G.R. NO. 152609 -

Ruling

WHEREFORE , premises considered, the petition is hereby DISMISSED for lack of merit. The assailed decision of the Court of Tax Appeals (CTA) is AFFIRMED in toto. [3] The Facts Quoting the CTA, the CA narrated the undisputed facts as follows: [Respondent] is a Philippine branch of American Express International, Inc., a corporation duly organized and existing under and by virtue of the laws of the State of Delaware, U.S.A., with office in the Philippines at the Ground Floor, ACE Building, corner Rada and de la Rosa Streets, Legaspi Village, Makati City. It is a servicing unit of American Express International, Inc. - Hongkong Branch (Amex-HK) and is engaged primarily to facilitate the collections of Amex-HK receivables from card members situated in the Philippines and payment to service establishments in the Philippines. Amex Philippines registered itself with the Bureau of Internal Revenue (BIR), Revenue District Office No. 47 (East Makati) as a value-added tax (VAT) taxpayer effective March 1988 and was issued VAT Registration Certificate No. 088445 bearing VAT Registration No. 32A-3-004868. For the period January 1, 1997 to December 31, 1997, [respondent] filed with the BIR its quarterly VAT returns as follows: Exhibit Period Covered Date Filed D 1997 1st Qtr. April 18, 1997 F 2nd Qtr. July 21, 1997 G 3rd Qtr. October 2, 1997 H 4th Qtr. January 20, 1998 On March 23, 1999, however, [respondent] amended the aforesaid returns and declared the following: Exh 1997 Taxable Sales Output VAT Zero-rated Sales Domestic Purchases Input VAT I 1st qtr P59,597.20 P5,959.72 P17,513,801.11 P6,778,182.30 P677,818.23 J 2nd qtr 67,517.20 6,751.72 17,937,361.51 9,333,242.90 933,324.29 K 3rd qtr 51,936.60 5,193.66 19,627,245.36 8,438,357.00 843,835.70 L 4th qtr 67,994.30 6,799.43 25,231,225.22 13,080,822.10 1,308,082.21 Total P247,045.30 P24,704.53 P80,309,633.20 P37,630,604.30 P3,763,060.43 On April 13, 1999, [respondent] filed with the BIR a letter-request for the refund of its 1997 excess input taxes in the amount of P3,751,067.04, which amount was arrived at after deducting from its total input VAT paid of P3,763,060.43 its applied output VAT liabilities only for the third and fourth quarters of 1997 amounting to P5,193.66 and P6,799.43, respectively. [Respondent] cites as basis therefor, Section 110 (B) of the 1997 Tax Code, to state: Section 110. Tax Credits. - x x x x x x x x x (B) Excess Output or Input Tax. - If at the end of any taxable quarter the output tax exceeds the input tax, the excess shall be paid by the VAT-registered person. If the input tax exceeds the output tax, the excess shall be carried over to the succeeding quarter or quarters. Any input tax attributable to the purchase of capital goods or to zero-rated sales by a VAT-registered person may at his option be refunded or credited against other internal revenue taxes, subject to the provisions of Section 112. There being no immediate action on the part of the [petitioner], [respon