MINDANAO II GEOTHERMAL PARTNERSHIP vs CIR Whether or not Mindanao II’s judicial claim for refund/credit of input VAT was

danao II’s judicial claim for refund/credit of input VAT was prematurely
GR No. 204745 filed
December 8, 2014
Held:
PERLAS-BERNABE, J. No, the SC held that the Mindanao II’s claim was not prematurely filed. In
the Aichi case, the SC held that the observance of the 120-day period is a mandatory and
Facts: jurisdictional requisite to the filing of a judicial claim for refund/credit of input VAT before
Mindanao II Geothermal Partnership is a partnership duly registered with the SEC the CTA. Consequently, its non-observance would lead to the dismissal of the judicial claim
and is a VAT-registered entity. It is engaged in the generation, collection, and distribution of on the ground of lack of jurisdiction. Aichi also clarified that the two (2)-year prescriptive
electricity. It entered into a Build-Operate-Transfer Contract with the Philippine National Oil period applies only to administrative claims and not to judicial claims. So, once the
Company-Energy Development Corporation (PNOC-EDC) for the installation, operation, and administrative claim is filed within the two (2)-year prescriptive period, the claimant must
maintenance of a 48.25 megawatt geothermal power plant, provided that the PNOC-EDC wait for the 120-day period to end and, thereafter, he is given a 30-day period to file his
shall supply and deliver steam to it at no cost. In turn, it shall convert the steam into electric judicial claim before the CTA, even if said 120-day and 30-day periods would exceed the
capacity and energy for the PNOC-EDC, and shall deliver the same to the NAPOCOR for and aforementioned two (2)-year prescriptive period.
on behalf of the PNOC-EDC.
However, in CIR v. San Roque Power Corporation (San Roque), the Court recognized
Mindanao II filed its quarterly VAT returns showing unutilized/excess input VAT. It an exception to the mandatory and jurisdictional nature of the 120-day period. It held that a
filed before the BIR an administrative claim for refund/credit of its unapplied and unutilized BIR Ruling in 2003 stated that the "taxpayer-claimant need not wait for the lapse of the 120-
input VAT. Thereafter, it filed its judicial claim for refund/credit of its unutilized/excess input day period before it could seek judicial relief with the CTA by way of Petition for Review."
VAT before the CTA.
In Taganito Mining Corporation v. CIR, the SC reconciled the pronouncements in
The CIR filed a MD on the ground of lack of jurisdiction. Relying on the case of CIR v. the Aichi and San Roque cases. It held that during the period December 10, 2003 (when the
Aichi Forging Company of Asia, Inc.(Aichi), the CIR contended that since the judicial claim for 2013 BIR Ruling was issued) to October 6, 2010 (when the Aichi case was
refund/credit was filed only 107 days from the filing of the administrative claim, it should be promulgated), taxpayers-claimants need not observe the 120-day period before it could
dismissed for being prematurely filed for petitioner's failure to comply with the 120-day file a judicial claim for refund of excess input VAT before the CTA. Before and after the
period prescribed under Section 112 (D) of the NIRC. aforementioned period (i.e., December 10, 2003 to October 6, 2010), the observance of
the 120-day period is mandatory and jurisdictional to the filing of such claim.
The CTA dismissed the claim for being prematurely filed. It held that the expiration
of the 120-day period is crucial before a taxpayer may file a judicial claim for refund before Here, records disclose that Mindanao II filed its administrative and judicial claims for
the CTA. Mindanao II filed a MR but it was denied. Upon appeal to the CTA En Banc, the refund/credit of its input VAT on December 28, 2009 and March 30, 2010, respectively, or
same was also dismissed for lack of merit. It upheld the CTA Division ruling and added that during the period when the 2013 BIR Ruling was in place. As such, it need not wait for the
Section 112 (D) of the NIRC is a mandatory and judicial requisite in the filing of a judicial expiration of the 120-day period before filing its judicial claim before the CTA, and hence, is
claim for refund/credit of input VAT before the CTA. deemed timely filed.

Upon denial of its MR before the CTA En Banc, Mindanao II filed a petition for
review on certiorari with the SC.

Issue:

MATIBAG | NAJARRO | TAXATION 2 | ATTY. DEBORAH ACOSTA-CAJUSTIN | 2017

TAGANITO vs CIR
G.R. No. 201195 Taganito argues that prior to Aichi, a taxpayer need not wait for the decision of the
November 26, 2014 CIR before filing its judicial claim. It argues that since it filed its judicial claim after the issuance
of BIR Ruling No. DA-489-03, but before the Aichi doctrine, it can invoke the said BIR ruling
MENDOZA, J: which provided that the "taxpayer-claimant need not wait for the lapse of the 120-day period
before it could seek judicial relief with the CTA by way of Petition for Review."
Facts:
Taganito Mining Corporation is VAT and BOI registered corporation. Issue:
Whether the judicial claim is timely filed or premature
It filed its Quarterly VAT Returns for the first to fourth quarters of taxable year 2006. Whether or not Taganito failed to comply with substantiation requirements
Taganito filed its Amended Quarterly VAT Returns.
Held:
March 26, 2008: Taganito filed with CIR, a claim for credit/refund of input VAT paid Judicial claim was timely filed
on its domestic purchases of taxable goods and services and importation of goods.
The prevailing doctrine is CIR v. San Roque Power Corporation where it was
April 17, 2008: Since CIR had not yet issued a final decision on the administrative conclusively settled therein that it is Section 112 of the NIRC which is applicable specifically
claim, Taganito filed a judicial claim before the CTA Division. to claims for tax credit certificates and tax refunds for unutilized creditable input VAT, and
not Section 229.
Taganito filed a motion for partial withdrawal of petition in view of the approval by
the BIR of its application for tax credit/refund. Taganito filed a supplemental petition for The two-year period under Section 229 does not apply to appeals before the CTA with
review limiting the issue of the case to the remaining amount which is the alleged excess input respect to claims for a refund or tax credit for unutilized creditable input VAT since input VAT
VAT paid on the importation of capital goods. is not considered "excessively" collected. Instead, it was settled that it is Section 112 which
applies, thereby making the 120 + 30day period mandatory and jurisdictional in nature.
CTA Division: CTA denied Taganito's petitions for lack of merit. It held that the official
receipts did not prove Taganito's actual payment of the claimed input VAT. Specifically, no As an exception to the mandatory and jurisdictional nature of the 120+30day period,
year was indicated. It further held that Taganito to meet the substantiation requirements judicial claims filed from the issuance of BIR Ruling No. DA-489-03 on December 10, 2003 up
since input taxes for the importation of goods must be substantiated by the import entry or to its reversal in Aichi on October 6, 2010, need not wait for the lapse of the 120+30 day
other equivalent document showing actual payment of VAT on the imported goods. period, in consonance with the principle of equitable estoppel.

CTA en Banc: In light of the ruling in CIR v. Aichi Forging Company of Asia, Inc., the In this case, Taganito filed its judicial claim on April 17, 2008 which is within the period
CTA En Banc held that it was incumbent upon Taganito to give the CIR a period of 120 days to of exception. Therefore, the judicial claim was not prematurely filed.
either partially or fully deny the claim. Since Taganito filed its judicial claim before the
expiration of the 120-day period, the CTA En Banc ruled that the judicial claim was Failure to comply with substantiation requirements
prematurely filed and it had no jurisdiction to entertain the case.
Taganito is calling on the SC to review the evidence submitted before the CTA to
Nonetheless, CTA En Banc held that it agreed with the ruling of the CTA Division that determine whether the input taxes were duly substantiated. This clearly constitutes a
Taganito failed to prove that it complied with the substantiation requirements, considering question of fact that is beyond the Court's ambit of review under Rule 45.
that the burden of proof rested upon the taxpayer to establish by sufficient and competent
evidence its entitlement to the refund.
MATIBAG | NAJARRO | TAXATION 2 | ATTY. DEBORAH ACOSTA-CAJUSTIN | 2017
 As noted by the CTA, there was no year indicated in the official receipts presented by
Taganito. It is plain that this claim cannot be deemed to have been properly substantiated.

Even assuming that the year was indicated, these official receipts still failed to comply
with the substantiation requirements. Any input tax that is subject of a claim for refund must
be evidenced by a VAT invoice or official receipt. With regard to the importation of goods or
properties, however, it is required that an import entry or other equivalent document showing
actual payment of VAT on the imported goods must also be submitted. In this case, Taganito
failed to submit the import entries relevant to its claim.

Assuming that Taganito had submitted the valid import entries, its claim would still
fail. Its claim of refund of input VAT relates to its importation of dump trucks, allegedly a
purchase of capital goods. It is required that a subsidiary record in ledger form shall be
maintained for the acquisition, purchase or importation of depreciable assets or capital goods
which shall contain, among others, information on the total input tax thereon as well as the
monthly input tax claimed in VAT declaration or return.

Even assuming that the importations were duly proven to be capital goods, Taganito's
claim still would not prosper because it failed to present evidence to show that it properly
amortized the related input VAT over the estimated useful life of the capital goods in its
subsidiary ledger.

MATIBAG | NAJARRO | TAXATION 2 | ATTY. DEBORAH ACOSTA-CAJUSTIN | 2017

FORT BONIFACIO DEVELOPMENT CORP. vs CIR Whether or not Fort Bonifacio Development Corp. is entitled to a refund or tax
GR Nos. 175707, 18003, 181092 credit of the amounts paid as VAT
November 19, 2014
Held:
LEONARDO-DE CASTRO, J. Yes, the SC held that FBDC is entitled to the 8% transitional input tax on its
beginning inventory of land, which is granted in Section 105. On its face, there is
Facts: nothing in Section 105 of the Old NIRC that prohibits the inclusion of real properties,
Fort Bonifacio Development Corp. commenced developing the Global City, and since together with the improvements thereon, in the beginning inventory of goods,
October 1996, had been selling lots to interested buyers. At the time of acquisition, VAT was materials and supplies, based on which inventory the transitional input tax credit is
not yet imposed on the sale of real properties. Section 100 of the old NIRC was so amended computed. It is the real properties "held primarily for sale to customers or held for
by including "real properties" in the definition of the term "goods or properties," thereby lease in the ordinary course of trade or business" that are subject to the VAT, and
subjecting the sale of "real properties" to VAT. Thus, the sale of the parcels of land by not when the real estate transactions are engaged in by persons who do not sell or
petitioner became subject to a 10% VAT, and this was later increased to 12%. Petitioner lease properties in the ordinary course of trade or business. It is clear that those
afterwards became a VAT-registered taxpayer. regularly engaged in the real estate business are accorded the same treatment as
the merchants of other goods or properties available in the market. In the same way
Petitioner submitted to BIR an inventory list of its properties as of. On the basis of that a milliner considers hats as his goods and a rancher considers cattle as his
Section 105 of the NIRC, petitioner claims a transitional or presumptive input tax credit. goods, a real estate dealer holds real property, whether or not it contains
After the value of the real properties was reduced due to a reconveyance by petitioner to improvements, as his goods.
BCDA of a parcel of land, petitioner claims that it is entitled to input tax credit. What
petitioner seeks to be refunded are the actual VAT payments made by it in cash, which it By limiting the definition of goods to "improvements" in Section 4.105-1,
claims were either erroneously paid by or illegally collected from it. Each Claim for Refund is the BIR not only contravened the definition of "goods" as provided in the Old
based on petitioner's position that it is entitled to a transitional input tax credit under NIRC, but also the definition which the same revenue regulation itself has
Section 105 of the old NIRC, which more than offsets the aforesaid VAT payments. provided.

Petitioner avers that the CA, CTA and the BIR did not merely interpret and construe The SC also held that previous payment of sales tax or VAT by FBDC on its
Section 105, and that they virtually amended the said section, for it is allegedly clear from land is not necessary before it may claim the input tax credit. The purpose behind
Section 105 of the old NIRC, in relation to Section 100, that "legislative intent is to the effect the transitional input tax credit is not confined to the transition from sales tax to
that the taxpayer is entitled to the input tax credit based on the value of the beginning VAT. Section 105 states that the transitional input tax credits become available
inventory of land, not merely on the improvements thereon, and irrespective of any prior either to (1) a person who becomes liable to VAT; or (2) any person who elects to
payment of sales tax or VAT." be VAT-registered. The clear language of the law entitles new trades or businesses
to avail of the tax credit once they become VAT-registered. The transitional input
The CIR denied the claims for refund. It argued that the 8% input tax credit tax credit, whether under the Old NIRC or the New NIRC,may be claimed by a
provided for in Section 105 of the NIRC, in relation to Section 100 thereof, is based newly-VAT registered person such as when a business as it commences
on the value of the improvements on the land; and that the taxpayer is entitled to operations. It is apparent that the transitional input tax credit operates to benefit
the input tax credit provided for in Section 105 of the NIRC only if it has previously newly VAT-registered persons, whether or not they previously paid taxes in the
paid VAT or sales taxes on its inventory of land. acquisition of their beginning inventory of foods, materials and supplies.

Issue:

MATIBAG | NAJARRO | TAXATION 2 | ATTY. DEBORAH ACOSTA-CAJUSTIN | 2017

CIR vs TEAM SUAL CORP.
G.R. No. 205055 Did TSC fail to Submit complete documents? -No
July 18, 2014
Section 112 of the NIRC, RR 3-88 or RMO 53-98 do not require submission of the
CARPIO, J: complete documents enumerated in RMO 53-98 for a grant of a refund or credit of input VAT.
RMO 53-98 specifically states that some documents are required to be submitted by the
Facts: taxpayer "if applicable".
Team Sual Corp or TSC is a VAT payer duly registered with the BIR. It is principally
engaged in the business of electric power generation and the sale of electric power to Moreover, if TSC indeed failed to submit the complete documents in support of its
Napocor. TSC applied for the VAT zero-rating of its sale of electric power to NPC which was application, the CIR could have informed TSC of its failure. However, the CIR did not inform
subsequently approved by the BIR. TSC of the document it failed to submit, even up to the present petition. The CIR likewise
raised the issue of TSC's alleged failure to submit the complete documents only in its motion
TSC filed its quarterly VAT returns for the four quarters of 2004 with the BIR. TSC filed for reconsideration of the CTA Special First Division's Decision.
its amended quarterly VAT returns for the first and fourth quarters of 2004.
The SC affirm the CTA EB's finding that TSC filed its administrative claim and submitted
TSC filed an administrative claim for refund of its unutilized input VAT. Due to the the complete documents in support of its application for refund or credit of its input tax at
BIR's inaction, TSC filed a petition for review with the CTA. the same time.

The CTA ruled that TSC's sale of electric power to NPC was effectively zero-rated. It
ruled that TSC is entitled to a refund or issuance of tax credit certificate but not in the whole
amount claimed as it disallowed some of the amounts.

The CTA EB affirmed the decision of the CTA 1st Division. It concluded that TSC
submitted the relevant documents to substantiate its claim for refund or credit of input tax.

Issue:
Whether or not TSC is entitled to refund/credit - Yes

Held:
The CIR has 120 days to decide the taxpayer's claim from the date of submission of
complete documents in support of the application filed.

The CTA 1D found that TSC complied with the requirements of Section 112 (A) of the
NIRC and granted its claim for refund or credit of input VAT. Upon appeal, the CTA EB
concluded that TSC submitted the relevant documents to substantiate its claim for refund or
credit of input tax. The SC adopted the findings of the CTA.

However, CIR insists that TSC failed to submit the complete documents enumerated
in RMO 53-98. Thus, the 120-day period given for it to decide allegedly did not commence.
MATIBAG | NAJARRO | TAXATION 2 | ATTY. DEBORAH ACOSTA-CAJUSTIN | 2017
SAN ROQUE POWER CORP. vs CIR administrative claims. The CTA en banc stressed that the 30-day period within which to
GR No. 205543 appeal with the CTA is jurisdictional and failure to comply therewith would bar the appeal
June 30, 2014 and deprive the CTA of its jurisdiction.

LEONARDO-DE CASTRO, J. San Roque filed a Petition for Review on Certiorari with the SC.

Facts: Issue:
San Roque is a domestic corporation principally engaged in the power-generation Whether or not San Roque timely filed its judicial claims with the CTA
business. It is registered with the Board of Investments on a preferred pioneer status for the
construction and operation of hydroelectric power-generating plants, as well as with the Held:
Bureau of Internal Revenue (BIR) as a Value-Added Tax (VAT) taxpayer. No, the SC held that San Roque failed to timely file its judicial claims with the CTA. In
the Aichi case, it was held that:
San Roque entered into a Power Purchase Agreement with the National Power (a) Section 112 of the NIRC of 1997, as amended, particularly governs claims for refund
Corporation (NPC) to develop the San Roque hydroelectric facilities. During the co-operation or tax credit of creditable input taxes, which is distinct from Sections 204 (C) and
period of 25 years, commencing from the completion date of the power station, all the 229 of the same statute which concern erroneously or illegally collected taxes;
electricity generated by the Project would be sold to and purchased exclusively by NPC. San (b) The two-year prescriptive period under Section 112 (A) of the NIRC of 1997, as
Roque alleged that it incurred creditable input taxes from its purchase of capital goods, amended, pertains only to administrative claims for refund or tax credit of
importation of goods other than capital goods, and payment for the services of non- creditable input taxes, and not to judicial claims for the same;
residents. San Roque subsequently filed with the BIR separate claims for refund or tax credit (c) Following CIR v. Mirant Pagbilao Corporation, the two-year prescriptive period
of its creditable input taxes. San Roque averred that it did not have any output taxes to under Section 112 (A) of the NIRC of 1997, as amended, is reckoned from the close
which it could have applied said creditable input taxes because: (a) the sale by San Roque of of the taxable quarter when the sales were made;
electricity, generated through hydropower, a renewable source of energy, is subject to 0% (d) In determining the end of the two-year prescriptive period under Section 112 (A) of
VAT under Section 108 (B) (7) of the NIRC; and (b) NPC is exempted from all taxes, direct and the NIRC of 1997, as amended, the Administrative Code of 1987 prevails over
indirect, under its charter, so the sale by San Roque of electricity exclusively to NPC, under the Civil Code,so that a year is composed of 12 calendar months; and
the PPA, is effectively zero-rated. (e) The 120-day period, under what is presently Section 112 (C) of the NIRC of 1997, as
amended, is crucial in filing an appeal with the CTA, for whether the CIR issues a
When the CIR failed to take action, San Roque filed two separate Petitions for decision on the administrative claim before the lapse of the 120-day period or the
Review before the CTA. The CTA First Division rendered a Decision on the consolidated CIR made no decision on the administrative claim after the 120-day period, the
judicial claims of San Roque. It held that the premature invocation of the court's taxpayer has 30 days within which to file an appeal with the CTA.
intervention; and the case is susceptible of dismissal for failure to state a cause of action.
As the CTA en banc held, Aichi was not applied retroactively to San Roque in the
San Roque filed a Petition for Review before the CTA en banc, protesting against the instant case. The 120+30 day periods have already been prescribed under Section 112(C) of
retroactive application of the Aichi case, in which the SC strictly required compliance with the NIRC of 1997, as amended, when San Roque filed its administrative and judicial claims
the 120+30 day periods under Section 112 of the NIRC. The CTA en banc upheld the for refund or tax credit of its creditable input taxes for the four quarters of 2006. The Court
application of Aichi and explained that there was no retroactive application of the same. The highlights the pronouncement in San Roque (2013) that strict compliance with the 120+30
120+30 day periods had already been provided in the NIRC even before the promulgation day periods is necessary for the judicial claim to prosper, except for the period from the
of Aichi. It found hat while San Roque timely filed its administrative claims for refund or tax issuance of BIR Ruling No. DA-489-03 on December 10, 2003 to October 6,
credit of creditable input taxes, it filed its judicial claims beyond the 30-day prescriptive 2010 when Aichi was promulgated, which again reinstated the 120+30 day periods as
period, reckoned from the lapse of the 120-day period for the CIR to act on the original mandatory and jurisdictional.
MATIBAG | NAJARRO | TAXATION 2 | ATTY. DEBORAH ACOSTA-CAJUSTIN | 2017
PILIPINAS TOTAL GAS vs CIR According to CTAEB, the 120-day period could not commence on the day Total Gas
G.R. No. 207112 filed its last supporting document (August 28, 2008) because to allow such would give the
December 8, 2015 taxpayer unlimited discretion to indefinitely extend the 120-day period by simply filing the
required documents piecemeal.
MENDOZA, J:
Issue:
Facts: 1. Whether or not the judicial claim was timely filed - YES
Total Gas registered itself with the BIR as a VAT taxpayer. 2. Whether or not the submission of incomplete documents with BIR renders the judicial
claim premature and dismissible for lack of jurisdiction - NO
Total Gas filed its Original Quarterly VAT Returns. Then it filed its Amended Quarterly
VAT Returns reflecting its sales subject to VAT, zero-rated sales, and domestic purchases of Held:
non-capital goods and services. Total Gas claimed that it incurred unutilized input VAT credits Timely filed? Yes
from its domestic purchases of non-capital goods and services in the total amount. Total Gas
claimed that it had P7M excess unutilized input VAT. CIR has 120 days from the date of submission of complete documents to decide a
claim for tax credit or refund of creditable input taxes. The taxpayer may, within 30 days from
May 15, 2008: Total Gas filed an administrative claim for refund of unutilized input receipt of the denial of the claim or after the expiration of the 120-day period, appeal the
VAT for the first two quarters of taxable year 2007, inclusive of supporting documents. decision or unacted claim to the CTA.

August 28, 2008: Total Gas submitted additional supporting documents to the BIR. To be clear, Section 112 (C) provides that the 120-day period is counted "from the
date of submission of complete documents in support of the application."
On January 23, 2009, Total Gas elevated the matter to the CTA in view of the inaction
of the CIR. Indeed, the 120-day period granted to the CIR is primarily intended to benefit the
taxpayer, to ensure that his claim is decided judiciously and expeditiously. To allow the CIR to
The CTA Division: Dismissed the petition for being prematurely filed. It held that Total determine the completeness of the documents submitted and, thus, dictate the running of the
Gas failed to complete the necessary documents to substantiate a claim for refund 120-day period, would provide the CIR the unbridled power to indefinitely delay the
enumerated under RMO 53-98. Believing that Total Gas failed to complete the necessary administrative claim, which would ultimately prevent the filing of a judicial claim with the
documents, the CTA Division was of the view that the 120-day period allowed to the CIR to CTA.
decide its claim had not even started to run.
For example, if after 121 days, the CIR informs the taxpayer that it must submit
CTA En Banc: Denied the petition for review of Total Gas. additional documents. Thus, the 120-day period to decide the administrative claim will not
yet begin to run. More than 120 days have already passed since the application. With no
(May 15, 2008  120 days: September 12, 2008  30 days: October 12, 2008) limitation to the period for the CIR to determine when complete documents have been
submitted, the taxpayer may be left in a limbo and at the mercy of the CIR, with no adequate
Counting from the date it filed its administrative claim on May 15, 2008, the CTA En remedy available to hasten the processing of its administrative claim.
Banc explained that the CIR had 120 days to act on the claim and Total Gas had 30 days from
then to question the inaction before the CTA. Since Total Gas only filed its petition on January So when should the submission of documents be deemed "completed"?
23, 2009, the petition for review was belatedly filed.
The CIR issued RMC No. 49-2003:

MATIBAG | NAJARRO | TAXATION 2 | ATTY. DEBORAH ACOSTA-CAJUSTIN | 2017

 “If, in the course of the investigation and processing of the claim, additional jurisdiction. First, the 120-day period had commenced to run and the 120+30 day period was,
documents are required for the proper determination of the legitimate amount of in fact, complied with. As already discussed, it is the taxpayer who determines when complete
claim, the taxpayer-claimants shall submit such documents within 30 days from documents have been submitted for the purpose of the running of the 120-day period.
request of the investigating/processing office, which shall be construed as within the
120-day period. Thus, there is now a need for notice to the taxpayer.
The CIR sent no written notice informing Total Gas that the documents were
incomplete or required it to submit additional documents. Such notice by way of a written
So initially, it is the taxpayer who has that right and the burden of providing any and
request is required by the CIR to be sent to Total Gas. Thus, by failing to inform Total Gas of
all documents that would support his claim for tax credit or refund. For pending claims not
the need to submit any additional document, the BIR cannot now argue that the judicial claim
acted upon due to incomplete documentation, the taxpayer-claimants are given 30 days to
should be dismissed because it failed to submit complete documents.
submit the documentary requirements unless given further extension. Thereafter, whether
these documents are actually complete as required by law — is for the CIR and the courts to
ALSO, the appeal made by Total Gas to the CTA cannot be said to be premature on
determine. If in the course of the investigation, additional documents are required, the
the ground that it did not observe the mandatory and jurisdictional 120+30 day period. When
taxpayer-claimants shall submit such documents within 30 days from request of the
Total Gas filed its appeal it relied on BIR Ruling No. DA-489-03, which, at that time, was not
investigating/processing office, which must be within the 120-day period.
yet struck down by the Court's ruling in Aichi. All taxpayers can rely on BIR Ruling No. DA-489-
03 from the time of its issuance on 10 December 2003 up to its reversal by this Court in Aichi
Should the taxpayer, on the date of his filing, manifest that he no longer wishes to
on 6 October 2010.
submit any other addition documents to complete his administrative claim, the 120-day
period allowed to the CIR begins to run from the date of filing.

BUT!!! The foregoing rules should only be made applicable to those claims for tax
credit or refund filed prior to June 11, 2014 like the present case. Because now we already
have RMC 54-2014:

“The application for VAT refund/tax credit must be accompanied by

complete supporting documents . . . In addition, the taxpayer shall attach a statement
under oath attesting to the completeness of the submitted documents . . .”

Under the current rule, the reckoning of the 120-day period has been withdrawn from
the taxpayer since it requires him at the time he files his claim to complete his supporting
documents and attest that he will no longer submit any other document to prove his claim.
Further, the taxpayer is barred from submitting additional documents after he has filed his
administrative claim.

Applying the old rule. . .

Whether or not the submission of incomplete documents with BIR renders the judicial claim
premature and dismissible for lack of jurisdiction - NO

The alleged failure of Total Gas to submit the complete documents at the
administrative level did not render its petition for review with the CTA dismissible for lack of
MATIBAG | NAJARRO | TAXATION 2 | ATTY. DEBORAH ACOSTA-CAJUSTIN | 2017
EASTERN TELECOMMUNICATIONS vs CIR
GR No. 183531 Held:
March 25, 2015 No, the SC held that ETPI is not entitled to a refund of its input taxes. If the claim for
refund/TCC is based on the existence of zero-rated sales by the taxpayer but it fails to
REYES, J. comply with the invoicing requirements in the issuance of sales invoices, its claim for tax
credit/refund of VAT on its purchases shall be denied considering that the invoice it is
Facts: issuing to its customers does not depict its being a VAT-registered taxpayer whose sales are
Eastern Telecommunications Philippines, Inc. (ETPI) is registered with the Bureau of classified as zero-rated sales.
Internal Revenue (BIR) as a VAT taxpayer. As a telecommunications company, ETPI entered
into various international service agreements with The appearance of the word "zero-rated" on the face of invoices covering zero-rated
international telecommunications carriers and handles sales prevents buyers from falsely claiming input VAT from their purchases when no VAT was
incoming telecommunications services for non-resident foreign telecommunication actually paid. If, absent such word, a successful claim for input VAT is made, the government
companies and the relay of said international calls within and around other places in the would be refunding money it did not collect. Further, the printing of the word "zero-rated"
Philippines. It entered into various interconnection agreements with local carriers that can on the invoice helps segregate sales that are subject to 10% (now 12%) VAT from those sales
readily relay the said foreign calls to the intended local end-receiver. that are zero-rated.

The non-resident foreign corporations pay ETPI in US dollars inwardly remitted Furthermore, ETPI failed to substantiate its claim for refund or tax credit. Considering
through the Philippine local banks. ETPI seasonably filed its Quarterly VAT Returns, and later that ETPI is engaged in mixed transactions that cover its zero-rated sales, taxable and exempt
amended the same to reflect its zero-rated and exempt sales. ETPI filed an administrative sales, it is only appropriate and reasonable for it to present competent evidence to validate
claim with the BIR for the refund of the amount representing excess input tax attributable to all entries in its returns in order to properly determine which transactions are zero-rated and
its effectively zero-rated sales. Pending review by the BIR, ETPI filed a Petition for Review which are taxable. Clearly, compliance with all the VAT invoicing requirements provided by
before the CTA in order to toll the two-year reglementary period. The BIR Commissioner tax laws and regulations is mandatory.
opposed the petition and averred that no judicial action can be instituted by a taxpayer
unless a claim has been duly filed before it. The CTA denied the petition because the VAT
official receipts presented by ETPI to support its claim failed to imprint the word "zero-
rated" on its face in violation of the invoicing requirements.

On appeal, the CTA en banc affirmed the decision of the old CTA. It stated that VAT-
registered persons must comply with the invoicing requirements. ETPI filed a Petition for
Review on Certiorari with the SC. It contended that the imprint of the word "zero-rated" on
the face of the sales invoice or receipt is merely required in RR No. 7-95 which cannot
prevail over a taxpayer's substantive right to claim a refund or tax credit for its input taxes;
and that the lack of the word "zero-rated" on its invoices and receipts does not justify an
outright denial of its claim for refund or tax credit considering that it has presented equally
relevant and competent evidence to prove its claim.

Issue:
Whether or not ETPI’s claim for refund of input taxes resulting from its zero-rated sales
should be granted despite the absence of the word “zero-rated” on its invoices
MATIBAG | NAJARRO | TAXATION 2 | ATTY. DEBORAH ACOSTA-CAJUSTIN | 2017
TAKENAKA CORP. vs CIR (3) A judicial claim must be filed with the CTA within 30 days from the receipt of the CIR's
G.R. No. 193321 decision denying the administrative claim or from the expiration of the 120-day period
October 19, 2016 without any action from the CIR.
(4) All taxpayers, however, can rely on BIR Ruling No. DA-489-03 from the time of its issuance
on 10 December 2003 up to its reversal by this Court in Aichi on 6 October 2010, as an
BERSAMIN, J:
exception to the mandatory and jurisdictional 120+30 day periods

Facts: Applying this, the SC held that Takenaka timel filed its administrative claim but belatedly filed
Takenaka, as a subcontractor, entered into an On-Shore Construction Contract with
its judicial claim. ☹
Philippine Air Terminal Co., Inc. (PIATCO) for the purpose of constructing the NAIA 3. PIATCO
is duly registered with PEZA.
(April 11, 2003  120 days: August 9, 2003  30 days: September 8, 2003)

Takenaka filed its Quarterly VAT Returns. Subsequently, it amended its quarterly VAT Takenaka filed administrative claim on April 11, 2003, within the 2-year prescriptive
returns several times. period after the close of the taxable quarter when the zero-rated sales were made. CIR had
120 days, or until August 9, 2003, to decide the claim. Because of the inaction of CIR, Takenaka
The BIR issued VAT Ruling No. 011-03 stating that the sales of goods and services had until September 8, 2003, the last day of the 30-day period, within which to file its judicial
rendered by Takenaka to PIATCO are subject to zero-percent (0%) VAT. claim.

Takenaka filed its claim for tax refund. For failure of the BIR to act on its claim, However, it brought its petition for review in the CTA only on March 10, 2004, or 184
Takenaka filed a Petition for Review with this CTA Division. It partly granted the refund. Not days after the last day for the filing. Clearly, Takenaka belatedly brought its judicial claim for
satisfied, Takenaka filed a "Motion for Reconsideration.'' The MR was granted. refund.

The CTA en Banc reversed the decision of the CTA Division. Hence, petition for review The 2-year prescriptive period refers to the period within which the taxpayer can file
on certiorari with the SC. an administrative claim, not the judicial claim with the CTA.

Issue: Failure to present Official Receipts

Whether or not Takenaka’s claim for refund should be granted
Takenaka failed to established its zero-rated sales of services to PIATCO through the
Held: presentation of official receipts.
But first, Timeliness of the Judicial Claim
A VAT invoice is the seller's best proof of the sale of goods or services to the buyer,
Summary of Rules under Mindanao II Geothermal Partnership vs. CIR: while a VAT receipt is the buyer's best evidence of the payment of goods or services received
(1) An administrative claim must be filed with the CIR within 2 years after the close of the from the seller. A VAT invoice and a VAT receipt should not be confused and made to refer to
taxable quarter when the zero-rated or effectively zero-rated sales were made.
one and the same thing. Certainly, neither does the law intend the two to be used
(2) The CIR has 120 days from the date of submission of complete documents in support of
the administrative claim within which to decide whether to grant a refund or issue a tax
alternatively.
credit certificate. The 120-day period may extend beyond the two-year period from the
filing of the administrative claim if the claim is filed in the later part of the two-year period. Takenaka submitted sales invoices, not official receipts, to support its claim for
If the 120-day period expires without any decision from the CIR, then the administrative refund. Without proper VAT official receipts issued to its clients, the payments received by
claim may be considered to be denied by inaction. Takenaka for providing services to PEZA-registered entities cannot qualify for VAT zero-rating.
Hence, it cannot claim such sales as zero-rated VAT not subject to output tax.
MATIBAG | NAJARRO | TAXATION 2 | ATTY. DEBORAH ACOSTA-CAJUSTIN | 2017
 Thus, although the sales of goods and services rendered by the petitioner to PIATCO
were subject to 0% VAT the claim for refund must still be denied for its failure as the taxpayer
to comply with the substantiation requirements for administrative claims for tax refund or tax
credit.

MATIBAG | NAJARRO | TAXATION 2 | ATTY. DEBORAH ACOSTA-CAJUSTIN | 2017