancellation,

Apply for the issuance of a tax credit certificate

Except transitional input tax,

For any unused input tax which may be used in

To the extent that such input tax has not been

In proper cases, the Commissioner shall

The acceptable foreign currency exchange proceeds thereof

Had been duly accounted for in accordance with the rules

Issue the tax credit certificate

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

It shall be allocated proportionately on the basis of the volume of sales.

For creditable input taxes within one hundred twenty

In accordance with Subsections (A) hereof.

The input taxes shall be allocated ratably between his zero-rated

The taxpayer affected may,

(B) Cancellation of VAT Registration.

Has been cancelled due to retirement from or

Due to changes in or cessation of status under Section 106(C) of

After the expiration of the one hundred twenty day-period,

Drawn by the Commissioner or

MONTERO // 3A TAX DIGESTS

By his duly authorized representative

Without the necessity of being countersigned by

PhP 135,993,570 supported by OR No. 0189. On December 20,

VAT for the amount of P148,003,047.62. BIR Commissioner did not