G.R. No. 261171 - COMMISSIONER OF INTERNAL REVENUE, VS. BW SHIPPING PHILIPPINES, INC..D E C I S I O N - Supreme Court E-Library

Ruling

accordingly, ordered the refund or issuance of a Tax Credit Certificate (TCC) in the latter's favor in the amount of PHP 5,503,628.95 representing its unutilized input value-added tax (VAT) attributable to zero­-rated sales for the four quarters of taxable year (TY) 2014. The Facts Respondent is a corporation duly organized and existing under the laws of the Philippines engaged in the general business of shipping including manning and crewing of vessels, as well as the carriage of passengers, freight, mail, livestock, and other lawful merchandise. It is a registered VAT taxpayer with Taxpayer Identification No. (TIN) 000-160-779-000. [6] On March 30, 2016, respondent filed an administrative claim for refund or issuance of TCC of its unutilized input VAT for TY 2014 in the total amount of PHP 7,346,268.45 before the Bureau of Internal Revenue (BIR). Respondent alleged that for TY 2014, it rendered manning services to shipping companies located and doing business outside the Philippines for which it was paid manning fees in foreign currency that were subjected to 0% VAT. Respondent opined that since their sales are purely zero-rated, the input taxes all related to zero-rated accounts. Accordingly, for said TY 2014, respondent generated purely zero-rated receipts on the aggregate amount of PHP 129,866,272.96 and paid input VAT attributable to said sales in the total amount of PHP 7,346,268.45. These input taxes, according to respondent, were not utilized in the same quarter and were likewise not used against their output taxes in the subsequent periods. [7] In a letter dated August 16, 2016 and received by respondent on August 22,2016, BIR denied respondent's claim. [8] This prompted respondent to file a Petition for Review before the CTA. [9] In its Answer, petitioner the Commissioner of Internal Revenue (CIR) alleged, among others, that respondent failed to demonstrate that the tax was erroneously collected. Moreover, respondent's claim for refund was not fully substantiated by proper documents. [10] The CTA Division Ruling In a Decision [11] dated September 23, 2019, the CTA First Division partially granted respondent's Petition and ordered the refund or issuance of TCC in their favor in the amount of PHP 5,503,628.95 representing its unutilized input VAT attributable to zero-rated sales for the four quarters of TY 2014. [12] The CTA Division held that respondents have complied with all requisites under Section 108 (8)(2) in relation to Sections 110(B) and 112(A) and (C) of National Internal Revenue Code of 1997 (NIRC) to be entitled to a refund of excess input VAT attributable to its zero-rated sales, [13] considering that: First , respondent is registered with the BIR as a VAT taxpayer, as evidenced by the BIR Certificate of Registration No. 9RC0000426666 with TIN 000-160-779-000. [14] Second , the services rendered by respondent are VAT-zero-rated. The manning services, among others, which respondent supplied to shipping companies abroad are s