Lawyerly

GR No. 205055

2014-07-18

CARPIO, J.

We adopt the above-mentioned findings of fact of the CTA Special First Division, as affirmed by the CTA EB. Whether TSC complied with the substantiation requirements of Section 112 of the NIRC and RR 3-88 is a question of fact,[19] which could only be answered after reviewing, examining, evaluating, or weighing all over again the probative value of the evidence before the CTA, which this Court does not have reason to do in the present petition for review on certiorari. The findings of fact of the CTA are not to be disturbed unless clearly shown to be unsupported by substantial evidence.[20] Since by the very nature of its functions, the CTA has developed an expertise on this subject, the Court will not set aside lightly the conclusions reached by them, unless there has been an abuse or improvident exercise of authority.[21]

GR Nos. 198729-30

2014-01-15

CBK POWER COMPANY LIMITED v. CIR

SERENO, C.J.

In Panasonic Communications Imaging Corporation of the Philippines v. Commissioner of Internal Revenue,[13] this Court ruled: Under the 1997 NIRC, if at the end of a taxable quarter the seller charges output taxes equal to the input taxes that his suppliers passed on to him, no payment is required of him. It is when his output taxes exceed his input taxes that he has to pay the excess to the BIR. If the input taxes exceed the output taxes, however, the excess payment shall be carried over to the succeeding quarter or quarters. Should the input taxes result from zero-rated or effectively zero-rated transactions or from the acquisition of capital goods, any excess over the output taxes shall instead be refunded to the taxpayer.

GR No. 184266

2013-11-11

APPLIED FOOD INGREDIENTS COMPANY v. CIR

SERENO, C.J.

In Panasonic Communications Imaging Corporation of the Philippines v. Commissioner of Internal Revenue,[8] this Court explained that "the VAT is a tax on consumption, an indirect tax that the provider of goods or services may pass on to his customers. Under the VAT method of taxation, which is invoice-based, an entity can subtract from the VAT charged on its sales or outputs the VAT it paid on its purchases, inputs and imports."

GR No. 187485

2013-10-08

CIR v. SAN ROQUE POWER CORPORATION

CARPIO, J.

Even this Court in resolving claims for refund of input VAT paid after January 1, 1998 recognized the effectivity of RR 7-95 in interpreting the provisions of the 1997 Tax Code. In Hitachi Global Storage Technologies Philippines, Corp. v. Commissioner of Internal Revenue,[19] this Court, speaking through Justice Carpio, sustained the denial of an application for refund of input VAT for the four taxable quarters of 1999 on the ground of petitioner-taxpayer's failure to comply with the provisions of RR 7-95. Citing Panasonic v. Commissioner of Internal Revenue,[20] We explained that RR 7-95 gained the status of a legislative act that binds the taxpayers and this Court:On 4 August 2000, Hitachi filed an administrative claim for refund or issuance of a tax credit certificate before the BIR. The claim involved P25,023,471.84 representing excess input VAT attributable to Hitachi's zero-rated export sales for the four taxable quarters of 1999.

GR No. 181136

2012-06-13

WESTERN MINDANAO POWER CORPORATION v. CIR

SERENO, J.

RR 7-95, which took effect on 1 January 1996, proceeds from the rule-making authority granted to the Secretary of Finance by the NIRC for the efficient enforcement of the same Tax Code and its amendments. In Panasonic Communications Imaging Corporation of the Philippines v. Commissioner of Internal Revenue,[18] we ruled that this provision is "reasonable and is in accord with the efficient collection of VAT from the covered sales of goods and services." Moreover, we have held in Kepco Philippines Corporation v. Commissioner of Internal Revenue[19] that the subsequent incorporation of Section 4.108-1 of RR 7-95 in Section 113 (B) (2) (c) of R.A. 9337 actually confirmed the validity of the imprinting requirement on VAT invoices or official receipts a case falling under the principle of legislative approval of administrative interpretation by reenactment.

GR No. 181136

2012-06-13

WESTERN MINDANAO POWER CORPORATION v. CIR

SERENO, J.

In fact, this Court has consistently held as fatal the failure to print the word "zero-rated" on the VAT invoices or official receipts in claims for a refund or credit of input VAT on zero-rated sales, even if the claims were made prior to the effectivity of R.A. 9337.[20] Clearly then, the present Petition must be denied.

GR No. 170257

2011-09-07

RIZAL COMMERCIAL BANKING CORPORATION v. CIR

MENDOZA, J.

As a final note, this Court has consistently held that findings and conclusions of the CTA shall be accorded the highest respect and shall be presumed valid, in the absence of any clear and convincing proof to the contrary.[36] The CTA, as a specialized court dedicated exclusively to the study and resolution of tax problems, has developed an expertise on the subject of taxation.[37] As such, its decisions shall not be lightly set aside on appeal, unless this Court finds that the questioned decision is not supported by substantial evidence or there is a showing of abuse or improvident exercise of authority on the part of the Tax Court.[38]

GR No. 179961

2011-01-31

KEPCO PHILIPPINES CORPORATION v. CIR

MENDOZA, J.

Quite significant is the ruling handed down in the case of Panasonic Communications Imaging Corporation of the Philippines v. Commissioner of Internal Revenue, [16] to wit: Section 4.108-1 of RR 7-95 proceeds from the rule-making authority granted to the Secretary of Finance under Section 245 of the 1977 NIRC (Presidential Decree 1158) for the efficient enforcement of the tax code and of course its amendments. The requirement is reasonable and is in accord with the efficient collection of VAT from the covered sales of goods and services. As aptly explained by the CTA's First Division, the appearance of the word "zero-rated" on the face of invoices covering zero-rated sales prevents buyers from falsely claiming input VAT from their purchases when no VAT was actually paid. If, absent such word, a successful claim for input VAT is made, the government would be refunding money it did not collect.

GR No. 179961

2011-01-31

KEPCO PHILIPPINES CORPORATION v. CIR

MENDOZA, J.

Indeed, in a string of recent decisions on this matter, to wit: Panasonic Communications Imaging Corporation of the Philippines v. Commissioner of Internal Revenue,[19] J.R.A. Philippines, Inc. v. Commissioner of Internal Revenue,[20] Hitachi Global Storage Technologies Philippines Corp. (formerly Hitachi Computer Products (Asia) Corporations) v. Commissioner of Internal Revenue,[21] and Kepco Philippines Corporation v. Commissioner of Internal Revenue,[22] this Court has consistently held that failure to print the word "zero-rated" on the invoices or receipts is fatal to a claim for refund or credit of input VAT on zero-rated sales.

GR No. 172378

2011-01-17

SILICON PHILIPPINES v. CIR

DEL CASTILLO, J.

In Panasonic Communications Imaging Corporation of the Philippines (formerly Matsushita Business Machine Corporation of the Philippines) v. Commissioner of Internal Revenue,[54] we upheld the denial of Panasonic's claim for tax credit/refund due to the absence of the word "zero-rated" in its invoices. We explained that compliance with Section 4.108-1 of RR 7-95, requiring the printing of the word "zero rated" on the invoice covering zero-rated sales, is essential as this regulation proceeds from the rule-making authority of the Secretary of Finance under Section 244[55] of the NIRC.

GR No. 181858

2010-11-24

KEPCO PHILIPPINES CORPORATION v. CIR

MENDOZA, J.

The issue of whether the word "zero-rated" should be imprinted on invoices and/or official receipts as part of the invoicing requirement has been settled in the case of Panasonic Communications Imaging Corporation of the Philippines vs. Commissioner of Internal Revenue[30] and restated in the later case of J.R.A. Philippines, Inc. v. Commissioner.[31] In the first case, Panasonic Communications Imaging Corporation (Panasonic), a VAT-registered entity, was engaged in the production and exportation of plain paper copiers and their parts and accessories. From April 1998 to March 31, 1999, Panasonic generated export sales amounting to US$12,819,475.15 and US$11,859,489.78 totaling US$24,678,964.93. Thus, it paid input VAT of P9,368,482.40 that it attributed to its zero-rated sales. It filed applications for refund or tax credit on what it had paid. The CTA denied its application. Panasonic's export sales were subject to 0% VAT under Section 106(A)(2)(a)(1) of the 1997 NIRC but it did not qualify for zero-rating because the word "zero-rated" was not printed on Panasonic's export

GR No. 181858

2010-11-24

KEPCO PHILIPPINES CORPORATION v. CIR

MENDOZA, J.

invoices. This omission, according to the CTA, violated the invoicing requirements of Section 4.108-1 of RR No. 7-95. Panasonic argued, however, that "in requiring the printing on its sales invoices of the word `zero-rated,' the Secretary of Finance unduly expanded, amended, and modified by a mere regulation (Section 4.108-1 of RR No. 7-95) the letter and spirit of Sections 113 and 237 of the 1997 NIRC, prior to their amendment by R.A. 9337."[32] Panasonic stressed that Sections 113 and 237 did not necessitate the imprinting of the word "zero-rated" for its zero-rated sales receipts or invoices. The BIR integrated this requirement only after the enactment of R.A. No. 9337 on November 1, 2005, a law that was still inexistent at the time of the transactions. Denying Panasonic's claim for refund, the Court stated: Section 4.108-1 of RR 7-95 proceeds from the rule-making authority granted to the Secretary of Finance under Section 245 of the 1977 NIRC (Presidential Decree 1158) for the efficient enforcement of the tax code and of course its amendments. The requirement is reasonable and is in accord with the efficient collection of VAT from the covered sales of goods and services. As aptly explained by the CTA's First Division, the appearance of the word "zero-rated" on the face of invoices covering zero-rated sales prevents buyers from falsely claiming input VAT from their purchases when no VAT was actually paid. If, absent such word, a successful claim for input VAT is made, the government would be refunding money it did not collect.

GR No. 174212

2010-10-20

HITACHI GLOBAL STORAGE TECHNOLOGIES PHILIPPINES CORP. v. CIR

CARPIO, J.

We already settled the issue of printing the word "zero-rated" on the sales invoices in Panasonic v. Commissioner of Internal Revenue.[13] In that case, we denied Panasonic's claim for refund of the VAT it paid as a zero-rated taxpayer on the ground that its sales invoices did not state on their face that its sales were "zero-rated." We said: But when petitioner Panasonic made the export sales subject of this case, i.e., from April 1998 to March 1999, the rule that applied was Section 4.108-1 of RR 7-95, otherwise known as the Consolidated Value-Added Tax Regulations, which the Secretary of Finance issued on December 9, 1995 and took effect on January 1, 1996. It already required the printing of the word "zero-rated" on invoices covering zero-rated sales. When R.A. 9337 amended the 1997 NIRC on November 1, 2005, it made this particular revenue regulation a part of the tax code. This conversion from regulation to law did not diminish the binding force of such regulation with respect to acts committed prior to the enactment of that law.

GR No. 177127

2010-10-11

J.R.A. PHILIPPINES v. CIR

DEL CASTILLO, J.

The question of whether the absence of the word "zero-rated" on the invoices/receipts is fatal to a claim for credit/refund of input VAT is not novel. This has been squarely resolved in Panasonic Communications Imaging Corporation of the Philippines (formerly Matsushita Business Machine Corporation of the Philippines) v. Commissioner of Internal Revenue.[28] In that case, we sustained the denial of petitioner's claim for tax credit/refund for non-compliance with Section 4.108-1 of Revenue Regulations No. 7-95, which requires the word "zero rated" to be printed on the invoices/receipts covering zero-rated sales. We explained that: Zero-rated transactions generally refer to the export sale of goods and services. The tax rate in this case is set at zero. When applied to the tax base or the selling price of the goods or services sold, such zero rate results in no tax chargeable against the foreign buyer or customer. But, although the seller in such transactions charges no output tax, he can claim a refund of the VAT that his suppliers charged him. The seller thus enjoys automatic zero rating, which allows him to recover the input taxes he paid relating to the export sales, making him internationally competitive.

	GR No. 205055 2014-07-18	CIR v. TEAM SUAL CORPORATION CARPIO, J.
We adopt the above-mentioned findings of fact of the CTA Special First Division, as affirmed by the CTA EB. Whether TSC complied with the substantiation requirements of Section 112 of the NIRC and RR 3-88 is a question of fact,[19] which could only be answered after reviewing, examining, evaluating, or weighing all over again the probative value of the evidence before the CTA, which this Court does not have reason to do in the present petition for review on certiorari. The findings of fact of the CTA are not to be disturbed unless clearly shown to be unsupported by substantial evidence.[20] Since by the very nature of its functions, the CTA has developed an expertise on this subject, the Court will not set aside lightly the conclusions reached by them, unless there has been an abuse or improvident exercise of authority.[21]
	GR Nos. 198729-30 2014-01-15	CBK POWER COMPANY LIMITED v. CIR SERENO, C.J.
In Panasonic Communications Imaging Corporation of the Philippines v. Commissioner of Internal Revenue,[13] this Court ruled: Under the 1997 NIRC, if at the end of a taxable quarter the seller charges output taxes equal to the input taxes that his suppliers passed on to him, no payment is required of him. It is when his output taxes exceed his input taxes that he has to pay the excess to the BIR. If the input taxes exceed the output taxes, however, the excess payment shall be carried over to the succeeding quarter or quarters. Should the input taxes result from zero-rated or effectively zero-rated transactions or from the acquisition of capital goods, any excess over the output taxes shall instead be refunded to the taxpayer.
	GR No. 184266 2013-11-11	APPLIED FOOD INGREDIENTS COMPANY v. CIR SERENO, C.J.
In Panasonic Communications Imaging Corporation of the Philippines v. Commissioner of Internal Revenue,[8] this Court explained that "the VAT is a tax on consumption, an indirect tax that the provider of goods or services may pass on to his customers. Under the VAT method of taxation, which is invoice-based, an entity can subtract from the VAT charged on its sales or outputs the VAT it paid on its purchases, inputs and imports."
	GR No. 187485 2013-10-08	CIR v. SAN ROQUE POWER CORPORATION CARPIO, J.
Even this Court in resolving claims for refund of input VAT paid after January 1, 1998 recognized the effectivity of RR 7-95 in interpreting the provisions of the 1997 Tax Code. In Hitachi Global Storage Technologies Philippines, Corp. v. Commissioner of Internal Revenue,[19] this Court, speaking through Justice Carpio, sustained the denial of an application for refund of input VAT for the four taxable quarters of 1999 on the ground of petitioner-taxpayer's failure to comply with the provisions of RR 7-95. Citing Panasonic v. Commissioner of Internal Revenue,[20] We explained that RR 7-95 gained the status of a legislative act that binds the taxpayers and this Court:On 4 August 2000, Hitachi filed an administrative claim for refund or issuance of a tax credit certificate before the BIR. The claim involved P25,023,471.84 representing excess input VAT attributable to Hitachi's zero-rated export sales for the four taxable quarters of 1999.
	GR No. 181136 2012-06-13	WESTERN MINDANAO POWER CORPORATION v. CIR SERENO, J.
RR 7-95, which took effect on 1 January 1996, proceeds from the rule-making authority granted to the Secretary of Finance by the NIRC for the efficient enforcement of the same Tax Code and its amendments. In Panasonic Communications Imaging Corporation of the Philippines v. Commissioner of Internal Revenue,[18] we ruled that this provision is "reasonable and is in accord with the efficient collection of VAT from the covered sales of goods and services." Moreover, we have held in Kepco Philippines Corporation v. Commissioner of Internal Revenue[19] that the subsequent incorporation of Section 4.108-1 of RR 7-95 in Section 113 (B) (2) (c) of R.A. 9337 actually confirmed the validity of the imprinting requirement on VAT invoices or official receipts a case falling under the principle of legislative approval of administrative interpretation by reenactment.
	GR No. 181136 2012-06-13	WESTERN MINDANAO POWER CORPORATION v. CIR SERENO, J.
In fact, this Court has consistently held as fatal the failure to print the word "zero-rated" on the VAT invoices or official receipts in claims for a refund or credit of input VAT on zero-rated sales, even if the claims were made prior to the effectivity of R.A. 9337.[20] Clearly then, the present Petition must be denied.
	GR No. 170257 2011-09-07	RIZAL COMMERCIAL BANKING CORPORATION v. CIR MENDOZA, J.
As a final note, this Court has consistently held that findings and conclusions of the CTA shall be accorded the highest respect and shall be presumed valid, in the absence of any clear and convincing proof to the contrary.[36] The CTA, as a specialized court dedicated exclusively to the study and resolution of tax problems, has developed an expertise on the subject of taxation.[37] As such, its decisions shall not be lightly set aside on appeal, unless this Court finds that the questioned decision is not supported by substantial evidence or there is a showing of abuse or improvident exercise of authority on the part of the Tax Court.[38]
	GR No. 179961 2011-01-31	KEPCO PHILIPPINES CORPORATION v. CIR MENDOZA, J.
Quite significant is the ruling handed down in the case of Panasonic Communications Imaging Corporation of the Philippines v. Commissioner of Internal Revenue, [16] to wit: Section 4.108-1 of RR 7-95 proceeds from the rule-making authority granted to the Secretary of Finance under Section 245 of the 1977 NIRC (Presidential Decree 1158) for the efficient enforcement of the tax code and of course its amendments. The requirement is reasonable and is in accord with the efficient collection of VAT from the covered sales of goods and services. As aptly explained by the CTA's First Division, the appearance of the word "zero-rated" on the face of invoices covering zero-rated sales prevents buyers from falsely claiming input VAT from their purchases when no VAT was actually paid. If, absent such word, a successful claim for input VAT is made, the government would be refunding money it did not collect.
	GR No. 179961 2011-01-31	KEPCO PHILIPPINES CORPORATION v. CIR MENDOZA, J.
Indeed, in a string of recent decisions on this matter, to wit: Panasonic Communications Imaging Corporation of the Philippines v. Commissioner of Internal Revenue,[19] J.R.A. Philippines, Inc. v. Commissioner of Internal Revenue,[20] Hitachi Global Storage Technologies Philippines Corp. (formerly Hitachi Computer Products (Asia) Corporations) v. Commissioner of Internal Revenue,[21] and Kepco Philippines Corporation v. Commissioner of Internal Revenue,[22] this Court has consistently held that failure to print the word "zero-rated" on the invoices or receipts is fatal to a claim for refund or credit of input VAT on zero-rated sales.
	GR No. 172378 2011-01-17	SILICON PHILIPPINES v. CIR DEL CASTILLO, J.
In Panasonic Communications Imaging Corporation of the Philippines (formerly Matsushita Business Machine Corporation of the Philippines) v. Commissioner of Internal Revenue,[54] we upheld the denial of Panasonic's claim for tax credit/refund due to the absence of the word "zero-rated" in its invoices. We explained that compliance with Section 4.108-1 of RR 7-95, requiring the printing of the word "zero rated" on the invoice covering zero-rated sales, is essential as this regulation proceeds from the rule-making authority of the Secretary of Finance under Section 244[55] of the NIRC.
	GR No. 181858 2010-11-24	KEPCO PHILIPPINES CORPORATION v. CIR MENDOZA, J.
The issue of whether the word "zero-rated" should be imprinted on invoices and/or official receipts as part of the invoicing requirement has been settled in the case of Panasonic Communications Imaging Corporation of the Philippines vs. Commissioner of Internal Revenue[30] and restated in the later case of J.R.A. Philippines, Inc. v. Commissioner.[31] In the first case, Panasonic Communications Imaging Corporation (Panasonic), a VAT-registered entity, was engaged in the production and exportation of plain paper copiers and their parts and accessories. From April 1998 to March 31, 1999, Panasonic generated export sales amounting to US$12,819,475.15 and US$11,859,489.78 totaling US$24,678,964.93. Thus, it paid input VAT of P9,368,482.40 that it attributed to its zero-rated sales. It filed applications for refund or tax credit on what it had paid. The CTA denied its application. Panasonic's export sales were subject to 0% VAT under Section 106(A)(2)(a)(1) of the 1997 NIRC but it did not qualify for zero-rating because the word "zero-rated" was not printed on Panasonic's export
	GR No. 181858 2010-11-24	KEPCO PHILIPPINES CORPORATION v. CIR MENDOZA, J.
invoices. This omission, according to the CTA, violated the invoicing requirements of Section 4.108-1 of RR No. 7-95. Panasonic argued, however, that "in requiring the printing on its sales invoices of the word `zero-rated,' the Secretary of Finance unduly expanded, amended, and modified by a mere regulation (Section 4.108-1 of RR No. 7-95) the letter and spirit of Sections 113 and 237 of the 1997 NIRC, prior to their amendment by R.A. 9337."[32] Panasonic stressed that Sections 113 and 237 did not necessitate the imprinting of the word "zero-rated" for its zero-rated sales receipts or invoices. The BIR integrated this requirement only after the enactment of R.A. No. 9337 on November 1, 2005, a law that was still inexistent at the time of the transactions. Denying Panasonic's claim for refund, the Court stated: Section 4.108-1 of RR 7-95 proceeds from the rule-making authority granted to the Secretary of Finance under Section 245 of the 1977 NIRC (Presidential Decree 1158) for the efficient enforcement of the tax code and of course its amendments. The requirement is reasonable and is in accord with the efficient collection of VAT from the covered sales of goods and services. As aptly explained by the CTA's First Division, the appearance of the word "zero-rated" on the face of invoices covering zero-rated sales prevents buyers from falsely claiming input VAT from their purchases when no VAT was actually paid. If, absent such word, a successful claim for input VAT is made, the government would be refunding money it did not collect.
	GR No. 174212 2010-10-20	HITACHI GLOBAL STORAGE TECHNOLOGIES PHILIPPINES CORP. v. CIR CARPIO, J.
We already settled the issue of printing the word "zero-rated" on the sales invoices in Panasonic v. Commissioner of Internal Revenue.[13] In that case, we denied Panasonic's claim for refund of the VAT it paid as a zero-rated taxpayer on the ground that its sales invoices did not state on their face that its sales were "zero-rated." We said: But when petitioner Panasonic made the export sales subject of this case, i.e., from April 1998 to March 1999, the rule that applied was Section 4.108-1 of RR 7-95, otherwise known as the Consolidated Value-Added Tax Regulations, which the Secretary of Finance issued on December 9, 1995 and took effect on January 1, 1996. It already required the printing of the word "zero-rated" on invoices covering zero-rated sales. When R.A. 9337 amended the 1997 NIRC on November 1, 2005, it made this particular revenue regulation a part of the tax code. This conversion from regulation to law did not diminish the binding force of such regulation with respect to acts committed prior to the enactment of that law.
	GR No. 177127 2010-10-11	J.R.A. PHILIPPINES v. CIR DEL CASTILLO, J.
The question of whether the absence of the word "zero-rated" on the invoices/receipts is fatal to a claim for credit/refund of input VAT is not novel. This has been squarely resolved in Panasonic Communications Imaging Corporation of the Philippines (formerly Matsushita Business Machine Corporation of the Philippines) v. Commissioner of Internal Revenue.[28] In that case, we sustained the denial of petitioner's claim for tax credit/refund for non-compliance with Section 4.108-1 of Revenue Regulations No. 7-95, which requires the word "zero rated" to be printed on the invoices/receipts covering zero-rated sales. We explained that: Zero-rated transactions generally refer to the export sale of goods and services. The tax rate in this case is set at zero. When applied to the tax base or the selling price of the goods or services sold, such zero rate results in no tax chargeable against the foreign buyer or customer. But, although the seller in such transactions charges no output tax, he can claim a refund of the VAT that his suppliers charged him. The seller thus enjoys automatic zero rating, which allows him to recover the input taxes he paid relating to the export sales, making him internationally competitive.

PANASONIC COMMUNICATIONS IMAGING CORPORATION OF PHILIPPINES v. CIR