SAN CARLOS SOLAR ENERGY INC., v. COMMISSIONER OF INTERNAL REVENUE

REPUBLIC OF THE PHILIPPINES COURT OF TAX APPEALS QUEZON CITY ENBANC SAN CARLOS SOLAR CTA EB No. 2562 ENERGY INC., (CTA Case No. 9576) Petitioner, Present: -versus- DEL ROSARIO, EJ., UY, RINGPIS-LIBAN, MANAHAN, BACORRO-VILLENA, MODESTO-SAN PEDRO, REYES-FAJARDO, CUI-DAVID, and FERRER-FLORES, JJ. COMMISSIONER OF Promulgated: INTERNAL REVENUE, Respondent. X-------------------------------------- DECISION REYES-FAJARDO,]. : Assailed in the Petition for Review1 dated January 31, 2022 are the Decision2 dated February 3, 2021 and Resolution3 dated September 22, 2021 in CTA Case No. 9576, whereby the Court in Division denied San Carlos Solar Energy Inc.'s prayer for additional refund of alleged excess and unutilized input value added tax (VAT), attributable to its zero-rated sales, covering January 1 to December 31, 2015, in the amount of P40,624,825.97. Rollo, pp. 102-143. 2 Id. at pp. 201-220. 3 ld. at pp. 222-228. ~

DECISION CfA EB No. 2562 (CTA Case No. 9576) Page 2 of9 The facts follow. Petitioner is a corporation duly organized and existing under Philippine laws and is a registered VAT taxpayer with Tax Identification Number 008-514-713-000. Its principal office is located at the Emerald Arcade, F.C. Ledesma St., San Carlos City, Negros Occidental. Respondent is the head of the Bureau of Internal Revenue (BIR) vested with the power and authority to grant a refund of or to issue a tax credit certificate for unutilized input VAT attributable to zero- rated sales. On November 3, 2016, petitioner filed with BIR RDO No. 76, its Application for Tax Credits/Refunds (BIR Form No. 1914), with attached supporting documents, requesting for refund of its alleged unapplied and unutilized input VAT directly to its zero-rated sales for the period January 1, 2015 to December 31, 2015 in the amount of P92,282,341.28. On March 14, 2017, petitioner received from BIR, a letter dated February 17, 2017, partially granting petitioner's VAT refund claim in the amount of P29,644,104.17 (hereinafter referred to as the BIR Decision). Petitioner requested for a computation of the granted refund claim as stated in the BIR Decision through its letter to the BIR dated March 28, 2017, and received by BIRon March 31, 2017. On April6, 2017, petitioner received the BIR's letter dated April 5, 2017, providing a detailed computation of the recommended VAT refund claim of P29,644,104.17. The BIR computed the recommended VAT refund claim of P29,644,104.17 as follows: Amount of Claim TOTAL Adjustments and Disallowances per Audit 92,282,341.28 Disallowed input taxes (363,200.57) (363,200.57) Non-compliance with the invoicing requirements- Sec. 113 of the NIRC of 1997, as amended Total Adjustments and Disallowances per Audit ~

DECISION 91,919,140.71 CTA EB No. 2562 (CTA Case No. 9576) Page 3 of9 (331,859.81) ( 1'787,894.99) Amount Recommended per Audit- Assessment Division, RR 12 (3,524.00) Adjustments and Disallowances per TARO Review (24,416.69) Excess and unaccounted/unverified prior year's input tax (51,701.16) Disallowed input taxes due to violation of invoicing requirements- Sec. 113 of the NIRC of 1997, as amended Disallowed input taxes per ITS verification pursuant to RMC 42-2003 - Ql4/Al4 Additional output VAT - on the Sale of Capital Goods to ISLASOL Output VAT on other income Output VAT on other income Final Withholding VAT on income payment to foreign affiliates (18,798,522.96) pursuant to Sec. 4.112.2 of Revenue Regulations (RR) 16-2005 Additional disallowed input taxes due to violation of invoicing (652,290.06) requirements- Sec. 113 of the NIRC of 1997, as amended (40,624,825.97) Net IT attributable to taxable sales pursuant to Section 4.110-4 of RR (62,275,035.64) 16-20[0]15, as amended, in relation to Section I I2 (A) of the 1997 NIRC, as amended 29,644,105.07 Total Adjustments and Disallowances per TARO Review Recommended for VAT refund per TARO Review On April12, 2017, petitioner filed its Petition for Review before the Court in Division. On February 3, 2021, the Court in Division rendered a Decision,4 disposing the case as follows: WHEREFORE, in light of the foregoing considerations, the instant Petition for Review filed by petitioner is hereby DENIED for lack of merit. SO ORDERED. In so ruling, the Court in Division found that petitioner anchored its zero-rated sales of renewable energy (RE) under Section 15(g) of Republic Act (RA) No. 9513.5 Among the requirements specified in its implementing rules and regulations6 is the Department of Energy Certificate of Endorsement (DOE-COE). Given 4 Supra note 2. 5 Renewable Energy Act of 2008. DOE Circular No. DC2009-05-0008. ~

DECISION CTA EB No. 2562 (CTA Case No. 9576) Page 4 of9 that petitioner failed to produce such document, there are no zero- rated sales from which the input VAT claimed may be attributed. For this reason, its plea for additional input VAT refund for CY 2015 was entirely denied. Petitioner moved,7 but failed8 to seek reversal of the assailed Decision; hence, the present recourse. Petitioner argues that it successfully established its zero-rated sales of RE for calendar year (CY) 2015. Specifically, the DOE-COE is only required when the incentive sought to be claimed is the tax- and duty-free importation of RE machinery, equipment, materials, and parts thereof, as well as any sale, transfer or disposition of said imported capital equipment, machinery or spare parts. This observation was confirmed by the Renewable Energy Management Bureau (REMB) Letter dated March 31, 2021, and DOE Certification dated May 10, 2021. Therefore, it cannot be faulted from its non- presentation thereof, as the incentive it availed is the VAT zero-rating on sales of RE. Petitioner also admits that said REMB Letter and DOE Certification were not offered as its evidence during trial. It nonetheless submits that jurisprudence allows the presentation of evidence, which did not exist at the time of trial. In sum, petitioner believes that it is entitled to additional refund its excess and unutilized input VAT, attributable to its zero- rated sales for CY 2015, in the amount of P40,624,825.97. On the other hand,9 respondent mirrors the conclusion reached by the Court in Division that the DOE-COE is a mandatory precondition to avail of the incentive of VAT zero-rating under Section 15 of RA No. 9513. RULING We deny the Petition. 7 Docket (CTA Case No. 9576), pp. 2807-2828. 8 Supra note 3. Respondent's Comment on Petitioner's Petition for Review. Rollo, pp. 600-605. ~

DECISION CTA EB No. 2562 (CTA Case No. 9576) Page 5 of9 Our jurisdiction over refund cases is found in Section 7(a)(l) and (2) of RA No. 1125,10 as amended by RA No. 9282, which provides: Sec. 7. Jurisdiction. - The CTA shall exercise: a. Exclusive appellate jurisdiction to review by appeal, as herein provided: 1. Decisions of the Commissioner of Internal Revenue in cases involving disputed assessments, refunds of internal revenue taxes, fees or other charges, penalties in relation thereto, or other matters arising under the National Internal Revenue Code or other laws administered by the Bureau of Internal Revenue; 2. Inaction by the Commissioner of Internal Revenue in cases involving disputed assessments, refunds of internal revenue taxes, fees or other charges, penalties in relations thereto, or other matters arising under the National Internal Revenue Code or other laws administered by the Bureau of Internal Revenue, where the National Internal Revenue Code provides a specific period of action, in which case the inaction shall be deemed a denial; Section 3(a)(l) and (2), Rule 4 of the Revised Rules of the Court of Tax Appeals (RRCTA)11 clarified that the Court in Division has jurisdiction over the decision or inaction of respondent involving refund of internal revenue taxes, among others.U Specifically, before the Court in Division may exercise its jurisdiction over unutilized input VAT refund cases, Section 112(C) of the NIRC, as amended must be strictly observed, which reads as follows: 10 An Act Creating the Court of Tax Appeals 11 A.M. 05-11-07-CTA. 12 SEC. 3. Cases within the jurisdiction of the Court in Divisions. - The Court in Divisions shall exercise: (a) Exclusive appellate jurisdiction to review by appeal the following: (1) Decisions of the Commissioner of Internal Revenue in cases involving disputed assessments, refunds of internal revenue taxes, fees or other charges, penalties in relation thereto, or other matters arising under the National Internal Revenue Code or other laws administered by the Bureau of Internal Revenue; (2) Inaction by the Commissioner of Internal Revenue in cases involving disputed assessments, refunds of internal revenue taxes, fees or other charges, penalties in relation thereto, or other matters arising under the National Internal Revenue Code or other laws administered by the Bureau of Internal Revenue, where the National Internal Revenue Code or other applicable law provides a specific period for action: ... ~

DECISION CTA EB No. 2562 (CTA Case No. 9576) Page 6 of9 SEC. 112. Refunds or Tax Credits of Input Tax. - (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 on 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. Relevantly, Item III of Revenue Memorandum Circular (RMC) No. 54-2014,13 expressed the 120+30 days mandatory and jurisdictional periods, in the following manner: III. Mandatory 120+30 Day Period - In case of full or partial denial of the claim for tax refund or tax credit, or the failure on 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 (120) day-period, appeal the decision or the unacted claim with the CTA. Verily, a judicial claim must be filed with the CTA within 30 days from the receipt of the Commissioner's decision denying the administrative claim or from the expiration of the 120-day period without any action from the Commissioner, as the case may be. In this regard, the taxpayer/claimant is required to observe the 120+30 day rule before lodging a petition for review with the CTA. In sum, the taxpayer can file the appeal in one of two ways: (1) file the judicial claim within thirty days after the Commissioner denies the claim within the 120-day period, or (2) file the judicial claim within thirty days from the expiration of the 120-day period if the Commissioner does not act within the 120-day period. 13 SUBJECT: Clarifying Issues Relative to the Application for Value Added Tax (VAT) Refund/Credit under Section 112 of the Tax Code, As Amended. ~

DECISION CTA EB No. 2562 (CTA Case No. 9576) Page 7 of9 Indeed, the Bureau of Internal Revenue (BIR) has one hundred twenty (120) days from date of submission of complete supporting documents, to decide on the claimant's administrative claim for input VAT refund. At present, supporting documents are deemed complete upon the filing the refund claimant's administrative claim for input VAT refund.14 In turn, there are two (2) ways by which a claimant may invoke the Court in Division's jurisdiction: one, through a Petition for Review, filed within thirty (30) days from the receipt of the BIR's adverse decision rendered within said one hundred twenty (120)-day period; or two, through a Petition for Review, filed within thirty (30) days after the lapse of such one hundred twenty (120)-day period, whichever comes earlier. Silicon Philippines, Inc. (formerly Intel Philippines Manufacturing, Inc.) v. Commissioner of Internal Revenue15 decreed: The judicial claim shall be filed within a period of 30 days after the receipt of respondent's decision or ruling or after the expiration of the 120-day period, whichever is sooner. Aside from a specific exception to the mandatory and jurisdictional nature of the periods provided by the law, any claim filed in a period less than or beyond the 120+30 days provided by the NIRC is outside the jurisdiction of the CTA.16 Petitioner filed its administrative claim for input VAT refund covering the four (4) quarters of CY 2015, as well as its supporting documents on November 3, 2016. 17 Counting one hundred twenty (120) days therefrom, the BIR had until March 3, 2017 to decide on said administrative claim. As no BIR adverse decision was received by petitioner as of March 3, 2017,18 the law considered such administrative claim as denied. Counting another thirty (30) days from March 3, 2017, petitioner had until April 3, 201719 to seek judicial redress. Ergo, petitioner's belated filing of its Petition for Review on April 12, 2017 deprived the Court in Division of jurisdiction to hear this case. 14 See Zuellig-Phanna Asia Pacific Ltd. Phils. ROHQ v. Commissioner of Internal Revenue, G.R. No. 244154, July 15, 2020. Beginning June 11, 2014, or upon effectivity of RMC No. 54- 2014, the documents are deemed complete upon filing of the claimant's administrative claim for input VAT refund. 15 G.R. No. 182737, March 2, 2016. 16 Boldfacing supplied. 17 See Exhibit "P-1," Docket (CTA Case No. 9576- Vol. 4), p. 2539. " The BIR's adverse decision (Exhibit "P-2") on petitioner's input VAT refund claim for the four (4) quarters of CY 2015 was received by the latter on March 14, 2017, or outside the one hundred twenty (120)-day period under Section 112(C) of the NIRC, as amended. 19 The 30th day, April2, 2017 fell on a Sunday. ~

DECISION CTA EB No. 2562 (CTA Case No. 9576) Page 8 of9 WHEREFORE, the Petition for Review dated January 31, 2022, filed by San Carlos Solar Energy Inc., is DENIED, for lack of merit. The Petition for Review filed by San Carlos Solar Energy Inc. in CTA Case No. 9576, is DISMISSED, on jurisdictional ground. SO ORDERED. . ~ ~ f. ~ - fOJCt;J, MARIAN IVYft!. REYES-FAJARDO Associate Justice We Concur: ROMAN G. DECROSARIO Presiding Justice ER~P.UY Associate Justice OiJ LEAVE MA. BELEN M. RINGPIS-LIBAN Associate Justice ~ '?I'~ ? _. /...... A~ .. ~..,t,,___ CATHERINE T. MANAHAN Associate Justice ~ Opinion. BACORRO-VILLENA

DECISION CTA EB No. 2562 (CTA Case No. 9576) Page 9 of9 With due relf{et':t,{pf!JW�ee Dissenting Opinion. MARIA ROWEM !UODESTO-SAN PEDRO Associate Justice LA~'!llvu~LvAtA'md-ton.J....ivm Associate Justice co~if�~~Es Associate Justice 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. Presiding Justice

REPUBLIC OF THE PHILIPPINES CO URT O F TAX APPEALS Quezon City ENBANC SAN CARLOS SO LAR ENERGY CTA EB NO . 2562 INC., (CTA Case No. 9576) Pe titi o n e r , Present: - versus- DEL ROSARIO, e]_, UY, RI NGPIS -LI BAN, MANAHAN , BACORRO-VILLENA, MODESTO -SAN PEDRO, REYES-FAJARDO, and CUI-DAVI D, FERRER-FLORES, fl. COMMISSIONER O F INTERNAL REVENUE, Resp o n d e n t . X -- --------- ---- --------- -- -- --- ----------L - ----- X DISSENTING OPINION BACORRO-VILLENA, L: With all due respect to my esteemed colleague, Justice Marian Ivy F. Reyes-Fajardo, I register my dissent to the ponencia as it (1) denies the present Petition for Review1 fil ed by petitioner San Carlos Solar Energy Inc. (pet itioner/SaCaSol) against respondent Commissioner oflnternal Revenue (respond ent/ CIR) fo r lack of m erit; (2) reverses and sets aside the Th ird Division's Decision dated 03 February 2o212 (Assaile d Decision ) and Resolution dated 22 September 20213(Assaile d Resolution); and thereby, (3) d ismisses the original Petition fo r Review4 filed by petitioner, in CTA Case No. 9576, fo r lack of jurisdiction. /' Rollo, Volumes I and II, pp. I02-593, with annexes. Division Docket, Volume IV, pp. 2787-2806. ld., pp. 297 1-2977. Division Docket, Volume I, pp. I0-130, with annexes.

DISSENTING OPINION CTA EB No. 2562 (CTA Case No. 9576) San Carlos Solar Energy, Inc. v. CIR X----------------------------------- X To recall, in the Assailed Decisions, the Third Division denied the original Petition for Review6 for lack of merit upon finding that petitioner is not entitled to a refund of its excess and unutilized input Value-Added Tax (VAT) directly attributable to its zero-rated sales for the period January to December 2015 in the amount ofP40,624,825.97� The Third Division held that petitioner, as a Renewable Energy (RE) Developer, failed to establish the existence of VAT zero-rated sales, which is a mandatory requirement in a VAT refund claim, as there is no showing that it was issued a Certificate of Endorsement by the Department of Energy (DOE-COE), through the Renewable Energy Management Bureau (REMB), on a per transaction basis, under Section 18(C)7, Rule 5, Part III of the implementing rules and regulations8 (IRR) of Republic Act (RA) No. 9513 or the Renewable Energy Act oj2oo8. Thereafter, in the Assailed Resolution9, the Third Division denied petitioner's "Motion for Reconsideration"10 (MR) thereto and its subsequent "Supplement to Motion for Reconsideration with Ad Cautelam Motion to Admit Additional Evidence"n and "Second Supplement Supplement to Motion for Reconsideration with Ad Cautelam Motion to Admit Additional Evidence"12 (collectively, "Supplemental Motions") for lack of merit. The Third Division denied the admission of additional documentary evidence attached to petitioner's Supplemental Motions as these have not been formally offered and admitted in evidence and do not fall within the recognized exceptions on the admissibility of evidence. In the ponencia, however, the Court En Bane reverses and sets aside the Assailed Decision'3 and Resolution'4 on the ground that the Third Division is bereft of jurisdiction to entertain petitioner's judicial claim for refund. The ponencia declared that petitioner's original Petition for Review'S was filed beyond the 120+30-day mandatory and jurisdictional period. Counting the , 120-day period under Section n2(C)'6 of the National Internal Revenue Cody Supra at note 2. Supra at note 4. SEC. 18. Conditions for Availment oflncentives and Other Privileges.- C. Certificate of Endorsem�nt by the DOE RE Developers, and manufacturers, fabricators, and suppliers of Jocally~produced RE equipment shall be qualified to avail of the incentives provided for in the Act only after securing a Certificate of Endorsement from the DOE, through the REMB, on a per transaction basis. (Italics in the original text and emphasis supplied) Department of Energy (DOE) Department Circular No. DC2009-05-0008. Supra at note 3. 10 Division Docket, Volume IV, pp. 2807-2828. 11 Division Docke~ id., pp. 2831-2867. 12 Division Docket, id., pp. 2868-2942. 11 Supra at note 2. l4 Supra at note 3. IS Supra at note 4. 16 SEC. 112. Refunds or Tax Credits ofInput Tax.-

DISSENTING OPINION CTA EB No. 2562 (CTA Case No. 9576) San Carlos Solar Energy, Inc. v. CIR X----------------------------------- X (NIRC) of 1997, as amended'7, from 03 November 2016 (the date when petitioner filed its administrative claim for refund'8, respondent had until 03 March 2017 to decide on the said administrative claim. As petitioner did not receive any adverse decision from the Bureau oflnternal Revenue (BIR) by 03 March 2017, petitioner's administrative claim for refund is, by law, "deemed denied". Counting another 30 days days from 03 March 2017, petitioner had until 03 April 2017'9 to seek judicial redress. Since petitioner's original Petition for Review20 was filed with the Third Division only on 12 April 2017, the Court is already deprived of jurisdiction to hear this case. I, respectfully, beg to differ. For the reasons essayed below, I submit that the Court En Bane should not dismiss petitioner's judicial claim for lack of jurisdiction and, instead, give due course to the present Petition for Review and resolve the same on the merits. PETITIONER'S ORIGINAL PETITION FOR REVIEW WAS TIMELY FILED; THUS, THE THIRD DIVISION HAD JURISDICTION OVER THE CASE. The records of the case show that petitioner filed its administrative claim for refund21 on 03 November 2016. Indeed, absent any indication that petitioner subsequently submitted documents, the 120-day period under Section n2(C) 22 of the National Internal Revenue Code (NIRC) of 1997, as amended, must be reckoned from 03 November 2016. Counting 120 days therefrom, respondent had until 03 March 2017 to act on petitioner's refund claim. It is noteworthy that, on 17 February 2017, the BIR's Deputy , Commissioner for Operations Group, Nestor S. Valeroso, (Deputy/ (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 on 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 ofTax Appeals. Prior to the amendments introduced by Republic Act (RA) No. 10963 or the Tax Refonn for Acceleration and 17 Inclusion Act ("TRAIN Law"). '" Exhibit "P-1", Division Docket, Volume IV, p. 2539. As 02 Apri12017, which is the 30" day from 03 March 2017, fell on a Sunday. 19 20 Supra at note 4. 2J Supra at note 17. 22 Supra at note 16.

DISSENTING OPINION No. 9576) EB No. 2562 (CTA Case v. CIR CTA Carlos Solar Energy, Inc. San Page 4 of 9 - - -- - - -- - - -- - - -- - --- - -------X X------- CDeHexxoeotpcmweiinresmatvitoeiionosrf,sn"i)Ipoo',2efn9wttie,h6thri4eioV4cnu,ha1eol0r-ep4drar.1oaerct7ysieoapi(l)vleoyeirusditsogudtroehafudennttahsedaLdeemertpteSoteeettoraci-nlttDiilooyreenncfoei1unrs1n'is2od1(n4CV2c)3AM2l4a(Triaoemrffrceethhorfruefe2ndN0Id'19It7R2oc,Cl2oaa8srio2mtfa,h13fe9t4teo91"r.7B2t,t8hIhaR)ees. amended.2s btpdasheueneafctnotiahritipeeitoCrpdrteenehocdceanekeurlsoil'ievaswndepitedinsaortegidhtnihmiongpenfaoitsctn3hiahnt0iamiesttotde1tanrah2apo"ye0ptnsia-llBvdinyefaIedRrsoyontcDpomhl1neuea4rlcsityi,mMihospdweiaoerfh(nltcoiae2irhr6ptrniew2sors0etaepnh1sfe7oeeuc)irrf,stneiscltvdouhaiegesenidcocnislfonaaoaanpniitmcedd1btt7iieurotieFionseoae-xsnbodnopernnaoreu'ystcdatthirap"ecyeledtdlae2repttg0ieeoao1amr7ttdfthioieoalaondertsf respondent. raiDaCensdfoemaucuDmniinndsietvSii2inos7niidtnsnwgricea2oied93ttni,oh0vitrnenmhed1saetcu4phyl3soaMseti0nmuta-dbhodreeeca-fnrodyhetrraf2peyr0areoce1cprmk7ftieuoeo,r(dnniadopdnedetddooitsunintffnionriodlptooeneeomtertanir"St0jdipehuo3eceadneMttdieimiocrtanui'iersoadcnmlnhtaadei(2dlpCer0m'np11)si73e2ien8aradAioesls,cfptbdratereuahgiitfelaepioivtnN2treo0,eoI1Rpft7iceChnlttaaetihooticimfeCto1ifono9iBlne9uef"Ior7rR')rs,ta. judicial claim. PCfacwNiifnhlloalteiisRemtdilthimrCpamwtdpnhIofiiiutisneftalecs1heemeia9dsiorxsn,9enepin7saneipao,rrIpenataanocesdtcupitr.fao,neismIonrahInidwow(eootfeunodoafirlsdrtrfndlhhem3eeaedosntleoso,olufdRyittoeastehbhmy-voadeeesInupnanaaShutytofpseeautrpiJlpespdoblirerizereeere(PiemdytoShhctoditehieelo,lniaiiCwcppjdttoupthohStniroeuinhii)lrfceissetcthsda'tohsh1meine2capve0MttCire.si+oroaIa3nnRinn0joos'suuoutdsfddfanooaietcccynohctiesunaiaemslrelpiilCroenrc,foTnnlgoaavtA,uiosnim.rdrdsiHenrItwsdunohhSclwibaiai.tn)lyhtleilgcvattobenhhovnreye.re, cry for Notably, in Silicon, dtheenrieedindtuaexptaoyienra-ccltiaoimn"anptr'escaisdemlyinbiesctraautsiveethcelaims refund were "deemed 23 Exhibit "'P-2", Division Docket, Volume IV, p. 2543. 24 Supra at note 16. Allegations, Petition for Review (filed on 12 Apri12017), supra at note 4, pp. 11-12. 25 See Par. 5, Jurisdictional 20 Supra at note 23. 27 Supra at note 17. 2S Supra at note 16. 29 Supra at note 23. 30 G.R. No. 182737, 02 March 2016.

DISSENTING OPINION CTA EB No. 2562 (CTA Case No. 9576) San Carlos Solar Energy, Inc. v. CIR Page 5 of9 X----------------------------------- X did not act at all on such refund claims. Whereas, there is no such inaction in this case as, in fact, the BIR Decision3' on petitioner's VAT refund claim was issued within the 120-day period under Section m(C)32 of the NIRC ofi997, as amended. Applying Silicon (in terms of the reckoning point for filing a judicial claim for refund) in this case to the effect that petitioner's administrative claim for refund is "deemed denied" immediately after the 120- day period lapses would effectively disregard the existence of and practically replace the BIR Decision with a "deemed denied due to inaction" decision (that should apply only when there is inaction on the part of the CIR). Such an interpretation is problematic and quite unfair especially that the Court in Division has ruled on the merits of the case. To my mind, the proper and reasonable interpretation of the Supreme Court's declarations in Silicon as regards the filing of a judicial claim for refund within the 120+30-day mandatory and jurisdictional period under Section 112(C)33 of the NIRC of 1997, as amended, gives rise to the following nuances: 1. When the CIR issues a decision or ruling on the taxpayer-claimant's administrative claim before the expiration of the 12o-day period and the taxpayer-claimant receives the same within the said period, the taxpayer-claimant has 30 days from receipt of the CIR's decision or ruling to file a judicial claim; 2. When the CIR issues a decision or ruling on the taxpayer-claimant's administrative claim before the expiration of the 120-day period but the taxpayer-claimant receives the same after the said period (as in this case), the taxpayer-claimant still has 30 days from receipt of the CIR's decision or ruling to file a judicial claim; and, 3� When the CIR fails to act on the taxpayer-claimant's administrative claim within the 120-day period or issues a decision or ruling on the taxpayer-claimant's administrative claim after the expiration of the 12o-day period, the taxpayer-claimant must no longer wait for the CIR to come up with a decision before filing a judicial claim within 30 days from the expiration of the said 120-day period as the CIR's inaction is the decision itself. Otherwise stated, the taxpayer-claimant may file a judicial claim within 30 days from receipt of the CIR's decision or ruling taxpayer-claimant's > administrative claim for refund for as long as the said decision or ruling wa/' 31 Supra at note 23. 12 Supra at note 16. ]] Supra at note 16.

DISSENTING OPINION CTA EB No. 2562 (CTA Case No. 9576) San Carlos Solar Energy, Inc. v. CIR X---------------------------------- -X issued within the 120-day waiting period. Any delay in the release of such timely issued decision or ruling and receipt thereof by the taxpayer-claimant should not prejudice the taxpayer-claimant to the effect that it loses the remedy of appeal altogether in not presuming that its administrative claim for refund is "deemed denied" upon the lapse of the 12o-day period. Instead, such delay in the release of the CJR's timely issued decision or ruling should be tempered by preserving the remedy in favor of the taxpayer-claimant in case of receipt thereof after the expiration of the 120-day waiting period. Now, since petitioner timely filed its original Petition for Review34 on 12 April 2017, within the 30-day reglementary period reckoned from receipt of the timely issued BIR Decision3s on 14 March 2017, the Court's Third Division properly acquired jurisdiction over the case. PETITIONER'S PRESENT PETITION FOR REVIEW HAS MERIT. Considering that the Court En Bane (by unanimous vote of the members then present) has recently declared in Vestas Services Philippines, Inc. v. Commissioner ofInternal Revenue36 (Vestas) that a DOE-COE is not a requirement to avail of the VAT zero-rating incentive under Section 15(g)37 of RA 9513 and the Third Division's findings that petitioner was issued a DOE Certificate of Registration (COR) and a Board of Investments (BOI) COR, with due respect, it is my position that petitioner has satisfied the conditions for availment of incentives under Section 1838, Rule 5, Part JII of the IRR of RA 9513 to establish that its sales qualify for VAT zero-rating.~ 34 Supra at note 4. 35 Supra at note 23. J6 CTA EB No. 2479 (CTA Case No. 9544 ), 14 October 2022. JJ Sec. 15. Incentives for Renewable Energy Projects and Activities. - RE Developers of renewable energy facilities, including hybrid systems, in proportion to and to the extent of theRE component, for both power and non-power applications, as duly certified by the DOE, in consultation with the 801, shall be entitled to the following incentives: (g) Zero Percent Value-Added Tax Rate. -The sale of fuel or power generated from 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 zero percent (0%) value-added tax (VAT), pursuant to the National Internal Revenue Code (NIRC) of 1997, as amended by Republic Act No. 9337. All RE Developers shall be entitled to zero-rated value-added tax on its purchases of local supply of goods, properties and services needed for the development, construction and installation of its plant facilities. This provision shall also apply to the whole process of exploring and developing renewable energy sources up to its conversion into power, including but not limited to the services performed by subcontractors and/or contractors. J8 Sec, 18. Conditions for Avaifment ofIncentives and Other Privileges.

DISSENTING OPINION CTA EB No. 2562 (CTA Case No. 9576) San Carlos Solar Energy, Inc. v. CIR X----------------------------------- X In Vestas, the Court En Bane concluded that a DOE-COE is required only for the importation of that RE machinery, equipment and materials (and not for VAT zero-rating purposes), to wit: A reading of Section 15 of RA 9513 reveals that the term "endorsement" was only mentioned twice in the whole provision. Both were made in clear reference only to or in connection with the duty- free importation ofRE machinery, equipment and materials, and their subsequent sales. Similarly, in Section 13 of the IRR ofRA 9513, the term "endorsement" was also mentioned thrice under the exemption from duties on RE machinery, equipment, and materials; specifically, under the paragraph governing the sale or disposition of the said capital equipment, viz: Here, the wordings of the above-quoted provisions are clear. "Endorsement" is only needed for duty-free importation of RE machinery, equipment, and materials, and its subsequent sales. Thus, with respect to the services EDC purchased or secured from petitioner, to avail the VAT zero-rating incentive to the said purchases, the COE appears not to be a requisite. Hence, the COE of EDC is not an evidence to be expected from petitioner to present or produce. Moreover, the rule in statutory construction is that every part of the statute must be interpreted with reference to the context, i.e., that every part of the statute must be considered together with the other parts, and kept subservient to the general intent of the whole enactment. Because the law must not be read in truncated parts, its provisions must be read in relation to the whole law. Applying the foregoing rule, it is only logical to read the conditions for availment of incentives under Section 18 of the IRR ofRA 9513, especially the requirement of the COE by the DOE, as applicable only to the incentives to where the latter was specifically mentioned in Section 13 of the said IRR and in the governing law of RA 9513. Thus, again, the COE issued by the DOE, on a per transaction basis, is required only for the incentive relating to duty-free importation on RE machinery, equipment, and materials. The foregoing interpretations are most consistent with the declared policy of RA 9513 (under Section 2 thereof), i.e., to encourage the development of renewable energy resources. If the Court En Bane construes the IRR as imposing an additional requirement for the RE Developer to present the COE issued by the DOE, on a per transaction basis (to avail the VAT zero-rating incentive}, We will be placing an unnecessary burden on the REDeveloper and on the taxpayer it contracted with. Likewise, We will be requiring something that is not even required by the law itself. It is settled rule that in case of discrepancy between the basic law and a rule or regulation issued to implement said law, the basic law prevail~�

DISSENTING OPINION CTA EB No. 2562 (CTA Case No. 9576) San Carlos Solar Energy, Inc. v. CIR X----------------------------------- X because the said rule or regulation cannot go beyond the terms and provisions of the basic law.'9 The Court En Bane also noted in Vestas that based on the Citizen's Charter of the DOE, the REMB has no existing mechanism or process for the issuance of a COE for VAT zero-rating.4o The REMB only issues four (4) types of endorsements, namely: (1) Endorsement to the Securities and Exchange Commission (SEC); (2) Endorsement to other concerned National Government Agencies (NGAs) and Local Government Units (LGUs); (3) Endorsement to Purchase or Transfer or Move Explosives; and, (4) COE for Duty-Free Importation Certification (DFIC).4' Given that Section I8(C)42 of the IRR43 of RA 9513 specifically states that it is the REMB which shall issue the COE and that the REMB does not issue such a certification for VAT zero- rating purposes, therein petitioner (taxpayer-claimant) cannot be expected to secure the said requirement because the law does not require the impossible.44 Furthermore, it is worth noting that the Bureau of Internal Revenue (BIR) recently clarified, through Revenue Regulations (RR) No. 7-202245 dated 22 June 2022, that RE Developers must only secure the DOE-COE requirement prior to the first year of availment specifically of the w% corporate income tax rate incentive, viz: SECTION 3� REQUIRED CERTIFICATIONS/ACCREDITATIONS FROM APPROPRIATE GOVERNMENT AGENCIES FOR THE AVAILMENT OF THE TAX INCENTIVES - RE developers and manufacturers, fabricators, l and suppliers of locally-produced RE equipment shall secure the certifications/accreditations listed hereunder before any incentive provided for in the Act may be availed of. 39 Citations omitted; Emphasis and italics in the original text. 40 https://www. doe.gov.ph/sites/defaultlfi Ies/pdf/citizen_charterIdoe-citizens-charter-cy-2020-09282020. pdf (Last accessed on 08 March 2023). 41 !d. 42 SEC. 18. Conditions for Availment of Incentives and Other Privileges C. Certificate ofEndorsement by the DOE RE Developers, and manufacturers, fabricators, and suppliers of locally-produced RE equipment shall be qualified to avail of the incentives provided for in the Act only after securing a Certificate of Endorsement from the DOE. through the REM B. on a per transaction basis. (Underscoring supplied) 43 Supra at note 8. 44 Louis "Barok" C. Biraogo v. The Philippine Truth Commission of2010, G.R. No. 192935, 07 December 2010. 45 Tax Incentives Under the Renewable Energy Act of 2008 and the Policies and Guidelines for the Availment Thereof.

DISSENTING OPINION CTA EB No. 2562 (CTA Case No. 9576) San Carlos Solar Energy, Inc. v. CIR X----------------------------------- X B. Certificate ofEndorsement by the DOE-REDevelopers shall secure the Certificate of Endorsement from the DOE prior to the first year of availment of the w% corporate income tax rate incentive. Manufacturers, fabricators, and suppliers of locally produced RE equipment who import components, parts, and materials necessary for the manufacture and/or fabrication of RE equipment shall secure a Certificate of Endorsement from the DOE, through the REMB, on a per importation basis.�6 Clearly from the foregoing, the Third Division erred in holding that a DOE-COE, on a per transaction basis, is required to avail the VAT zero-rating incentive under RA 9513 and in thus denying petitioner's judicial claim solely on the ground that it failed to submit such requirement. Since a DOE-COE applies only to the incentive of duty-free importation of RE machinery, equipment and materials, the subject sales of petitioner from its operations as a solar energy provider during the period of claim should qualify for VAT zero-rating under Section 15(g)47 ofRA 9513. All told, I vote to GIVE DUE COURSE to the present Petition for Review48 and to resolve the same on the merits. (._ JEAN MAR~ 46 Emphasis and italics in the original text and underscoring supplied. 47 Supra at note 37. '" Supra at note 1.

REPUBLIC OF THE PHILIPPINES Court of Tax Appeals QUEZON CITY En Bane SAN CARLOS SOLAR ENERGY CTA EB NO. 2562 INC., (CTA Case No. 9576) Petitioner, Present: DEL ROSARIO, P.J., UY, RINGPIS-LIBAN, -versus- MANAHAN, BACORRO-VILLENA, MODESTO-SAN PEDRO, REYES-FAJARDO, CUI-DAVID, and FERRER-FLORES, JJ COMMISSIONER OF INTERNAL REVENUE, Promulgated: Respondent. X --------------------------------------------------------------------------------------- DISSENTING OPINION MODESTO-SAN PEDRO, J.: With utmost respect, I withhold my assent to granting the instant Petition for Review and to the consequent dismissal of CTA Case No. 9576 for lack ofjurisdiction. I am of the firm view that the instant petition for review was timely filed, pursuant to Section 112(C) of the National Internal Revenue Code of 1997 ("Tax Code''), as amended, which provides: "SEC. 112. Refunds or Tax Credits ofInput Tax. - (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 compete documents in support / of the application filed in accordance with Subsections (A) and (B) hereof/

DISSENTING OPINION CTA EB NO. 2562 (CTA CASE NO. 9576) In case of full or partial denial of the claim for tax refund or tax credit, or the failure on 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 and underscoring supplied.) In the present case, records show that petitioner filed the administrative claim for refund with respondent on 3 November 2016. On 17 February 2017, respondent rendered a decision, partially granting petitioner's claim for refund, which petitioner formally received on 14 March 2017. Considering that respondent issued a decision before the lapse of the 120-day period, petitioner's claim cannot be considered as deemed denied due to inaction. In view of respondent's action on petitioner's administrative claim for refund within the 120-day period provided in Section 112(C) of the Tax Code, the 30-day period to appeal to this Court is reckoned from 14 March 2017. Petitioner's judicial appeal filed on 12 April2017 is thus timely filed. I also take the view that the case of Silicon Philippines, Inc. (formerly Intel Philippines Manufacturing, Inc.) v. Commissioner of Internal Revenue1 ("Silicon Case'') is not applicable in the present case due to the stark difference in their factual milieu. In the Silicon Case, the CIR did not act on the administrative claim for refund. Thus, the "deemed denied" provision in Section 112(C) of the Tax Code applies. Meanwhile, in the present case, the CIR acted on the administrative claim of petitioner. All told, I VOTE to DENY the instant Petition for Review and AFFIRM the Assailed Decision dated 3 February 2021 and Assailed Resolution dated 22 September 2021 in CTA Case No. 9576. 1 G.R. No. 182737, 2 March 2016.