CISCO SYSTEMS MANAGEMENT B.V. v. COMMISSIONER OF INTERNAL REVENUE (Consolidated with Case Nos. 6686 & 6737)

,. Republic of the Philippines COURT OF TAX APPEALS Quezon City FIRST DIVISION ************** CISCO SYSTEMS MANAGEMENT C.T.A. CASE NOS. 6583,6686 B.V.- PHILIPPINE BRANCH &6737 OFFICE Members: Petitioner, ACOSTA, Chairperson -versus- BAUTISTA, and CASANOVA, JJ. COMMISSIONER OF INTERNAL REVENUE, Promulgated: DECISION CASANOVA, J.: This is a consolidation of three (3) Petitions for Review filed by petitioner, all praying for the refund or issuance of a tax credit certificate in the sum of P21,543,123.02 allegedly representing petitioner's erroneously paid VAT, including penalties and input tax credits on purchases attributable to zero-rated sales of services, for the period covering the fourth quarter of 2000 to the third quarter of 2002 (October 1, 2000 to September 30, 2002), detailed as follows: Period Covered CTA Case No. Amount of Claim 4th Quarter-2000 6583 p 2,041,747.56 1st Quarter-2001 6686 2nd Qtr-2001 to 3rd Qtr 2002 6737 4,518,229.38 14,983,146.08 p 21.543.123.02 ~

.. DECISION C.T.A. CASE NOS. 6583, 6686 & 6737 The Facts Petitioner is a duly registered Philippine branch of CISCO Systems Management B.V., a foreign corporation organized and existing under the laws of the Netherlands, with principal office in the Philippines located at 1i h Floor, Citibank Tower, Paseo de Roxas, Makati City. 1 Petitioner is registered with the Bureau of Internal Revenue (BIR) as a Value-Added Tax (VAT) taxpayer with TIN No. 203-658-383-000. 2 Respondent is vested with the power to decide, approve and grant refund or issue tax credit certificate of overpaid internal revenue taxes and unused input taxes as provided by law.3 On March 17, 1999, petitioner entered into an " International Sales Support and Services Agreement" with CISCO Systems, Inc. (CISCO-US), a non-resident foreign corporation organized and existing under the laws of the United States of America. Under said Agreement, petitioner became a non- exclusive service provider, supplying technical details and information and the like for CISCO-US.4 In its VAT returns for the fourth quarter of 2000, four quarters of 2001 and first to third quarters of 2002, petitioner declared the service income it derived from its contract with CISCO-US and the corresponding output VAT due which was offset against the input VAT credits for each quarter and the balance of output VAT due, including the penalties for late filing of return, if any, was paid by petitioner as shown below: Quarter Output Total VAT Tax Credits/ Penalty Total Amount InoytVAT ~ Payments (For late Payable/ kW..tm ~ pate Filed Y..AI (Overpayment) 2000 H 4th Qtr 2/7/2001 P1,699,985.00 P465,845 .16 P1,234,139.84 P341,762.56 P1,575,902.40 2001 &. 1 Par. 1 ofAdmitted Facts in CTA Case No. 6583, docket, p. 58; Par. 1 ofAdmitted Facts in CTA Case No. 6686, docket, p. 62; Par. !ofAdmitted Facts in CTA Case No. 6737, docket, p. 76. 2 Par. 3 ofAdmitted Facts in CTA Case No. 6686, docket, p. 63; Par. 3 ofAdmitted Facts in CTA Case No. 6737, docket, p. 76. 3 Par. 2 of Admitted Facts in CTA Case No. 6583, docket, pp. 58-59; Par. 2 of Admitted Facts in CTA Case No. 6686, docket, pp. 62-63 ; Par. 2 ofAdmitted Facts in CTA Case No. 6737, docket, p. 76. ~Par. 4 ofAdmitted Facts in CTA Case No. 6686; docket, p. 63.

. DECISION C.T.A. CASE NOS. 6583, 6686 & 6737 1st Qtr 4/25/2001 4,518,229.00 879, 199.00 3,639,030.00 P1,526,807.00 2,112,223.00 194,762.12 M 2nd Qtr 7/25/2001 4,258,681.08 1,654,567.51 2,604,113.57 2,409,351.45 879,429.60 590,584.36 II 3rd Qtr 10/25/2001 1,914,444.10 1,035,014.50 879,429.60 656,794.33 JJ 2nd Qtr 1/23/2002 3,258,430.90 905,350.96 2,353,079.94 1,762,495.58 (93,511 .88) (582 , 397 .35) 2002 (5 33,226 .00) (1,262,179 .00) KK 1st Qtr 4/26/2002 3,416,093.80 1,896,109.03 1,519,984.77 863, 190.44 LL 2nd Qtr 7/25/2002 1,973,818.20 982,769.24 991,048.96 1,084,560.84 MM 7/ 1-31/02 8/ 26/ 2002 488,885.47 (488,885.47) (93 , 511.88) NN 8/1-31/02 9/ 20/2002 161,678.00 694,904.00 (533,226.00) 00 9/ 1-30/02 10/22/2002 1,262,179.00 (1,262,179.00) Believing that it is entitled to VAT zero-rating on the service income received from CISCO-US pursuant to Section 108(6)(2) of the Tax Reform Act of 1997 (''Tax Code''), petitioner filed on separate occasions administrative claims for refund/ tax credit certificate totaling P21,543,123 .02 allegedly representing erroneously paid output VAT including penalties and input tax credits attributable to zero-rated sales covering the period October 1, 2000 to September 30, 2002, detailed as follows: 5 Erroneous!~ Paid Date of filing of Period Output VAT Output VAT - Covered claim w/ the for the qtr Penalties prev. 2 months Input VAT Total Claim BIR Jan . 2, 2003 4th Qtr-2000 1,234,139 .84 341,762.56 465,845.16 2,041,747 .56 Mar. 28, 2003 1st Qtr-2001 3,639,030 .38 879,199.00 4,518,229.38 July 24, 2003 2nd Qtr-2001 2,604 , 113 .57 1,654,567 .51 4,258,681.08 3rd Qtr-2001 879,429 .60 1,035,014.50 1,914 ,444 .10 4th Qtr-2001 3, 258 ,430 .90 1st Qtr-2002 2,353 ,079.94 905,350.96 3,416,093.80 1,519,984.77 1,896,109 .03 2nd Qtr-2002 991,048 .96 982,769 .24 1,973 ,818.20 3rd Qtr-2002 (1,262,179.35) 93,511.88 1,330,345.47 161,678.00 14.983.146.08 Grand Total: 21.543.123.02 In order to suspend the running of the two-yea r prescriptive period with in which to file j udicial cla im for a tax refund, petitioner fi led with thi~ 5 See Par. 3 ofAdmitted Facts in CTA Case No. 6583, docket, p. 59; Par. 5 ofAdmitted Facts in CTA Case No. 6686, docket, p. 63; Par. 9 ofAdmitted Facts in CTA Case No. 6737, docket, p. 78.

DECISION l C.T.A. CASE NOS. 6583, 6686 & 6737 Court on January 2, 2003, April 25, 2003 and July 25, 2003, three separate Petitions for Review docketed as CTA Case No. 6583, CTA Case NO. 6686 and CTA Case No. 6737, respectively: CTA Date of Filing of Period Covered Claimed Case No. Petition for Input VAT Review 6583 p 2,041,747.56 6686 January 2, 2003 4th Quarter-2000 4, 5 18, 229 .38 6737 Apri l 25, 2003 1st Quarter-2001 14,983 ,146.08 July 25, 2003 2nd Qtr-2001 to 3rd Qtr 2002 ~ 21 ~ 5~3~123.02 Total : On February 16, 2004, petitioner filed a motion for the consolidation of the above cases considering that the same involve the same parties and issues. The Court granted the said motion in open court on February 27, 2004 , followed by a confirming Resolution dated March 8, 2004. 6 The Issues The parties presented the following issues for this Court's resolution: CTA Case No. 6583: 7 1. Whether or not petitioner's sales of services are zero-rated for VAT purposes. 2. Whether or not petitioner incurred the alleged erroneous payment of VAT, Input VAT and penalties for the 4th quarter ending December 31, 2000, in the amount of P2,041,747.56. 3. Whether or not the alleged erroneously paid VAT, Input VAT and penalties for the 4th quarter ending December 31, 2000 are duly substantiated. 4. Whether or not petitioner has carried over to the succeeding taxable quarter/year the alleged Input VAT for the 4th quarter ending December 31, 2000 ~ 6 See CTA Case No. 65 83 docket, pp. 73, 80-8 1. 7 CTA Case No. 6583 docket, pp . 59-60.

DECISION C.T.A. CASE NOS. 6583, 6686 & 6737 5. Whether or not petitioner has complied with the requirements under Section 204(C), in relation to Section 229, of the Tax Code. 6. Whether or not petitioner is entitled to the refund or tax credit in the sum of P2,041,747.56 as alleged erroneously paid VAT, Input VAT and penalties for the 4th quarter ending December 31, 2000. CTA Case No. 6686: 8 1. Whether or not petitioner's sales of services are zero-rated for VAT purposes. 2. Whether or not petitioner incurred the alleged erroneous payment of VAT and Input VAT for the 1st quarter of 2001, in the amount of ?4,518,229.38. 3. Whether or not the alleged erroneously paid VAT and Input VAT for the 1st Quarter of 2001 are duly substantiated. 4. Whether or not petitioner has carried over to the succeeding taxable quarter/year the alleged Input VAT for the 1st Quarter of 2001. 5. Whether or not petitioner is entitled to the refund or tax credit in the sum of ?4,518,229.38, as alleged erroneously paid VAT and Input VAT for the 1st Quarter of 2001. CTA Case No. 6737. 9 1. Whether or not petitioner's sales of services are zero-rated for VAT purposes. 2. Whether or not petitioner incurred the alleged erroneous payment of VAT due and Input VAT for the 2nd Quarter of 2001 up to September of 2002, in the amount of P14,983 , 146.08. 3. Whether or not the alleged erroneously paid VAT due and Input VAT for the 2nd Quarter of 2001 up to September of 2002 are duly substantiated .$- 8 CTA Case No . 6686, docket, p. 64 9 CTA Case No. 6737, docket, pp. 79-80.

DECISION C.T.A. CASE NOS. 6583, 6686 & 6737 4. Whether or not Petitioner has carried over to the succeeding taxable quarter/year the alleged Input VAT for the periods 2nd Quarter of 2001 up to September 2002. 5. Whether or not petitioner is entitled to the refund or tax credit in the sum of P14,983,146.08 as alleged erroneously paid VAT and Input VAT for the 2nd Quarter of 2001 up to September of 2002. The Court's Ruling The consolidated Petitions for Review are bereft of merit. Pertinent to the resolution of this case is Section 108 (B)(2) of the 1997 Tax Code, to wit: "SECTION 108. Value-added Tax on Sale of Services and Use or Lease of Properties. - 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 (2) Services other than those mentioned in the preceding paragraph, the consideration for which is paid for in acceptable foreign currency and accounted for in accordance with the rules and regulations of the Bangko Sentral ng Pilipinas (BSP)" A scrutiny of the contractl0 and service invoices revealed that petitioner's services fall under " Services other than those mentioned in the preceding paragraph" referred to under Section 108 (B)(2) of the Tax Code. As mentioned in the above provision, in order for such sales to qualify as zero-rated, the same should be paid for in acceptable foreign currency and accounted for in accordance with the rules and regulations of the BSP. This rule was stated by the Supreme Court in the case of Commissioner of Internal Revenue vs. American Express International, Inc. (Philippine Branchjl, and We quote, to wit ~ 10 Exhibit R. II 462 SCRA 197.

DECI SION C.T.A. CASE NOS. 6583, 6686 & 6737 "xxx[O]ur VAT law itself provides for a clear exception, under which the supply of service shall be zero-rated when the following requirements are met: (1) the service is performed in the Philippines; (2) the service falls under any of the categories provided in Section 102(b) of the Tax Code12; and (3) it is paid for in acceptable foreign currency that is accounted for in accordance with the regulations of the Banko Sentral ng Pilipinas. Since respondent's services meet these requirements, they are zero-rated . xxx" In the case at bar, the Court as well as the commissioned independent CPA firm found that: "We were not able to match and/or trace to what particular services invoices and credit notes each of the inward remittances mentioned above were applied/credited since the documents supporting the inward remittances, i.e. CIR, SOA and VAT Ors, did not provide for such information. We were also not able to account for the noted difference of P15,337,910 .34. "13 Hence, since it is not definite as to what kind of service the inward remittances pertains, petitioner's reported sales of services cannot qualify for VAT zero-rating and the alleged erroneously paid output VAT including penalties as well as the input VAT totaling P21,543,123.02 for the period covering the 4th quarter of 2000 to the 3rd quarter of 2002 cannot be refunded. Well entrenched in our jurisprudence is that tax refunds are in the nature of tax exemptions. As such, they are regarded as in derogation of sovereign authority and to be construed strictissimijuris against the person or entity claiming the exemption. 14 Accordingly, the claimant has the burden of proof to establish the factual basis of his or her claim for tax credit or refund. ~ 12 The Tax Code refers to the National Internal Revenue Code of 1986 as amended by Executive Order No. 273 and Republic Act Nos. 7716 and 824 1 dated July 25, 1987, May 5, 1994, and December 20, 1996, respectively. 13 Exhibit EEE-2, Report ofthe Court commissioned independent CPA Firm, SGV and Co., page 7 to 8. 14 Commissioner of Internal Revenue vs. S.C. Johnson and Son, Inc., 309 SCRA 8 7 {1999}. 15 Citibank N.A. vs. Court ofAppeals, 280 SCRA 459 [199 7]

DECISION C.T.A. CASE NOS. 6583, 6686 & 6737 In addition, it was noted that the official receipts supporting its claimed zero-rated sales/receipts do not bear the word "zero-rated" in violation of the invoicing requirements under Section 4.108-1 of Revenue Regulations No. 7- 95 in relation to Sections 113 and 237 of the NIRC of 1997. 16 In Kepco Philippines Corp. vs. Commissioner of Internal Revenue, 17 the Court En Bane ruled that: "Zero-rated sales of services can be proven by other documents. However, the requirement of issuing a duly registered VAT official receipt with the imprinted word 'zero- rated' is mandatory under the law and cannot be substituted especially for input VAT refund purposes. Thus, for failure of petitioner to comply with the requirements provided for by VAT Law and its implementing rules and regulations, the claim for refund of input VAT allegedly attributable to zero-rated sales cannot be refunded. It is noteworthy to state that the legislative grant of authority to the Secretary of Finance to promulgate all needful rules and regulations for the effective enforcement of the provisions of the NIRC, Section 4.108-1 of Revenue Regulations No. 7-95 requiring the imprinting of the words 'zero-rated' on sales invoices or official receipts cannot be said as having no valid basis or legislative root. On the contrary, it is both reasonable and necessary for the effective implementation of the provisions of the NIRC concerning zero-rated sales. Hence, the requirement that sales invoices shall be imprinted with the word 'zero-rated' cannot be taken as an enlargement or expansion of the law for the reason that it merely implements the provisions of the 1997 NIRC on sales that are subject to 10% VAT, zero-rated sales (0% VAT) and exempt sales. The imprinting of 'zero-rated' is necessary to distinguish sales subject to 10% VAT, those that are subject to 0% VAT (zero- rated) and exempt sales, to enable the Bureau of Internal Revenue to properly implement and enforce the other provisions of the 1997 NIRC on VAT, xxx. XXX XXX XXX Taxpayers have the burden of proving compliance with the mandatory provisions of the National Internal Revenue Cod ~ 16 Supra., p. 8. 17 CTA EB No. I07, June 29, 2007.

DECI SION C.T.A. CASE NOS. 6583, 6686 & 6737 and its implementing rules and regulations. This principle shall be complied with in all actions involving taxation, more particularly, when claim for refunds or tax credits are involved as in petitioner's case before this Court. After all, it is well- settled that tax refunds are in the nature of tax exemptions and as such must be strictly construed against the claimant. Otherwise, the intention of the lawmakers in enacting the VAT- law as a revenue generating mechanism would be negated and the same law could in fact become a convenient and effective scheme of bleeding the already limited financial resources that are available to the government in performing its functions." In this consolidated Petitions for Review, petitioner failed to discharge its burden of proving its claims for tax refund or issuance of tax credit certificates for the VAT it paid attributable to zero-rated sales of services from the fourth quarter of 2000 to the third quarter of 2002. WHEREFORE, for failure of petitioner to properly substantiate its claimed zero-rated sales of services, the consolidated Petitions for Review are hereby DISMISSED. Accordingly, petitioner's consolidated claim for refund in the amount of P21,543,123.02 is hereby DENIED. SO ORDERED. ~ CAESAR A. CASANOVA Associate Justice WE CONCUR: ~ERNcE.S-TO-~D.~~.C.,RO. DS.T..A...... $-.:_' Presiding Justice cy--

DECISION C.T.A. CASE NOS. 6583, 6686 & 6737 CERTIFICATION Pursuant to Article VIII, Section 13 of the Constitution, it is hereby certified that the conclusions in the above Decision were reached in consultation before the case was assigned to the writer of the opinion of the Court's Division . Q~~- ~ ERNESTO D. ACOSTA Presiding Justice Chairperson, First Division

REPUBLIC OF THE PHILIPPINES COURT OF TAX APPEALS QUEZON CITY FIRST DIVISION **************** CISCO SYSTEMS MANAGEMENT CTA CASE NOS. 6583, B.V.-PHILIPPINE BRANCH 6686, & 6737 OFFICE Petitioner, Members : -versus- ACOSTA, Chairperson, BAUTISTA, and CASANOVA, JJ. COMMISSIONER OF Promulgated: INTERNAL REVENUE, Respondent. X- ------- - ------------------------------- CONCURRING AND DISSENTING OPINION With due respect to my esteemed co lleagues, I agree with the deni al of petiti oner's claim for refund or issuance of tax credit certificate in the sum of P2 1,543, 123.02 due to its failure to properly substanti ate the services being cla imed as subj ect to zero percent Value-Added Tax (VAT). However, I wish to manifest my di ssent to the additiona l ground for the denial of petiti oner's claim , th at is, petitioner's receipts do not bear the word "zero-rated" in violati on of Section 4.108-1 of Revenue Regulations No. 7-95 in relation to Section 113 and 237 ofthe 1997.

Concurring and Di ssenting Opinion CTA CASE Nos. 6583 , 6686, & 6737 Page 2 of6 Contrary to the majority view, Sections 113 and 237 of the 1997National Internal Revenue Code (N/RC), clearly provide as follows: "Section 113. Invoicing and Accounting Requirements for VAT registered persons- (A) Invoicing Requirements - A VAT-registered person, shall, for every sale, issue an invoice or receipt. In addition to the information required under Section 237, the following information shall be indicated in the invoice or receipt: 1. A statement that the seller is a VAT-registered person followed by his taxpayer's identification number (TIN); and 2. The total amount which the purchaser pays or is obligated to pay to the seller with the indication that such amount includes the value-added tax." XXX XXX XXX "Section 237. Issuance of Receipts or Sales of Commercial Invoices. - All persons subject to an internal revenue tax shall, for each sale, or transfer of merchandise or for services rendered valued at Twenty five pesos (P25.00) or more, issue duly registered receipts or sales or commercial invoices, prepared at least in duplicate, showing the date of transaction, quantity, unit cost and description of merchandise or nature of service; Provided however, That in case of sales, receipts or transfers in the amount of One Hundred Pesos (PI 00.00) or more, regardless of amount, where the sale or transfer is made by a person liable to value added tax to another person also liable to value-added tax; or where the receipt is issued to cover payment made as rentals, commissions, compensations or fees, receipts or invoices shall be issued which shall show the name, business style, if any, and address of the purchaser; customer or client: Provided further, That where the purchaser is a VAT registered person, in addition to the information herein required, the invoice or receipt shall further show the Taxpayer's Identification Number (TIN) of the purchaser. xxx." A reading of the above laws would show that nowhere can you find any requirement for the imprinting of the words "zero-rated", rather, only the following information are required to be contained in an official receipt or sales invoice: tt4.-

Concurring and Di ssenting Opinion CTA CASE Nos. 6583 , 6686, & 6737 Page 3 of6 (1) A statement that the seller is a VAT-registered person; (2) The taxpayers identification number (TIN); (3) The total amount which the purchaser pays or is obligated to pay to the seller indicating the inclusion of the value-added tax; (4) Transaction date; (5) Quantity of merchandise; (6) Description of merchandise or nature of service; (7) Unit cost; (8) The name, business style, if any, and address of the purchaser, customer or client in the case of sales, receipts or transfers in the amount of One hundred pesos (P1 00.00) or more, or regardless of amount, where the sale or transfer is made by a person liable to value-added tax to another person also liable to value-added tax; or where the receipt is issued to cover payment made as rentals, commissions, compensations or fees; and (9) The TIN ofthe VAT-registered purchaser. Also pertinent hereto is Section 112 (A) of the 1997 NIRC which reads in part: "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)(l) 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) xxx" In sum, when a taxpayer wants to claim for refund for its allegedly zero-rated sales, the only requirements are those provided in Sections 113, 23 7 and 112(A) of the 1997 NIRC. Requiring that the official receipts or sales invoices of the taxpayer should bear the word "zero-rated" would be adding a condition that is not plainly written under the law.

Concurring and Dissenting Opinion CTA CASE Nos. 6583 , 6686, & 6737 Page 4 of6 The "requirement" of imprinting the questioned information on the VAT invoice or receipt can only be found in Section 4.108-1 of Revenue Regulations No. 7-95 (The Implementing Rules and Regulations of the VAT law). However, the said provision is merely a regulation created for the so le and limited purpose of implementing a very exact law. Well known is the legal principle that administrative rules and regulations cannot expand the letter and spirit of the law they seek to enforce. And in case of conflict between the basic law and a rule or regulation issued to implement said law, the law prevails because said rule or regulation cannot go beyond the terms and provision s of the basic law.' Furthermore, in the case of Commissioner of Internal Revenue vs. Seagate Technology (Philippines), 2 no less than the Supreme Court itself elucidated the need to focus only on the legally mandated requirements for claims for VAT refund. Pertinent portion of the Decision reads: "A VAT-registered status, as well as compliance with the invoicing requirements (Section 113 (A) of the Tax Code), is sufficient for the effective zero rating of the transactions of a taxpayer. The nature of its business and transactions can easily be perused from, as already clearly indicated in, its VAT registration papers and photocopied documents attached thereto. xxx. Administrative convenience cannot thwart legislative mandate." After that, in the recent case of Intel Technology Philippines, Inc., vs. Commissioner of Internal Revenue/ the Supreme Court held that only the following 1 People vs. Lim, 108 Phil. 1091. 2 G.R. No. 153866, February II , 2005. 3 G.R. No. 166732, Apri l 27, 2007.

Concurring and Dissenting Opinion CTA CASE Nos. 6583,6686, & 6737 Page 5 of6 items are required to be indicated in the receipts or invoices: (1) a statement that the seller is a VAT-registered entity followed by its TIN-V; (2) the total amount which the purchaser pays or is obligated to pay to the seller with the indication that such amount includes the value-added tax; (3) date of the transaction; (4) quantity of merchandise; (5) unit cost; (6) description of merchandise or nature of service; (7) the name, business style, if any, and address of the purchaser, customer or client in the case of sales, receipt or transfers in the amount of Pl 00.00 or more, or regardless of the amount, where the sale or transfer is made by a person liable to VAT to another person also liable to VAT, or where the receipt is issued to cover payment made as rentals, commissions, compensations or fees; and (8) the TIN of the purchaser where the purchaser is a VAT-registered person. Though the issue in the Intel case is the outright invalidation of invoices or official receipts for the non-indication of the BIR authority to print, and the TIN-V, it applies to the present case by analogy. The applicable laws likewise do not provide for the absolute denial of a claim for tax credit/refund for failure to imprint the term "zero-rated" on invoices or official receipts. It bears stressing too that it was only on November 1, 2005, with amendment introduced by Republic Act 9337,4 that the writing or printing of the term "zero-rated sale" was introduced. As this claim involves the period covering the fourth quarter of 2000 to the third quarter of2002, the said Republic Act cannot apply retroactively. 4 R.A. 9337 was supposed to take effect on July 1, 2005 but due to constitutionality issues, it became effective only on November I, 2005 upon the finality of the Supreme Court' s September 1, 2005 Decision upholding the said law's validity.

Concurring and Dissenting Opinion CTA CASE Nos. 6583 , 6686, & 6737 In this connection, it should be noted that like other statutes, tax laws operate prospectively whether they enact, amend or repeal unless the purpose of the legislature to give retrospective effect is expressly declared or may be implied from the language used.5 Hence, there is no basis for the automatic denial of a claim for refund in case the invoice/receipts of the taxpayer fail to bear the word "zero-rated." In view of all the foregoing, while I agree that the claim cannot be granted for petitioner' s failure to substantiate the same, still, I manifest my dissent to the majority opinion insofar as it finds that the term "zero-rated" must be imprinted on petitioner' s invoices for it to be a valid evidence in claiming for refund of or issuance of tax credit certificate. D._:- 1s2- -~ ERNESTO D. ACOSTA Presiding Justice 5 Commi ssioner of Internal Revenue vs. Filipinas Campani a De Seguros, L-14880, April 29, 1960