CTA Case No. 5111 (Decision)

REPUBLIC OF fHE PHILIPPINES COURf OF TAX APPEALS OUEZON C IIY MANILA MINING COHPOFl/\1 ION, P < t i t i o 11 e� ,.. , - versus -� t;. I . A. C/\St: NO. b I I 1 Pr�omuloated: GOMMISSIONLH OF INitllNAL HE VI'NlH:, -------- X Hespotldent .. .. ... - -- �- -- �- )( -- - ��- -- -- -- - 1. .) I:'.. C I ::-: :.:; I ( > N I IIi s IS f.\ 1 u d i c 1 a I n I i1 I 111 r or ,.. :: r tttt d o I' v a 1 u e- added input I f.l x � s !! I I P q tHI I y I'!� �t I I I u t1 A r� o It tts export dlli'III\J fhP qtliH"' l>"t I v per rods COV11' i IHJ .JattUat�y I. t f) l)eCf.�� flliJPt� ;3 1 ' tn IIIH tntHI HIHO 1.1 II t of P 1 (l . !�) 6 U . l 4 U . \.Ll . j ()llf:-!1 or yanized and exiBtittq I i'HIS of t It 1. Hepubl iu the Phi I tpptnes . I l i s e n q a q o d I 11 l II e '" i n i nq b u s i ne s s a n d a s sucll. I s A d 1.1 I y n q i B t e I P. d V f\ I ll f-) - l d d fH.l I a X ( VA I ) t a X p a y e I' w I t II ,.. t s p o n d n 11 t � s B u ,.. � a u . purs u ar1l lo lIre r�.qu i ret!ltttt of Seclioll 1u1 or t II P. N a t i o 11 a I Inter rta I Ht".!venue Code, as shown tJ y f l s V I\ I H e J I s I. r� t� i u n N o . : : tJ ��� - (_) lJ (J 6 ) 2 { E x h ., " C ., ) . It is lll<ewise tl Bu.9.r�d ur lnvestlllfllt ( HU I ) registered en te1�pr i se wtt.h ce�� ttricate ot' fleg1strat:ion Nos . 79-8:3 ( E� x h. �. ,_," ) � IJ p " ,J - 1 " ) , U P f3 B --: 5 9 ( f: x II . " ,J - 2."), UP 90-507 (Exh. "J-:3") and Ef-'91-2 1 2 {E:xll. "J� -4"). 51G

DEC I S I ON -- NO. 5111 G. J.A. CASE -2- 0n v a r i o u s d a t e s , p e t i t i one t' f i I e d i t s c o r� t' e s p ond I n g q 11 a r t e r� I y V A I r� e t. u1' n s for� t 11e year� 1992, f.IS t n I I O'WB t Quar�ter Uate Flied Net Creditable Exhibi.t. s . ���-------�- -� - . 1st Apr I I 20, 1992 __ .. } ll_P.IJ.... J a _ _ . "F & F-1" 2nd Ju I y 17, 1992 "G & G-1" 3rd October� 20, 1992 p :.. 204 � 763. 03 "H & H-1" 4th January 20, 1993 3,246,636.04 "I & 1-1" 5,077,453.21 4' t_g_,_t_!-. 62. lUIAL Ott 1��1 n y 'r' B . Bur��a u .:1 11 HfJ1�11�:atlur� I' or� r- ax r: r� d 1 l i r r u r 1 d o I' v \ I p n i d I or t II r.n t. i (HI ,J fl II ll a I. \1 I ' I \-:19 l.' I o � I ll IH" .:HJ , I 9 9 2 I n t h f! (I Ill (_l 1.1 II t I �-� P 0 , l I '� , 11 �I H . ,,-' - \1- :w: 11 . " I l " ) . <'1 n cf o II ,J u I y I. U , 1 9 9 ) E\ltotliet s I Ill i I .J t f\ p p I I t; a t i n ll I i I �d Loy Il I or� tile 19<-' ill l.liH antnu n t of { 1.:. >: " � ''1�:"). ('()I tot tl I diiiOUflt of P 1 6 , h ti l:'i , t' 4 U . 9-:1 t u 1 t ll e y e .:-u� I HU . lo t.late . 1 espnndenl' f:ll 1 eqed 1 v l1a s not Acted on petitioner�� ::; <'lpplluAtions for t. ax ctC!ditltHfund of VAl". Hence, t II I s appeal r 1 1 ed on May 24, 1994 In accnr�dattle with sctlon i_';;s() of the lax cocte and the rule established In l. II f case of commIssioner� of lnter�nal nevenue v s . V I o t o r� i fl s M i I I i n q C o . , I nc . SCHA I L) which sll-lttS that,

DECISION - 5111 C.T.A. CASE NO. -3- " r II e o I a i m tor� r e �run d w I t h the Bureau of Inter�na I nevenue and the subsequent appea I to the Court of Tax Appeals must be flied within the two-year period. If, however, the Commissioner takes time in deciding the claim, and the per-iod of two year's is about to end, lhe sui't or pr�ocaHiHinrJ must be started in the Cu11rt: of lax Appeals bel' ur�e the t.11ld of tiHJ two- VHH' HHiod without awaiting the decision o�f said ComlnissiorHH'. " Ht",cor ds sltow that on Uecttnbt'!l' \ 199:: . i"'(:;pondent I ; l U 1:! d an .1\ll t ll o 1 1 t v to Issue VJ-\1 Crodit/ller�und in t II e total amount ul P/,b::lt, IJY. l\:1, brnhen down as follows, l:i til�� n u " I' I 1 If. 1 11 a I h v r- ttu "' Pti, 4!!2, li4. f b If t ( H ll o I C ll !:;; t n Ill">' " <'. 1 () ;J 4 .!-' -i.: 0 u I ,, t <1 I Pl,h:3l.1)9,/'i1 . . - --� - � -�� - � - � � �---- - � -�-��-� - - � - - � - Hl"r11:e . nn :�Hpl (mbf-!t i-'H. l�ltt4, rf'JSflottdertt Issued lax c red 1 t Cr:> r� t 1 I i r;C.l t P No . :;N l)U!.63 r Ill t It j l:llllUUIIl ut Pb. IJ!-L:'. 1;_,,. fl r� f:! I H P s R til II I q (: I H d i I il I d H input VAl on local p u r� nIt a H i II lite llf\111<' nf liH� p e I' I t I o ll e I' f o I" I" It per�iod ,.JfllliiHI'V t II [) f! c ( Ill b e I . I \:-! \:-! r W II i c I\ I' II e I a t t H I' A 0 C e p t f.! d ( 1:: X l'l. .. ,, .. . pp . bb. BIH l'fJGord;;), H�;-spondent has sent a ltter a rJ d r ('OJ s s e rl I o 1 IH C Ollllli I S S i u ll e I' (d' 1 h e B u r� e f.Ht o1 Customs authorizillq t lie I SSIIEtnr:' o I' a t ax c 1� e �I i t c e ,- t I f r c a t f r or Input Vf.\l pElld ort illliJ<)I'tA�tton for the sflntc pel� iod Itt the a 1no u n t o t P ?. . u b 'l , 4 u b . o u i 11 f a v o r o f p 11 l i l i o n e r� ( t x h . " 3 " , ..... p. t\4, HIH rr;,_:s .). J IJH i:.t b o v e a 111 o u n t s o I' t a:-: c r e 1.1 i t we r� e H I' r I v e d a t by respnndent' s rev(nue o1 f� i cer s 011 pet it loner�� s subject. 518

DECISION -� 5I I 1 C. f. A. CASE NO. - 4- a p p l l cjj t t on for tax or�edlttretund, the details of which a r e a s t� o I I ow s : (Ex h . "2-A" , p. 36, B I A reo . ) On Local On Importation TOTAL Purchase .... @Qg_---- (_l_fl}_ Amount claimed P14,512,335.95 P2,054,405.00 P16,566,l40.93 Less: Di sa I I owed 39,9/7.59 39,9U .59 Input raxes � �-� 40, ?.?8..: ."! 1 . Overstatement 4" -4� ..0. l.22-� 8. 41 . �- ... - A I I owabl e Input P14,032, 129.9-i P,054,405.00 P16,0tl6,534.93 faxes _ _ l:l 1?. 9ti: 1 f:,:!:.+?.-_()- _B !?19_t_)_: - Less: Output lx on sa I e to CB P"''f,LL--'-!J::: c:: P .?_L X!.. !_:.J9- ___ Amount C red i tab I e It p r et;ed 1 nq compu l a�t 1 on t llet t. ou I o 1� c I a 1111 t� or� r� u 1� 1111 d , on 1 y t II dlllOtlfl�t ot ( ph � j. J ;:: � l :..1 ,, � 1 \:J P2.,0b4,4Ub. UUI \11 i:l S 0 I . d I I I : d � lite amuultt of PH,b�l'ti,\:Jb. 14 r' e p r� : s e n l 1 nu petltiOitH ' f; Salt!;; ul uuiJ dii(J SIIV<':!r� lo the Cent: I' a I tid 1111 o I ll\u Plllllpplne Wd<l SUI.iJfH:tHd to a �1 0% output VAl. fllt:l iSSUt: GOIIJ'I�onl:III'J US IS IIll I t tHJ t. r; ; Whet tl e r� or not lite sale ul !JOid and s11ver to �ttle Bani' ot� the PttiiiPJ-lllles tile peltlloner- is s u bJ e c t t o I U % o u t p t 1 I V A I p e I' tHII p l 0 I' I I V r� U I e 1 11 �r� avur o 1 t. 11 e r� e s p o IH1 en t 1 n v1ew ot tha numerous dec1s1ons lhiS COUit IHl S G 0 Ill e 0 ll t WI t II ll p h 0 I d I II iJ I' H EJ p 0 n d e tl t ' S pur�ely legal pos1t1on on VAl

��t.� OEGISION - C. l.A. CASE NO. b11 1 -b - Au I I ng Nos . tl--92, dated ,January 2:3, 199. and 59-92, Apt' I I and Hevenue Memorandum Order No . 2-92, dated May 14, t\19:e:', which c o n s i cJ e I' sales gold tu Central Bani< as domesttG salts anrl the r� t;; I' o t' e not zer�o-� r h '�' s . ln tt1e case ot JAtlus Consoltdat.e<J Mining and IH:ve I opmen t V!-;. 1; omm 1 s H 1 on (l! r of I nt e r na l lh v .:t nu e , N 0 . �I I \:J �I , I I I t1 H t1 s 0 I U t I u n . d a t e Ll A p r 1 I b, 1.H14; a11d ab 1:1dnpt:d I n tIt t or It nu()n-Suyoc Mi fli'H>, I Ill. Vs . Comtnl ss 1 oner� u�t I nttH' na I Bevenue, CIA No . ,J ll I y I U , I 8!1 ; an 1 I a Mini 11\1 company V<"'' . C 0111111 I S S I 0 IHH' o I' I n I.(H'I\d I CIA No . �IBtiO, 1- t:.' t l I'll a I y !. () . 1 \:J v ) .; BHnoue t CoqJOI"c.tl 1 on vs . Commrus1oner cor�por at 1011 vs. comm 1 ss 1 oner� of' lnter�nal linvenue, l, I A and coq)(H'at ion VB .. Commissioner Ol I II I e r� IHt I fleVHIIUEt, Cll C1:1S 1-elH'Uf!I'Y 1�1, IHit), We have I'll l:d COIISiSttJ.ntfy that t lie l't.d I'OaGI I \It: appllcutttln Hullnu Nu . w I II IIU t tu t:ha tax pa ye I' . In r h.; 1110 r� H reCt:!ll'l case Lour�t ot 1\ppe a 1 s Ill Benouet Corporul. 1 o n vs . comm iss i o net� ot Internal HeV(!OUe, Cl\-ti. H. No. Sl'-�- ,:iUtl I ;s, May ::so, 1996, wht-JI'f! our dec1s1on has been attlt'ttHHl, 1t was held: 52(J ) ,�

DECISION - C.l.A. ASE NO. 5111 -6- "Respondent argues in the affirmative. He contends: XXX XXX XXX WIth due r-espect, tills Oft ice be I 1 e v e s t tl e sa i d 111 1 n I n g 0 o 111 p a n 1 e s wll not be u n d ul y pl�ejudioed 1t thiS 0 t' r i c t:l don 1 e s t he 1 ,. c I a i 111 e d 1 11 p ut tax refunds for sales OT gold to the C made dur'III<J rhe period 1-H'IOr Lo ,.. v l1 o a t 1 o n o t t 11 e a t� n r � s a i d r� u t 1 n g s . U ll d t'J I' t II e V A r I H w , I 0 % V A f I s 1 Ill p o s e d on eac11 starJe nt every laxabiH sele . lttls ta:.: compon e nt IS passed on to t t1 e bu y tH� , a s t: J) e b u y e r ' s 1 n p u t t a x , !H' o v i d e d , ll o w tJ v e 1 � , t� h t1 t� t 1�1 e s a 1 d buyer 1s a v 11 I � � l a x i:l tJ I f p e r s o n . �1 h P. said bu y t'; I' ' I II l lll'fl, lJStS thiS tax p il S S e <.1 0 II , a S ll I B I II fl II t t a X C I' e (j It . 1 11 ptyiiiO 111s own olllpul taxt:<s (10% v 1 ) o11 h 1 s t R x a IJ I e sa 1 e s . ., l'tus , 1: o s �t o I t 11 f 1: i:l x pass. d on a l; c umu I 1:1 t e s up o 11 t. t1 e t u1� n I) v t:ll :-, or� s tag e s n r� s i I e :-; unt 1 I til 1 s co::; I of l'ltt-J tax passed on U t t� I Ill a l I V I <; S t ::> II p l)1\ t II e II I I i Ill d t tl ..; u n H u111 e 1 s . 1\ I 8 o , u n d .:n t It e v A I I d w . t ll t: b I I tI 1\i:i::;; ,. I) () p t I I) II s wI th t'eSIJEGt' ro lttB 111pt1l taxes pe1�t.aintnq t� o p 11 I" c; 11 a s t! s a 1 1 d ' a I e s , I t s 11 c ll t> a I e s <.H't ze1�o rated, v 1 z . , tht! se I l -l 11' 111ay 11 s u a 11 cJ a pp 1 y 11 1 s 1 n put t a x es 1n pay I ll 9 1\ I S 1 () o 0 U l. p II l l 8 X S 0 II 11 I S o l IH'H' s a I e s w 11 1 c It a r t"? s u b 1 f.! c l: �t o 1 o !<t. vA I , (J r c I d i 111 t or 1nput t ax r� e I" un d V I S- i:l �� V I S hIS I It p II t l aX eS a l t r 1 ll u t a I) I e t o h 1 s z t:!l'' n r� a t e d s a I e s , (e.g. , t:xpurt sales), W tl H ll t lh S a I d Ill I 11 i It \J C: U Iii p a ll I t1 S , r� e I y 1 n {"J 11 p o n t 11 o a f n r� e m e n t 1 o 11 e d tHif' I I tH' 13 I H r� II I III n B ' tHJ I d t ll e tr� g 0 t d to t tl e L 11 a t: z e I' n 1 a l e V A I , t h e y d I d no l t� u I I v pass on to t 11 e c B the cos I. o t� the ir I' e s p e c: 1 1 v e inp ut t a xes . sa 1 d 1 11 p u t l a x e s r� e 111 a 1 n e d i 11 t 11 e 1 1�� fJ 0 S s e S S I u It s (SIC) � I he 0n I y 1� e per� cuss 1 on o r t 11 e rev on at 1 on u 1' L he :; a I d e il I' I i e i' r II I I fl g s IB t 11 e y W I I I be pt�evented the opltoll ol' (;Jallnlng 521

IH: C I S I ON - NO. b 1 'I 1 C . I . A. CAl' 7- tllt.t satd t np u t taxes as r�erund. But, tl\!y l'f:iflluin entitled tu use the sana 111 pay1nq the1r� output taxes 1n c o n 11 e c t 1 u n w1 lh �t lit. 1 r� o t h e r� sa I es lr'SIISClOt lOllS >'fllllh Bl'e Sllbject to the 10% Vf.\l. It f'ollows, t:htH':! is no p I e .J II d I (; H t li d t Ill a y ('!f'l S U H 'f I � 0111 t h t:'t I' H t I' U a C t I V 13 a p p I I t: d t i 0 II t) t� t. h 0 b a I C:.l revnti:ltlon bet]ause what they only I (I t; I�) I s t ll H r� I n 11 t t () II i:1 v e i t l'l t1 j r I n p ll'l tnXHS I tdiJIHId Whi<:ll, Ill llle t II'Sl p I a r.: u a 11 d liiHI<:l r 1: II e 1 a w , t:I:H ' y t' t? ny w i:l y c lf1 ct r 1 y _ 11 n t e 1l't It I e d tn. tH an L 1 11 q . r or� t II e sa 1, e o 1� a I' q u111 e 11 l , t It a 1 t 11 e v 11� a v <.1 11 o o t I1H r-- sa I e s t1� ansaclt<'�IIS illllJtr:t lu 1011:. VAl .l (I a If 1 S I W 1�1 I 1.: II I It e I r I IIp II I t i'lX t S Ill r.l y IJH llllt:HI Ill llf.lYIIIUnt. 1. 1 11'1, It I'Oit<HVS , 1 It e y a t � t'! 1; n n s t 1 t u t e d a :; t 11 t! 1 1 11 a 1 fli.f 11I1S d�Jd I llii Will Cli t lh; t,;l)t; I;; (It l IH! t a X passe rl u 11 s IJr.t I I I e y a I I V ,! o p dfld r t:;S t . llt=:llr::e , I ll t ft I!:) CO IIIitH: t I Ul'l , t II .: s a 1d 1 npu t t <I ;.. e s ttl a y a I r t:. <H'I y I � e I eqa I I y c: u n \1 e t' t tt d a s Gos t �I� \J d 1 I a I I� I '" <:1 S d 1:'1 dIff: l I 0 rt t 0 r� I I I(; 0 liHt t a X jtll l p n S <:;; , () II t li I t; .:; 1.: 0 I' t'l , I' II e y � I' e It I ) n II I) t P I e I II d I C '' d by t II t-: I t'd I' 0 d C: t I II t. appllt::al.l�lll of tilt Sdld I' II I I I 1\1 II tdtollld l.>t IIOlld tltdl tile PI'Oflulltll;eltlen t I fl VA I Hu I IIIJ l\111 UO-- \:l;. tt�tdl' dlllO ltlfJ sale ot� J<Id 11s <1 I 1.) (.; t I s d I H s u b J Hc t l u I 0 'v f.\ i I ' : I.JI.t t t) u 1\ - I S ll:� II l W I t I) S th:l I ull H.! II i i:l � uI tlte National lntt:H'Ili:ll 111-VtHIIH" �:udt. t n w 1 I.: st 1;. I Uu . v a I u (j ... a u d l'1 cJ t :, " ' ' 11 sale ol u t'l u d s < a ) H at e a n d r.,. . , " l' t� I. d )1. � fllel't: sha II b' 1 tJI� '��� d , C:ISSt'StH.d a n d o o I I e c t e rl <H1 o v e r y ' "' I t-! � b � 1� l e r� or� e x c ,., a n �;1 e I; t JUOI'(S , a / a1.1d1Hl tax (clqUIVi.ilt-Jnl to 1 u Ol' l tH 1J I' o t. :-:1 e I I I II U pI' I G e or� U I" o S S V rJ I U t I II 111 o11 o y o r� t' II e o o o d s B (> I d , h d r� t � r A d d 1 � tl X l; It H llljt d , S U l.: II t <i X l n IH:! p i:i I d f) y t It <.l s I I H 1 u r� l r a 11 s t e r o r : f' I' o v 1 d tHl , t 1'1 .\..I thu lutlowtnq aala"' L)y vAI' -I't't\JIStet't:'''l pHI"sons shall be subjtut to U%:

[)ECISION - C.T.A. CASE NO. 5111 -8- (1) Export sales; and (2) Sales to persons or entities whose exemption under special laws or international agreements to which the Phi I ipp l ne s Is a si g nator y effectively subjects suoh s ale s to zero rate. 'Expor-t sa le s ' means the sale and shipment or e xp o rt a t i on of go od s from the Phi I ippines to a foreign country, Irrespective ot any shipping ar�ra ' ngement that may be agr�eed upo n which may Influence or d e t e rm i ne the t r an sf e r of Influence or determine the transfer ot ownr�ship or the goods so exported, or foreign cur�r-enoy denominated sal as . 'i-oreign ou t� r� EHI cy denom t nate d sa 1 e s ' 111 e an s sales to non-residents ot goods assembled or� manufaotur�ed 111 the Phi 11pp1nes, tor d el l v e r� y to residents In the Phi I tppines and paid for In convertible foreign currency remitted t h rough t he ba n k i n g system in the Phi I 1ppines. It Is clear from the aove sa l e s recognlz"d provision that t he by the law as zero-r�atad Mfe tt>c export sales and thoP' made to persons or entitles exempt under au oos1 g tp n rs� r e d..�e e oael gan r m o at. e l lso . d n- i)�tg,r�sn\ aah tteela �tr dto whsto.).st.. . .atCt.;eh ehP,sn ee.s tt"reit'a t ht ltew oIonnBe(t Pa l�cr hea p ni'rks.tlnelap gto 6p i sf- a r a io1l intn0 e e lea,ssssl W rvlpptc- e e ahterilger t r.e et�aocYij ialo vt hurle ud llly(s rayi �h.)rtetc e�lhda8 ee sm1,'tooa1oodon rwpo e g Itd 11.IIs lsIsu 'ult.1taeo l m t n swda tetdh w tt tn1ue oete bor rta stee s 1o�a"-<tiad "J' tsns svat haa uea.s tn shcacfeetes en tdiraatq t �aeb�xurua ,du., te i .v ra,b.�s oy.t bpt y trp h atos e o ewHntr s o nth tte s e u hedol de towa nduhs xt Ve rpA oe rt1 ana le s b1ye an x p igem e n o ,�.�.a ,.assa n .. h iy w y dn ah etl sh ar bn n ; tneeont,I

DECISION �- 5 �1 1 �t G. I'. A. CASE NO. -9- said case sti II has a last resort - the input taes may be legally converted as cost avai table as deduction for income tax purposes. Hence, they are also not prejudiced by the retroactive application of the rut ing. We note that in resolving the case against the herein petitioner, the Court of Tax Appeals cited the f'Uiing in the � case oF Atlas Consolidated Mining and Development Corporation vs. Commissioner of Internal Hevenue (CTA Case No. 4794, pr-om. 05 Apr�i I 194> to effect that the retroactive appl rcatlon or VAT Hut ing Nos. 8-92 and 59-92 may not neoessari ty be proscribed by Section 246 of the T a x Code , especially so where there is no showing of aotual and Imminent pr-ejudice to t he taxpayer as a result thereof <p. B of the Decision). So tar�, tiiEH�e appear�s lo bt:t no ��ever-sal ot' the ru t lng In said c:asa. WI-IEHEFOHt::, in view of aI I the for-egoinn, tho petition Is het-eby OENIEO for laok of mer�1t. SO OIWEREU. !I HAM<:N. '"Jr Associate ,Jud WE CUNCUH, - ACOSTA Presiding Judge S'lr . i �..... . i. I I

�. DECISION - A C � T � � CASE NO � 5 11 1 - 10 - OE.RT' IF I CAT I ON hereby certify that thla decision was reaohed after due oonaultation with the members of the Court of Tax Appeals In aooordanoe with Se o t l on 13, Artlole VIII of the Constitution. Qc ERNESTO D. ACOSTA Presiding Judge Court of Ta Appeals