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CIR v. Filminera Resources Corporation, G.R. No. 236325, September 16, 2020.

Filminera Resources Corporation filed claims for refund of its unutilized input VAT attributable to its zero-rated sales to Philippine Gold Processing and Refining Corporation (PGPRC), a domestic corporation registered with the Board of Investments (BOI), for the third and fourth quarters of fiscal year 2010. The Court of Tax Appeals denied the claims, ruling that Filminera failed to prove that PGPRC exported the goods. The Supreme Court affirmed, holding that the BOI certification submitted by Filminera was insufficient without proof that PGPRC actually exported the products sold during the relevant periods. As the taxpayer claiming exemption, Filminera bore the burden to prove that the sales met the requirements for a zero-rated transaction

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2K views1 page

CIR v. Filminera Resources Corporation, G.R. No. 236325, September 16, 2020.

Filminera Resources Corporation filed claims for refund of its unutilized input VAT attributable to its zero-rated sales to Philippine Gold Processing and Refining Corporation (PGPRC), a domestic corporation registered with the Board of Investments (BOI), for the third and fourth quarters of fiscal year 2010. The Court of Tax Appeals denied the claims, ruling that Filminera failed to prove that PGPRC exported the goods. The Supreme Court affirmed, holding that the BOI certification submitted by Filminera was insufficient without proof that PGPRC actually exported the products sold during the relevant periods. As the taxpayer claiming exemption, Filminera bore the burden to prove that the sales met the requirements for a zero-rated transaction

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Pancho Maningo
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© © All Rights Reserved
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CIR v. Filminera Resources Corporation, G.R. No. 236325, September 16, 2020.

PRINCIPLE: Proof of actual exportation of goods sold by a Value Added Tax (VAT)-registered
taxpayer to a Board of Investments (BOI)-registered enterprise is vital for the transaction to be
considered as zero-rated export sales.

FACTS: On July 5, 2007, Filminera Resources and Philippine Gold Processing and Refining
Corporation (PGPRC), a domestic corporation registered with the BOI, entered into an Ore Sales
and Purchase Agreement. For the third and fourth quarters of the fiscal year (FY) ending June 30,
2010, Filminera Resources' sales were all made to PGPRC.

On March 30, 2012 and June 29, 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, on August 16, 2012 and November 23, 2012, Filminera Resources filed separate
petitions for review before the CTA. The two cases were consolidated, and thereafter, trial on the
merits ensued.

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.
CTA Division amended its Decision, concluded that Filminera Resources' sales were zero-rated.
CTA En Banc dismissed the petition for lack of merit. On reconsideration, 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. CTA En Banc denied the CIR's motion.

ISSUE: Whether or not Filminera Resources Corporation's sales to PGPRC during the third and
fourth quarters of FY 2010 qualify as export sales subject to the zero percent (0%) rate under
Section 106

RULING: No, Filminera Resources Corporation is not entitled to a refund or the issuance of a tax
credit certificate in the amount of P 11,579,541.76.

Nothing in the BOI certification shows that PGPRC similarly exported its entire products for the third
and fourth quarters of FY 2010, or from January 1 to June 30, 2010. Without the certification from
the BOI that the products sold to PGPRC during the third and fourth quarters of FY 2010 were
actually exported and consumed in a foreign country, the sales cannot be considered export sales.

While the BOI certification allows the seller to accord VAT zero-rating status to sales made to the
BOI-registered buyer during the extended period of the certification, this must be pre-empted by the
condition that the BOI-registered buyer actually and eventually exported such products. This is
consistent with the Cross Border Doctrine and Destination Principle of the Philippine VAT system.

We stress that the taxpayer-claimant has the burden of proving the legal and factual bases of its
claim for tax credit or refund. The taxpayer who claims for exemption must justify his claim by the
clearest grant of organic or statute law and should not be permitted to stand on vague implications.

Thus, Filminera Resources Corporation is not entitled to a refund or the issuance of a tax credit
certificate in the amount of P 11,579,541.76.

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