31\epublir of tbe tlbHippines

~upreme QCourt
j}itlnniln

SECOND DIVISION

COMMISSIONER OF G.R. No. 261171

INTERNAL REVENUE,
Petitioner, Present:

LEONEN, * J., Chairperson,

LAZARO-JAVIER, Acting Chairperson,
- versus - LOPEZ, M.,
LOPEZ, J., and
KHO, JR., JJ.

BW SHIPPING
PHILIPPINES, INC., Promulgated:
Respondent.
OCT 04 2023 ~
x------------------------------------------------------------------~.»-_--__-_-__----~

DECISION

KHO, JR., J.:

Before the Court is a Petition for Review on Certiorari 1 under Rule 45

of the Rules of Court assailing the Decision2 dated October 29, 2021 and the
Resolution 3 dated May 30, 2022 of the <2ourt of Tax Appeals (CTA) En Banc
in CTA EB No. 2254 (CTA Case NJ. 9448). The CTA En Banc ruling
affirmed the Decision4 dated Septembe~ 23, 2019 and the Resolution 5 dated
I

On Leave, left a vote pursuant to Section 4, Rule q of the Supreme Court Internal Rules.
Rollo, pp. 38-52.
Id. at 64--79. Penned by Associate Justice Ma. Belen M. Ringpis-Liban with Presiding Justice Roman
I
G. Del Rosario, Associate Justices Juanito C. Castafjeda. Jr., Erlinda P. Uy, Catherine T. Manahan, Jean
Marie A. Bacorro-Villena. Maria Rowena Mode~lo-San Pedro, and Marian Ivy F. Reyes-Fajardo,
concurring.
Id. at 81--84. Penned by Associate Justice•Ma. Bel~n M. Ringpis-Liban with Presiding Justice Roman
G. Del Rosario, Associate Justices Juanito C. Castaneda, Jr., Erlinda P. Uy, Catherine T. Manahan, Jean
Marie A. Bacorro-Villena, Maria Rowena Modesto➔San Pedro, Marian Ivy F. Reyes-Fcljardo, and Lanee
S. Cui-David, concurring. I

Id. at 99-119. Penned by Associate Justice Catherine T. Manahan with Presiding Justice Roman G. Del
Rosario and Esperanza R. Fabon-Victorino, concuri·ing.
hi. at 120---123. I
I
I

I
Decision G.R. No. 26 I 171

February 19, 2020 of the CTA First Division which partially granted the
Petition for Review filed by respondent BW Shipping Philippines, Inc.
(respondent), and accordingly, ordered the refund or issuance of a Tax Credit
Ce1tificate (TCC) in the latter's favor in the amount of PHP 5,503.,628.95
representing its unutilized input value-added tax (VAT) attributable to zero-
rated sales for the four quarters of taxable year (TY) 2014.

The Facts

Respondent is a corporation duly organized and existing under the laws

of the Philippines engaged in the general business of shipping including
manning and crewing of vessels, as well as the carriage of passengers, freight,
mail, livestock, and other lawful merchandise. lt is a registered VAT taxpayer
with Taxpayer Identification No. {TIN) 000-160-779-000. 6

On March 30, 2016, respondent filed an administrative claim for refund

or issuance of TCC of its unutilized input VAT for TY 2014 in the total
amount of PHP 7,346,268.45 before the Bureau of Internal Revenue (BIR).
Respondent alleged that for TY 2014, it rendered manning services to
shipping companies located and doing business outside the Philippines for
which it was paid manning fees in foreign currency that were subjected to 0%
VAT. Respondent opined that since their sales are purely zero-rated, the input
taxes all related to zero-rated accounts. Accordingly, for said TY 2014,
respondent generated purely zero-rated receipts on the aggregate amount of
PHP 129,866,272.96 and paid input VAT attributable to said sales in the total
amount of PHP 7,346,268.45. These input taxes, according to respondent,
were not utilized in the same quarter and were likewise not used against their
output taxes in the subsequent periods. 7

In a letter dated August I 6, 20 I 6 and received by respondent on August

22, 2016, BIR denied respondent's claim. 8 This prompted respondent to file a
Petition for Review before the CTA. 9

In its Answer, petitioner the Commissioner of Internal Revenue (CIR)

alleged, among others, that respondent failed to demonstrate that the tax was
erroneously collected. Moreover, respondenf s claim for refund was not fully
substantiated by proper documents. w

" Id. at 65 .
•, Id. at 65-M.
K IJ. at 66.
9
Id. m 85-98
'" Id. at 66.
Decision 3 G.R. No. 261171

The CTA Division Ruling

In a Decision 11 dated September 23, 2019, the CTA First Division

partially granted respondent's Petition and ordered the refund or issuance of
TCC in their favor in the amount of PHP 5,503,628.95 representing its
unutilized input VAT attributable to zero-rated sales for the four quarters of
TY 2014. 12

The CTA Division held that respondents have complied with all
requisites under Section I 08 (8)(2) in relation to Sections 11 0(B) and 1 l 2(A)
and (C) of National Internal Revenue Code of 1997 (NIRC) to be entitled to
a refund of excess input VAT attributable to its zero-rated sales, 13 considering
that:

First, respondent is registered with the BIR as a VAT taxpayer, as

evidenced by the BIR Ce11ificate of Registration No. 9RC0000426666 with
TIN 000-l 60-779-000. 14

Second, the services rendered by respondent are VAT-zero-rated. The

manning services, among others, which respondent supplied to shipping
companies abroad are services "other than processing, manufacturing or
repacking of goods." 15 Moreover, the shipping companies that were recipients
of respondent's services are doing business outside of the Philippines, as
established by the Certificates of Non-Registration of Company issued by the
Securities and Exchange Commission (SEC), Certificates of
Registration/Articles of Incorporation issued by foreign government agencies,
screenshots of foreign registration per foreign regulatory websites and the
Consularized Manning Agreements/Purchasing & Infrastructure Support
Agreements. To support that respondent was paid in foreign currency duly
accounted for in accordance with the rules and regulations of the Bangko
Sentral ng Pilipinas (BSP) for the four quarters of TY 2014, respondent
submitted its list of zero-rated sales, summary of the results of examination of
inward remittances, list of official receipts, and the related official receipts,
sales invoices, Certificate of Inward Remittances dated October 20, 2017
issued by the Bank of the Philippine Islands, and bank credit memos .
However, due to respondent's failure • to provide official receipts to some
purported sales, only the declared zero-rated sales amounting to PHP
115,630,375.65 were considered qualified for VAT zero-rating. 16

Third, in its Quaiterly VAT Returns for the four quaiters of TY 2014,
respondent declared a total amount of PHP 7,346,268.45 input VAT derived

11 Id. at 99-119.
12
Id. at I 18.
D See id. at I 04--1 18.
14
Id. at 107.
15
Id. at I 08.
16
See id. at I 07--1 13.
Decision 4 G.R. No. 261171

from its domestic purchases of goods other than capital goods and importation
of goods other than capital goods. However, due to lack of proper
substantiation, only the amount of PHP 5,841,616.63 was included as
respondent's valid input VAT. 17

Fourth and fifth, respondent had no output tax liability for the four
quarters of the TY 2014 against which the subject input VAT claim may be
applied or credited. Although respondent carried over the claimed input VAT
in its succeeding quarterly VAT returns for the TY 2015, the same remained
unutilized until it was deducted as "VAT Refund/TCC Claimed" in its
Quarterly VAT Return for the 1st Quarter of the TY 2016 thus, preventing the
carry-over or application of the claimed input VAT in the next TY s. 18

Sixth, all administrative claims including the submission of required

documents were timely filed within the two-year period after the close of the
taxable quarter for all quarters of the TY 2014 on March 30, 2016. Respondent
likewise timely filed its petition with the CTA on August 20, 2016. Said filing
was within the 30-day reglementary period from the date the BIR failed to act
on respondent's administrative claim, which should have been within 120
days from the filing of such claim on March 30, 2016. 19 Proceeding therefrom,
the CTA Division held that only the remaining input VAT of PHP
5,841,616.63 can be attributed to respondent's declared zero-rated sales of
PHP 129,866,272.96 and only the input VAT of PHP 5,503,628.95 1s
attributable to the valid zero-ratecf sales of PHP 115,630,375.65.20

The CIR moved for reconsideration, which was denied in a Resolution21

dated February 19, 2020.

The CIR then filed a Petition for Review 22 to the CT A En Banc alleging
that respondent's sales of services to the shipping companies as its foreign
principals are not entitled to zero-rated or effectively zero-rated sales because
the latter are doing business in the Philippines, thus failing to satisfy the
requisite that the recipient of the services should be doing business outside of
the Philippines. The Consularized Manning Agreements/Purchasing &
Infrastructure Support Agreements, according to the CIR, shows the foreign
principal 's intention to establish a continuous business appointing respondent
as its local agent and/or representative. Accordingly, respondent renders
service and performs functions which do not only pertain to screening
competent and qualified Filipin9 seafarer for employment on board the
vessels of its foreign principals, but also extends to control supervisory and

17
See id. at 114-117.
18
See icl. at 117-118.
ltJ See id. at 106-107.
20
Id. at 118.
21
Id. at 120-123.
22
Id. at 85-97.
Decision 5 G.R. No. 261171

human resource management fi.tnctions which are essential in the operation of

a corporation. 23

The CTA En Banc Ruling

In a Decision 24 dated October 29, 2021, the CTA En Banc affinned the
CTA Division rulings. The CT A En Banc held that as correctly found by the
CTA Division, the Certificates of Non-Registration issued by the SEC certify
that their records do not show that the shipping companies serviced by
respondents are registered as a corporation or partnership in the Philippines.
On the other hand, the consularized Certificates/Articles of Foreign
Incorporation indicate that said companies are non-resident foreign
corporations which were organized and doing business outside the
Philippines. In addition, respondent was able to show that the shipping
companies are duly registered in foreign countries as per official online
websites. Taken together with the Consularized l\llanning
Agreements/Purchasing & Infrastructure Support Agreements, the
aforementioned evidence were held by the CT A En Banc as sufficient proof
that the shipping companies, as recipient of respondent's services, were
foreign entities not doing business in the Philippines. 25

The CTA En Banc likewise held that respondent's appointment as agent

and the Consularized Manning Agreements/Purchasing & Infrastructure
Support Agreements do not show that the shipping companies are doing
business in the Philippines. Respondent was merely rendering manning and
crewing services to the shipping companies through screening competent and
qualified Filipino seafarer for employment on board the vessels of said
companies. The CTA En Banc. opined thal while human resources is
indispensable for business, there is nothing that limits a corporation to fiil its
workforce only through direct hiring; recruiting activity maybe outsourced to
other companies. However, it was noted that jurisprudence on money claims
of seafarers would in ce1tain instances describe foreign shipping corporations
as "doing business through its agent," which according to the CTA En Banc
is a self-imposed characterization for purposes of shipping companies'
liability in line with Section 10 of the Migrant Workers and Overseas Filipinos
Act of 1995. 26

Further, the CTA En Banc found that the foreign principals of

respondent are mostly affiliates of the B\V Group and that it appears that BW
Group has office in the Philippines. The CTA En Banc noted that the address
that was indicated in the BW Group for its office in the Philippines is the same
with that. of respondent and that respondenf~ ·website redirects to the BW
Group's website. Nonetheless, it held that ;1hhough these are worth further

23 See id. at 69--70.

24
Id. at 64- --79.
2~ Id. ar 7 J-72.
i,, Id. at 74 -76.
Decision 6 G.R. No. 261171

investigating, there is a deatth of evidence presented by the CIR to fortify its

allegations which defeats a definitive pronouncement in the CIR's favor. 27

The CIR moved for a reconsideration, 28 which was denied by the CTA
En Banc in a Resolution 29 dated May 30, 2022. Hence, this Petition.

The Issue Before the Court

The issue before the Court's resolution is whether the CTA En Banc
correctly affirmed the CTA Division's order to refund or issue a TCC for
respondent's excess/unutilized input VAT for the four quarters of TY 2014.

The Court's Ruling

The Petition is without me1~t.

Respondent's claim for tax refund or issuance of TCC for its

excess/unutilized input VAT attributable to its zero-rated sales is based on
Section I 12(A), in relation to Section I 08(8) of the NIRC, as amended by
Republic Act No. (RA) 9337, 30 to wit:

SEC. 108. Value-added Tax on Sale of Services and Use or Lease of

Properties. -

(B) Transactions Su~ject lo Zero Percent (0%) Rate. - The

following services performed in the Philippines by VAT-registered persons
shall be subject to zero percent (0%) rate:

( 1) Processing. manufacturing or repacking goods for other persons

doing business outside the Philippines which goods are subsequently
exported. where the services are paid for in acceptable foreign currency and
accounted for in accordance wi.th the rules and regulations of the Bangko
Sentra/ ng Pilipinas (BSP);

(2) Services other than those mentioned in the preceding paragraph,

rendered to a person engaged in business conducted outside the
Philippines or to a nonresident person not engaged in business who is
outside the Philippines when the services are performed, the consideration
for which is paid for in acceptable foreign currency and accounted for in
accordance with the rules and regulations of the Bangko Sentral ng Pilipinas
(BSP);

17
lei. at 73 and 76-77.
:?H Id. at 127-136.
9
:: Id. at 81-84.
311
Entitled. '"AN Acr AMENDING SECTIONS 27, 28, J4, f 06, 107, !08, 109,110, I I I, 112, 113, 114, 116, 117,
I I 9, 12 I, 148, 151. 236, 237 ANO 288 Qr, THF NATIONAL INTERNAL REVENUE CODE OF 1997, AS
AMENOEO, AND FOR OTI IER PURPOSES." approved on May 24, 2005.
Decision 7 G.R. No. 261171

SEC. 112. Re.fimds or Tax Credi!.\' <?/"Input Tax. -

(A) Zero-rated or E.ffectively Zero-rated Sales. - Any VAT-

registered person, whose sales are zero-rated or effectively zero-rated may,
within two (2) years after the close of the taxable quarter when the sales
were made, apply for the issuance of a tax credit certificate or refund of
•
creditable input tax due or paid attributable to such sales, except transitional
input tax. to the extent that such input tax has not been applied against output
tax: Provided, however, That in the case of zero-rated sales under Section
I 06(A)(2)(a)( 1), (2) and (b) and Section I 08(B)( 1) and (2), the acceptable
foreign currency exchange proceeds thereof had been duly accounted for in
accordance with the rules and regulations of the Bangko Sentral ng Pilipinas
(BSP): Provided, fi1rther, That where the taxpayer is engaged in zero-rated
or effectively zero-rated sale and also in taxable or exempt sale of goods or
properties or services, and the amount of creditable input tax due or paid
cannot be directly and entirely attributed to any one of the transactions, it
shall be allocated proportionately on the basis of the volume of sales.
Provided, finally, That for a person making sales that are zero-rated under
Section I 08(B )( 6), the input taxes shall be allocated ratably between his
zero-rated and non-zero-rated sales.

In order for respondent to qualify for VAT zero-rating, the following

requisites under Section I 08 (B) (2) of the NIRC, as amended by RA 9337
must be met: ''first, the services t·endered should be other than 'processing,
manufacturing or repacking of goods;' second, the services are performed in
the Philippines; third, the service-recipient is (a) a person engaged in business
conducted outside the Philippines; or (b) a non-resident person not engaged in
a business which is outside the Philippines when the services are performed;
and,fourth, the services are paid for in acceptable foreign currency inwardly
remitted and accounted for in conformity with BSP rules and regulations." 31

The first, second, and fourth requisites are undisputed. The manning
services which involved respondent's recruitment in the Philippines of crew
for shipping companies abroad is other than processing, manufacturing or
repacking of goods for which respondent was paid in foreign currency duly
accounted for in accordance with the BSP rules and regulations.

The CIR's contention is anchored on the third requisite alleging that

although respondent was able to establish that that the shipping companies
are foreign entities, an examination of its Manning Agreements/Purchasing
& Infrastructure Support Agreements would reveal that said recipients are
performing acts that imply a continuity of business dealings or arrangements
in the Philippines. This is further exemplified by the provision in said
agreements that designates respondent as the agent and the shipping
companies as the principal. According to the CIR, while the manning
services are not directly related to the main business of these companies,
which is the shipping of goods, said services are incidental to and in

31
Chevron Holdings, Inc. v. Commissioner <?llnternal Revenue, G.R. No. 215159, July 5, 2022 [Per J. M.
Lopez, En Bane'].
Decision 8 G.R. No. 261171

progressive prosecution of commercial gain or for the purpose and object of

the shipping companies; it would not be able to operate without said
services. Accordingly, these shipping companies may be considered as
doing business in the Philippines. 32

The Court is not convinced.

In Commissioner of Internal Revenue v. Deutsche Knowledge Services

Pte. Ltd., 33 the Court, through A.gsociate Justice Henri Jean Paul B. Inting,
held that in order for sales to a non-resident foreign corporation to qualify for
zero-rating under Section 108(B)(2) of the NIRC, the claimant must be able
to prove "( 1) that their client was established under the laws of a country not
the Philippines or, simply, is not a domestic corporation; and (2) that it is not
engaged in trade or business in the Philippines. To be sure, there must be
sufficient proof of both of these components: showing not only that the clients
are foreign corporations, but also are not doing business in the Philippines." 34
Accordingly, the Court likewise ruled that "the SEC Certifications of Non-
Registration show that [clients] are foreign corporations. On the other hand,
the articles of association/certificates of incorporation stating that these
[clients] are registered to operate in their respective home countries, outside
the Philippines are prima facie evidence that their clients are not engaged in
trade or business in the Philippines."35

Here, it is notable that the CIR does not dispute that the shipping
companies are foreign corporati@ns. Moreover, based on the consularized
Certificates/Articles of Foreign Incorporation, there is prima facie evidence
that the shipping companies are not engaged in trade or business in the
Philippines. This notwithstanding, the CIR claims that the Manning
Agreements/Purchasing & Infrastructure Suppo1t Agreements between
respondent and the shipping companies show that the latter are doing business
in the Philippines. The foregoing begs this question: "are the foregoing
agreements sufficient to overcome the prima facie evidence in favor of the
shipping companies?"

In Site/ Philippines Corp. v. Commissioner of Internal Revenue, 36 the

Court, through Associate Justice Benjamin S. Caguioa, held that "[t]here is no
specific criterion as to what constitutes 'doing' or 'engaging in' or
'transacting' business. Each case must be judged in the light of its peculiar
environmental circumstances. The term implies a continuity of commercial
dealings and atTangements, and contemplates, to that extent, the performance
of acts or works or the exercise o£some of the functions normally incident to,
and in progressive prosecution of commercial gain or for the purpose and

.u Rollo, pp. 48-49.

:n G.R. No. 234445, July 15, 2020 [Per .I. lnting, Second Division].
J.; See id.
35
See id.
36
805 Phil. 464(2017) [Per J. Caguioa, First Division].
Decision 9 G.R. No. 261171

object of the business organization. 'In order that a foreign corporation may
be regarded as doing business within a State, there must be continuity of
conduct and intention to establish a continuous business, such as the
appointment of a local agent, and not one of a temporary character. '"37

Relatedly, under Rule I, Section IU) of the Implementing Rules and

Regulation of RA 11647,38 amending RA 7042, 39 otherwise known as the
"Foreign Investment Act of 1991," the term "doing business" includes
"soliciting orders, service contracts, opening offices, whether liaison offices
or branches; appointing representatives or distributors, operating under full
control of the foreign corporation, domiciled in the Philippines or who in any
calendar year stay in the country for a period or periods totaling one hundred
eighty ( 180) days or more; participating in the management, supervision or
control of any domestic business, firm, entity or corporation in the
Philippines; and any other act or acts that imply a continuity of commercial
dealings or arrangements, and contemplate to that extent the performance of
acts or works, or the exercise of some of the functions normally incident to
and in progressive prosecution of commercial gain or of the purpose and
object of the business organization." Likewise, under said provision, the
following acts shall not be considered as doing business in the Philippines:

I) Mere investment as a shareholder by a foreign entity in

domestic corporations duly registered to do business, or the
exercise of rights as such investor;

2) Having a nominee director or officer to represent its interests

in such corporation;

3) Appointing a representative or distributor domiciled in the

Philippines which transacts business in the representative's or
distributor's own name and'account;

4) The pub Iication of a general advertisement through any print

or broadcast media;

5) Maintaining a stock of goods in the Philippines solely for the

purpose of having the same processed by another entity in the
Philippines;

6) Consignment by a foreign entity of equipment with a local

company to be used in the processing of products for export;

37
Id. at 484~ citations omitted.
JR Entitled ... AN Acr PR0M0TIN(i FOREIGN INVESTMENTS, AMENDING THEREBY REPUBLIC Acr No. 7042,
OTHERWISE KNOWN As TIIE 'FOREIGN INVESTMENTS AC'r OF 1991,' As AMENDED, AND FOR OTHER
PURPOSES," approved on March 2, 2022.
JI) Entitled, '"AN AlT To PR0M0TI: FoR'EIGN INVESTMENTS, PRESCRll3E Tl IE PROCEDURES FOR
R.EOISTl.:RIN0 ENTERPRISES DOING BUSINESS IN Tl IE Pl IILIPPINf:S, AND FOR OTHER PURPOSES,"
approved on June 13. 1991.
Decision G.R. No. 261171

7) Collecting information in the Philippines; and

•
8) Performing services auxiliary to an existing isolated contract
of sale which are not on a continuing basis, such as installing in
the Philippines machinery it has manufactured or exported to the
Philippines, servicing the same, training domestic workers to
operate it, and similar incidental services.

In Agilent Technologies Singapore v. Integrated Silicon Technology

Phil. Corp., 40 the Court held, through Associate Justice Consuelo Ynares-
Santiago, that to constitute "doing business," the activity to be undertaken in
the Philippines is one that is by and large for profit-making.

Based on the foregoing, the Court holds that the CIR failed to establish
that the shipping companies are doing business in the Philippines.

First, there was no showing that respondent, as representative/agent of

•
the shipping companies, the principal, are operating under the full control of
the latter. On the contrary, it appears that beyond providing recruitment
instructions with respect to the number of complements and categories or
rating of seaman for a particular vessel, scale of remuneration and approving
the dismissal or transfer of a seafarer, the shipping companies have no
command over respondent on the operation of the latter's business even in the
conduct of its recruitment process. The recruitment instructions and the
approval of the dismissal or transfer of crew members, as held by the CTA En
Banc, are merely necessary consequences of outsourcing manpower
recruitment.

Moreover, the designation of shipping companies as "Principal" in the

Manning Agreements/Purchasing & Infrastructure Support Agreements was
specifically provided in the Omnibus Rules and Regulations Implementing the
Migrant Workers and Overseas Filipinos Act of 1195, as Amended by
Republic Act No. 10022 (Omnibus Rules). Under Rule II, Section l(oo) of
the Omnibus Rules, a principal re•fers to "an employer or foreign placement
agency hiring or engaging Filipino workers for overseas employment through
a licensed private recruitment/manning agency." This was likewise reiterated
under Part I, Rule II (39) of the 2016 Revised POEA Rules and Regulation
Governing the Recruitment and Employment of Seafarers (POEA Rules),
which defined it as referring to "the employer or to a person, partnership or
corporation engaging and employing seafarers through a licensed manning
agency." A manning agency, on the other hand, which is designated in the
agreements as the "Agent" is defined under Rule II, Section 1(y) of the
Omnibus Rules as referring to "any person, partnership or corporation duly
licensed by the Secretary of Labor and Employment to engage in the
recruitment and placement of seafarers for ships plying international waters

.w 471 Phil. 582 (2004) [Per J. Ynarcs-Santiago, First Division!.

Decision 1l G.R. No. 261171

and for related maritime activities." Licensed Manning Agency is likewise

defined under Part I, Rule 11 (24) of the POEA Rules as "a person, partnership
or corporation duly licensed by the Secretary or his/her duly authorized
representative to engage in the recruitment and placement of Filipino seafarers
for a ship plying international waters and for related maritime activities." Said
designations, as shown above, do not necessarily imply control or the conduct
of business in the Philippines by the shipping companies.

Second, the hiring of the crew members in the Manning Agreements/

Purchasing and Infrastructure Support Agreements engaged by the shipping
companies are not considered a continuity of its commercial dealings nor are
these in pursuit of commercial gain. The shipping companies in this case own
vessels that transpmt goods such as gas, coal, and iron ore. Although crew
members or engineers and the purchase of provisions are essential in the
operation of these vessels, these recruitments do not necessarily bring in
profit; the shipping companies earn profit by providing transport services. As
pointed out by the CTA En Banc, nothing limits corporations to employ their
workforce through direct hiring. Recruitment activities may be outsourced, as
specifically acknowledged by the POEA Rules and Omnibus Rules. As noted
by the CTA En Banc, there are cases on money claims by seafarers which
would identify foreign shipping companies as "doing business through its
agent;" 41 however, a study of these cases shows that said characterization have
no basis and that the same has 11ever been raised nor resolved as an issue
therein, thus may not be used as a source for a definitive pronouncement.

Unless there is showing of abuse in the exercise of its authority, the Court
accords the highest respect to the factual findings of the CTA considering the
expertise that it has developed on the subject. 42 With both the CTA Division
and the CTA En Banc giving weight and credence to respondent's evidence
as sufficient proof of its entitlement to the refund or issuance a TCC for its
excess/unutil ized input VAT for the four quarters of TY 2014, and based on
the above discussion, the Court shall not disturb said CTA findings.

ACCORDINGLY, the Petition is DENIED. The Decision dated

October 29, 2021 and the Resolution dated May 30, 2022 of the Court of Tax
Appeals En Banc in CT A EB No. 2254 which affirmed the Decision dated
September 23, 2019 and Resolution dated February 19, 2020 of the Court of
Tax Appeals First Division partiaily granting the Petition for Review filed by
respondent BW Shipping Philippines, Inc. are hereby AFFIRMED.
Petitioner Commissioner of Internal Revenue is hereby ordered to refund or
issue a Tax Credit Certificate in favor of respondent BW Shipping
Philippines, Inc. in the amount of PHP 5,503,628.95 representing unutilized
input value-added tax attributable to zero-rated sales for the four quarters of
taxable year 2014.
"1 See Gau S'henp, Phils., Inc:. v. .Joaquin, 481 Phil. 222 (2004) [Per J. Callejo, Sr., Second Division] and
Tagud v. BSM Crew Service Centre Phil.,·., Inc., 822 Phil. 380(2017) [Per J. Carpio, Second Division].
42 Team Energy Corp. v. Commissioner <?f'lnternal Revenue, 828 Phil. 85, 122(2018) [Per J. Leonen, Third
Division 1.
o~cision 12 G.R. No. 261171

SO ORDERED.

4
-~{)~f. iZH~~-
Associate Justice

WE CONCUR:

l ,,~-, "
ll411 ~,;,,,,,,---

AMY C LAZ O-JAVIER

Associate Just~ce
Acting Chairperson

JHOSE~OPEZ
Associate Justice

I attest that the conclusions in the abov~ De~isicn lldd been rce1ched in
consultation before the ~ase was assigned to the writi:~r nf the opinion of the
Coun~s Division.

:AcT.ing Chairp.:.rson, Second Division

Decision 13 G.R. No. 261171

CERTIFICATION

Pursuant to Constitution, Article VIII, Section 13 and the Acting

Division Chairperson's Attestation, I certify that the conclusions in the above
Decision had been reached in consultation before the case was assigned to the
writer of the opinion of the Court's Division.

A L 4 • G. GESMUNDO
/.,._,.._ffe1
ief Justice