G.R. No. 192650 - Martos vs. New San Jose Builders, Inc.

Petitioner Maibarara Geothermal, Inc. (MGI) is a corporation duly organized under Philippine laws, registered as a Renewable Energy (RE) Developer of the 20 MW Maibarara Geothermal Power Generation Project in Batangas and Laguna.
MGI holds a Certificate of Registration from the Department of Energy (DOE) and the Board of Investments (BOI) and is a registered VAT taxpayer with Certificate of Registration No. OCN3RC0000483772.

MGI filed four administrative claims for refund of unutilized input Value-Added Taxes (VAT) attributable to zero-rated sales for each quarter of taxable year (TY) 2013, totaling PHP 81,572,707.81.
The Commissioner of Internal Revenue (CIR) failed to act on these claims, prompting MGI to file petitions for review before the Court of Tax Appeals (CTA), which were consolidated.

The CTA Division, in a Decision dated March 4, 2019, denied MGI's claims for lack of merit because MGI failed to establish that it made any zero-rated sales during TY 2013.
The Division relied on prior jurisprudence (Luzon Hydro Corporation v. CIR) that emphasized the taxpayer’s burden to prove actual zero-rated sales to claim input VAT refunds.
MGI’s quarterly VAT returns and witness testimonies confirmed no sales for TY 2013; actual sales to Trans-Asia Oil occurred only in February 2014.

The CTA EB upheld the CTA Division's Decision, emphasizing the necessity of establishing the presence of zero-rated sales during the claim period.
The CTA EB reiterated the requirements laid down in Section 112(A) of the National Internal Revenue Code (NIRC), including that claims be filed within two years after the close of the taxable quarter when sales were made.
The CTA EB further held that MGI failed to prove it was engaged in zero-rated sales for TY 2013 because of lack of proper documentation, including an illegible official receipt and no Certificate of Endorsement from the DOE on a per transaction basis.
The CTA EB denied MGI’s motion for reconsideration.

The CTA EB ruled that three documents are required to qualify for VAT zero-rating under Republic Act No. 9513 and its IRR: DOE Certificate of Registration, BOI Certificate of Registration, and DOE Certificate of Endorsement on a per transaction basis.
MGI contended that the DOE Certificate of Endorsement was only required for duty-free importation incentives and not for VAT zero-rating.

Whether the CTA EB erred in ruling that MGI failed to establish that it is engaged in zero-rated sales under Republic Act No. 9513 and its Implementing Rules and Regulations (IRR).

Whether the CTA EB erred in affirming the denial of MGI’s claim for refund of input VAT under Section 112(A) of the National Internal Revenue Code (NIRC).