Mirant Navotas Corp. v. Commissioner of Internal Revenue

FORMER SIXTH DIVISION [CA-G.R. SP No. 65397. April 23, 2004.] MIRANT NAVOTAS CORPORATION [formerly Southern Energy Navotas, Inc.] , petitioner , vs . COMMISSIONER OF INTERNAL REVENUE , respondent . D E C I S I O N VIDALLON-MAGTOLIS , J p : This petition for review seeks the setting aside of the decision 1 dated April 10, 2001 of the Court of Tax Appeals (CTA) in CTA Case No. 5910, which denied for lack of merit the petitioner's claim for refund of unutilized input value-added tax (VAT) on domestic purchases of goods and services for the second quarter of 1997 amounting to P246,541.97, as well as its resolution 2 dated June 7, 2001 which denied the petitioner's motion for reconsideration of the aforesaid decision. THE FACTUAL ANTECEDENTS The facts of the case as jointly stipulated by the parties and approved by the tax court as follows: "1. Petitioner was originally registered with the Securities and Exchange Commission (SEC) under the name 'Hopewell Energy (Philippines), Inc.' However, effective June 17, 1999, Petitioner's name was changed to 'Southern Energy Navotas, Inc.' after it filed an application with the SEC for amendment of its articles of incorporation. "2. Petitioner is principally engaged in the business of power generation and subsequent sale thereof to National Power Corporation under a Build, Operate, Transfer scheme. "3. Petitioner is registered as Value-Added Tax (VAT) taxpayer in accordance with Section 107 of the Tax Code [now Section 236 of the National Internal Revenue Code of 1997], with BIR Certificate of Registration bearing RDO Control No. 96-051-005718. "4. Petitioner has a pending Application for Effective Zero Rating which was filed on March 1, 1996 with the BIR Revenue District Office No. 51 at Pasay City for the construction and operation of a gas turbine power station under the build, operate, and transfer (BOT) scheme with the National Power Corporation ("NPC"). "5. For the second quarter of 1997, Petitioner filed its quarterly VAT return on July 21, 1997, which returns reflected a (sic) total domestic purchases of goods and services amounting to P2,465,419.33 a total input tax paid thereon in the amount of P246,541.97. "6. On June 30, 1999, Petitioner filed an administrative claim for refund of unutilized input VAT with the Bureau of Internal Revenue in the amount of P246,541.97 for the second quarter of 1997. "7. To this date, Respondent has not yet approved the administrative claim for refund. 3 On October 8, 1999, the petitioner filed an amended VAT return for the quarter ending June 30, 1997 reflecting, among others, zero-rated sales in the amount of P57,393,078.71. On October 11, 1999, the petitioner filed with the Bureau of Internal Revenue (BIR) its VAT return for the third quarter of 1999 reflecting, among others, the deduction of the unutilized input taxes for the year 1997 (which included the unutilized input taxes for the second quarter of 1997) from the total available input tax of the third quarter of 1999. The said deduction came after the petitioner has carried over its unutilized input taxes for taxable year 1997 from one quarter to another up to the third quarter of 1999. After the petitioner's presentation and offer of evidence, 4 the tax court in its resolution 5 dated July 17, 2000 resolved to admit all the evidence presented by the petitioner. On the other hand, the respondent waived its right to present evidence on its behalf. Thereafter, the petitioner filed its memorandum. 6 On April 10, 2001, the tax court rendered the assailed decision 7 denying the petitioner's claim for refund on the sole ground that there was no approved application for zero-rating. The petitioner's motion for reconsideration 8 was likewise denied. 9 Hence, this petition. On November 23, 2001, upon the petitioner's manifestation of change of name and motion for annulment of caption, 10 this Court through Our then 8th Division, promulgated a resolution 11 granting the petitioner's motion to change/amend the name of Southern Energy Navotas, Inc. to Mirant Navotas Corporation. THE ISSUES The petitioner summarizes the issues herein as follows: I WHETHER OR NOT PETITIONER IS ENTITLED TO THE REFUND OF ITS UNAPPLIED OR UNUTILIZED CREDITABLE VAT INPUTS FOR THE QUARTER ENDED JUNE 30, 1997 AMOUNTING TO P246,541.97. II WHETHER OR NOT THE COURT OF TAX APPEALS ERRED IN DENYING PETITIONER'S CLAIM FOR REFUND ON THE SOLE GROUND THAT THE PETITIONER FAILED TO ACQUIRE AN APPROVED APPLICATION FOR ZERO RATING FROM THE BIR. THE PETITIONER'S ARGUMENTS The petitioner alleges that the power generation services rendered by the petitioner to the National Power Corporation (NPC) are subject to zero percent VAT. According to the petitioner, its parent company, Hopewell Energy International Limited (HEIL), and the NPC entered into a "Build Operate and Transfer Project Agreement for a Gas Turbine Power Station in Navotas, Manila" (BOT Agreement) whereby HEIL has agreed to design, build and operate a gas turbine power station in the Philippines. The NPC agreed to purchase the electricity generated from the said power station. After the lapse of the agreed period, HEIL will eventually transfer the ownership of the said power station to NPC. HEIL created the petitioner as its subsidiary in the Philippines to undertake the construction and operation of the power station and other undertakings under the BOT Agreement. For this purpose, an Accession Undertaking was entered into among HEIL, the NPC and the petitioner wherein it was stipulated that all references to HEIL in the BOT Agreement shall be construed to be references to the petitioner which shall undertake all the obligations of its parent company HEIL, to the NPC under the BOT Agreement. For the supply of electricity and related undertakings under the BOT Agreement, it was agreed that NPC shall pay the petitioner monthly capacity fees and energy fees. The petitioner shall deliver to NPC a monthly invoice in respect of the capacity fees and energy fees, payment of which shall be made by NPC within 30 days from the delivery of the invoice. For the second quarter of 1997, the petitioner had zero rated sales of power generation services rendered to NPC, for which the petitioner had issued invoices to NPC. The petitioner claims that the power generations services it rendered to the NPC are effectively zero rated for VAT purposes under the following provisions of law and jurisprudence: 1. Section 102 of the old tax code [now Section 108 of the National Internal Revenue Code (NIRC) of 1997]; 2. Section 13 of Republic Act No. 6395, as amended, which declared NPC as exempt from the payment of all forms of taxes, duties and fees; 3. In Maceda vs. Macaraig , 12 the Supreme Court affirmed the exemption of NPC from the payment of all taxes, whether direct or indirect; 4. In its Resolution 13 dated June 8, 1993, the Supreme Court reaffirmed the NPC's exemption from all direct and indirect taxes; and 5. In Memorandum dated January 28, 1998 issued by the Department of Finance (DOF) addressed to the Commissioner of Internal Revenue (CIR), holding that the purchases by NPC of electricity from independent power producers are subject to VAT at zero-rate. The petitioner further contends that it has creditable VAT inputs for the quarter ending June 30, 1997 in the amount of P246,541.97 which were duly substantiated by documentary evidence as required. The petitioner also alleges that its creditable VAT input for the second quarter of 1997 on its domestic purchase of goods and services amounting to P246,541.97 remains unutilized considering that the petitioner has not engaged in any business activity or transaction for which it was liable for output VAT other than its zero-rated sale of power generation services to NPC which does not produce any output VAT liability. Thus, since the petitioner's input taxes for the second quarter of 1997 have not been offset against any output tax, the unutilized input taxes were carried over from one quarter to another up to the third quarter of 1999 where the petitioner finally deducted the unutilized input taxes for the calendar year 1997 from the total available input tax as of the third quarter of 1999. The petitioner allegedly made the deduction because of the instant claim for refund which prevented the mode of carrying forward of input taxes and offsetting it against the petitioner's future tax credit. Moreover, the petitioner's claim for refund was seasonably filed. For the taxable quarter ending June 30, 1997, the petitioner filed its VAT return with the BIR on July 21, 1997. Subsequently, the petitioner's administrative claim for refund of its creditable input VAT amounting to P137,535.60 was filed in June 30, 1999 with the BIR-RDO 51 in Pasay City. The present judicial claim for refund was filed on July 20, 1999. Clearly then, both the petitioner's administrative and judicial claims for refund of its creditable input VAT have been filed within the two-year prescribed period under Section 112 (A) of the 1997 tax code. Likewise, contrary to the CTA's finding, nowhere is it required under the National Internal Revenue Code (NIRC) that there should be an approved application for zero-rating as a condition precedent for the grant of refund of creditable input VAT. Such a requirement finds basis only in Section 8 (d) of Revenue Regulations No. 5-87 issued by the BIR which provides: "(d) Application for the imposition of zero-rate. Any person claiming that its sales of goods or services are effectively zero-rated under Section 100 and 102 shall file an application in a form prescribed therefor with the Commissioner of Internal Revenue justifying the imposition of zero rate on the said transactions. Upon approval, his status as a zero-rated taxpayer shall remain valid until revoked." 14 Citing the cases of Commissioner of Internal Revenue vs. Court of Appeals 15 and Land Bank of the Phils. vs. Court of Appeals , 16 the petitioner argues on the well-settled rule in administrative law that subordinate rules and regulations issued by administrative agencies pursuant to a law enacted by Congress should not amend or extend the statute sought to be implemented. Such rules and regulations should be confined and limited by the power conferred by the legislature. Moreover, in Philippine Petroleum Corporation vs. Municipality of Pililla, Rizal , 17 all issuances by administrative agencies must remain consistent and in harmony with the law they seek to apply and implement. In case of discrepancy in the basic law and an implementing rule or regulation, the former prevails. Such being the case, it can be said with a reasonable degree of certainty that the requirement imposed by the BIR for an approved application for zero-rating under its regulations is invalid for having gone beyond the law it is supposed to implement. Besides, petitioner submits that the requirement for an approved application for zero-rating is a mere technicality imposed by the BIR which should not prevail over the substantive right of the petitioner herein. THE COURT'S RULING We first resolve the issue of whether or not the National Power Corporation (NPC) is exempt from all forms of taxes direct and indirect in order for Us to determine whether or not the power generation services rendered by the petitioner to the NPC are effectively zero-rated for VAT purposes. In the case of Maceda vs. Macaraig , 18 the High Court in a resolution dated June 8, 1993 reiterated its earlier ruling in the same case of Maceda vs. Macaraig 19 promulgated on May 31, 1991, which held that the NPC is exempt from " all forms of taxes , duties, fees, imposts, as well as costs and service fees including filing fees, appeal bonds, supersedeas bonds, in any court or administrative proceedings." 20 As explained by the High Court in the aforesaid case, "the use of the phrase 'all forms' of taxes demonstrate the intention of the law to give NPC all the tax exemptions it has been enjoying before. The rationale for this exemption is that being non-profit the NPC 'shall devote all its returns form its capital investment as well as excess revenues from its operation, for expansion. To enable the Corporation to pay the indebtedness and obligations and in furtherance and effective implementation of the policy enunciated in Section one of this Act . . ." 21 In its later resolution, the High Tribunal emphatically declared that the exemptions includes "indirect taxes." Thus: "Petitioner contends that P.D. No. 938 repealed the indirect tax exemption of NPC as the phrase 'all forms of taxes, etc.,' in its Section 10, amending Section 13, R.A. No. 6395, as amended by P.D. No. 380, does not expressly include 'indirect taxes.' "His point is not well-taken. "A chronological review of the NPC laws will show that it has been the lawmaker's intention that the NPC was to be completely tax exempt from all forms of taxes direct and indirect. "NPC's tax exemption at first applied to the bonds it was authorized to float to finance its operations upon its creation by virtue of C.A. No. 120. "When the NPC was authorized to contract with the IBRD for foreign financing , any loans obtained were to be completely tax exempt. "After the NPC was authorized to borrow from other sources of funds aside from issuance of bonds it was again specifically exempted from all types of taxes 'to facilitate payment of its indebtedness.' Even when the ceilings for domestic and foreign borrowings were periodically increased, the tax exemption privileges of the NPC were maintained. "NPC's tax exemption from real estate taxes was, however, specifically withdrawn by Rep. Act No. 987, as above stated. The exemption was, however, restored by R.A. No. 6395. "Section 13, R.A. No. 6395, was very comprehensive in its enumeration of the tax exemptions allowed NPC. Its Section 13(d) is the starting point of this bone of contention among the parties. For easy reference, it is reproduced as follows: "[T]he Corporation is hereby declared exempt: 'xxx xxx xxx '(d) From all taxes, duties, fees, imposts and all other charges imposed by the Republic of the Philippines, its provinces, cities, municipalities and other government agencies and instrumentalities, on all petroleum products used by the Corporation in the generation, transmission, utilization, and sale of electric power.' "P.D. No. 380 added the phrase 'directly of indirectly' to said Section 13(d), which now reads as follows: 'xxx xxx xxx '(d) From all taxes, duties, fees, imposts, and all other charges imposed directly or indirectly by the Republic of the Philippines, its provinces, cities, municipalities and other government agencies and instrumentalities, on all petroleum products used by the Corporation in the generation, transmission, utilization and sale of electric power.' (Emphasis supplied) "Then came P.D. No. 938 which amend Sec. 13(a), (b), (c) and (d) into one very simple paragraph as follows: cHaCAS "The Corporation shall be non-profit and shall devote all its returns from its capital investment as well as excess revenues from its operation, for expansion. To enable the Corporation to pay its indebtedness and obligations and in furtherance and effective implementation of the policy enunciated in Section one of this Act, the Corporation, including its subsidiaries, is hereby declared exempt from the payment of ALL FORMS OF taxes, duties, fees, imposts as well as costs and service fees including filing fees, appeal bonds, supersedeas bonds, in any court or administrative proceedings.' (Emphasis supplied) "Petitioner reminds Us that: '[I]t must be borne in mind that Presidential Decree Nos. 380 and 938 were issued by one man, acting as both the Executive and Legislative. '[S]ince both presidential decrees were made by the same person, it would have been very easy for him to retain the same or similar language used in P.D. No. 380 in P.D. No. 938 if his intention were to preserve the indirect tax exemption of NPC. "Actually, P.D. No. 938 attests to ingenuousness of then President Marcos no matter what his faults were. It should be noted that Section 13, R.A. No. 6395, provided for tax exemptions for the following terms: 13(a): court or administrative proceedings; 13(b) income, franchise, realty taxes; 13(c) import of foreign goods required for its operations and projects; 13(d) petroleum products used in generation of electric power. "P.D. No. 938 lumped up 13(b), 13(c), and 13(d) into the phrase 'ALL FORMS OF TAXES, ETC.,' included 13(a) under the 'as well as' clause and added PNOC subsidiaries as qualified for tax exemptions. "This is the only conclusion one can arrive at if he has read all the PNC laws in order of enactment or issuance narrated above in part 1 hereof. President Marcos must have considered all the NPC statutes from C.A. No. 120 up to its latest amendments, P.D. No. 380, P.D. No. 395 and P.D. No. 759, AND came up with a very simple Section 13, R.A. No. 6395, as amended by P.D. No. 938. "One common theme in all these laws is that the NPC must be enabled to pay its indebtedness which, as of P.D. No. 938, was P12 Billion in total domestic indebtedness, at any one time, and US$4 Billion in total foreign loans at any one time. The NPC must be and has to be exempt from all forms of taxes if this goal is to be achieved. "By virtue of P.D. No. 938, NPC's capital stock was raised to P8 Billion. It must be remembered that to pay for the government share in its capital stock P.D. No. 758 was issued mandating that P200 Million would be appropriated annually to cover the said unpaid subscription of the Government in NPC's authorized capital stock. And significantly one of the sources of this annual appropriation of P200 million is TAX MONEY accruing to the General Fund of the Government. It does not stand to reason then that former President Marcos would order P200 Million to be taken partially or totally from tax money to be used to pay the Government subscription in the NPC, on one hand, and then order the NPC to pay all its indirect taxes, on the other. "The above conclusion that then President Marcos lumped up Section 13 (b), 13 (c) and 13 (d) into the phrase 'ALL FORMS OF' is supported by the fact that he did not do the same for the tax exemption provision for the foreign loans to be incurred. "The tax exemption on foreign loans found in Section 8(b), R.A. No. 6395, reads as follows: "The loans, credits and indebtedness contracted under this sub-section and the payment of the principal, interest and other charges thereon, as well as the importation of machinery, equipment, materials and supplies by the Corporation, paid from the proceeds of any loan, credit or indebtedness incurred under this Act, shall also be exempt from all taxes, fees, imposts, other charges and restrictions, including import restrictions, by the Republic of the Philippines, or any of its agencies and political subdivisions.' "The same was amended by P.D. No. 380 as follows: "The loans, credits and indebtedness contracted under this sub-section and the payment of the principal, interest and other charges thereon, as well as the importation of machinery, equipment, materials, supplies and services, by the Corporation, paid from the proceeds of any loan, credit or indebtedness incurred under this Act, shall also be exempt from all direct and indirect taxes, fees, imposts, other charges and restrictions, including import restrictions previously and presently imposed, and to be imposed by the Republic of the Philippines, or any of its agencies and political subdivisions." (Emphasis supplied) "P.D. No. 938 did not amend the same and so the tax exemption provision in Section 8(b), R.A. No. 6395, as amended by P.D. No. 380, still stands. Since the subject matter of this particular Section 8 (b) had to do only with loans and machinery imported, paid for from the proceeds of these foreign loans, THERE WAS NO OTHER SUBJECT MATTER TO LUMP IT UP WITH, and so, the tax exemption stood as is with the express mention of 'direct and indirect' tax exemptions. And this 'direct and indirect' tax exemption privilege extended to 'taxes, fees, imposts, other charges . . . to be imposed' in the future surely, an indication that the lawmakers wanted the NPC to be exempt from ALL FORMS of taxes direct and indirect. "It is crystal clear, therefore, that NPC had been granted tax exemption privileges for both direct and indirect taxes under P.D. No. 938." 22 Undoubtedly, the petitioner's power generation services rendered to NPC are effectively zero-rated as provided for under Section 108 (B) paragraph (3) of the 1997 National Internal Revenue Code (NIRC), as amended: "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 "3) Services rendered to persons or entities whose exemption under special laws or international agreements to which the Philippines is a signatory effectively subjects the supply of such service to zero percent (0%) rate; . . ." However, for the petitioner to avail of the privilege of tax credit or refund of creditable input VAT under Section 112 (A) 23 of the 1997 NIRC in its power generation services to NPC, an application therefor has to be filed with the Commissioner of Internal Revenue (CIR) justifying the imposition of zero rate on the said transactions, and the same has to be approved by the CIR pursuant to Section 8 (d) of the Revenue Regulations No. 5-87, thus: "Section 8. Zero-rating (a) . . . (d) Application for the imposition of zero rate . Any person claiming that his sales of goods or services are effectively zero-rated under Sections 100 and 102 shall file an application in a form prescribed therefor with the Commissioner of Internal Revenue justifying the imposition of zero rate on the said transactions. Upon approval, his status as a zero-rated taxpayer shall remain valid until revoked ." The aforesaid requirement was further reiterated in the most recent Revenue Regulations No. 7-95, which We also find applicable in the case at bench, the pertinent provision of which reads: "Sec. 4.107-1. Registration of Value Added Taxpayers . "(a) . . . "(d) Application for effective zero-rating . Except for actual export sale, other cases of zero-rated sales in Sec. 4.100-3 and Sec. 4.102-2(c) shall require prior application with Revenue District Office for effective zero-rating. Without an approved application for effective zero-rating, the transaction otherwise entitled to zero-rating shall be considered exempt ." The petitioner alleges though that nowhere is it required under the NIRC that there should be an approved application for zero-rating as a condition precedent for the grant refund of creditable input VAT. Hence the imposition by the BIR for an approved application for zero rating under it rules and regulations is invalid for having gone beyond what the law it is supposed to implement provides. Verily, there is no express provision in the NIRC requiring an approved application for zero-rating to avail of the tax credit or refund of creditable input tax due. However, under the interpretative power of the Secretary of Finance, upon recommendation of the Commissioner of Internal Revenue, the former had the power to promulgate all needful rules and regulations for the effective enforcement of the provisions of the NIRC as provided for under Section 244 of the 1997 NIRC. Moreover, it appears that the petitioner recognizes the necessity of the filing of the application to avail of the privilege as in fact it filed its application for zero-rating of the questioned transaction with the Revenue District No. 51 of Pasay City on March 1, 1996. 24 It would therefore be absurd not to require the approval of the application before one can be granted the tax credit or refund of creditable input VAT; otherwise, an application would not have been necessary. Besides, the inaction of the CIR of the petitioner's application cannot be taken as an approval thereof, for it is an outright disregard of the basic principle in the tax law that taxes are lifeblood of the government and should be collected without unnecessary hindrance. 25 Settled is the rule that a claim for refund is in the nature of a claim for exemption and should be construed in strictissimi juris against the taxpayer. 26 "Laws granting exemption from tax are construed strictissimi juris against the taxpayer and liberally in favor of the taxing power. Taxation is the rule and exemption is the exception.' The law 'does not look with favor on tax exemptions and that he would seek to be thus privileged must justify it by words too plain to be mistaken and too categorical to be misinterpreted.'" 27 In fine, the tax court is correct when it found that "without an approved application for effective zero-rating, the transaction otherwise entitled to zero-rating shall be considered exempt, in which case, the transactions are not entitled to input tax credits as provided for in Section 9 (a) of Revenue Regulations 5-87 and Section 4.103-1 (a) of the Revenue Regulations 7-95, thus: Revenue Regulations 5-87: "Sec. 9. Exemptions . In general. An exemption means that the sale of goods or services is not subject to value-added tax (output tax). The seller is not allowed any tax credit on VAT (input tax) previously paid. The person making the exempt sale of goods or services shall not separately bill any output tax to his customers because the said transaction is not subject to VAT." Revenue Regulations 7-95: "Sec. 4.103-1. Exemptions . (A). In general. An exemption means that the sale of goods or properties and/or services and the use or lease of properties is not subject to VAT (output tax) and the seller is not allowed any tax credit on VAT (input tax) previously paid. "The person making the exempt sale of good, properties or services shall not bill any output tax to his customers because the said transaction is not subject to VAT. On the other hand, a VAT-registered purchaser of VAT-exempt goods/properties or services which are exempt from VAT is not entitled to any input tax on such purchase despite the issuance of a VAT invoice or receipt." The petitioner had failed to present an approved application for zero-rating as required; hence, the subject transactions herein cannot be considered as zero-rated. Therefore, the petitioner is not entitled to the claim for refund. In view of the foregoing, We deem it no longer necessary to discuss the other issues herein. WHEREFORE, the petition is DISMISSED for lack of merit . TDcEaH SO ORDERED. Salazar-Fernando and Sundiam, JJ . , concur. Footnotes 1. Rollo , p. 55. 2. Id . at p. 61. 3. Id . at pp. 5556. 4. Id . at p. 74. 5. Id . at p. 89. 6. Id . at p. 91. 7. Id . at p. 55. 8. Id . at p. 109. 9. Id . at p. 61. 10. Id . at p. 122. 11. Id . at p. 533. 12. 197 SCRA 771. 13. Maceda vs. Macaraig, Jr ., 223 SCRA 221. 14. Id . at p. 40. 15. 240 SCRA 368. 16. 249 SCRA 149. 17. 198 SCRA 82. 18. 223 SCRA 217. 19. 197 SCRA 771. 20. Id . at p. 798. 21. Ibid ., citing Section 13, P.D. No. 938: "Sec. 13. Non profit Character of the Corporation: Exemption from all Taxes, Duties, Fees, Imposts and Other Charges by the Government and Government Instrumentalities . The Corporation shall be non-profit and shall devote all its returns from its capital investment as well as excess revenues from its operation, for expansion. To enable the Corporation to pay the indebtedness and obligations and in furtherance and effective implementation of the policy enunciated in Section One of this Act, the Corporation including its subsidiaries hereby declared exempt from the payment of all forms of taxes, duties, fees, imposts as well as costs and service fees including filing fees, appeal bonds, supersedeas bonds, in any court or administrative proceedings ." 22. Maceda vs. Macaraig , 223 SCRA 217, 236241. 23. Section 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 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 taxpayers 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 transaction, it shall be allocated proportionately on the basis of the volume of sales. 24. Rollo , p. 188. 25. Philex Mining Corporation vs. Commissioner of Internal Revenue , 294 SCRA 687, 696. 26. Commissioner of Internal Revenue vs. Tokyo Shipping Co., Ltd. Ltd. 244 SCRA 332, 336. 27. Sea-Land Service, Inc. vs. Court of Appeals , 357 SCRA 441, 444.