CASE DIGEST: Silicon Philippines, Inc. vs. CIR (G.R. No. 182737; March 2, 2016)

CASE DIGEST: Silicon Philippines, Inc. vs. Commissioner of Internal Revenue (G.R. No. 182737; March 2, 2016)

FACTS: SP claimed tax refund or issuance of TCC relating to its excess/unutlized input valued-added tax (VAT) for the last 3 quarters of 2001. Due to continuous inaction by the CIR on its claims amounting to 25 million pesos, SP filed a petition for review before the CTA Div. The CTA Div ruled against SP.

The CTA Div ruled that, under the NIRC, TF or TC of unused input VAT is allowed only when the excess input is due to zero-rated or effectively zero-rated sales and (b) when the excess input is due to capital goods purchased by a VAT-registered person.

To prove zero-rated export sales, one must show (a) sales invoice; (b) export declaration or bil of lading/airway bill as proof of actual shipment from the PH; and (3) bank credit advice or certificate of remittance proving payment of goods in foreign currency. The CTA Div found that SP presented nothing more than a certificate of inward remittances for the entire year 2001. Hence, the CTA Div held SP's export sales amounting to 2.4 billion pesos NOT VAT zero-rated sales.

Moreover, accoring to the CTA Div, a taxpayer claiming TF or TCC of input VAT paid on capital goods must prove all of the following: (a) registration as VAT entity; (b) payment of input VAT; (c) payments covered by VAT invoces or official receipts; (d) no offsetting against output VAT liability; and (e) filing within the 2-year prescriptive period.

According to the CTA Div, only the first and fifth requirements were complied with.

Not all purchases are capital goods. According to the CTA Div, the following requisites must be present: (a) estimated useful life of more than 1 year; (b) depreciable assets per RR 7-95; and (c) direct or indirect use in production or sale of taxable goods or services.
The CTA Div found that items purchased by SP are not considered decpreciable assets. Also, others were not shown as capitalized in the books of accounts and subjected to depreciation.

MR was filed. Denied. SP went to the CTA EB which dismissed its petition for lack of merit.

ISSUE: Does the CTA have jurisdiction over SP's petitions for review, considering the period set for by law regarding judicial tax remedies?

HELD: No, the CTA has no jurisdiction over SP's petitions.

Upon the filing of an administrative claim, the CIR has 120 days to grant refund or issue TCC or to fully or partially deny the claim. A judicial claim shall be filed within a period of 30 days after receipt of the CIR's decision or after the expiration of the 120-day period, whichever is sooner.

Periods for appeal in tax cases are jurisdictional in nature. Any claim filed in a period less than or beyond the 120-day period or the 30-day period provided by the Tax Code is outside the jurisdiction of the CTA.

In this case, SP's 3 petitions were 502 days, 261 days and 332 days late.

SP cannot use BIR Ruling No. DA-489-03 providing that a taxpayer-claimant need not wait for the lapse of the 120-day period before it could seek judicial relief with the CTA by way of Petition for Review. This rule does not allow filing of judicial claims long after the expiration of the 120 or 30-day periods.

Therefore, SP's judicial claims before the CTA must be dismissed for lack of jurisdiction.