Maibarara Geothermal, Inc. vs. Commissioner of Internal Revenue

Facts:

Petitioner Maibarara Geothermal, Inc. (MGI) is a DOE‑ and BOI‑registered renewable energy (RE) developer and a VAT‑registered taxpayer. For the four quarters of taxable year (TY) 2013 MGI filed administrative claims for refund/credit of alleged unutilized input VAT totaling PHP 81,572,707.81; the Commissioner of Internal Revenue (CIR) did not act on those claims, so MGI filed petitions with the Court of Tax Appeals (CTA) (CTA Case Nos. 9119, 9201, 9254 and 9336).

The CTA Special First Division denied MGI’s consolidated petitions in a decision dated March 4, 2019, reasoning that a claimant must prove actual zero‑rated or effectively zero‑rated sales to obtain refund/credit of input VAT and that MGI’s VAT returns and witnesses showed no sales during TY 2013; MGI’s motion for reconsideration was denied in a July 9, 2019 resolution. The CTA En Banc affirmed in a November 26, 2020 decision, holding (among other points) that (a) Section 112(A) of the NIRC requires the existence of zero‑rated sales during the period of the claim (or within the prescriptive period), and (b) under the DOE IRR a DOE Certificate of Endorsement was required to qualify RE transactions for VAT zero‑rating; a dissent at the CTA EB contended the COE was not required for VAT zero‑rating. MGI’s motion for reconsideration before the CTA EB was denied on June 2, 2021.

MGI brought a petition for review on certiorari under Rule 45 to the Supreme Court, challenging the CTA EB rulings. The Supreme Court Third Division resolved...(Pro-only)

Issues:

• Did the CTA En Banc err 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)?
• Did the CTA En Banc err in affirming the CTA Division that MGI is not entitled to a refund/credit of input VAT under Section 112(A) of the National Internal Revenue Code (N...(Pro-only)

Ruling:

• (Pro-only)

Ratio:

• (Pro-only)

Doctrine:

• (Pro-only)