G.R. No. 183531 - Eastern Telecommunications Phils. Inc. vs. Commissioner of Internal Revenue

Eastern Telecommunications Philippines, Inc. (ETPI) is a domestic telecommunications company located in Makati City and registered as a VAT taxpayer with the Bureau of Internal Revenue (BIR).
The petition involves ETPI's claim for a refund of its unutilized input VAT amounting to P9,265,913.42 allegedly attributable to its zero-rated sales of services to non-resident foreign corporations for the taxable year 1998.

ETPI engaged in international service agreements handling inbound international telecommunications services and later entered into interconnection agreements with local carriers to relay these calls.
Payments from the non-resident foreign corporations were made in US dollars via Philippine banks in accordance with international standards as outlined by the Blue Book (Traffic Settlement Procedure).
ETPI filed its Quarterly VAT Returns for 1998, which were later amended on February 22, 2001, to correct input VAT credits and reflect zero-rated and exempt sales.

On January 25, 2000, ETPI filed an administrative claim with the BIR for a refund of the excess input VAT under Section 112 of Republic Act No. 8424 (NIRC) and related Revenue Regulations (RR No. 5-87 and amended by RR No. 7-95).
Concurrently, ETPI filed a Petition for Review before the Court of Tax Appeals (CTA) on February 21, 2000 to toll the reglementary two-year period for filing under Section 229 of the NIRC.
The BIR Commissioner contested ETPI’s procedural compliance, asserting that ETPI did not file a formal written claim as required, but merely submitted an amended quarterly VAT return.

The CTA’s Decision (November 19, 2003) denied ETPI’s petition on the ground that:

The VAT official receipts submitted did not have the word "zero-rated" imprinted on them as required by Section 4.108-1 of RR No. 7-95.
ETPI failed to furnish supporting sales invoices for its VATable and exempt sales, crucial for the proper allocation of input VAT.

ETPI’s subsequent motion for reconsideration was likewise denied in a Resolution dated March 19, 2004.

ETPI ultimately sought judicial relief by filing a petition before the Court of Appeals (CA), which referred the case back to the CTA en banc following the passage of R.A. No. 9282.
On April 30, 2008, the CTA en banc affirmed the previous ruling, emphasizing the mandatory invoicing requirements.
A Concurring and Dissenting Opinion by CTA Presiding Justice Ernesto Acosta expressed disagreement on the mandatory nature of the "zero-rated" inscription but concurred in the denial on the ground that ETPI failed to prove its input VAT on domestic purchases.
ETPI’s subsequent motion for reconsideration was again denied in a Resolution dated July 2, 2008, prompting the present petition for review.

Whether or not the Court of Tax Appeals erred in denying ETPI’s claim for a refund of input VAT attributable to its zero-rated sales for the taxable year 1998.

Whether the failure to imprint the word "zero-rated" on VAT invoices and receipts constitutes a material non-compliance justifying the denial of a tax refund or credit claim.
Whether the amended quarterly VAT returns and the supporting documents (or lack thereof) suffice in proving the accuracy and validity of the refund claim.
The extent to which the specialized expertise of the CTA on tax matters should be given deference in reviewing the factual findings of the case.