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* THIRD DIVISION.
306
indicate in their invoices and receipts the fact that they are zero-
rated or that its transactions are zero-rated became more apparent
upon the integration of the abovequoted provisions of Revenue
Regulations No. 7-95 in Section 113 of the NIRC enumerating the
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307
MENDOZA, J.:
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assailing the April 19, 2005 Decision1 and the July 8, 2005
Resolution2 of the Court of Tax Appeals En Banc (CTA-En
Banc) in CTA E.B. No. 11 (CTA Case No. 6255) entitled
„Eastern Telecommunications Philippines, Inc. v.
Commissioner of Internal Revenue.‰
The Facts
Petitioner Eastern Telecommunications Philippines, Inc.
(ETPI) is a duly authorized corporation engaged in
telecommunications services by virtue of a legislative
franchise. It has entered into various international service
agreements with international non-resident
telecommunications companies and it handles incoming
telecommunications services for nonresident foreign
telecommunication companies and the relay of said
international calls within the Philippines. In addition, to
broaden the coverage of its distribution of
telecommunications services, it executed several
interconnection agreements with local carriers for the
receipt of foreign calls relayed by it and the distribution of
such calls to the intended local end-receiver.3
From these services to non-resident foreign
telecommunications companies, ETPI generates foreign
currency revenues which are inwardly remitted in
accordance with the rules and regulations of the Bangko
Sentral ng Pilipinas to its US dollar accounts in banks such
as the Hong Kong and Shanghai Banking Corporation,
Metrobank and Citibank. The manner and mode of
payments follow the international standard as set forth in
the Blue Book or Manual prepared by the Consul-
_______________
1 Rollo, pp. 57-87.
2 Id., at pp. 88-92.
3 Id., at pp. 11-13.
308
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(VAT) Returns for the year 1999, but these were later
amended on February 22, 2001, to wit:
VAT Input Excess Input
Quarter VAT Output Zero-Rated Sales Exempt Sales Domestic VAT
______________________________________________________________________________
First P246,493.67 P117,492,585.78 P68,961,171.91 P6,646,624.35 P
6,400,130.68
Second 396,701.57 406,216,049.26 238,424,702.46 5,955,933.54 11,959,362.65
Third 243,620.78 245,267,026.51 143,957,182.21 6,108,825.34 17,833,567.22
Fourth 975,939.54 279,851,242.11 164,256,063.38 6,759,948.00 23,617,575.67
______________________________________________________________________________
Total P1,853,755.56 P1,048,826,903.66 P615,599,119.96 P25,471,331.23
_______________
4 Id., at pp. 14, 150-151.
5 Id., at pp. 105-108 and 151.
6 Id., at p. 133.
309
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7 Id., at p. 16.
8 Id., at p. 152.
9 Id., at pp. 149-160; penned by Associate Justice Lovell R. Bautista
and concurred in by Presiding Justice Ernesto D. Acosta and Associate
Justice Juanito C. Castañeda, Jr.
10 Unspecified.
11 Rollo, pp. 57-87; penned by Associate Justice Olga Palanca-
Enriquez and concurred in by Associate Justice Juanito C. Castañeda,
Jr., Associate Justice Erlinda P. Uy and Associate Justice Caesar A.
Casanova with a dissenting opinion by Presiding Justice Ernesto D.
Acosta which Associate Justice Lovell R. Bautista concurred with.
310
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SUPREME COURT REPORTS ANNOTATED VOLUME 679 2/17/18, 11(00 PM
I
The CTA-En Banc erred when it sanctioned the denial of
petitionerÊs claim for refund on the ground that petitionerÊs invoices
do not bear the imprint „zero-rated,‰ and disregarded the evidence
on record which clearly establishes that the transactions giving rise
to petitionerÊs claim for refund are indeed zero-rated transactions
under Section 108(B)(2) of the 1997 Tax Code.
II
The CTA-En Banc erred when it denied petitionerÊs claim for refund
based on petitionerÊs alleged failure to substantiate its taxable and
exempt sales.
_______________
311
III
Petitioner presented substantial evidence that unequivocally proved
petitionerÊs zero-rated transactions and its consequent entitlement
to a refund/tax credit.
IV
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13 Id., at pp. 24-25.
14 Id., at p. 381.
15 Id., at p. 382.
312
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16 Id., at p. 386.
17 Id., at p. 384.
18 Id., at p. 392.
19 Chamber of Real Estate and BuildersÊ Associations, Inc. v. The Hon.
Executive Secretary Alberto Romulo, G.R. No. 160756, March 9, 2010, 614
SCRA 605, 639-640.
313
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20 Kepco Philippines Corporation v. Commissioner of Internal Revenue, G.R.
No. 181858, November 24, 2010, 636 SCRA 166, 177-178.
314
will result to the disallowance of the claim for input tax by the
purchaser-claimant.
If the claim for refund/TCC is based on the existence of zero-
rated sales by the taxpayer but it fails to comply with the
invoicing requirements in the issuance of sales invoices (e.g.
failure to indicate the TIN), its claim for tax credit/refund of
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315
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22 Id., at pp. 36-37.
23 J.R.A. Philippines, Inc. v. Commissioner of Internal Revenue, G.R.
No. 177127, October 11, 2010, 632 SCRA 517, 527; Western Mindanao
Power Corporation v. Commissioner of Internal Revenue, G.R. No.
181136, June 13, 2012, 672 SCRA 350.
24 Rollo, p. 395.
25 Id., at pp. 398-399.
316
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26 Philippine Phosphate Fertilizer Corporation v. Commissioner of
Internal Revenue, 500 Phil. 149, 163; 461 SCRA 369, 384-385 (2005).
27 Rollo, pp. 356-357.
28 Id., at p. 75.
29 Id., at p. 74.
30 Commissioner of Internal Revenue v. Court of Appeals, 363 Phil.
239, 246; 303 SCRA 508, 517 (1999).
317
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31 Hitachi Global Storage Technologies Philippines Corp. v.
Commissioner of Internal Revenue, G.R. No. 174212, October 20, 2010,
634 SCRA 205, 213.
32 Toshiba Information Equipment (Phils.), Inc., v. Commissioner of
Internal Revenue, G.R. No. 157594, March 9, 2010, 614 SCRA 526, 561-
562.
** Per Special Order No. 1290 dated August 28, 2012.
*** Designated acting member, in lieu of Associate Justice Presbitero
J. Velasco, Jr., per Special Order No. 1291 dated August 28, 2012.
**** Designated additional member, per Special Order No. 1299 dated
August 28, 2012.
318
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