Case Summary (G.R. No. 236325)
Applicable Law and Constitutional Basis
- 1987 Philippine Constitution (decision date post-1990)
- 1997 National Internal Revenue Code (NIRC), Section 106(A)(2)(a)(5) on zero-rated export sales
- Revenue Regulations No. 16-2005, Section 4.106-5(a)(5) (Consolidated VAT Regulations)
- Revenue Memorandum Order No. 09-00 (RMO 9-00) re: BOI-registered exporters with 100% export sales
- Revenue Memorandum Circular No. 74-99 on cross-border doctrine
Factual Background
- July 5, 2007: Filminera entered Ore Sales and Purchase Agreement with Philippine Gold Processing and Refining Corporation (PGPRC), a BOI-registered enterprise
- Third and fourth quarters of FY ending June 30, 2010: all sales by Filminera were to PGPRC
- March 30 and June 29, 2012: Filminera filed amended quarterly VAT returns and administrative claims for refund or tax credit certificate (TCC) of unutilized input VAT attributable to its zero-rated sales
Procedural History
- August 16 and November 23, 2012: Filminera filed petitions before CTA (Case Nos. 8528 & 8576), later consolidated.
- September 25, 2014: CTA Division denied petitions for insufficiency of evidence on actual export.
- Filminera submitted BOI Certification (January 27, 2010) showing 100% export for calendar year 2009.
- May 25, 2015: CTA Division granted reconsideration, ordering refund/TCC of ₱111,579,541.76.
- September 10, 2015: CTA Division denied CIR’s reconsideration motion.
- March 29, 2017: CTA En Banc dismissed CIR’s petition; November 16, 2017: denied reconsideration.
- CIR elevated the case to the Supreme Court via Rule 45 petition.
Issue
Whether the BOI Certification dated January 27, 2010 suffices to establish that PGPRC actually exported 100% of its products during the third and fourth quarters of FY 2010, thereby qualifying Filminera’s sales for zero-rating and entitlement to input VAT refund or TCC.
Parties’ Contentions
- CIR: The certificate covers only January 1–December 31, 2009 and cannot certify exportation for January 1–June 30, 2010; validity extension does not substitute actual export attestation.
- Filminera: Procedural compliance with Rule 45 was substantial; the BOI Certification’s one-year validity encompasses the refund period and supports zero-rating.
Jurisdictional Note and Scope of Review
- Supreme Court Rule 45 review is limited to questions of law; factual re-examination is generally proscribed.
- Petition was accompanied by duplicate originals of CTA En Banc decision, resolution, and dissenting opinion reproducing the BOI Certification—deemed substantial compliance with Rule 45 record-attachment requirements.
Legal Analysis: Scope and Effect of BOI Certification
- The certificate expressly covers exports for calendar year 2009 only; it does not attest to exports from January–June 2010.
- The one-year validity period authorizes zero-rating of sales during that period but does not itself prove actual exportation in those months.
- Under the cross-border doctrine and destination principle, zero-rating requires proof of actual export to relieve VAT from goods’ cost.
Legal Analysis: Conditions for Zero-Rating to BOI-Registered Buyers
RMO 9-00 and RR 16-2005 mandate that:
- Seller must be VAT-registered.
- Buyer must be BOI-registered manufacturer/producer.
- Buyer’s products must be 100% exported, evidenced by BOI Certification valid for one year.
- Buyer furnishes suppliers with the certificate as authority for zero-rating.
- Supplier issues VAT invoices marked “zero-rated” citing buyer’s BOI registration number.
Burden of Proof and Invoicing Requirements
- The taxpayer
Case Syllabus (G.R. No. 236325)
Facts
- Filminera Resources Corporation (Filminera Resources), a VAT-registered seller, entered into an Ore Sales and Purchase Agreement on July 5, 2007 with Philippine Gold Processing and Refining Corporation (PGPRC), a BOI-registered enterprise.
- For the third and fourth quarters of the fiscal year ending June 30, 2010, all of Filminera Resources’ sales were made exclusively to PGPRC.
- On March 30 and June 29, 2012, Filminera Resources filed amended quarterly VAT returns for those quarters and simultaneously lodged administrative claims for refund or tax credit certificates (TCC) of unutilized input VAT attributable to its zero-rated sales.
- On August 16 and November 23, 2012, Filminera Resources elevated its administrative claims to the Court of Tax Appeals (CTA) Division, docketed as CTA Cases Nos. 8528 and 8576; the Commissioner of Internal Revenue (CIR) filed answers in October and December 2012.
- The CTA Division initially denied the petitions on September 25, 2014 for insufficiency of evidence that the sales qualified as zero-rated exports under Section 106(A)(2)(a)(5) of the 1997 NIRC (as amended) and Section 4.106-5(a)(5) of RR No. 16-2005.
- On reconsideration, the CTA Division accepted a BOI Certification dated January 27, 2010 (attesting that PGPRC exported 100% of its sales volume for January 1–December 31, 2009) and amended its decision on May 25, 2015 to order a refund/TCC of P111,579,541.76.
- The CIR’s motion for reconsideration was denied on September 10, 2015, after which the CTA En Banc dismissed the CIR’s appeal on March 29, 2017 and denied its motion for reconsideration on November 16, 2017, upholding the zero-rating grant.
- The CIR filed a Petition for Review on Certiorari under Rule 45 of the Rules of Court before the Supreme Court, contesting the sufficiency of the BOI Certification and compliance with Rule 45’s attachment requirements.
Procedural History
- CTA Division Decision (September 25, 2014): Denied refund for insufficiency of evidence on zero-rating.
- CTA Division Amended Decision (May 25, 2015): Granted partial reconsideration, ordered refund/TCC of P111,579,541.76.
- CTA Division Resolution (September 10, 2015): Denied CIR’s motion for reconsideration.
- CTA En Banc Decision (March 29, 2017): Dismissed CIR’s petition for lack of merit.
- CTA En Banc Resolution (Novemb