Toledo Power Co. v. Commissioner of Internal Revenue

THIRD DIVISION [C.T.A. CASE NO. 8671. June 28, 2017.] TOLEDO POWER CO. , petitioner , vs. COMMISSIONER OF INTERNAL REVENUE , respondent . DECISION BAUTISTA , J p : The Petition for Review 1 prays for the refund in the amount of Php44,391,193.47, representing petitioner's unutilized input value-added tax ("VAT") arising from its zero-rated sales/receipts for the second, third, and fourth quarters of calendar year ("CY") 2011. 2 The Parties 3 Petitioner Toledo Power Co. ("TPC") is a partnership duly registered with the Securities and Exchange Commission with principal office address at Brgy. Daanlungsod, Toledo City, Cebu. It is a VAT-registered entity with Tax Identification Number 003-883-626-999 VAT and a generation company granted by the Energy Regulatory Commission ("ERC") with the authority to operate its generation facilities. Respondent Commissioner of Internal Revenue ("CIR") is duly appointed and empowered to perform the duties of his office including, among others, the duty to act on and approve claims for refund as provided by law. His address is at Bureau of Internal Revenue ("BIR") National Office Building, Diliman, Quezon City. The Facts TPC filed with the BIR its Quarterly VAT Returns (BIR Form No. 2550-Q) for the second to fourth quarters of CY 2011, which reflected the following entries: TAXABLE QUARTER OUTPUT TAX DUE TOTAL ALLOWABLE INPUT TAX NET VAT PAYABLE (OVERPAYMENT) TAX CREDITS/ PAYMENTS TOTAL AMOUNT PAYABLE (OVERPAYMENT) Second (Original) 4 Php20,330,208.66 Php180,059,087.02 Php(159,728,878.36) Php7,952,371.99 Php(167,681,250.35) Second (1st Amended) 5 20,330,208.66 180,253,222.08 (159,923,013.42) 7,952,371.99 (167,875,385.41) Second (2nd Amended) 6 20,330,208.66 180,253,222.08 (159,923,013.42) 7,952,371.99 (167,875,385.41) Third (Original) 7 25,666,492.71 166,914,857.90 (141,248,365.19) 8,710,992.45 (149,959,357.64) Third (Amended) 8 25,666,492.71 166,914,857.90 (141,248,365.19) 8,710,992.45 (149,959,357.64) Fourth (Original) 9 19,870,410.72 179,995,321.18 (160,124,910.46) 9,187,001.70 (169,311,912.16) Fourth (Amended) 10 19,870,410.72 179,995,321.18 (160,124,910.46) 9,187,001.70 (169,311,912.16) On February 28, 2013, TPC filed its administrative claim for refund of the unutilized input VAT for the second to fourth quarters of CY 2011. 11 Due to the CIR's inaction on TPC's administrative claim for refund, the latter filed the present Petition for Review 12 on July 12, 2013. On September 6, 2013, the CIR filed his Answer, 13 raising, in essence, as its Special and Affirmative Defense the defense that the claim for refund should not be given due course for lack of jurisdiction as TPC failed to exhaust all administrative remedies before elevating the case to the Court. The CIR filed his Pre-Trial Brief 14 on October 1, 2013, while TPC filed its Pre-Trial Brief 15 on October 4, 2013. Thereafter, a pre-trial conference was held on October 10, 2013. 16 Together, the parties filed the Joint Stipulation of Facts and Issues 17 on October 30, 2013, which was approved by the Court in a Pre-Trial Order 18 dated January 24, 2014. During trial, TPC presented the following witnesses: (1) Ms. Edita C. Encarnacion, the Assistant Vice-President Accounting of Global Business Power Corporation ("Global Power"),the holding company of TPC; 19 (2) Ms. Raymonda Aida B. Obrero, the Assistant Vice-President Accounting of petitioner; 20 (3) Mr. Rolando L. Vicente, Finance Manager of Cebu Electric Cooperative, Inc. III (the purchaser of electric power from TPC) 21 (4) Mr. Joseph Cedric V. Calica, the Court-commissioned Independent Certified Public Accountant ("ICPA") for the case; 22 (5) Mr. Isidito Camota Decina, Head of TPC's Dispatch Group; 23 and (6) Atty. Bernadette Ann V. Policarpio, legal counsel of Global Power. 24 TPC filed its Formal Offer of Evidence 25 on December 7, 2015, offering Exhibits "P-1," to "P-8," "P-9," "P-9-A," "P-9-B," "P-10," "P-10-A," "P-11" to "P-34," "P-35," "P-35-A," "P-36," "P-36-A," "P-39" to "P-65," "P-66," "P-66-A," "P-101," "P-102," "P-102-1" to "P-102-2,154," "P-103," "P-103-1" to "P-103-17," "P-104," "P-105," "P-105-1" to "P-105-166," "P-106," "P-106-1" to "P-106-9," "P-107-1" to "P-107-77" (with sub-markings),"P-108," "P-109," "P-110-1" to "P-110-30" (with sub-markings),"P-111" to "P-126," "P-127," "P-127-1" to "P-127-8," "P-128," "P-128-1" to "P-128-16," "P-129" to "P-131," "P-132," "P-132-A," "P-133," "P-133-A," "P-134," "P-134-A," "P-140" to "P-163," "P-170," "P-170-1," "P-172," "P-172-1," "P-173," "P-174," "P-174-1," "P-175," "P-175-1," "P-176," "P-176-1," "P-177," "P-177-1," "P-178," "P-178-1," "P-179," "P-179-1," "P-180," "P-180-1," "P-181," "P-181-1," "P-182," "P-182-1," "P-183," "P-183-1," "P-184," "P-185," "P-185-1," "P-186," "P-186-1," "P-187," "P-187-1," "P-188," "P-188-2," "P-189," "P-189-1," "P-190," "P-190-1," "P-196" to "P-198," "P-199," "P-199-1," "P-199-2," "P-199-3," "P-200," "P-200-A," "P-201," "P-201-A," "P-202," "P-202-A," "P-202-B," "P-206," and "P-206-A." The CIR filed his Comment (Re: Petitioner's Formal Offer of Evidence) 26 on December 8, 2015. In Resolutions dated January 22, 2016 and June 14, 2016, the Court admitted all of TPC's evidence. 27 Meanwhile, the CIR manifested that he would not be presenting evidence. 28 Accordingly, the CIR filed his Memorandum 29 on February 10, 2016 while TPC filed its Memorandum 30 on July 15, 2016. With the filing of the parties' memoranda, the Court issued a Resolution 31 submitting the case for decision; hence, this Decision. DTCSHA The Issue 32 WHETHER TPC IS ENTITLED TO A CLAIM FOR REFUND, IN THE TOTAL AMOUNT OF PHP44,391,193.47, REPRESENTING ITS UNUTILIZED INPUT TAXES RELATED TO ZERO-RATED SALES FOR THE SECOND TO FOURTH QUARTERS OF CY 2011. Petitioner's Arguments 33 TPC alleges that it has complied with the requisites to validly claim a refund under Section 112 (A) of the 1997 National Internal Revenue Code, as amended ("1997 NIRC") , 34 to wit: (1) it is a VAT-registered taxpayer; (2) it is engaged in zero-rated sales; (3) the input taxes are due or paid and have not been applied against output taxes during and in the succeeding quarters; (4) the input taxes being claimed are attributable to zero-rated sales; and (5) the claim for refund was timely filed. Accordingly, TPC posits that it is entitled to the claim for refund of its unutilized input VAT for the second to fourth quarters of CY 2011. Respondent's Counter-Arguments 35 On the other hand, the CIR counters that TPC failed to show that its purchases of non-capital goods and services were made in the course of its trade and business. Further, the CIR argues that TPC failed to show that said purchases were properly supported by VAT invoices and/or official receipts and other documents showing that TPC actually paid VAT. According to the CIR, TPC likewise failed to prove that the input taxes it allegedly paid on its purchases of goods and services were attributable to its zero-rated sales, and that such have not been applied against any output tax and were carried over in the succeeding taxable quarter; neither was TPC able to prove compliance with the prescribed checklist of requirements to be submitted for claims for VAT refund; hence, there was no sufficient compliance with the filing of an administrative claim for refund, which is a condition sine qua non prior to the filing of a judicial claim. The CIR argues that, consequently, for being a pro forma administrative claim for refund, the Court has no jurisdiction to entertain the Petition for Review. Thus, the CIR prays that the Petition for Review be denied for utter lack of merit. The Ruling of the Court The Petition for Review has no merit. This is not the first time TPC has claimed a refund of its unutilized input VAT. In 2015 alone, the Supreme Court had occasion to examine TPC's claims for VAT refund in CIR v. Toledo Power Company 36 and CIR v. Toledo Power Company . 37 In the latter case, the Supreme Court laid down the following requisites for claiming unutilized or excess input VAT, except transitional input VAT: 1. The taxpayer-claimant is VAT-registered; 2. The taxpayer-claimant is engaged in zero-rated or effectively zero-rated sales; 3. There are creditable input taxes due or paid attributable to the zero-rated or effectively zero-rated sales; 4. The said input tax has not been applied against the output tax; and 5. The application and the claim for refund have been filed within the prescribed period. Given the foregoing circumstances, the Court finds it proper to apply the Supreme Court's pronouncements in the aforementioned earlier cases of TPC to the present case. The Court will now discuss whether TPC complied with the requisites enumerated above in the present case. Considering, however, that it is imperative that the Court determine at the outset whether the claim was properly made procedurally, the Court will first discuss whether the claim was filed within the prescribed period ( i.e. ,the fifth requisite).Thereafter, the Court will discuss in seriatim the first to fourth requisites enumerated above. TPC's administrative and judicial claims for refund were timely filed. Section 112 of the 1997 NIRC provides the prescriptive periods for filing administrative and judicial claims for refund of unutilized or excess input VAT. The relevant paragraphs provide: Sec. 112. Refunds or Tax Credits of Input Tax. (A) Zero-Rated or Effectively Zero-Rated Sales . Any VAT-registered person, whose sales are zero-rated or effectively zero-rated may, within two (2) years after the close of the taxable quarter when the sales were made, apply for the issuance of a tax credit certificate or refund of creditable input tax due or paid attributable to such sales, except transitional input tax, to the extent that such input tax has not been applied against output tax; Provided, however ,That in the case of zero-rated sales under Section 106(A)(2)(a)(1),(2) and (b) and Section 108(B)(1) and (2),the acceptable foreign currency exchange proceeds thereof had been duly accounted for in accordance with the rules and regulations of the Bangko Sentral ng Pilipinas (BSP);Provided, further ,That where the taxpayer is engaged in zero-rated or effectively zero-rated sale and also in taxable or exempt sale of goods or properties or services, and the amount of creditable input tax due or paid cannot be directly and entirely attributed to any one of the transactions, it shall be allocated proportionately on the basis of the volume of sales; Provided, finally ,That for a person making sales that are zero-rated under Section 108(B)(6),the input taxes shall be allocated ratably between his zero-rated and non-zero-rated sales. xxx xxx xxx (C) Period within which Refund or Tax Credit of Input Taxes shall be Made . In proper cases, the Commissioner shall grant a refund or issue the tax credit certificate for creditable input taxes within one hundred twenty (120) days from the date of submission of complete documents in support of the application filed in accordance with Subsection (A) hereof. In case of full or partial denial of the claim for tax refund or tax credit, or the failure on the part of the Commissioner to act on the application within the period prescribed above, the taxpayer affected may, within thirty (30) days from the receipt of the decision denying the claim or after the expiration of the one-hundred-twenty-day period, appeal the decision or the unacted claim with the Court of Tax Appeals. Meanwhile, in Mindanao II Geothermal Partnership v. CIR , 38 the Supreme Court summarized the rules on prescriptive periods for filing claims for refund of unutilized input VAT, as follows: 1. An administrative claim must be filed with the CIR within two (2) years from the close of the taxable quarter when the zero-rated or effectively zero-rated sales were made; 2. The CIR has one hundred twenty (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 credit certificate; 3. A judicial claim must be filed with the CTA within thirty (30) days from receipt of the CIR's decision denying the administrative claim or from the expiration of the one hundred twenty (120)-day period without any action from the CIR; and 4. All taxpayers, however, can rely on BIR Ruling No. DA-489-03 39 from the time of its issuance on December 10, 2003 up to its reversal by CIR v. Aichi Forging Company of Asia, Inc. 40 on October 6, 2010, as an exception to the mandatory and jurisdictional 120+30-day periods. As applied to the present case, TPC complied with the prescribed periods. TPC filed its administrative claim for refund with attached supporting documents on February 28, 2013, which is within two (2) years from June 30, 2011 the close of the earliest taxable quarter being claimed for refund ( i.e. ,second quarter of CY 2011).TPC then waited for the lapse of the one hundred twenty (120)-day period, which ended on June 28, 2013. However, the CIR failed to act on TPC's administrative claim; hence, TPC properly considered its administrative claim to have been denied by inaction. Thereafter, TPC filed its judicial claim for refund on July 12, 2013, which is within the thirty (30)-day period from the expiration of the one hundred twenty (120)-day period. Accordingly, TPC timely filed its administrative and judicial claims. Having discussed that the proper procedure was observed in the filing of TPC's administrative and judicial claims, the Court will now go into the substance of TPC's claim to determine its entitlement to the refund sought. TPC is VAT-registered. It is undisputed that TPC is registered with the BIR as a VAT taxpayer, as evidenced by its BIR Certificate of Registration No. 2RC0000074406 and Taxpayer's Identification Number 003-883-626-000. 41 TPC is engaged in zero-rated sales; however, it failed to fully substantiate the same in the second to fourth quarters of CY 2011. Under its Restated and Amended Agreement of General Partnership, 42 TPC is engaged in the business of acquiring, owning, rehabilitating, maintaining, and operating coal-fired and oil-fired electrical generation facilities. 43 As a generation company, TPC was granted by the ERC with the authority to operate its generation facilities under Certificate of Compliance ("COC") No. 04-06 GXT 61-0066, which authority was renewed by the ERC under COC No. 09-11-61-0066. 44 It is undisputed that TPC is a VAT-registered entity engaged in zero-rated sales as it generates power, and sells and supplies the same to entities located in economic zones or to BOI-registered entities. 45 As part of its documentary evidence, TPC submitted its VAT official receipts, 46 together with its Quarterly VAT Returns for the second, 47 third, 48 and fourth 49 quarters of CY 2011 showing zero-rated sales in the aggregate amount of Php1,526,462,176.90. After a careful perusal of the documents presented, this Court finds that for the second, third, and fourth quarters of CY 2011, only zero-rated sales amounting to Php313,650,306.15, Php310,416,558.73, and Php508,741,364.66, respectively, in the aggregate amount of Php1,132,808,229.54 were duly substantiated by TPC's VAT official receipts. The allocation rates for the period covered were 46.808457655%,43.759580329% and 72.767207578%,the details of which are: SECOND QUARTER EXHIBIT "P-19" THIRD QUARTER EXHIBIT "P-21" FOURTH QUARTER EXHIBIT "P-23" TOTAL Zero-Rated Sales per VAT Return Php499,588,510.69 50 Php494,449,324.81 51 Php532,424,341.40 52 Php1,526,462,176.90 Less : Disallowed Zero-Rated Sales 185,938,204.54 184,032,766.08 23,682,976.74 393,653,947.36 Valid Zero-Rated Sales (A) Php313,650,306.15 Php310,416,558.73 Php508,741,364.66 Php1,132,808,229.54 Total Sales (B) Php670,071,867.06 Php709,368,226.10 Php699,135,478.18 Php2,078,575,571.34 ALLOCATION RATE (A/B) 46.808457655% 43.759580329% 72.767207578% However, the Court finds that TPC's zero-rated sales amounting to Php393,653,947.36 should be disallowed for failure to provide proper documentary evidence, to wit: CLIENT'S NAME EXH. NO. OR NO. AMOUNT REASONS Second Quarter BALAMBAN ENERZONE CORP. - - Php13,950,253.21 Without Official Receipt CEBECO III P-105-61 2558 177,648.64 Zero-rated sales per OR is only Php14,693,920.95 BALAMBAN ENERZONE CORP. - - 8,141,254.96 Without official receipt CARMEN COPPER CORP. - - 140,646,381.59 Without official receipt CEBECO III P-105-68 2567 8,116,498.64 Zero-rated sales per OR is only Php8,110,879.46 BALAMBAN ENERZONE CORP. - - 1,514,556.82 Without official receipt CEBECO III P-105-78 2582 13,391,610.68 Zero-rated sale component not indicated Sub-total Second Quarter Php185,938,204.54 Third Quarter BALAMBAN ENERZONE CORP. - - Php5,525,354.74 Without official receipt CEBECO III P-105-99 2595 17,106,185.07 Zero-rated sale component not indicated CEBECO III P-105-102 2606 13,515,055.01 Zero-rated sale component not indicated CEBECO III P-105-111 2615 8,515,330.04 Zero-rated sale component not indicated CARMEN COPPER CORP. P-105-116 2311 139,370,841.22 Sub-total Third Quarter Php184,032,766.08 Fourth Quarter BALAMBAN ENERZONE CORP. - - Php11,525,079.87 Without official receipt CEBECO III P-105-128 2630 492,326.41 Zero-rated sales per OR is only Php4,988,424.59 CEBECO III P-105-148 2647 10,894,913.10 Zero-rated sale component not indicated CARMEN COPPER CORP. P-105-159 2319 770,657.36 OR #2319 is for zero-rated sale amounting to Php159,582,112.56 Sub-total Fourth Quarter Php23,682,976.74 TOTAL PHP393,653,947.36 TPC has creditable input taxes attributable to its zero-rated sales; however, its output taxes are more than its substantiated input taxes. For the same quarters, TPC reported input taxes in the aggregate amount of Php107,414,461.23. Out of this amount, only the amount of Php44,391,193.47 is the subject of the present Petition for Review, detailed as follows: SECOND QUARTER THIRD QUARTER FOURTH QUARTER TOTAL Input Tax on Cap. Goods <1M from previous qtr. Php1,345,662.18 Php1,432,960.04 Php1,961,646.89 Php4,740,269.11 Input Tax on Cap. Goods <1M deferred for succeeding qtr. 1,432,960.04 1,961,646.89 1,970,077.71 5,364,684.64 Amortization Php(87,297.86) Php(528,686.85) Php(8,430.82) Php(624,415.53) Input Tax on Cap. Goods >1M 101,779.07 51,609.18 147,827.81 301,216.06 Input Tax on Cap. Goods <1M 357,325.71 825,012.10 184,413.32 1,366,751.13 Input Tax on Goods 2,044,014.47 2,301,264.55 11,731,296.45 16,076,575.47 Input Tax on Importation 2,152,538.00 14,892,505.00 15,145,647.00 32,190,690.00 Input Tax on Services 26,904,712.65 13,509,769.16 17,689,162.07 58,103,643.88 Total Input Tax Php31,473,072.04 Php31,051,473.14 Php44,889,915.83 Php107,414,461.23 Allocation Rate 74.557452006% 69.702773062% 76.154673596% Excess Input Tax Applied to output tax due Php23,465,520.58 Php21,643,737.86 Php34,185,768.88 Php79,295,027.31 11,049,162.83 15,147,423.21 8,707,260.57 34,903,846.61 SUBJECT OF THE CLAIM PHP12,416,357.75 PHP6,496,314.65 PHP25,478,508.31 PHP44,391,180.70 53 To prove its claim, TPC offered as evidence its suppliers' invoices and official receipts 54 and Bureau of Customs ("BOC") Import Entries and Internal Revenue Declarations ("IEIRDs"). 55 Upon verification of the foregoing documents, the Court finds the ICPA report 56 to be in order. Mr. Calica, the ICPA, noted several exceptions amounting to Php6,000,718.42, summarized below: SECOND QUARTER THIRD QUARTER FOURTH QUARTER TOTAL EXHIBIT No Sales Invoices/official receipts submitted Php965,821.55 Php785,571.58 Php1,558,440.68 Php3,309,833.81 P-106-1 No valid supporting documents 5,369.72 66,254.12 64,585.27 136,209.11 P-106-2 Supporting documents are not in the period covered by the claim 1,596,259.91 - 214,883.04 1,811,142.95 P-106-3 VAT are not separately shown in the supporting documents - 90,819.89 11,078.35 101,898.24 P-106-4 No date/year indicated 312.00 - - 312.00 P-106-5 With incomplete or no address of the company - 111,559.52 56,925.96 168,485.48 P-106-6 Incorrect/incomplete name of the company - - 3,600.00 3,600.00 P-106-7 Discrepancy of VAT on importation filed v. supporting documents 1,193.00 19,045.83 448,998.00 469,236.83 P-106-8 TOTAL PHP2,568,956.18 PHP1,073,250.94 PHP2,358,511.30 PHP6,000,718.42 With further verification and evaluation of the documents presented, the Court finds that the following input VAT on purchases of goods and services amounting to Php21,242,629.99 57 and input VAT on importation amounting to Php31,721,453.17 58 must be disallowed from TPC's claim for not being properly substantiated by VAT invoices or official receipts, as prescribed under Sections 110 (A) and 113 (A) and (B) of the 1997 NIRC in relation to Sections 4.110-1, 4.110-8, and 4.113-1 of Revenue Regulations ("RR") No. 16-05, as amended. 59 The relevant provisions of the 1997 NIRC mandate the following: Sec. 110. Tax Credits . (A) Creditable Input Tax. (1) Any input tax evidenced by a VAT invoice or official receipt issued in accordance with Section 113 hereof on the following transactions shall be creditable against the output tax: xxx xxx xxx Sec. 113. Invoicing and Accounting Requirements for VAT-Registered Persons . (A) Invoicing Requirements . A VAT-registered person shall issue: (1) A VAT invoice for every sale, barter or exchange of goods or properties; and (2) A VAT official receipt for every lease of goods or properties, and for every sale, barter or exchange of services. (B) Information Contained in the VAT Invoice or VAT Official Receipt. The following information shall be indicated in the VAT invoice or VAT official receipt: (1) A statement that the seller is a VAT-registered person, followed by his Taxpayer's Identification Number (TIN); (2) The total amount which the purchaser pays or is obligated to pay to the seller with the indication that such amount includes the value-added tax: Provided ,That: (a) The amount of the tax shall be shown as a separate item in the invoice or receipt; (b) If the sale is exempt from value-added tax, the term "VAT-exempt sale" shall be written or printed prominently on the invoice or receipt; (c) If the sale is subject to zero percent (0%) value-added tax, the term "zero-rated sale" shall be written or printed prominently on the invoice or receipt; (d) If the sale involves goods, properties or services some of which are subject to and some of which are VAT zero-rated or VAT-exempt, the invoice or receipt shall clearly indicate the breakdown of the sale price between its taxable, exempt and zero-rated components, and the calculation of the value-added tax on each portion of the sale shall be shown on the invoice or receipt: Provided ,That the seller may issue separate invoices or receipts for the taxable, exempt, and zero-rated components of the sale. (3) The date of transaction, quantity, unit cost and description of the goods or properties or nature of the service; and (4) In the case of sales in the amount of One Thousand Pesos (Php1,000) or more where the sale or transfer is made to a VAT-registered person, the name, business style, if any, address and Taxpayer Identification Number (TIN) of the purchaser, customer or client. As gleaned from the aforementioned provisions of the 1997 NIRC ,there are rigid requirements for invoicing transactions subject to VAT. Proceeding therefrom, the Court finds that TPC was only able to properly substantiate input taxes in the amount of Php48,449,659.43 vis--vis the amount of Php29,056,805.65 claimed to have been attributable to TPC's zero-rated sales, as computed below: SECOND QUARTER THIRD QUARTER FOURTH QUARTER TOTAL Total Input Tax Php31,473,072.04 Php31,051,473.14 Php44,889,915.83 Php107,414,461.01 Less : Disallowances Per ICPA 2,568,956.18 1,073,250.94 2,358,511.30 6,000,718.42 Per Court's Exception On Goods and Services 18,261,090.42 1,334,851.84 1,646,687.73 21,242,629.99 On Importation 2,151,345.00 14,873,459.17 14,696,649.00 31,721,453.17 Total Disallowances Php22,981,391.60 Php17,281,561.95 Php18,701,848.03 Php58,964,801.58 Substantiated Input VAT Php8,491,680.44 Php13,769,911.19 Php26,188,067.80 Php48,449,659.43 Allocation Rate 46.808457655% 43.759580329% 72.767207578% SUBSTANTIATED INPUT VAT ATTRIBUTABLE TO ZERO-RATED SALES PHP3,974,824.64 PHP6,025,655.35 PHP19,056,325.66 PHP29,056,805.65 Comparing the output taxes reported by TPC in its Quarterly VAT Returns for the second to fourth quarters of CY 2011 with its properly substantiated input taxes, the Court finds that TPC still has an output tax due of Php36,810,306.44, to wit: Output Tax Second Quarter, CY 2011 Php20,330,208.66 60 Third Quarter, CY 2011 25,666,492.71 61 Fourth Quarter, CY 2011 19,870,410.72 62 Total Output Tax Php65,867,112.09 Substantiated Input Tax attributable to zero-rated sales 29,056,805.65 OUTPUT TAX STILL DUE PHP36,810,306.44 Thus, while TPC indeed has creditable input taxes due attributable to its zero-rated sales, the same is not sufficient to cover its output taxes. Based on the Court's evaluation of the documents presented by TPC, it has a resulting output tax still due for the second to fourth quarters of CY 2011. TPC's substantiated input taxes were not sufficient to offset its output taxes. In consonance with the Court's finding discussed above, TPC's properly substantiated input taxes for the second to fourth quarters of CY 2011 are not sufficient to offset its output taxes for the same quarters. There being no excess input VAT which may be the subject of a claim for refund under Section 112 of the 1997 NIRC ,TPC's claim for refund must be denied. All told, TPC failed to sufficiently prove its entitlement to a refund of its unutilized input VAT from its zero-rated sales/receipts for the second to fourth quarters of CY 2011. Its failure to substantiate that it has sufficient input taxes to offset its output taxes due for the period covered merits the denial of its claim for refund. WHEREFORE ,premises considered, the Petition for Review is DENIED for lack of merit. SO ORDERED. (SGD.) LOVELL R. BAUTISTA Associate Justice Esperanza R. Fabon-Victorino and Ma. Belen M. Ringpis-Liban, JJ. ,concur. ANNEX A Input VAT on Purchases of Goods and Services ANNEX B Input VAT on Importation Footnotes 1. Records, CTA Case No. 8671, Vol. 1, Petition for Review ("PFR") ,pp. 6-94, with annexes. 2. Id. at 22. 3. Id.,Vol. 1, Joint Stipulation of Facts and Issues ("JSFI") ,pp. 298-299. 4. Records, Vol. 6, Exhibit "P-17," Quarterly Value-Added Tax ("VAT") Return (BIR Form No. 2550-Q) ,pp. 3046-3047. 5. Id.,Exhibit "P-18," Quarterly VAT Return (BIR Form No. 2550-Q) ,pp. 3048-3049. 6. Id.,Exhibit "P-19," Quarterly VAT Return (BIR Form No. 2550-Q) ,pp. 3050-3051. 7. Id.,Exhibit "P-20," Quarterly VAT Return (BIR Form No. 2550-Q) ,pp. 3052-3053. 8. Id.,Exhibit "P-21," Quarterly VAT Return (BIR Form No. 2550-Q) ,pp. 3054-3055. 9. Id.,Exhibit "P-22," Quarterly VAT Return (BIR Form No. 2550-Q) ,pp. 3056-3057. 10. Records, Vol. 6, Exhibit "P-23," Quarterly VAT Return (BIR Form No. 2550-Q) ,pp. 3058-3059. 11. Records, Vol. 5, Exhibit "P-9," Letter-Request for Refund, pp. 3025-3034; Records, Vol. 5, Exhibit "P-10," Application for Tax Credits/Refunds (BIR Form No. 1914) ,p. 3035. 12. Records, Vol. 1, PFR ,pp. 6-94, with annexes. 13. Id.,Answer ,pp. 103-118. 14. Records, Vol. 1, Respondent's Pre-Trial Brief ("PTB") ,pp. 120-124. 15. Id.,Petitioner's PTB ,pp. 149-158. 16. Records, Vol. 1, Minutes of Hearing dated October 10, 2013 ,p. 285; Records, Vol. 1, Resolution ,pp. 294-295. 17. Records, Vol. 1, JSFI ,pp. 298-302. 18. Id.,Pre-Trial Order ,pp. 343-348. 19. Records, Vol. 1, Minutes of Hearing dated March 17, 2014 ,p. 356; Transcript of Stenographic Notes ("TSN"),March 17, 2014 Hearing ,pp. 1-25; Records, Vol. 1, Judicial Affidavit of Edita C. Encarnacion, pp. 159-179; Records, Vol. 5, Exhibit "P-35," Judicial Affidavit of Edita C. Encarnacion, pp. 2934-2954. 20. Records, Vol. 2, Minutes of Hearing dated April 24, 2014 ,p. 823; TSN, April 24, 2014 Hearing ,pp. 1-18; Records, Vol. 5, Exhibit "P-36," Judicial Affidavit of Ms. Reymonda Aida B. Obrero ,pp. 2955-2971. 21. Records, Vol. 2, Minutes of Hearing dated June 30, 2014 ,p. 891; TSN, June 30, 2014 Hearing ,pp. 1-12; Records, Vol. 6, Exhibit "P-66," Judicial Affidavit of Rolando L. Vicente ,pp. 3082-3089. 22. Records, Vol. 3, Minutes of Hearing dated October 9, 2014 ,p. 1306; TSN, October 9, 2014 Hearing ,pp. 1-16; Records, Vol. 6, Exhibit "P-134," Judicial Affidavit of Joseph Cedric V. Calica ,pp. 3117-3131; Records, Vol. 4, Minutes of Hearing dated February 24, 2015 ,p. 2152; TSN, February 24, 2015 Hearing ,pp. 1-14; Records, Vol. 6, Exhibit "P-201," Supplemental Judicial Affidavit of Joseph Cedric V. Calica ,pp. 3132-3142. 23. Records, Vol. 5, Minutes of Hearing dated April 6, 2015 ,p. 2812; TSN, April 6, 2015 Hearing ,pp. 1-18; Records, Vol. 7, Exhibit "P-206," Judicial Affidavit of Isidito Camota Decina ,pp. 3937-3942. 24. Records, Vol. 5, Minutes of Hearing dated July 20, 2015 ,p. 2873; TSN, July 20, 2015 Hearing ,pp. 1-20; Records, Vol. 5, Judicial Affidavit of Bernadette Ann V. Policarpio ,pp. 2816-2822. 25. Records, Vol. 5, Petitioner's Formal Offer of Evidence ,pp. 2910-2933. 26. Records, Vol. 7, Comment (Re: Petitioner's Formal Offer of Evidence) ,pp. 3993-3996. 27. Records, Vol. 7, Resolution ,pp. 3998-3999; Records, Vol. 7, Resolution ,pp. 4021-4022. 28. Records, Vol. 5, Minutes of Hearing dated October 27, 2015 ,p. 2905. 29. Id.,Respondent's Memorandum ,pp. 4005-4015. 30. Id.,Petitioner's Memorandum ,pp. 4023-4047. 31. Id.,Vol. 7, Resolution ,p. 4049. 32. Id.,Vol. 1, PTO ,p. 344. 33. Records, Vol. 7, Petitioner's Memorandum ,pp. 4028-4044. 34. Republic Act No. 8424 ,as amended (1997). 35. Records, Vol. 7, Respondent's Memorandum ,pp. 4006-4013. 36. G.R. Nos. 196415 & 196451, December 2, 2015, 775 SCRA 709. 37. G.R. Nos. 195175 & 199645, August 10, 2015, 765 SCRA 511. 38. G.R. Nos. 193301 & 194637, March 11, 2013, 693 SCRA 49. 39. Dated December 10, 2003. 40. G.R. No. 184823, October 6, 2010, 632 SCRA 422. 41. Records, Vol. 5, Exhibit "P-5," Bureau of Internal Revenue Certificate of Registration ,p. 3014. See also Records, Vol. 1, PTO ,p. 344. 42. Id.,Exhibit "P-2," Restated and Amended Agreement of General Partnership ,p. 2975. 43. Id.,Vol. 1, Petition for Review ,p. 7. 44. Id.,Vol. 5, Exhibit "P-3," ERC Certificate of Compliance ,p. 3010. 45. Records, Vol. 5, Exhibit "P-6," Philippine Economic Zone Authority ("PEZA") Certificate of Registration, p. 3015; Records, Vol. 5, Exhibit "P-7," Registration Agreement ,pp. 3016-3021; Records, Vol. 5, Exhibit "P-8," PEZA Certification ,pp. 3022-3024; Records, Vol. 5, Exhibit "P-11," Board of Investments ("BOI") Certification ,pp. 3036-3037; Records, Vol. 5, Exhibit "P-12," National Electrification Administration ("NEA") Certificate of Registration ,p. 3038; Records, Vol. 5, Exhibit "P-13," Articles of Incorporation of Cebu III Electric Cooperative, Inc. ,pp. 3039-3040; Records, Vol. 5, Exhibit "P-14," National Electrification Commission ("NEC") Certificate of Franchise ,p. 3041; Records, Vol. 6, Exhibit "P-51," Cebu III Electric Cooperative, Inc. Certification ,p. 3102; Amended Independent Certified Public Accountant ("ICPA") Report, Exhibit "P-123," Balamban Enerzone Corporation documents; Amended ICPA Report, Exhibit "P-124," Carmen Copper Corporation documents; Amended ICPA Report, Exhibit "P-125," Cebu III Electric Cooperative, Inc. documents; Records, Vol. 7, Exhibit "P-196," BOI Certification ,pp. 3921-3923; Records, Vol. 7, Exhibit "P-197," BOI Certification ,pp. 3924-3926. 46. Amended ICPA Report, Exhibits "P-105-1," "P-105-5," "P-105-6," "P-105-7," "P-105-8," "P-105-9," "P-105-10," "P-105-11," "P-105-18," "P-105-21," "P-105-25," "P-105-27," "P-105-29," "P-105-31," "P-105-32," "P-105-33," "P-105-34," "P-105-38," "P-105-40," "P-105-43," "P-105-45," "P-105-46," "P-105-47," "P-105-55," "P-105-56," "P-105-57," Various official receipts . 47. Records, Vol. 6, Exhibit "P-19," Quarterly VAT Return (BIR Form No. 2550-Q) ,pp. 3050-3051. 48. Id.,Exhibit "P-21," Quarterly VAT Return (BIR Form No. 2550-Q) ,pp. 3054-3055. 49. Id.,Exhibit "P-23," Quarterly VAT Return (BIR Form No. 2550-Q) ,pp. 3058-3059. 50. Line 17. 51. Line 17. 52. Line 17. 53. Rounding off difference of Php12.77. 54. Amended ICPA Report, Exhibits "P-102-1" to "P-102-2154," Various official receipts and invoices . 55. Id.,Exhibits "P-103-1" to "P-103-17," Various Import Entries and Internal Revenue Declarations . 56. Exhibit "P-133," Amended ICPA Report. 57. See Annex A for details. 58. See Annex B for details. 59. Dated September 1, 2005. 60. Records, Vol. 6, Exhibit "P-19," Quarterly VAT Return (BIR Form No. 2550-Q) ,Line 19B, p. 3050. 61. Id.,Exhibit "P-21," Quarterly VAT Return (BIR Form No. 2550-Q) ,Line 19B, p. 3054. 62. Id.,Exhibit "P-23," Quarterly VAT Return (BIR Form No. 2550-Q) ,Line 19B, p. 3058.