COCA COLA BOTTLERS PHIL INC v.
CIR of 2008 clearly does not fall under any of the foregoing
(basically hindi niya dineclare yung input taxes niya for the
VAT return LMFAO)
DOCTRINE: Section 4.110-8 of Revenue Regulations No.
16-2005, as amended, it states that the input taxes being
claimed as tax credit should be reported in the
information returns
FACTS: Petitioner purchases materials/services from other
VAT registered companies. One of its accounting practices
concerning the purchase of services on credit consists of
charging input tax component into a temporary account
Input-Tax-Services-Clearing upon receipt of the invoice
from its supplier of services.
When the petitioner pays the account, the input taxes
recorded in the temporary account is transferred to the
Input-Tax Services acct which is subsequently closed to
Output Tax Payable at the end of the taxable qtr.
For the end of the taxable qtr on June 30, 2008, petitioner
reported overpayment despite payment of the assigned
value in the DBP. However, respondent avers that
petitioner was underpayed. Petitioner argued that such
underpayment was a result of mere inadvertence saying
that several purchases of services were not transferred to
the Input-Tax-Services account and consequently not
declared in its Quarterly VAT Return and not charged to
the output tax.
Respondent asks that the complaint be dismissed on the
grounds that the petition was premature and that
petitioner is not entitled to refund.
ISSUE: Is petitioner entitled to refund?
CTA RULING: NO. The claimed P80,366,056.99 subject of
the instant case essentially represents undeclared input
taxes for the second quarter of 2008, and not the
erroneously paid VAT or understatement of VAT
overpayment, since it was not declared in the pertinent
VAT Return and consequently not offset against output tax
for the same period.
This Court noted that, while the substantiated claimed
input taxes in the amount of P67,528,010.56 for the
second j quarter of 2008 were recorded in petitioner's
books of accounts, the same shall be denied on the ground
that the said amount was not reported in petitioner's VAT
return due to the alleged inadvertence. Therefore,
following Section 4.110-8 of Revenue Regulations No. 16-
2005, as amended, petitioner cannot credit or offset the
undeclared input taxes against output taxes for the said
taxable period.
Applying Section 112, petitioner's claim for refund or tax
credit of its undeclared input taxes for the second quarter
instances provided by law.
In the present case, the subject input tax is allegedly a
result of an undeclaration, that is, if the input tax was
declared, petitioner would not have paid a higher output
tax. This then does not fall under the purview of Section
112 of the NIRC but it can be claimed under Section A /
229 of the NIRC.
However, as found by the Court in Division, petitioner
failed to substantiate its claim that it made an
overpayment of output tax as a result of its undeclared
input tax. As found by the Court in Division, petitioner only
made a declaration of Php67,528,010.56 input tax, this
amount is insufficient to cover its output tax in the total
amount of Php2,727,216,115.50.15 Therefore, petitioner
could not have possibly made an erroneous payment that
can be the subject of refund under Section 229 of the NIRC.
CIR v. PHILIX MINING CORP
Doctrine: WHAT CONSTITUTES PROOF/ “Separate
Indication Method”
FACTS: Respondent is engaged in the mining business,
including exploration and operation of mine properties
and the commercial production and marketing of mine
products and is a VAT-registered entity. It has been
approved zero-rate effective April 2 1998.
Respondent filed its quarterly VAT return for first quarter
of 2010 on April 26, 2010. It subsequently filed an
amended return on February 13, 2012 which reflected
importation of goods with input VAT of 26, 422, 709. 98
and purchase of services with input VAT of 17 773 583982.
On March 16, 2012 pursuant to Section 4. 112-1 of RR 16-
2005, respondent filed its claim for refund. Due to
petitioner’s inaction, respondent filed its petition for
review with the CTA Division.
On September 18 2012 petitioner filed a motion to dismiss
claiming that the judicial claim for refund was filed beyond
the 2-yr prescriptive period. In response, respondent
argued that the law applies also to administrative claims
for refund. The CTA division denied petitioner’s motion to
dismiss for lack of merit.
CTA RULING: A perusal of the exhibit shows that the words
“zero-rated” were printed on top of the respective
invoices. There was only one exhibit that failed to show
the words “zero-rated” on the face of the invoice.
However, this amount was already deducted from the
claim of respondents granted by the CTA Division.
Petitioner argues that respondent’s claim for refund
includes transactions outside the period covered but failed
to cite a single transaction. The CTA Division already found
that the amount claimed for refund by respondents were
already previously filed with the CTA and hence,
constitutes a double claim. Therefore, such amount was
not granted by the CTA division. Similarly, undated VAT
OR’s were disallowed because it cannot be ascertained
whether the same pertain to the subject period of claim.
The CTA Division also excluded the amount which does
not have supporting Bureau of Customs or bank official
receipts or machine-validated import entry and internal
revenue declarations and VAT ORs.
Therefore petitioners’ bare allegations unsubstantiated by
evidence are not equivalent to proof; hence, there is no
reason to disturb the finding of the CTA Division.
DEUTSCHE KNOWLEDGE SERVICES PTE. LTD. v. CIR
DOCTRINE: Exemptions from taxation are highly
disfavored in law and he who claims exemption must be
able to justify his claim by the clearest grant of organic or
statutory law. (PROOF OF ZERO-RATED SALES)
FACTS: Petitioner is licensed to do business in the
Philippines as a regional operating headquarters and is
registered as a VAT taxpayer. In the 4 th qtr of 2007,
petitioner rendered services in the Philippines to persons
engaged in business conducted outside the PH, the
payments of which were made in Euro and other
acceptable foreign currencies with the BSP.
On Nov. 9, 2009, petitioner filed a claim for refund
attributable to zero-rated sales for said qtr in the total
amount 40M+++ Respondent failed to act upon such claim
constraining petitioner to filed a petition for review before
the CTA Division but the latter rejected the petition for
insufficiency of evidence.
CTA RULING: Petitioner failed to submit proof of
compliance prescribed by RMO 53-98. Additionally,
petitioner failed to submit any proof that it rendered
services to persons engaged in business outside the PH,
the payments of which were made in Euro.
Sec 108(B)(2) of the NIRC states that a transaction is zero-
rated if the services is other than “Processing,
manufacturing, or repacking of goods” and is paid for in
acceptable foreign currency. Therefore the taxpayer must
show that:
1. The recipient is doing business outside the PH
2. The payment of the service fee was made in
acceptable foreign currency; and,
3. The accounting of such remittance was in
accordance with the BSP rules.
Petitioner failed to produce evidence as to the first
requirement.
MOREOVER, petitioner filed its judicial claim for refund
less than 120 days after the filing of the administrative
claim. Under Sec 112(D) of NIRC, respondent has 120 days
within which to process claims for refunds/unitilized input
tax. HENCE, petitioner’s judicial claim for refund was
prematurely filed and failed to establish right to refund.
M+W PHILIPPINES INC v. CIR
DOCTRINE: In other words, the failure on the part of
taxpayer to prove that all the requirements for entitlement
have been met, justify the denial of the claim in whole or in
part. Such is obtaining in the case at bar.
FACTS: Insisting that it is entitled to refund or tax credit in
the amount of Php9,222,659.29, representing its alleged
unutilized input value-added tax (VAT) paid on domestic
purchases of goods and services attributable to effectively
zero-rated sales for the four quarters of taxable year 2009,
petitioner moves for a reconsideration 1 of the Decision 2
dated January 7, 2015, which sustained the denial of its
Petition for Review by the Court in Division.
Petitioner argues that its income taxes should not have
been disallowed because it was incurred and paid in 2009
or within the period when BIR Officials were not strictly
implementing the “Separate indication method” for input
taxes.
CTA RULING: Petitioner’s MR must fail. It failed to meet
the required standard of substantiation to merit the grant
of the relief sought under Sec 113( e) of NIRC saying that
“the amount of the tax shall be shown as a separate item
in the invoice or receipt”.
CIR v. SEAGATE TECHNOLOGY PHIL, INC
DOCTRINE: Business companies registered in and
operating from the Special Economic Zone in Naga, Cebu
are entities exempt from all internal revenue taxes and
the implementing rules relevant thereto, including the
value-added taxes or VAT.
Although export sales are not deemed exempt
transactions, they are nonetheless zero-rated. Hence, the
distinction between exempt entities and exempt
transactions has little significance, because the net result
is that the taxpayer is not liable for the VAT.
A VAT-registered enterprise may comply with all
requisites to claim a tax refund of or credit for the input
VAT it paid on capital goods it purchased. In short, after
compliance with all requisites, such enterprise is entitled
to refund or credit.
FACTS: A VAT-registered enterprise, STP has principal
office address at the new Cebu Township One, Special
Economic Zone, Barangay Cantao-an, Naga, Cebu. STP
is registered with the Philippine Export Zone Authority
(PEZA) and certified to engage in the manufacture of
recording components primarily used in computers for
export. VAT returns were filed for the period 1 April 1998
to 30 June 1999. With supporting documents, a claim for
refund of VAT input taxes in the amount of 28 million
pesos (inclusive of the 12-million VAT input taxes subject
of this Petition for Review) was filed on 4 October 1999.
CIR did not act promptly upon STP's claim so the latter
elevated the case to the CTA for review in order to toll the
running of the two-year prescriptive period.
On appeal, CIR asserted that by virtue of the PEZA
registration alone of STP, the latter is not subject to the
VAT.
According to CIR, STP's sales transactions intended for
export are not exempt.
ISSUE: Is STP entitled to refund/tax credit for purchase?
RULING: YES. As a PEZA-registered enterprise within a
special economic zone, STP is entitled to the fiscal
incentives and benefit provided for in either PD 66 or EO
226. It shall, moreover, enjoy all privileges, benefits,
advantages or exemptions under both Republic Act Nos.
(RA) 7227 and 7844.
Its sales transactions intended for export may not be
exempt, but like its purchase transactions, they are zero-
rated. No prior application for the effective zero rating of
its transactions is necessary. Being VAT-registered and
having satisfactorily complied with all the requisites for
claiming a tax refund of or credit for the input VAT paid on
capital goods purchased, STP is entitled to such VAT refund
or credit.
STP, which as an entity is exempt, is different from its
transactions which are not exempt. The end result,
however, is that it is not subject to the VAT. The non-
taxability of transactions that are otherwise taxable is
merely a necessary incident to the tax exemption
conferred by law upon it as an entity, not upon the
transactions themselves.
TEAM ENERGY CORP v. CIR
DOCTRINE: For a judicial claim for VAT refund to prosper,
the claim must not only be filed within the mandatory
120+30-day periods. The taxpayer must also prove the
factual basis of its claim and comply with the invoicing
requirements of the NIRC, as amended, and other
appropriate revenue regulations. Input VAT payments on
local purchases of goods or services must be
substantiated with VAT invoices or official receipts,
respectively
FACTS: On December 17, 2004, petitioner filed an
Application for VAT Zero-Rate for the supply of electricity
to the NPC from January 1, 2005 to December 31, 2005,
which was subsequently approved.
                Petitioner filed with the BIR its Quarterly VAT
Returns for the first three quarters of 2005 on April 25,
2005, July 26, 2005, and October 25, 2005, respectively.
Likewise, petitioner filed its Monthly VAT Declaration for
the month of October 2005 on November 21, 2005, which
was subsequently amended on May 24, 2006.
                On December 20, 2006, petitioner filed an
administrative claim for cash refund or issuance of tax
credit certificate corresponding to the input VAT reported
in its Quarterly VAT Returns for the first three quarters of
2005 and Monthly VAT Declaration for October 2005 in the
amount of P80,136,251.60.
                Opposing the appeal, the Commissioner averred
that the amount claimed by Team Energy was not properly
documented and that NPC's exemption from taxes did not
extend to its electricity supplier such as Team Energy. As
special and affirmative defenses, the Commissioner
alleged that it was imperative upon Team Energy to prove
its compliance with the registration requirements of a VAT
taxpayer; the invoicing and accounting requirements for
VAT-registered persons; and the checklist of requirements
for a VAT refund under Revenue Memorandum Order No.
53-98.
ISSUE: Is petitioner entitled to refund?
RULING: NO. Claimants of tax refunds have the burden to
prove their entitlement to the claim under substantive
law and the factual basis of their claim.
Moreover, in claims for VAT refund/credit, applicants
must satisfy the substantiation and invoicing requirements
under the NIRC and other implementing rules and
regulations. The Court reiterates that to claim a refund of
unutilized or excess input VAT, purchase of goods or
properties must be supported by VAT invoices, while
purchase of services must be supported by VAT official
receipts.
If we are to use sales invoice in the sale of services, an
absurd situation will arise when the purchaser of the
service can claim tax credit representing input VAT even
before there is payment of the output VAT.
PHILEX MINING CORP v. CIR
DOCTRINE: Taxes cannot be subject to compensation for
the simple reason that the government and the taxpayer
are not creditors and debtors of each other.
There is a material distinction between a tax and debt.
Debts are due to the Government in its corporate capacity,
while taxes are due to the Government in its sovereign
capacity. xxx There can be no off-setting of taxes against
the claims that the taxpayer may have against the
government. A person cannot refuse to pay a tax on the
ground that the government owes him an amount equal
to or greater than the tax being collected. The collection
of a tax cannot await the results of a lawsuit against the
government.

FACTS: Petitioner Philex Mining Corp. assails the decision

of the Court of Appeals affirming the Court of Tax Appeals
decision ordering it to pay the amount of P110.7 M as
excise tax liability for the period from the 2 nd quarter of
1991 to the 2nd quarter of 1992 plus 20% annual interest
from 1994 until fully paid pursuant to Sections 248 and
249 of the Tax Code of 1977. Philex protested the demand
for payment of the tax liabilities
stating that it has pending claims for VAT input
credit/refund for the taxes it paid for the years 1989 to
1991 in the amount of P120 M plus interest. Therefore
these claims for tax credit/refund should be applied
against the tax liabilities.
ISSUE: Can there be an off-setting between the tax
liabilities vis-à-vis claims of tax refund of the petitioner?
RULING: NO. Philex's claim is an outright disregard of the
basic principle in tax law that taxes are the lifeblood of the
government and so should be collected without
unnecessary hindrance. Evidently, to countenance Philex's
whimsical reason would render ineffective our tax
collection system. Too simplistic, it finds no support in law
or in jurisprudence.

CIR v. SAN ROQUE POWER CORP NASA TAX REMEDIES

CASE NA FILE CHECK MU