G.R. No. 236325 , September 16, 2020
COMMISSIONER OF INTERNAL REVENUE, PETITIONER, VS. FILMINERA RESOURCES CORPORATION, RESPONDENT.

FACTS

Filminera Resources Corporation, a VAT-registered entity, sold gold ore to Philippine Gold Processing and Refining Corporation (PGPRC), a BOI-registered enterprise, during the third and fourth quarters of fiscal year 2010. Claiming these were zero-rated export sales, Filminera filed administrative and judicial claims for a refund or tax credit certificate for its unutilized input VAT amounting to P111,579,541.76. The CTA Division initially denied the claim, finding Filminera failed to prove its sales qualified as zero-rated exports under Section 106(A)(2)(a) of the National Internal Revenue Code.
On motion for reconsideration, Filminera submitted a BOI Certification dated January 27, 2010, stating PGPRC exported 100% of its total sales volume from July 1, 2009, to June 30, 2010. The CTA Division then reversed itself, granting the refund. The CIR appealed to the CTA En Banc, arguing the BOI Certification was insufficient as it did not specifically cover the period of the claim (January to June 2010) and was a “forgotten evidence” not formally offered during trial. The CTA En Banc dismissed the CIR’s petition, upholding the grant of the refund.

ISSUE

Whether Filminera Resources Corporation successfully proved that its sales to PGPRC qualified as zero-rated export sales, thereby entitling it to a refund of unutilized input VAT.

RULING

The Supreme Court denied the CIR’s petition and affirmed the CTA En Banc’s decision. The Court held that Filminera satisfactorily established its entitlement to the VAT refund. The legal logic centers on the interpretation of Section 106(A)(2)(a)(5) of the NIRC and Section 4.106-5 of Revenue Regulations No. 16-2005, which grant zero-rating to sales of goods to a BOI-registered enterprise whose export sales exceed 70% of total annual production.
The Court ruled that the BOI Certification, which confirmed PGPRC exported 100% of its sales volume for a period encompassing the claim dates, constituted substantial compliance with the requirement for proof of exportation. It rejected the CIR’s technical objections, noting the certification’s validity period overlapped with the claim period and that the CTA rules allow the submission of evidence on motion for reconsideration to serve the interests of justice. The Court emphasized that tax refunds, like tax exemptions, are construed strictly against the claimant, but once the claimant discharges its burden of proof with competent evidence—as Filminera did here—the refund must be granted. The CTA’s factual findings, being supported by evidence, are accorded finality.