Coral Bay Nickel Corporation vs. CIR, CTA EB No. 1569

x16w-2026-03-15_07_50_08-3-coral-bay-nickel-corporation-vs-cir-cta-eb-nos-1569.pdf

This appeal is brought by a taxpayer whose claim for the refund or credit pertaining to its alleged unutilized input tax for the third and fourth quarters of the year two thousand two amounting to fifty million one hundred twenty-four thousand eighty-six point seventy-five pesos had been denied by the Commissioner of Internal Revenue. The Court of Tax Appeals En Banc and in Division denied its appeal.

We sustain the denial of the appeal.

Antecedents

The petitioner, a domestic corporation engaged in the manufacture of nickel and/or cobalt mixed sulphide, is a VAT entity registered with the Bureau of Internal Revenue. It is also registered with the Philippine Economic Zone Authority as an Ecozone Export Enterprise at the Rio Tuba Export Processing Zone under PEZA Certificate of Registration dated December twenty-seven, two thousand two.

On August five, two thousand three, the petitioner filed its Amended VAT Return declaring unutilized input tax from its domestic purchases of capital goods, other than capital goods and services, for its third and fourth quarters of two thousand two totalling fifty million one hundred twenty-four thousand eighty-six point seventy-five pesos. On June fourteen, two thousand four, it filed with Revenue District Office Number thirty-six in Palawan its Application for Tax Credits/Refund (BIR Form nineteen fourteen) together with supporting documents.

Due to the alleged inaction of the respondent, the petitioner elevated its claim to the CTA on July eight, two thousand four by petition for review, praying for the refund of the aforesaid input VAT.

After trial on the merits, the CTA in Division promulgated its decision on March ten, two thousand eight denying the petitioner's claim for refund on the ground that the petitioner was not entitled to the refund of alleged unutilized input VAT following Section one hundred six (A) (two) (a) (five) of the National Internal Revenue Code of nineteen ninety-seven, as amended, in relation to Article seventy-seven (two) of the Omnibus Investment Code and conformably with the Cross Border Doctrine. In support of its ruling, the CTA in Division cited Commissioner of Internal Revenue versus

Toshiba Information Equipment (Phils) Incorporated and Revenue Memorandum Circular Number forty-two zero three.

After the CTA in Division denied its Motion for Reconsideration on July two, two thousand eight, the petitioner elevated the matter to the CTA En Banc, which also denied the petition through the assailed decision promulgated on May twenty-nine, two thousand nine.

The CTA En Banc denied the petitioner's Motion for Reconsideration through the resolution dated December ten, two thousand nine.

Hence, this appeal, whereby the petitioner contends that Toshiba is not applicable inasmuch as the unutilized input VAT subject of its claim was incurred from May one, two thousand two to December thirty-one, two thousand two as a VAT-registered taxpayer, not as a PEZA-registered enterprise; that during the period subject of its claim, it was not yet registered with PEZA because it was only on December twenty-seven, two thousand two that its Certificate of Registration was issued; that until then, it could not have refused the payment of VAT on its purchases because it could not present any valid proof of zero-rating to its VAT-registered suppliers; and that it complied with all the procedural and substantive requirements under the law and regulations for its entitlement to the refund.

Was the petitioner, an entity located within an ECOZONE, entitled to the refund of its unutilized input taxes incurred before it became a PEZA registered entity?