[INPUT TAXES NEED NOT BE DIRECTLY ATTRIBUTABLE TO ZERO-RATED SALES SO THAT THEY CAN BE VALIDLY REFUNDED]

Petitioner Commissioner of Internal Revenue (CIR) filed a Petition for Review seeking to reverse the Court En Banc’s Resolution granting Respondent Maersk Global Service Centres (Philippines) LTD. partial refund in the total amount of Php 32,744,472.01. Petitioner argued that the Respondent failed to overcome the burden that the subject input tax being claimed for refund remained unutilized despite being carried over to the succeeding periods. Likewise, Respondent was unable to prove that its input tax is directly attributable to alleged zero-rated sales. In ruling, scrutiny of records affirmed the findings made by the court-commissioned Independent Certified Public Accountant (ICPA) and the Court in Division that the excess input VAT paid by the Respondent is entirely attributable to its zero-rated sales. Revenue Regulations (RR) No. 14-2005 deletes the requirement that the input VAT being claimed for refund should be “directly and entirely attributable” to zero-rated sales. Furthermore, the Respondent sufficiently proved that the input VAT, subject of the present claim, has not been applied against any output tax for the succeeding quarters of the following taxable year. Thus, the Petition was DENIED for lack of merit. [COMMISSIONER OF INTERNAL REVENUE VS. MAERSK GLOBAL SERVICE CENTRES (PHILIPPINES) LTD., CTA CASE NO. 9432, JULY 29, 2021]

[FILING OF ADMINISTRATIVE CLAIM PAST THE MANDATORY AND JURISDICTIONAL REQUIREMENT OF 120+30 DAY PERIOD IS OUTSIDE COURT JURISDICTION] 

Petitioner Taihei Alltech Construction (Phil.) Inc. filed a Petition for Review seeking to reverse the CTA 2^nd Division’s decision that its judicial claim for tax refund of input VAT on local purchases of goods and services attributable to its zero-rated sales is already time-barred. Petitioner claimed that Revenue Memorandum Circular (RMC) No. 54-2014 should not be applied retroactively. Likewise, none of the cases cited by Respondent Commissioner of Internal Revenue (CIR) and the Court in Division involved the application of Revenue Regulations (RR) No. 1-2017, which is applicable to the present case. Moreover, Petitioner cited San Roque Power Corporation vs. CIR in which the Supreme Court has allowed an exception to the mandatory and jurisdictional requirement of the 120+30-day period, and that its strict application will be prejudicial to VAT claims re-processed under RR No. 1-2017. Furthermore, its claim for a tax refund was re-processed by Respondent, thus, should be allowed a new period within which to decide the administrative claim. On the other hand, Respondent countered that assuming Petitioner's administrative claims were timely filed on September 30, 2013, and December 23, 2013, the CIR had 120 days or until January 28, 2014, and April 22, 2014, respectively, within which to render his decision thereon. Citing RMC No. 54-2014, Petitioner would then have 30 days from the lapse of 120 days or until February 27, 2014, and May 22, 2014, respectively, to elevate the matter before the Court. Thus, filing a Petition for Review on July 10, 2019, is beyond the mandatory and jurisdictional period provided under Section 112 (D) of the 1997 Tax Code. In ruling, the Court held that considering Petitioner fully complied with all the necessary requirements to substantiate its administrative claim, the 120-day period is thereby reckoned; hence Petitioner should have filed its Petition for Review not later than February 27, 2014, and May 22, 2014, for the 3rd and 4th quarters of 2011. RR No. 1-2017 did not create an exception to the 120+30 day mandatory and jurisdictional period. Consequently, since Petitioner filed its Petition only on July 10, 2019, it is deemed out of time, and is therefore, out of the Court’s jurisdiction. Consequently, the Petition was DENIED. [TAIHEI ALLTECH CONSTRUCTION (PHIL.) INC. VS. COMMISSIONER OF INTERNAL REVENUE, CTA EN BANC CASE NO. 2331, JULY 19, 2021]

OBSERVANCE OF DUE PROCESS IS NECESSARY FOR VALID ASSESSMENT

Petitioner Commissioner of Internal Revenue (CIR) filed a Petition for Review seeking to set aside the assailed Decision of the Court’s Special Second Division cancelling the Final Assessment Notices (FAN) issued against the Respondent First Global BYO Corporation covering the taxable years 2009, 2010, and 2011. Petitioner argued that the FANs should not have been cancelled since due process has been observed. On the other hand, Respondent countered that the assessment should be cancelled for having been issued beyond the prescriptive period. In ruling, the Court held that the subject assessments are null and void due to lack of due process since the Petitioner failed to inform the Respondent of the facts and the laws from which the assessment is based. Even if the due process has been observed, the subject assessments would still be cancelled since they have prescribed, having been issued beyond the three-year prescriptive period and having shown no valid justification for extraordinary prescription to apply. Consequently, the Petition was DENIED. [COMMISIONER OF INTERNAL REVENUE VS. FIRST GLOBAL BYO CORPORATION, CTA EN BANC CASE NO. 2168, JULY 1, 2021]