SILICON PHILIPPINES, INC.

,
(Formerly INTEL PHILIPPINES MANUFACTURING, INC.)
vs.
COMMISSIONER OF INTERNAL REVENUE
G.R. No. 172378
January 17, 2011

***The burden of proving entitlement to a refund lies with the claimant.

FACTS:
 Petitioner Silicon Philippines, Inc., a corporation duly organized and existing under
and by virtue of the laws of the Republic of the Philippines, is engaged in the
business of designing, developing, manufacturing and exporting advance and
large-scale integrated circuit components or "IC's."
 Petitioner is registered with the Bureau of Internal Revenue (BIR) as a Value
Added Tax (VAT) taxpayer and with the Board of Investments (BOI) as a preferred
pioneer enterprise.
 Petitioner filed with the respondent Commissioner of Internal Revenue (CIR),
through the One-Stop Shop Inter-Agency Tax Credit and Duty Drawback Center of
the Department of Finance (DOF), an application for credit/refund of unutilized
input VAT
 Due to the inaction of the respondent, petitioner filed a Petition for Review with
the CTA Division
 With regard to petitioner's claim for credit/refund of input VAT attributable to
its zero-rated export sales, the CTA Division denied the same because petitioner
failed to present an Authority to Print (ATP) from the BIR; neither did it print on
its export sales invoices the ATP and the word "zero-rated”
 Petitioner moved for reconsideration.
 Respondent filed a Motion for Partial Reconsideration.
 The CTA Division denied both motions.
 Petitioner elevated the case to the CTA En Banc via a Petition for Review, which
denied the petition
 Petitioner sought reconsideration of the assailed Decision but the CTA En
Banc denied the Motion
 Hence, the instant petition

ISSUES:
1.) Whether printing the ATP on the invoices or receipts is not required
2.) Whether a claimant for unutilized input VAT on zero-rated sales is required to
present proof that it has secured an ATP from the BIR prior to the printing of
its invoices or receipts
 3.) Whether failure to print the word "zero-rated" on the sales invoices should not
result in the denial of a claim
4.) (as to the claim for refund of input VAT on capital goods) Whether petitioner
has sufficiently proven through testimonial and documentary evidence that all
the goods purchased were used in the production and manufacture of its
finished products which were sold and exported

HELD:

{{{Before us are two (2) types of input VAT credits.

(1) One is a credit/refund of input VAT attributable to zero-rated sales under
Section 112 (A) of theNIRC, and
(2) the other is a credit/refund of input VAT on capital goods pursuant to Section
112 (B) of the same Code.
Credit/refund of input VAT on zero-rated sales
In a claim for credit/refund of input VAT attributable to zero-rated sales,
Section 112 (A) 43 of the NIRC lays down four requisites, to wit:
1) the taxpayer must be VAT-registered;
2) the taxpayer must be engaged in sales which are zero-rated or
effectively zero-rated;
3) the claim must be filed within two years after the close of the
taxable quarter when such sales were made; and
4) the creditable input tax due or paid must be attributable to such
sales, except the transitional input tax, to the extent that such
input tax has not been applied against the output tax.}}}

1.) NO. Printing the ATP on the invoices or receipts is not required
 Intel Technology Philippines, Inc. v. Commissioner of Internal Revenue
ATP need not be reflected or indicated in the invoices or receipts because
there is no law or regulation requiring it. Thus, in the absence of such law
or regulation, failure to print the ATP on the invoices or receipts should not
result in the outright denial of a claim or the invalidation of the invoices or
receipts for purposes of claiming a refund.
 ATP must be secured from the BIR. While there is no law requiring the ATP
to be printed on the invoices or receipts, Section 238 of the NIRC expressly
requires persons engaged in business to secure an ATP from the BIR prior to
printing invoices or receipts. Failure to do so makes the person liable under
Section 264 of the NIRC.
 1.) YES. Under Section 112 (A) of the NIRC, a claimant must be engaged in sales
which are zero-rated or effectively zero-rated. To prove this, duly registered
invoices or receipts evidencing zero-rated sales must be presented. However,
since the ATP is not indicated in the invoices or receipts, the only way to
verify whether the invoices or receipts are duly registered is by requiring the
claimant to present its ATP from the BIR. Without this proof, the invoices or
receipts would have no probative value for the purpose of refund.
 In the case of Intel, we emphasized that:
It bears reiterating that while the pertinent provisions of the Tax
Code and the rules and regulations implementing them require entities
engaged in business to secure a BIR authority to print invoices or
receipts and to issue duly registered invoices or receipts, it is not
specifically required that the BIR authority to print be reflected or
indicated therein. Indeed, what is important with respect to the BIR
authority to print is that it has been secured or obtained by the
taxpayer, and that invoices or receipts are duly registered.

3.) NO. Failure to print the word "zero-rated" on the sales invoices is fatal to a
claim for refund of input VAT.
 In Panasonic Communications Imaging Corporation of the Philippines
(formerly Matsushita Business Machine Corporation of the Philippines) v.
Commissioner of Internal Revenue,
we upheld the denial of Panasonic's claim for tax credit/refund due to the
absence of the word "zero-rated" in its invoices. We explained that
compliance with Section 4.108-1 of RR 7-95, requiring the printing of the
word "zero rated" on the invoice covering zero-rated sales, is essential as
this regulation proceeds from the rule-making authority of the Secretary of
Finance under Section 244 of the NIRC.
 The non-presentation of the ATP and the failure to indicate the word "zero-
rated" in the invoices or receipts are fatal to a claim for credit/refund of
input VAT on zero-rated sales. The failure to indicate the ATP in the sales
invoices or receipts, on the other hand, is not. In this case, petitioner failed
to present its ATP and to print the word "zero-rated" on its export sales
invoices. Credit/refund of input VAT on capital goods

4.) NO. Capital goods are defined under Section 4.106-1 (b) of RR No. 7-95
To claim a refund of input VAT on capital goods, Section 112 (B) of
the NIRC requires that:
1. the claimant must be a VAT registered person;
 2. the input taxes claimed must have been paid on capital goods;
3. the input taxes must not have been applied against any output
tax liability; and
4. the administrative claim for refund must have been filed within
two (2) years after the close of the taxable quarter when the
importation or purchase was made.
Corollarily, Section 4.106-1 (b) of RR No. 7-95 defines capital goods as follows:
"Capital goods or properties" refer to goods or properties with
estimated useful life greater that one year and which are treated
as depreciable assets under Section 29 (f), used directly or
indirectly in the production or sale of taxable goods or services.
Based on the foregoing definition, we find no reason to deviate from the findings of
the CTA that training materials, office supplies, posters, banners, T-shirts, books, and
the other similar items reflected in petitioner's Summary of Importation of Goods are
not capital goods.