G.R. No. L-31979 - Pizarro vs. Court of Appeals

Petitioner: Applied Food Ingredients Company, Inc., a VAT-registered entity engaged in the importation and exportation business, registered at BIR Regional District Office (RDO) No. 43 in Pasig City.
Respondent: Commissioner of Internal Revenue (CIR), the government official responsible for administering tax laws and regulations.

From September 1998 to December 31, 2000, the petitioner paid an aggregate sum of input taxes amounting to ₱9,528,565.85 on its importation of food ingredients as declared in its Quarterly VAT Returns.
These imported food ingredients were subsequently exported between April 1, 2000 and December 31, 2000, generating export sales totaling ₱114,577,937.24, with the proceeds remitted to the petitioner’s dollar accounts in Equitable Bank Corporation and Australia New Zealand Bank-Philippine Branch.

Petitioner asserted that the export sales conducted during the period were zero-rated under Section 106(A)(2)(a)(1) of the National Internal Revenue Code (NIRC) of 1997.
The petitioner claimed that the accumulated input taxes of ₱9,528,565.85 had not been offset against any output tax, thereby entitling it to a tax refund or credit certificate.

On March 26, 2002, and again on June 28, 2002, petitioner filed two separate applications seeking the issuance of tax credit certificates in the amounts of ₱5,385,208.32 and ₱4,143,357.53, respectively.
Due to the respondent’s inaction within the mandated period, petitioner elevated the issue by filing a Petition for Review on July 24, 2002 before the Court of Tax Appeals (CTA) in what became CTA Case No. 6513.

The CTA First Division, in its Decision dated June 13, 2007, denied petitioner’s claim on the ground of failure to comply with the invoicing requirements prescribed under Section 113 of the NIRC and Revenue Regulations.
The CTA En Banc later affirmed the claim denial, specifically noting that the export sales invoices lacked the required markings—“zero-rated,” a proper TIN-VAT, and the relevant BIR permit number—which violated the mandated invoicing requirements for zero-rated transactions.

Whether the petitioner is entitled to the issuance of a tax credit certificate or refund in the amount of ₱9,528,565.85, representing creditable input taxes incurred from September 1998 to December 2000 that are attributable to its alleged zero-rated export sales covering the period April 1, 2000 to December 31, 2000.