Question:

In 2008, Chevron Holdings filed an administrative claim for refund or issuance of a tax credit certificate on the unutilized
input VAT attributable to the sale of services to its foreign affiliates. The Commissioner of Internal Revenue failed to act
on the claim; hence, in 2008, Chevron Holdings filed a Petition for Review before the CTA Division for the refund or credit
of excess input VAT for the first quarter of 2006 in the amount of P5,391,252.04. In 2008, Chevron Holdings again filed a
Petition for Review for the refund or credit of P31,411,704.68 excess input VAT for the second to fourth quarters. Chevron
Holdings' Motion for Reconsideration was denied; hence, it elevated the matter to the CTA En. In 2014, the CTA En Banc
rendered its Decision reversing the CTA Division and partly granting Chevron Holdings' petitions. The CTA En Banc ruled
that the input tax carry-over of P56,564,096.77 reported in the Quarterly VAT Return for the first quarter cannot be validly
applied against the output tax for the year 2006 because Chevron Holdings failed to present VAT invoices or receipts to
prove its existence. Chevron Holdings sought reconsideration. In 2014, the CTA En Banc issued an Amended Decision
reiterating that, on its own, the Certification of Non-Registration of Corporation/Partnership is insufficient to prove that
the foreign affiliate was outside the Philippines when the services were rendered. Unsatisfied, Chevron Holdings filed the
instant petition before the Court.

1. Whether the sales rendered to Chevron Holdings' non-resident foreign affiliates qualify for VAT zero-rating under
Section 108 (B)(2) of the Tax Code.
2. Whether Chevron Holdings is required to substantiate its excess input tax carried-over from the previous
quarters in the amount of P55,784,357.71 to be entitled to refund or credit of unutilized input taxes arising from
zero-rated sales from January to December 2006.
3. Whether the CTA En Banc properly charged Chevron Holdings' output tax liabilities the validated input taxes and
only when there existed excess input taxes that it allows the refund.

Answer:
1. Chevron Holdings failed to prove that certain services to non-resident foreign affiliate clients qualify for VAT
zero-rating under Section 108 (B)(2) of the Tax Code.
To qualify for VAT zero-rating, Section 108 (B)(2) requires the concurrence of four conditions: first, the services
rendered should be other than "processing, manufacturing or repacking of goods;" second, the services are
performed in the Philippines; third, the service-recipient is a person engaged in business conducted outside the
Philippines; or a non-resident person not engaged in a business which is outside the Philippines when the
services are performed; and, fourth, the services are paid for in acceptable foreign currency inwardly remitted
and accounted for in conformity with BSP rules and regulations. The first and second requisites are undisputed.
As an ROHQ, Chevron Holdings performs services to its affiliates in the Asia-Pacific, North American, and African
Regions, such as general administration and planning, business planning and coordination, sourcing and
procurement of raw materials and components, corporate finance advisory services, marketing control, and sales
promotion, training and personnel management, logistics services, research and development services, and
product development, technical support and maintenance, data processing and communications, and business
development. Certainly, the services it renders in the Philippines are not in the same category as "processing,
manufacturing or repacking of goods."

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2. Chevron Holdings failed to strictly comply with the invoicing requirements under the Tax Code. The CTA En Banc
correctly disallowed P24,598,395.58 as input tax. Section 4.113-1 of RR No. 16-2005, in relation to Section 113
(B)(2) of the Tax Code, requires the VAT to be separately indicated in the invoice or official receipt. Failure to
comply with the invoicing requirements is sufficient ground to deny the claim for refund of tax credit. Only a VAT
invoice or official receipt can give rise to input tax; without input tax, there is nothing to refund. Therefore,
considering that input taxes in the amount of P24,598,395.58 were not shown as a separate item in the invoice
or official receipts, these cannot be considered valid input taxes that may be refunded or credited in favor of
Chevron Holdings. The CTA En Banc found that only P155,654,748.22 qualified for VAT zero-rating of sales of
services to foreign affiliates. Out of the total reported input VAT of P40,152,123.09 attributable to both twelve
percent (12%) VAT-able and zero-rated transactions, only P9,081,815.00 was substantiated with VAT official
receipts and invoices. Accordingly, Chevron Holdings is entitled to the refund of unutilized input tax allocable to
its zero-rated sales for January 1 to December 31, 2006, in the total amount of P1,140,381.22.

3. It was erroneous for the CTA to charge the validated and substantiated input taxes against Chevron Holdings'
output taxes first and use the resultant amount as the basis for computing the allowable amount for refund. The
CTA also erred in requiring Chevron Holdings to substantiate its excess input tax carried over from the previous
quarter as it is not a requirement for entitlement to a refund of unused or unutilized input VAT from zero-rated
sales. Chevron Holdings sufficiently proved compliance with all the requisites for entitlement to a refund or credit
of unutilized input tax allocable to zero-rated sales under Section 112 (A) of the Tax Code. (CHEVRON HOLDINGS,
INC. (FORMERLY CALTEX ASIA LIMITED), PETITIONER, VS. COMMISSIONER OF INTERNAL REVENUE,
RESPONDENT.)

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Question:
In 2012, Filminera Resources filed its amended quarterly VAT returns for the third and fourth quarters, respectively. On
the same dates, Filminera Resources filed administrative claims for refund or issuance of TCC of its unutilized input VAT
attributable to its zero-rated sales for the third and fourth quarters. Thereafter, in 2012, Filminera Resources filed
separate petitions for review before the CTA, which were docketed as CTA Case No. 8528 and CTA Case No. 8576. In 2014,
the CTA Division denied Filminera Resources' petitions on the ground of insufficiency of evidence. Filminera Resources
sought reconsideration and submitted a certified true copy of BOI Certification dated 2010 to establish that PGPRC was a
BOI-registered enterprise that exported its total sales volume from July 2009 to June 2010. In 2015, the CTA Division
amended its Decision on petitioner's motion for reconsideration dated 2014. The CIR's motion for reconsideration was
denied in 2015. Hence, the CIR elevated the case to the CTA En Banc. In 2017, the CTA En Banc dismissed the petition for
lack of merit. On reconsideration, the CIR insisted that the BOI Certification was not sufficient to support Filminera
Resources' claim for refund because there must be proof of actual exportation of PGPRC's products. In 2017, the CTA En
Banc denied the CIR's motion and ruled: with the formal offer and admission into evidence of the BOI Certification that
PGPRC exported 100% of its total sales volume, Filminera Resources' sales thus qualify for VAT zero-rating under the law.

1. Is Filminera Resources Corporation entitled to a refund or the issuance of a tax credit certificate?

Answer:
1. No, Filminera Resources Corporation is not entitled to a refund or the issuance of a tax credit certificate.
Under Section 112(A) of the 1997 NIRC, the seller may claim a refund or tax credit for the input VAT attributable
to its zero-rated sales subject to the following conditions: the taxpayer is VAT-registered; the taxpayer is engaged
in zero-rated or effectively zero-rated sales; the claim must be filed within two years after the close of the taxable
quarter when such sales were made; the creditable input tax due or paid must be attributable to such sales,
except the transitional input tax, to the extent that such input tax has not been applied against the output tax;
and in case of zero-rated sales under Section 106(A)(2)(a)(l) and (2), Section 106(B) and Section 108(B)(l) and (2)
of the 1997 NIRC, the acceptable foreign currency exchange proceeds have been duly accounted for in accordance
with Bangko Sentral ng Pilipinas rules and regulations.
The first and third requisites have been established before the CTA. Filminera Resources is a VAT-registered
taxpayer that filed administrative and judicial claims for refund within the period prescribed by law. Meanwhile,
the fifth requisite is not applicable. As for the second requisite, Filminera Resources failed to prove that its sales
to PGPRC for the third and fourth quarters of FY 2010 are export sales. We reiterate that without the certification
from the B 01 attesting actual exportation by PGPRC of its entire products from January to June 2010, the sales
made during that period are not zero-rated export sales. The second requisite not having been met, there is no
need for us to discuss the fourth requirement. Thus, Filminera Resources Corporation is not entitled to a refund
or the issuance of tax credit certificate in the amount of P111,579,541.76, representing its unutilized input value-
added tax attributable to zero-rated sales for the third and fourth quarters of the fiscal year ending 2010.
(COMMISSIONER INTERNAL REVENUE, PETITIONER, VS. FILMINERA RESOURCES CORPORATION, RESPONDENT.)

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Question:
In 2010, the COMELEC received a Letter of Authority from the Bureau of Internal Revenue to examine its books of accounts
and accounting records for all withholding taxes for 2008. The investigation yielded a deficiency EWT assessment of P26M
and P4.37M against the COMELEC for failure to deduct, withhold and remit the required tax on income payments made
to Smartmatic and Avante. The COMELEC received the Final Assessment Notice and Formal Letter of Demand in 2012 and
the Regional Director's denial of its protest and demand to pay the assessed tax in 2012. In 2012, the COMELEC interposed
an administrative appeal to the CIR, which was denied in 2014. In 2014, the COMELEC filed a Petition for Review with the
CTA. In 2016, the CTA Second Division rendered its Decision, partly granting the COMELEC's petition.
The COMELEC sought a reconsideration. The CTA Division denied the CIR's motion in 2017. Thus, the CIR elevated the
matter to the CTA En Banc. The COMELEC filed its own petition to the CTA En Banc. The two petitions were consolidated.
CTA En Banc dismissed the COMELEC's petition because the required number of votes to reverse the CTA Division's
Amended Decision under Section 2 of RA No. 1125, as amended by RA No. 9282 and RA No. 9503, in relation to Section
3, Rule 2 of the Revised Rules of the Court of Tax Appeals, was not obtained. As such, the Amended Decision dated 2017
was affirmed. The COMELEC moved for reconsideration but was denied in 2019. The CTA En Banc clarified that PSALM is
not applicable because of the irreconcilable repugnancy between Section 1 of PD No. 242 and Section 66. Meantime, in
2019, the CIR, through the Legal Division of the BIR, filed a motion for extension of time to file a petition for review before
SC.

1. On the procedural aspect, whether the COMELEC properly filed its petition for review with the CTA En Banc
without first filing a motion for reconsideration of the CTA Division's Amended Decision dated 2017 considering
this Court's ruling in Asiatrust.
2. On the substantive aspect, whether the COMELEC is liable for the deficiency of basic EWT and its increments on
the income payments made to Smartmatic and Avante for the lease contracts.

Answer:
1. The COMELEC correctly instituted a petition with the CTA En Banc without first seeking a reconsideration of the
CTA Division's Amended Decision.
Asiatrust and related cases do not share the same factual milieu as in this case, and do not apply to the COMELEC.
We clarify.
It will be observed in Asiatrust and CE Luzon that the amended decision of the CTA Division is entirely new. The
amended decision is based on a re-evaluation of the parties' allegations or reconsideration of new and/or
existing evidence that were not considered and/or previously rejected in the original decision. In Asiatrust, the
case was set for hearing, and the Court allowed Asiatrust Bank to submit additional evidence, which became the
foundation of the amended decision. In CE Luzon, the Court re-evaluated the pieces of documentary evidence
supporting CELG's claim for refund of unutilized input Value Added Tax and found it meritorious, thereby
increasing the amount it granted CELG for refund. In both cases, we held that the amended decisions are proper
subjects of motions for reconsideration.
In the instant case, the Amended Decision of the CTA Division is not a "new" decision, but a reiteration of the
Decision dated August 2, 2016. It was not based on a re-evaluation or re-examination of documentary exhibits
presented by the parties. The CTA Division, without any modification, repeated in toto its discussion and ruling
in the original decision that: the COMELEC is liable for the deficiency basic EWT for its failure to withhold EWT

Page 4
 on lease contract payments to Smartmatic and Avante; and the COMELEC is not liable for deficiency interest since
the liability is imposed on the responsible officer charged with the withholding and remittance of the tax.
However, since the dispositive portion of the decision ordered the COMELEC to pay the entire amount of
P49,082,867,69 (deficiency basic EWT plus deficiency interest), the CTA Division reflected in the Amended
Decision the COMELEC's correct liability of P30,645,542.62 without the deficiency interest as discussed in the
body of the original Decision. Indeed, the Amended Decision is a mere clarification, a correction at best, of the
amount due from the COMELEC.

2. No, the COMELEC is liable for the deficiency of basic EWT and its increments on the income payments made to
Smartmatic and Avante for the lease contracts.
We hold that the COMELEC is not liable for deficiency interest. The CIR did not question the ruling of The CTA
Division in its Decision dated August 2, 2016, that the COMELEC's liability is limited to the deficiency basic EWT
of P30,645,542.62 and does not include interest under Section 249 of the Tax Code. It was only in his motion for
reconsideration of the Amended Decision dated January 3, 2017 that the CIR argued that the COMELEC is also
liable for deficiency interest. However, the Amended Decision is by no means a new decision that may be the
subject of a reconsideration. It follows, therefore, that the CIR lost his right to question the CTA Division's
pronouncement against the COMELEC's liability for interest on deficiency basic EWT when he failed to seek a
reconsideration of the Decision dated August 2, 2016. The CTA Division's finding that the COMELEC is not liable
for deficiency interest became final and shall be binding upon the CIR.
In like manner, the CIR cannot raise for the first time in his motion for reconsideration of the Amended Decision
dated January 3, 2017 that the responsible officer for the withholding and remittance of EWT should be ordered
to pay the accrued interest on the COMELEC's deficiency basic EWT. Again, the Decision dated August 2, 2016 of
the CTA Division had attained finality insofar as the CIR is concerned when he failed to seek a reconsideration of
the Decision. It is too late in the day for him to raise this new issue. Accordingly, we deny the CIR's petition for
lack of merit. (COMMISSIONER OF INTERNAL REVENUE, PETITIONER, VS. COMMISSION ON ELECTIONS,
REPRESENTED BY ATTY. MARIA NORINA S. TANGARO- CASINGAL, ACTING DIRECTOR OF THE LAW DEPARTMENT,
RESPONDENT.)

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Question:
In 2012, Philex Mining filed its amended quarterly VAT returns for the second and third quarters to reflect excess input
tax arising from its zero-rated sales. In 2015, the CTA Division partly granted Philex Mining's petitions. It held that Philex
Mining timely filed its administrative and judicial claims for a refund within the period prescribed under Sections 112 (A)
and (C) of the 1997 National Internal Revenue Code, as amended, and that it attached to the Claimant Information Sheets
the required documents to support its claims. The CIR moved for reconsideration alleging that the judicial claim for refund
was premature, Philex Mining did not submit to the DOF-OSS the required checklist of documents, and Philex Mining
failed to comply with the accounting requirements, specifically the keeping of subsidiary sales journal and subsidiary
purchase journal, and the filing of monthly VAT declarations. In 2015, the CTA Division denied the CIR's motion for
reconsideration for lack of merit. Discontent, the CIR appealed to the CTA En Banc reiterating the arguments raised in his
motion for reconsideration filed with the CTA Division. In 2016, the CTA En Banc affirmed the CTA Division's findings and
conclusion. Failing at reconsideration, the CIR, through the Office of the Solicitor General, filed the instant petition with
this Court.

1. Can the decision and resolution of the CTA be set aside?

Answer:
1. No, the decisions cannot be set aside.
Philex Mining's failure to maintain subsidiary sales and purchase journals or to file the monthly VAT declarations
should not result in the outright denial of its claim for refund or credit of unutilized input VAT attributable to its
zero-rated sales. These are not part of the requirements for Philex Mining to be entitled thereto. Section 112
(A) of the Tax Code is very clear; no construction or interpretation is needed. The Court may not construe a
statute that is free from doubt; neither can we impose conditions or limitations when none is provided for.
While tax refunds are tax exemptions and are construed strictissimi juris against the taxpayer, tax statutes shall
be construed strictly against the taxing authority and liberally in favor of the taxpayer, for taxes, being burdens,
are not to be presumed beyond what the statute expressly and clearly declares. Verily, the CTA did not err in
ruling that the absence of subsidiary sales journal, subsidiary purchase journal, and monthly VAT declarations
is not sufficient to deprive Philex Mining of its right to a refund. In any event, the CIR's allegation that Philex
Mining failed to prove its creditable input tax attributable to its zero-rated sales necessarily involves factual
issue and, thus, is evidentiary in nature which cannot be entertained in the present petition where only
questions of law may be generally raised. (COMMISSIONER OF INTERNAL REVENUE, PETITIONER, VS. PHILEX
MINING CORPORATION, RESPONDENT.)

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Question:
NPC protested the assessment, arguing that, with the effectiveness of RA No. 9136 or the Electric Power Industry Reform
Act in 2001, its power generation is no longer considered a public utility operation requiring a franchise. Thus, NPC can
no longer be regarded as a business subject to a franchise tax under Section 137 of the Local Government Code of 1991.
The Provincial Treasurer failed to act on the protest; hence, NPC appealed to the RTC. In 2013, the RTC rendered a Decision
in favor of the Province of Pampanga and declared NPC liable for the franchise tax. Aggrieved, NPC filed a petition for
review with the CTA praying that the assessment be nullified, and that NPC be declared exempt from franchise tax. In its
2014 Decision, the CTA Second Division held that NPC's liability for local franchise tax is not novel. The Supreme Court has
ruled in the 2003 case of National Power Corporation v. City of Cabanatuan, and reiterated in the 2006 case of National
Power Corp. v. Province of Isabela, that NPC may still be held liable for the franchise tax if it has a franchise in the sense
of a secondary or special franchise, and it is exercising its rights or privileges under the franchise within the territory of
the respondent city government. In the present case, NPC has franchise through RA No. 6395, and that it is selling
electricity in the Province of Pampanga. The CTA denied NPC's motion for reconsideration in 2014, for lack of merit.
Undeterred, NPC elevated the matter to the CTA En Banc. In 2016 the CTA En Banc issued a Decision upholding the CTA
Second Division's findings and conclusion that NPC is liable for franchise tax in so far as its missionary electrification
function is concerned. In 2016, NPC moved to reconsider the 2016 Decision, essentially adopting the dissenting opinion.
In 2017, the CTA En Banc denied NPC's motion holding that the defense of violation of due process based on a void
assessment is deemed waived for having been belatedly raised. In any case, the essence of the right of due process is an
opportunity to be heard.

1. Does the defense of violation of due process based on a void assessment deem waived for having been belatedly
raised?
2. Is the assessment void?

Answer:
1. No, that is not the case. Under RA No. 9282, approved on March 30, 2004, the CTA was elevated to the same
level and equal rank as the Court of Appeals. Upon its effectiveness in 2004, decisions or rulings of the CTA En
Banc are now appealable to the Supreme Court via a petition for review on certiorari under Rule 45 of the Rules
of Court. Furthermore, Section 1, Rule 16, of the RRCTA provides that a party adversely affected by a decision or
ruling of the CTA En Banc may appeal by filing with the Supreme Court a verified petition for review under Rule
45 of the Rules of Court. Accordingly, NPC properly filed a petition for review on certiorari with this Court. At the
onset, we hold that the issue of nullity of the Assessment Letter is not deemed waived even if raised only in NPC's
motion for reconsideration of the CTA En Banc's Decision.

2. Yes, the assessment was void.

Page 7
 correct taxes, fees, or charges have not been paid, he shall issue a notice of assessment stating the nature of the
tax, fee, or charge, the amount of deficiency, the surcharges, interests, and penalties. Within sixty days from the
receipt of the notice of assessment, the taxpayer may file a written protest with the local treasurer contesting
the assessment; otherwise, the assessment shall become final and executory. The local treasurer shall decide the
protest within sixty days from the time of its filing. If the local treasurer finds the protest to be wholly or partly
meritorious, he shall issue a notice cancelling wholly or partially the assessment. However, if the local treasurer
finds the assessment to be wholly or partly correct, he shall deny the protest wholly or partly with notice to the
taxpayer. The taxpayer shall have thirty days from the receipt of the denial of the protest or from the lapse of
the sixty-day period prescribed herein within which to appeal with the court of competent jurisdiction otherwise
the assessment becomes conclusive and unappealable.
Here, the Assessment Letter hardly complies with the requirements of Section 195 of the LGC and implementing
rules that will enable NPC to file an effective protest. The letter quoted provisions of the Tax Ordinance of the
Province of Pampanga imposing franchise tax and penalties for non-payment or late payment. Glaringly absent,
however, are the amount of the alleged deficiency tax, surcharges, interest, and penalties. The period covered
by the assessment was not also indicated. Although Section 195 of the LGC does not expressly require the taxable
period to be stated in the notice of assessment, the period is important to determine compliance with the
prescriptive period when the Provincial Treasurer is authorized by law to assess and collect deficiency taxes.
(NATIONAL POWER CORPORATION, PETITIONER, VS. THE PROVINCE OF PAMPANGA AND PIA MAGDALENA D.
QUIBAL, RESPONDENTS.)

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