San Roque Power Corp. v. Commissioner of Internal Revenue

THIRD DIVISION [C.T.A. CASE NO. 8675. August 20, 2015.] SAN ROQUE POWER CORPORATION , petitioner , vs. COMMISSIONER OF INTERNAL REVENUE , respondent . DECISION RINGPIS-LIBAN , J p : This is a Petition for Review 1 filed on July 24, 2013, to seek judicial relief from the Commissioner of Internal Revenue's (CIR) inaction on petitioner San Roque Power Corporation's (San Roque) administrative claim for refund or application for the issuance of a tax credit certificate (TCC) which San Roque filed with the Bureau of Internal Revenue (BIR) on February 28, 2013. STATEMENT OF THE CASE The relevant antecedents are as follows: Petitioner is a corporation duly organized and existing under the laws of the Philippines, with principal office at Barangay San Roque, San Manuel, Pangasinan. 2 Petitioner is one of the generation companies under Republic Act No. 9136, otherwise known as the Electric Power Industry Reform Act of 2001 whose sales of generated power is value added tax zero-rated. 3 Petitioner is a duly registered Value-Added Tax ("VAT") taxpayer with Tax Identification No. 005-017-501. 4 Petitioner is likewise classified as a large taxpayer and under the jurisdiction of the Large Taxpayers Service of the Bureau of Internal Revenue ("BIR"). 5 Respondent is the duly appointed Commissioner of the BIR empowered to perform the duties of her office, including, among others, to decide disputed assessments, taxes, fees or other charges under the law, as well as administrative claims for refund, with office address at the 4/F, BIR National Office Building, BIR Road, Diliman, Quezon City. 6 Petitioner filed with the BIR its quarterly VAT returns for the period covering April 1, 2011 to March 31, 2012. QUARTERLY RETURN DATE FILED April 1, 2011 to June 30, 2011 July 15, 2011 July 1, 2011 to September 30, 2011 October 18, 2011 October 1, 2011 to December 31, 2011 January 25, 2012 January 1, 2012 to March 31, 2012 April 24, 2012 On February 28, 2012, petitioner filed with the BIR-Revenue District Office ("RDO") No. 121 its Application for Refund/Tax Credit Certificate for the unutilized input VAT for the fiscal year/period April 1, 2011 to March 31, 2012. 7 HCaDIS On March 18, 2013, San Roque submitted additional documents to support its claim for tax refund or credit of its unutilized input taxes. 8 Respondent failed to act on San Roque's claim for tax refund/tax credit within the allowable period. Hence, petitioner filed the instant petition on July 24, 2013. The Summons was issued on August 7, 2013. 9 On August 30, 2013, respondent filed by registered mail a Motion to Admit Answer with attached Answer. 10 On September 3, 2015, respondent filed a Manifestation stating that on August 30, 2013, respondent filed her Answer and Motion to Admit Answer. 11 In the Answer, 12 respondent interposed as its Special and Affirmative Defenses, that the Court does not have jurisdiction over petitioner's claim for tax refund; that the burden of proof to establish entitlement to a tax refund rests upon petitioner, and its failure to discharge such burden is fatal to its claim; and that the claims of tax exemption must be justified by the clearest grant of law. On September 23, 2013, petitioner filed a Manifestation with Motion for Time to File Reply. 13 On October 11, 2013, the Court issued a Resolution granting the Motion to Admit Answer and the Motion for Time to File Reply. 14 On November 6, 2013, petitioner filed its Reply. 15 On April 3, 2014, the parties filed their Joint Stipulation of Facts and Issues. 16 On April 23, 2014, the Court issued the Pre-Trial Order. 17 Trial thereafter ensued. Petitioner presented Ms. Laline Estayo, an accountant of San Roque, and Ms. Ma. Milagros F. Padernal the Court-commissioned Independent Certified Public Accountant, as its witnesses and the documentary evidence marked as Exhibits "P-1" to "P-42". During the hearing on September 18, 2014, 18 the respondent's counsel manifested that she had no witness to present since there was still no report of BIR investigation. Thereafter, as prayed for by the parties, the parties were granted thirty (30) days or until October 18, 2014 within which to file their respective memoranda. On October 17, 2014, respondent filed her Memorandum. 19 On October 20, 2014, San Roque filed its Memorandum. 20 This case was deemed submitted for decision in a Resolution 21 dated November 4, 2014. ISSUES As stipulated by the parties, the following are the issues 22 for this Court's consideration: 1. Whether or not this Court has jurisdiction over the present case; and 2. Whether or not petitioner is entitled to a refund or tax credit in the total amount of Thirty-Five Million Seven Hundred Fifty-Three Thousand Seven Hundred Seventy-Nine pesos and Four Centavos (P35,753,779.04): a. Whether or not the amount of P35,753,779.04 represents the excess and unutilized creditable input taxes paid by petitioner for the period April 1, 2011 to March 31, 2012 which is directly attributable to its VAT zero-rated sales to the National Power Corporation (NAPOCOR); b. Whether or not the excess unutilized creditable input taxes for the period April 1, 2011 to March 31, 2012 is duly supported by pertinent documents, such as VAT compliant invoices and official receipts; c. Whether or not petitioner's excess and unutilized creditable input taxes paid by petitioner for the period April 1, 2011 to March 31, 2012 in the total amount of P35,753,779.04 remains unutilized. The issues raised boil down to the sole issue of whether or not petitioner is entitled to its claim for refund or issuance of TCC on its alleged unutilized input tax attributable to zero-rated sales to NAPOCOR the amount of P35,753,779.04, incurred during the fiscal period April 1, 2011 to March 31, 2012. PETITIONER'S ARGUMENTS San Roque claims that the Court has jurisdiction over the instant case since the same was filed within the prescriptive period; that it is entitled to a tax refund or credit in the total amount of Thirty-Five Million Seven Hundred Fifty Three Thousand Seven Hundred Seventy-Nine Pesos and Four Centavos (P35,753,779.04); that the amount of P35,753,779.04 represents the unutilized input taxes paid by San Roque for the fiscal period April 1, 2011 to March 31, 2012 which is attributable to its VAT zero-rated sales to Napocor; that the unutilized input taxes is supported by VAT compliant invoices and official receipts; and that San Roque's unutilized input taxes paid by it for the fiscal period April 1, 2011 to March 31, 2012 in the total amount of P35,753,779.04 remains unutilized. RESPONDENT'S ARGUMENTS Respondent argues that San Roque failed to show that its purchases of non-capital goods and services were made in the course of its trade and business; that San Roque failed to show that the said purchases were properly supported by VAT invoices and/or official receipts and other documents; that San Roque failed to prove that the input taxes were attributable to its zero-rated sales and such have not been applied against any output tax and were not carried over in the succeeding taxable quarter or quarters; and that there is no proof of compliance with the prescribed checklist of requirements to be submitted involving a claim for VAT refund pursuant to Revenue Memorandum Order (RMO) No. 53-98; AHCETa RULING OF THE COURT Timeliness of the Petition Section 112 of the NIRC of 1997, as amended provides: "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 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. (B) . . . (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 of 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." (Emphasis supplied) The instant case involves a claim for refund for the period from April 1, 2011 to March 31, 2012. The close of the taxable quarter and the last day for filing the administrative claim are illustrated below: PERIOD COVERED CLOSE OF THE LAST DAY OF THE TAXABLE PERIOD TWO-YEAR PERIOD April to June 2011 June 30, 2011 June 30, 2013 July to September 2011 September 30, 2011 September 30, 2013 October to December 2011 December 31, 2011 December 31, 2013 January to March 2012 March 31, 2012 March 31, 2014 Records show that San Roque filed its administrative claim with the BIR on February 28, 2012 23 and filed its supporting documents on March 18, 2013. 24 Hence, San Roque's administrative claim for refund or TCC was seasonably filed with the respondent. In the case of Commissioner of Internal Revenue vs. San Roque Power Corporation, Taganito Mining Corporation vs. Commissioner of Internal Revenue, Philex Mining Corporation vs. Commissioner of Internal Revenue , 25 the Supreme Court clarified the rule with regard to the application of prescriptive periods under Section 112 (A) and (C). Thus: "This law is clear, plain, and unequivocal. Following the well-settled verba legis doctrine, this law should be applied exactly as worded since it is clear, plain, and unequivocal. As this law states, the taxpayer may, if he wishes, appeal the decision of the Commissioner to the CTA within 30 days from receipt of the Commissioner's decision, or if the Commissioner does not act on the taxpayer's claim within the 120-day period, the taxpayer may appeal to the CTA within 30 days from the expiration of the 120-day period." In the instant case, from the date of submission of the supporting documents on March 18, 2013, respondent has a period of one hundred twenty (120) days or up to July 17, 2013 within which to act on the petitioner's claim. After the lapse thereof, San Roque has thirty (30) days or up to August 16, 2013 within which to file a judicial claim before this Court. Petitioner filed before this Court its Petition for Review on July 24, 2013, also within the period required by the rules. Hence, both the administrative and judicial claims were filed on time. The Court shall now proceed on the merits of San Roque's claim for refund or TCC on its alleged unutilized input tax for the fiscal period from April 1, 2011 to March 31, 2012. In a long line of cases, 26 the Supreme delineated the requirements that must be satisfied by a taxpayer-claimant, the petitioner in the instant case, in order that its claim for a refund or issuance of a tax credit certificate (TCC) of unutilized input VAT attributable to zero-rated sales may be allowed or granted, to wit: ScHADI 1. The taxpayer must be VAT-registered; 2. The taxpayer must be engaged in zero-rated or effectively zero-rated sales; 3. The input taxes were incurred or paid; 4. The input tax due or paid must be attributable to such sales; 5. The input taxes have not been applied against any output taxes; and 6. The claim must be filed within the two-year prescriptive period. Evidence forwarded to this Court shows that petitioner satisfactorily complied with the first and sixth requisites. Whether San Roque's sales are subject to VAT at zero percent Anent the second requisite, San Roque duly established that it is a power generation company under Republic Act (R.A.) No. 9136, otherwise known as the "Electric Power Industry Reform Act of 2001". Its BIR Certificate of Registration 27 shows that it is engaged in the generation, collection and distribution of electricity. Likewise, petitioner is registered with the BOI as a "New Operator of Hydroelectric Power Generating Plant" pursuant to the Omnibus Investments Code of 1987. 28 Furthermore, San Roque's 345-megawatt hydroelectric power generation facility at Brgy. San Roque, San Miguel Pangasinan has been certified by the Energy Regulation Commission (ERC) that it has complied with the requirements set forth by the latter for its new generation facility, as evidenced by the Certificate of Compliance (COC) with COC No. 09-08-GN 1-0064. 29 On October 11, 1997, San Roque entered into a Power Purchase Agreement (PPA) 30 with the National Power Corporation (NPC) to operate and maintain the San Roque hydroelectric facilities on a build-operate-transfer (BOT) basis. By virtue of the PPA, petitioner generated zero-rated sales of electricity through hydropower to NPC as evidenced by the journal vouchers, 31 and VAT zero-rated invoices 32 and official receipts (OR) 33 issued by petitioner to the latter. Such receipts from the sale of electricity, qualify for VAT zero-rating under Section 108 (B) (7) of the NIRC of 1997, as amended by R.A. No. 9337, as implemented by Section 4.108-5 (b) (7) of Revenue Regulations (RR) No. 16-2005 to wit: "SEC. 108. Value-added Tax on Sale of Services and Use or Lease of Properties . xxx xxx xxx (B) Transactions Subject to Zero Percent (0%) Rate The following services performed in the Philippines by VAT-registered persons shall be subject to zero percent (0%) rate: xxx xxx xxx (7) Sale of power or fuel generated through renewable sources of energy such as , but not limited to, biomass, solar, wind, hydropower , geothermal, ocean energy, and other emerging energy sources using technologies such as fuel cells and hydrogen fuels." " SEC. 4.108-5. Zero-rated Sale of Services . (b) Transactions Subject to Zero Percent (0%) VAT Rate. The following services performed in the Philippines by a VAT-registered person shall be subject to zero percent (0%) VAT rate: xxx xxx xxx (7) Sale of power or fuel generated through renewable sources of energy such as , but not limited to, biomass, solar, wind, hydropower , geothermal and steam, ocean energy, and other emerging sources using technologies such as fuel cells and hydrogen fuels; Provided, however, That zero-rating shall apply strictly to the sale of power or fuel generated through renewable sources of energy, and shall not extend to the sale of services related to the maintenance or operation of plants generating said power." (Emphasis supplied) Corollary thereto is the provision of Section 4.108-3 (f) of RR No. 16-2005, as amended by RR 4-2007, which states: "SECT. 4.108-3. Definitions and Specific Rules on Selected Services . xxx xxx xxx (f) Sale of electricity by generation, transmission, and distribution companies shall be subject to twelve percent (12%) on their gross receipts starting Feb. 1, 2006; Provided, that sale of power or fuel generated through renewable sources of energy such as , but not limited to, biomass, solar, wind, hydropower , geothermal, ocean energy, and other emerging energy sources using technologies such as fuel cells and hydrogen fuels shall be subject to 0% VAT . ' Generation companies ' refer to persons or entities authorized by the Energy Regulatory Commission (ERC) to operate facilities used in the generation of electricity. For this purpose, generation of electricity refers to the production of electricity by a generation company or a co-generation facility pursuant to the provisions of RA No. 9136 (EPIRA). They shall include all Independent Power Producers (IPPs) and NPC/Power Sector Assets and Liabilities Management Corporation (PSALM) owned generation facilities." (Emphasis supplied) In its Quarterly VAT Returns for the four quarters of FY 2012, San Roque declared zero-rated sales/receipts in the total amount of P7,486,945,900.74, broken down as follows: aICcHA Period Amount Exhibit 1st Quarter P1,689,737,658.39 P-10 (Docket, Vol. 2, (04/01/11 to p. 1069) 06/30/11) 2nd Quarter 1,767,668,674.32 P-12 (Docket, Vol. 2, (07/01/11 to p. 1090) 9/30/11) 3rd Quarter 2,225,320,491.31 P-14 (Docket, Vol. 2, (10/01/11 to p. 1106) 12/31/11) 4th Quarter 1,804,219,076.72 P-16 (Docket, Vol .2, (01/01/12 to p. 1124) 03/31/12) Total P7,486,945,900.74 =============== Correspondingly, the zero-rated VAT ORs submitted by petitioner for the same period reflected a total amount of P7,486,945,900.74, as detailed below: Date US Dollar Japanese Yen Philippine Peso Exhibit 4/27/2011 P32,672,897.20 P-24-3-1 5/26/2011 34,773,614.82 P-24-3-2 6/24/2011 33,782,710.28 P-24-3-3 4/27/2011 484,215,000.00 259,732,926.00 P-24-3-4 5/26/2011 484,215,000.00 255,471,834.00 P-24-3-5 6/24/2011 484,275,000.00 256,633,950.00 P-24-3-6 4/27/2011 6,598,214.45 285,913,828.55 P-24-3-7 5/26/2011 6,473,158.95 279,633,993.48 P-24-3-8 6/24/2011 5,772,121.18 251,121,904.06 P-24-3-9 7/27/2011 33,782,710.28 P-24-3-10 8/25/2011 33,782,710.28 P-24-3-11 9/23/2011 33,782,710.28 P-24-3-12 7/27/2011 484,215,000.00 261,524,521.50 P-24-3-13 8/25/2011 484,215,000.00 261,815,050.50 P-24-3-14 9/26/2011 484,215,000.00 266,608,779.00 P-24-3-15 7/27/2011 5,797,245.63 251,727,999.75 P-24-3-16 8/25/2011 6,536,386.64 277,273,521.27 P-24-3-17 9/23/2011 8,168,238.33 347,370,671.46 P-24-3-18 10/27/2011 33,782,710.28 P-24-3-19 11/28/2011 33,849,299.07 P-24-3-20 11/28/2011 53,700.63 P-24-3-21 12/28/2011 33,849,299.07 P-24-3-22 10/28/2011 484,215,000.00 277,600,459.50 P-24-3-23 12/7/2011 484,215,000.00 275,566,756.50 P-24-3-24 12/28/2011 484,215,000.00 274,017,268.50 P-24-3-25 10/27/2011 11,315,444.66 496,103,040.23 P-24-3-26 12/12/2011 10,662,565.30 460,270,956.31 P-24-3-27 12/28/2011 7,765,080.48 340,227,001.23 P-24-3-28 1/25/2012 33,849,299.07 P-24-3-29 2/24/2012 33,849,299.07 P-24-3-30 3/28/2012 33,849,299.07 P-24-3-31 1/25/2012 484,215,000.00 270,676,185.00 P-24-3-32 2/24/2012 484,215,000.00 269,175,118.50 P-24-3-33 3/28/2012 484,215,000.00 259,055,025.00 P-24-3-34 1/25/2012 6,906,602.48 300,375,048.46 P-24-3-35 2/24/2012 6,888,177.90 296,770,256.64 P-24-3-36 3/28/2012 7,178,263.98 306,619,545.91 P-24-3-37 Total P7,486,945,900.74 ================ From the foregoing, the amount declared in San Roque's quarterly VAT returns are duly substantiated by zero-rated VAT ORs. Hence, the total amount of P7,486,945,900.74 qualifies as zero-rated sales. Whether San Roque incurred input VAT during the subject fiscal period and whether the input tax due was attributable to the zero-rated sales Based on its Quarterly VAT returns for FY 2012, San Roque's input VAT for the subject period amounts to P36,093,484.03, detailed as follows: Apr-June 2011 July-Sept 2011 Oct-Dec 2011 Jan-Mar 2012 Particulars Exhibit P-10 Exhibit P-12 Exhibit P-14 Exhibit P-16 Total Input tax Deferred on Capital Goods Exceeding P1M from Previous Quarter (Line 20B) P5,179,453.30 P4,799,666.43 P4,400,816.04 P5,307,985.71 P5,179,453.30 Add: Input tax on Purchases of Capital Goods exceeding P1M (Line 21D) 298,928.57 255,209.38 1,575,658.31 1,375,547.69 3,505,343.95 Total P5,478,381.87 P5,054,875.81 P5,976,474.35 P6,683,533.40 P8,684,797.25 Less: Input tax on Purchases of Capital Goods exceeding P1M deferred for the succeeding period (Line 23A) 4,799,666.43 4,400,816.04 5,307,985.71 6,109,395.12 6,109,395.12 Amortization of Input tax on Purchases of Capital Goods exceeding P1M P678,715.44 654,059.77 668,488.64 574,138.28 P2,575,402.13 Add: Input taxes on Current Purchases (188,950.94) Purchase of Capital Goods not exceeding P1M (Line 21B) 94,774.29 83,978.57 - 42,667.97 221,420.83 Domestic Purchases of Goods Other than Capital Goods (Line 21F) 1,233,521.45 983,816.73 1,242,436.45 2,036,504.24 5,496,278.87 Importation of Goods Other than Capital Goods (Line 21H) 25,810.44 - 831,842.00 - 857,652.44 Domestic Purchase of Services (Line 21J) 11,420,176.86 3,412,512.19 3,850,253.17 3,961,978.11 22,644,920.33 Services Rendered by Non- residents(Line 21L) 1,208,760.81 429,633.91 2,616,530.29 42,884.42 4,297,809.43 Total input tax on current purchases 13,983,043.85 4,909,941.40 8,541,061.91 6,084,034.74 33,518,081.90 Total input tax for the period P14,661,759.29 P5,564,001.17 P9,209,550.55 P6,658,173.02 P36,093,484.03 ============= ============= ============= ============= ============ In support of its input VAT, San Roque presented various VAT invoices, 34 VAT ORs, 35 Bank ORs/Bureau of Customs ORs (BCOR), 36 Import Entry Internal Revenue Declarations (IEIRD) 37 and BIR Forms No. 1600 (manual and EFPS). 38 The Court-commissioned ICPA, Ms. Ma. Milagros F. Padernal of Uy Singson Abella & Co., examined the documents presented by San Roque and noted erroneous items pertaining to input VAT on Capital Goods Exceeding P1 million-amortization, Purchases of Goods other than Capital Goods, and Purchases of Services, totaling P56,661.06, which shall be disallowed for the reasons stated below: EHaASD Reason for Disallowance Period Total Exhibit/Reference Capital Goods Exceeding P1 million amortization Not Supported 4th Qtr P610.38 P-42 Purchases of Goods Other Than Capital Goods Supported by original VAT invoices in 1st Qtr 6,727.48 P-28-338 to P-28-340 the Petitioner's name not dated or 4th Qtr 14,464.18 P-28-1650 issued within the taxable year 21,191.66 Supported by original VAT invoices in 3rd Qtr 2,028.11 P-29-1 to P-29-2 the Petitioner's name with no BIR 4th Qtr 950.78 P-29-3 to P-29-4 Permit to print 2,978.89 Supported by original VAT invoices 3rd Qtr 8,942.33 P-30-1 not in the Petitioner's name 4th Qtr 6,467.32 P-30-2 15,409.65 Not supported 4th Qtr 15,559.77 P-32 Total 55,139.97 Purchases of Services Supported by original VAT ORs 3rd Qtr 910.71 P-34-1 in the Petitioner's name marked as Not a Valid Source of Input Tax Grand Total P56,661.06 ========== Further review of the ICPA's report and San Roque's supporting documents reveals that in addition to the disallowance of P56,661.06, input VAT in the amount of P1,875,784.68, should also be disallowed from San Roque's claim for the supporting invoices and ORs failed to meet the substantiation requirements under Sections 110 (A), 113 (A) and (B), and 237 of the NIRC of 1997, as amended, in relation to Sections 4.110-1, 4.110-8 and 4.113-1 of RR No. 16-05, as amended. Below is the breakdown of the additional input VAT disallowances of P1,875,784.68: Findings Amount Exhibit 1 Input VAT on purchases of goods supported by documents other than VAT invoices Tyco Integrated Systems Phils., Inc. P4,236.23 P-27-28 SM ACA Shell Forbes 342.32 P-28-5 SM ACA Shell Forbes 228.62 P-28-21 SM ACA Shell Forbes 374.37 P-28-46 SM ACA Shell Forbes 355.83 P-28-47 Wellcross Freeport, Inc. 14,529.96 P-28-48 SM ACA Shell Forbes 199.52 P-28-71 SM ACA Shell Forbes 358.27 P-28-75 SM ACA Shell Forbes 277.05 P-28-93 SM ACA Shell Forbes 409.78 P-28-94 SM ACA Shell Forbes 424.94 P-28-116 SM ACA Shell Forbes 375.55 P-28-139 SM ACA Shell Forbes 369.76 P-28-165 SM ACA Shell Forbes 260.78 P-28-165 SM ACA Shell Forbes 385.92 P-28-198 SM ACA Shell Forbes 240.98 P-28-199 SM ACA Shell Forbes 194.00 P-28-215 SM ACA Shell Forbes 124.71 P-28-232 SM ACA Shell Forbes 152.10 P-28-253 SM ACA Shell Forbes 275.22 P-28-260 SM ACA Shell Forbes 256.32 P-28-271 Proline Sports Center 1,660.71 P-28-295 SM ACA Shell Forbes 398.60 P-28-296 SM ACA Shell Forbes 331.67 P-28-311 SM ACA Shell Forbes 299.90 P-28-317 SM ACA Shell Forbes 216.02 P-28-323 SM ACA Shell Forbes 335.44 P-28-324 SM ACA Shell Forbes 240.13 P-28-362 SM ACA Shell Forbes 272.30 P-28-363 SM ACA Shell Forbes 232.21 P-28-416 SM ACA Shell Forbes 346.01 P-28-437 SM ACA Shell Forbes 349.22 P-28-498 SM ACA Shell Forbes 292.52 P-28-527 SM ACA Shell Forbes 342.00 P-28-698 SM ACA Shell Forbes 334.25 P-28-719 SM ACA Shell Forbes 314.59 P-28-726 SM ACA Shell Forbes 296.91 P-28-737 Subtotal 30,634.71 2 Input VAT on purchases of goods of services supported by VAT invoices of ORs wherein the input VAT amounts were not separately shown Mercury Drug Corporation 1,571.36 P-28-365 Mercury Drug Corporation 1,792.47 P-28-366 SM ACA Shell Forbes 357.06 P-28-426 MySolutions, Inc. 4,510.80 P-28-509 Kia Traders Autocenter, Inc. 1,592.68 P-28-856 GNS Tire & Service Center, Inc. 522.21 P-28-865 Mercury Drug Corporation 3,585.91 P-28-903 Exclusively His Men's Clothing 3,085.71 P-28-1098 Coem Sales & Supplies, Inc. 944.89 P-28-1105 Eastern Communications 7,161.03 P-33-65 Plumas Transport Corporation 3,481.56 P-33-367 Rasa Surveying & Realty 15,000.00 P-33-1073 Subtotal 43,605.68 3 Input VAT on purchase of goods supported by invoice with serial no. outside the authority to print granted to petitioner Sporteum Philippines, Inc. 15,804.14 P-28-652 4 Input VAT on purchases of services supported by documents other than VAT ORs Travel Managers International, Inc. 11,908.20 P-28-1122 Travel Managers International, Inc. 13,588.08 P-28-1145 Travel Managers International, Inc. 6,364.18 P-28-1167 Travel Managers International, Inc. 1,041.86 P-28-1168 Travel Managers International, Inc. 11,389.86 P-28-1242 Kia Traders Autocenter, Inc. 763.93 P-28-609 Subtotal 45,056.11 5 Input VAT on purchases of services supported by NON-VAT OR or ORs with supplier's TIN but without the word "VAT" Plumas Transport Corporation 4,966.09 P-33-1025 Phil. Long Distance Tel. Co. 112.37 P-33-33 Phil. Long Distance Tel. Co. 1,913.41 P-33-34 Phil. Long Distance Tel. Co. 16,920.00 P-33-35 Phil. Long Distance Tel. Co. 1,919.99 P-33-36 Phil. Long Distance Tel. Co. 112.37 P-33-37 Phil. Long Distance Tel. Co. 112.37 P-33-38 Phil. Long Distance Tel. Co. 4,855.94 P-33-39 Phil. Long Distance Tel. Co. 168.66 P-33-40 Phil. Long Distance Tel. Co. 177.69 P-33-41 Phil. Long Distance Tel. Co. 112.37 P-33-42 Phil. Long Distance Tel. Co. 3,712.41 P-33-43 Phil. Long Distance Tel. Co. 279.49 P-33-44 Phil. Long Distance Tel. Co. 160.71 P-33-45 Phil. Long Distance Tel. Co. 119.88 P-33-46 Phil. Long Distance Tel. Co. 160.71 P-33-47 Phil. Long Distance Tel. Co. 160.71 P-33-48 Phil. Long Distance Tel. Co. 160.71 P-33-49 Phil. Long Distance Tel. Co. 160.71 P-33-50 Phil. Long Distance Tel. Co. 160.71 P-33-51 Phil. Long Distance Tel. Co. 160.71 P-33-52 Phil. Long Distance Tel. Co. 160.71 P-33-53 Phil. Long Distance Tel. Co. 160.71 P-33-54 Phil. Long Distance Tel. Co. 130.37 P-33-55 Phil. Long Distance Tel. Co. 112.37 P-33-147 Phil. Long Distance Tel. Co. 5,285.13 P-33-148 Phil. Long Distance Tel. Co. 112.37 P-33-149 Phil. Long Distance Tel. Co. 16,920.00 P-33-150 Phil. Long Distance Tel. Co. 1,913.41 P-33-151 Phil. Long Distance Tel. Co. 112.37 P-33-152 Phil. Long Distance Tel. Co. 1,920.00 P-33-153 Phil. Long Distance Tel. Co. 5,726.05 P-33-156 Phil. Long Distance Tel. Co. 165.35 P-33-157 Phil. Long Distance Tel. Co. 181.17 P-33-158 Phil. Long Distance Tel. Co. 112.37 P-33-159 Phil. Long Distance Tel. Co. 3,712.40 P-33-160 Phil. Long Distance Tel. Co. 262.33 P-33-161 Phil. Long Distance Tel. Co. 160.71 P-33-162 Phil. Long Distance Tel. Co. 119.88 P-33-163 Phil. Long Distance Tel. Co. 160.71 P-33-164 Phil. Long Distance Tel. Co. 160.71 P-33-165 Phil. Long Distance Tel. Co. 160.71 P-33-166 Phil. Long Distance Tel. Co. 160.71 P-33-167 Phil. Long Distance Tel. Co. 160.71 P-33-168 Phil. Long Distance Tel. Co. 160.71 P-33-169 Phil. Long Distance Tel. Co. 160.71 P-33-170 Phil. Long Distance Tel. Co. 160.71 P-33-171 Phil. Long Distance Tel. Co. 130.37 P-33-172 Phil. Long Distance Tel. Co. 3,558.95 P-33-262 Phil. Long Distance Tel. Co. 4,635.33 P-33-263 Phil. Long Distance Tel. Co. 1,913.41 P-33-264 Phil. Long Distance Tel. Co. 112.37 P-33-265 Phil. Long Distance Tel. Co. 16,921.32 P-33-266 Phil. Long Distance Tel. Co. 112.37 P-33-267 Phil. Long Distance Tel. Co. 457.26 P-33-268 Phil. Long Distance Tel. Co. 1,920.00 P-33-269 Phil. Long Distance Tel. Co. 2,722.41 P-33-270 Phil. Long Distance Tel. Co. 164.82 P-33-271 Phil. Long Distance Tel. Co. 159.34 P-33-272 Phil. Long Distance Tel. Co. 112.37 P-33-273 Phil. Long Distance Tel. Co. 3,712.40 P-33-274 Phil. Long Distance Tel. Co. 358.12 P-33-275 Phil. Long Distance Tel. Co. 160.71 P-33-276 Phil. Long Distance Tel. Co. 119.88 P-33-277 Phil. Long Distance Tel. Co. 160.71 P-33-278 Phil. Long Distance Tel. Co. 161.43 P-33-279 Phil. Long Distance Tel. Co. 160.71 P-33-280 Phil. Long Distance Tel. Co. 160.71 P-33-281 Phil. Long Distance Tel. Co. 160.71 P-33-282 Phil. Long Distance Tel. Co. 160.71 P-33-283 Phil. Long Distance Tel. Co. 160.71 P-33-284 Phil. Long Distance Tel. Co. 160.71 P-33-285 Phil. Long Distance Tel. Co. 130.37 P-33-286 Phil. Long Distance Tel. Co. 2,724.74 P-33-405 Phil. Long Distance Tel. Co. 163.18 P-33-406 Phil. Long Distance Tel. Co. 165.38 P-33-407 Phil. Long Distance Tel. Co. 112.37 P-33-408 Phil. Long Distance Tel. Co. 3,712.40 P-33-409 Phil. Long Distance Tel. Co. 341.05 P-33-410 Phil. Long Distance Tel. Co. 160.71 P-33-411 Phil. Long Distance Tel. Co. 119.88 P-33-412 Phil. Long Distance Tel. Co. 160.71 P-33-413 Phil. Long Distance Tel. Co. 160.71 P-33-414 Phil. Long Distance Tel. Co. 160.71 P-33-415 Phil. Long Distance Tel. Co. 160.71 P-33-416 Phil. Long Distance Tel. Co. 160.71 P-33-417 Phil. Long Distance Tel. Co. 160.71 P-33-418 Phil. Long Distance Tel. Co. 160.71 P-33-419 Phil. Long Distance Tel. Co. 160.71 P-33-420 Phil. Long Distance Tel. Co. 130.37 P-33-421 RAJ Ce Construction 1,912.93 P-33-460 Phil. Long Distance Tel. Co. 112.37 P-33-462 Phil. Long Distance Tel. Co. 1,913.41 P-33-463 Phil. Long Distance Tel. Co. 16,920.33 P-33-464 Phil. Long Distance Tel. Co. 1,920.00 P-33-465 Phil. Long Distance Tel. Co. 112.37 P-33-466 Phil. Long Distance Tel. Co. 112.37 P-33-467 Phil. Long Distance Tel. Co. 4,163.52 P-33-468 Phil. Long Distance Tel. Co. 6,469.60 P-33-492 Phil. Long Distance Tel. Co. 7,440.40 P-33-493 Phil. Long Distance Tel. Co. 2,771.79 P-33-524 Phil. Long Distance Tel. Co. 170.70 P-33-525 Phil. Long Distance Tel. Co. 190.40 P-33-526 Phil. Long Distance Tel. Co. 3,712.41 P-33-527 Phil. Long Distance Tel. Co. 162.97 P-33-528 Phil. Long Distance Tel. Co. 160.71 P-33-529 Phil. Long Distance Tel. Co. 119.88 P-33-530 Phil. Long Distance Tel. Co. 160.71 P-33-531 Phil. Long Distance Tel. Co. 160.71 P-33-532 Phil. Long Distance Tel. Co. 160.71 P-33-533 Phil. Long Distance Tel. Co. 160.71 P-33-534 Phil. Long Distance Tel. Co. 160.71 P-33-535 Phil. Long Distance Tel. Co. 160.71 P-33-536 Phil. Long Distance Tel. Co. 160.71 P-33-537 Phil. Long Distance Tel. Co. 160.71 P-33-538 Phil. Long Distance Tel. Co. 130.37 P-33-539 Phil. Long Distance Tel. Co. 112.37 P-33-540 Phil. Long Distance Tel. Co. 112.37 P-33-541 Phil. Long Distance Tel. Co. 1,913.41 P-33-542 Phil. Long Distance Tel. Co. 16,920.00 P-33-543 Phil. Long Distance Tel. Co. 1,924.50 P-33-544 Phil. Long Distance Tel. Co. 112.37 P-33-545 Phil. Long Distance Tel. Co. 112.37 P-33-546 Phil. Long Distance Tel. Co. 1,573.57 P-33-547 Phil. Long Distance Tel. Co. 2,746.63 P-33-656 Phil. Long Distance Tel. Co. 171.85 P-33-657 Phil. Long Distance Tel. Co. 199.70 P-33-658 Phil. Long Distance Tel. Co. 3,712.41 P-33-659 Phil. Long Distance Tel. Co. 162.97 P-33-660 Phil. Long Distance Tel. Co. 160.71 P-33-661 Phil. Long Distance Tel. Co. 119.88 P-33-662 Phil. Long Distance Tel. Co. 160.71 P-33-663 Phil. Long Distance Tel. Co. 160.71 P-33-664 Phil. Long Distance Tel. Co. 160.71 P-33-665 Phil. Long Distance Tel. Co. 160.71 P-33-666 Phil. Long Distance Tel. Co. 160.71 P-33-667 Phil. Long Distance Tel. Co. 160.71 P-33-668 Phil. Long Distance Tel. Co. 160.71 P-33-669 Phil. Long Distance Tel. Co. 160.71 P-33-670 Phil. Long Distance Tel. Co. 130.37 P-33-671 Phil. Long Distance Tel. Co. 112.37 P-33-672 Phil. Long Distance Tel. Co. 6,449.73 P-33-760 Phil. Long Distance Tel. Co. 6,646.84 P-33-762 Phil. Long Distance Tel. Co. 7,668.89 P-33-763 Phil. Long Distance Tel. Co. 6,646.40 P-33-764 Phil. Long Distance Tel. Co. 7,782.55 P-33-765 Phil. Long Distance Tel. Co. 112.37 P-33-775 Phil. Long Distance Tel. Co. 1,913.41 P-33-776 Phil. Long Distance Tel. Co. 16,920.00 P-33-777 Phil. Long Distance Tel. Co. 1,920.00 P-33-778 Phil. Long Distance Tel. Co. 112.37 P-33-779 Phil. Long Distance Tel. Co. 112.37 P-33-780 Phil. Long Distance Tel. Co. 3,755.63 P-33-781 Phil. Long Distance Tel. Co. 3,712.41 P-33-808 Phil. Long Distance Tel. Co. 181.13 P-33-809 Phil. Long Distance Tel. Co. 160.71 P-33-810 Phil. Long Distance Tel. Co. 119.88 P-33-811 Phil. Long Distance Tel. Co. 160.71 P-33-812 Phil. Long Distance Tel. Co. 160.71 P-33-813 Phil. Long Distance Tel. Co. 160.71 P-33-814 Phil. Long Distance Tel. Co. 160.71 P-33-815 Phil. Long Distance Tel. Co. 160.71 P-33-816 Phil. Long Distance Tel. Co. 160.71 P-33-817 Phil. Long Distance Tel. Co. 160.71 P-33-818 Phil. Long Distance Tel. Co. 160.71 P-33-819 Phil. Long Distance Tel. Co. 130.37 P-33-820 Phil. Long Distance Tel. Co. 112.37 P-33-821 Phil. Long Distance Tel. Co. 2,772.49 P-33-822 Phil. Long Distance Tel. Co. 297.77 P-33-958 Phil. Long Distance Tel. Co. 112.37 P-33-959 Phil. Long Distance Tel. Co. 112.37 P-33-960 Phil. Long Distance Tel. Co. 9,163.84 P-33-961 Phil. Long Distance Tel. Co. 1,913.41 P-33-962 Phil. Long Distance Tel. Co. 1,920.00 P-33-963 Phil. Long Distance Tel. Co. 16,920.33 P-33-964 Phil. Long Distance Tel. Co. 2,889.80 P-33-965 Phil. Long Distance Tel. Co. 172.40 P-33-966 Phil. Long Distance Tel. Co. 192.05 P-33-967 Phil. Long Distance Tel. Co. 3,712.41 P-33-968 Phil. Long Distance Tel. Co. 400.54 P-33-969 Phil. Long Distance Tel. Co. 160.71 P-33-970 Phil. Long Distance Tel. Co. 119.88 P-33-971 Phil. Long Distance Tel. Co. 160.71 P-33-972 Phil. Long Distance Tel. Co. 160.71 P-33-973 Phil. Long Distance Tel. Co. 160.71 P-33-974 Phil. Long Distance Tel. Co. 160.71 P-33-975 Phil. Long Distance Tel. Co. 160.71 P-33-976 Phil. Long Distance Tel. Co. 160.71 P-33-977 Phil. Long Distance Tel. Co. 160.71 P-33-978 Phil. Long Distance Tel. Co. 160.71 P-33-979 Phil. Long Distance Tel. Co. 130.37 P-33-980 Phil. Long Distance Tel. Co. 112.37 P-33-981 Phil. Long Distance Tel. Co. 2,930.10 P-33-1093 Phil. Long Distance Tel. Co. 170.75 P-33-1094 Phil. Long Distance Tel. Co. 189.86 P-33-1095 Phil. Long Distance Tel. Co. 3,712.41 P-33-1096 Phil. Long Distance Tel. Co. 180.08 P-33-1097 Phil. Long Distance Tel. Co. 160.71 P-33-1098 Phil. Long Distance Tel. Co. 119.88 P-33-1099 Phil. Long Distance Tel. Co. 160.71 P-33-1100 Phil. Long Distance Tel. Co. 160.71 P-33-1101 Phil. Long Distance Tel. Co. 160.71 P-33-1102 Phil. Long Distance Tel. Co. 160.71 P-33-1103 Phil. Long Distance Tel. Co. 160.71 P-33-1104 Phil. Long Distance Tel. Co. 160.71 P-33-1105 Phil. Long Distance Tel. Co. 160.71 P-33-1106 Phil. Long Distance Tel. Co. 160.71 P-33-1107 Phil. Long Distance Tel. Co. 130.37 P-33-1108 Phil. Long Distance Tel. Co. 112.37 P-33-1109 Phil. Long Distance Tel. Co. 7,633.87 P-33-1173 Phil. Long Distance Tel. Co. 6,637.82 P-33-1174 Phil. Long Distance Tel. Co. 112.37 P-33-1175 Phil. Long Distance Tel. Co. 1,913.41 P-33-1176 Phil. Long Distance Tel. Co. 16,920.00 P-33-1177 Phil. Long Distance Tel. Co. 1,920.00 P-33-1178 Phil. Long Distance Tel. Co. 112.37 P-33-1179 Phil. Long Distance Tel. Co. 112.37 P-33-1180 Phil. Long Distance Tel. Co. 1,524.08 P-33-1181 EKC Construction & Aggregates 25,397.07 P-33-1323 Phil. Long Distance Tel. Co. 7,633.87 P-33-1613 Phil. Long Distance Tel. Co. 6,637.82 P-33-1614 Phil. Long Distance Tel. Co. 7,631.57 P-33-1620 Phil. Long Distance Tel. Co. 6,635.83 P-33-1621 Eastern Communications 6,922.15 P-33-1630 Java Hotel 1,232.14 P-33-1631 Subtotal 420,231.94 6 Input VAT on purchases of goods supported by invoices dated outside the period of claim Pasamonte Gasoline Station 145.93 P-28-4 Pasamonte Gasoline Station 152.58 P-28-90 Subtotal 298.51 7 Input VAT on services tendered by non-resident supported by BIR Form 1600 dated outside the period of claim Kokusai Commerce Co. Ltd. & AMEC 1,126,939.67 P-3G-2-1 & P36-3-1 8 Overclaimed input tax on purchases previously classified as goods other than capital goods in the third quarter of FY 2012 and subsequently reclassified as capital goods subject to amortization in the fourth quarter of FY 2012 Septem, Inc. 7,232.14 P-31-1 Eastern Copperfields Trading, Inc. 175,928.57 P-31-2 Accent Micro Technologies, Inc. 10,053.21 P-31-3 Subtotal 193,213.92 Grand Total P1,875,784.68 =========== Therefore, out of San Roque's reported input VAT for FY 2012 in the amount of P36,093,484.03, only the amount of P34,161,038.29 represents San Roque's valid input VAT, computed as follows: Total Input VAT per Returns P36,093,484.03 Less: Disallowances Per ICPA's findings P56,661.06 Per this Court's findings 1,875,784.68 1,932,445.74 Valid Input VAT P34,161,038.29 ============ However, a portion of the P34,161,038.29 valid input VAT shall be applied against San Roque's reported output VAT liability for FY 2012 in the amount of P339,705.19. Hence, only the remaining input VAT of P33,821,333.10, as computed below, is attributable to the entire valid zero-rated receipts of P7,486,945,900.74: Valid Input VAT 34,161,038.29 Less: Output VAT 339,705.19 Valid Excess Input VAT P33,821,333.10 ============ Although the claimed excess input VAT was carried-over by petitioner in its Quarterly VAT Returns 39 from the first quarter of FY 2013 to the fourth quarter of FY 2013, the same remained unutilized until it was fully deducted in its Quarterly VAT Return for the fourth quarter of FY 2013 as "VAT Refund/TCC Claimed" 40 from the total available input tax of P73,799,536.74. 41 Thus, the claimed input tax for the taxable FY 2012 could not have been carried-over to the succeeding first quarter of FY 2014. Tax refunds partake the nature of tax exemptions and are thus construed strictissimi juris against the person or entity claiming the exemption. 42 The burden in claiming tax refund rests upon the taxpayer. In this case, petitioner was able to prove its entitlement to the claim for refund or issuance of tax credit certificate for its unutilized creditable input VAT attributable to its zero-rated sales for the fiscal year covering April 1, 2011 to March 31, 2012, but in the reduced amount of P33,821,333.10 . WHEREFORE , premises considered, the instant Petition for Review is hereby PARTIALLY GRANTED . Accordingly, respondent is hereby ORDERED TO REFUND in favor of petitioner the amount of P33,821,333.10 representing its unutilized input VAT for the fiscal period from April 1, 2011 to March 31, 2012. SO ORDERED . (SGD.) MA. BELEN M. RINGPIS-LIBAN Associate Justice Lovell R. Bautista and Esperanza R. Fabon-Victorino, JJ., concur. Footnotes 1. Docket (CTA Case No. 8675), pp. 6-17, with Annexes. 2. Joint Stipulation of Facts and Issues, Docket, pp. 738-740. 3. Ibid . 4. Ibid . 5. Ibid . 6. Ibid . 7. Exhibit "P-18". 8. Petitioner's Memorandum, Docket, p. 1312. 9. Docket, p. 256. 10. Docket, p. 279. 11. Ibid . p. 258. 12. Ibid . pp. 285-295. 13. Ibid . p. 300. 14. Ibid . p. 306. 15. Ibid. p. 310. 16. Ibid . p. 738. 17. Ibid . p. 871. 18. Docket, Minutes of the hearing, p. 1248. 19. Docket, pp. 1252-1263. 20. Ibid . pp. 1308-1344. 21. Ibid . p. 1348. 22. Ibid . p. 739, Joint Stipulation of Facts and Issues. 23. Exhibit "P-18". 24. Exhibit "P-23". 25. G.R. No. 187485, February 12, 2013. Citation omitted. 26. AT&T Communications Services Philippines, Inc. vs. Commissioner of Internal Revenue , G.R. No. 182364, August 3, 2010; Intel Technology Philippines, Inc. vs. Commissioner of Internal Revenue , G.R. No. 166732, April 27, 2007; Luzon Hydro Corporation vs. Commissioner of Internal Revenue , G.R. No. 188260, November 13, 2013; San Roque Power Corporation vs. Commissioner of Internal Revenue , G.R. No. 180345, November 25, 2009; and Silicon Philippines, Inc. (Formerly Intel Philippines Manufacturing, Inc.) vs. Commissioner of Internal Revenue , G.R. No. 172378, January 17, 2011. 27. Exhibit "P-9", Docket, Vol. 2, p. 963. 28. Exhibit "P-5", Docket, Vol. 2, pp. 952-955. 29. Exhibit "P-7", Docket, Vol. 2, pp. 959-962. 30. Exhibit "P-8", Docket, Vol. 2, pp. 964-1068. 31. Exhibits "P-24-2-1" to "P-24-2-8". 32. Exhibits "P-24-1-1" to "P-24-1-38". 33. Exhibits "P-24-3-1" to "P-24-3-37". 34. Exhibits "P-26-1" to "P-26-7", "P-27-1" to "P-27-27", "P-27-29" to "P-27-31", "P-27-34" to "P-27-35", "P-27-38" to "P-27-39", "P-28-1" to "P-28-1650", "P-29-1" to "P-29-4", "P-30-1" to "P-30-2" and "P-31-1" to "P-31-2", "P-36-1-1" to "P-36-1-14". 35. Exhibits "P-27-28", "P-27-32" to "P-27-33", "P-27-36" to "P-27-37", "P-33-1" to "P-33-1649" and "P-34-1". 36. Exhibits "P-35-1-1" to "P-35-1-8". 37. Exhibits "P-27-32-1", "P-27-33-1", "P-27-36-1", "P-27-37-1", "P-35-2-1" to "P-35-2-8". 38. Exhibits "P-36-2-1" to "P-36-2-8" and "P-36-3-1" to "P-36-3-8". 39. Exhibits "P-37-1" to "P-37-4"; "P-19" to "P-22". 40. Exhibits "P-37-4(1/2)" and "P-22", Line 23D. 41. Exhibit "P-37-4(1/2)", line 22. 42. Far East Bank and Trust Company as Trustee of Various Retirement Present: Funds vs. Commissioner of Internal Revenue and the Court of Tax Appeals, G.R. No. 138919, May 2, 2006, citing Commissioner of Internal Revenue v. S.C. Johnson & Son, Inc., 368 Phil. 388, 411 (1999) .