The Court of Tax Appeals (CTA) has denied the petition of BSM Crew Service Centre Philippines, Inc. which sought a tax refund of P4.7 million from the Bureau of Internal Revenue (BIR) for 2017.

BSM filed its petition for review before the CTA as a full court  on Aug. 18, 2023 and assailed the July 19, 2023 decision of court's special third division which denied its claim for refund of P4,788,317.31 in alleged unutilized input value-added tax.

The firm said the refund was for its domestic purchases of goods other than capital goods, services, and capital goods exceeding P1 million, attributable to zero-rated transactions for the period Jan. 1 to Dec. 31, 2017.

The claim was denied by the BIR in a letter dated June 26, 2019 due to several reasons such as violation of invoicing requirements and insufficient supporting documents. 

In affirming the BIR, the CTA's special third division said that BSM failed to prove its entitlement to the refund since it failed to show that it has zero-rated sales or effectively zero-rated sales for 2017.

In its appeal before th CTA as a full court, BSM stressed that specific provisions of its service agreements demonstrate that its services were to be rendered in the Philippines. 

In denying its petition, the CTA said: "At the risk of being repetitive, the Court En Banc must underscore that actions for tax refund or credit, as in the instant case, are in the nature of a claim for exemption and the pieces of evidence presented to entitle a taxpayer to an exemption is strictissimi scrutinized to show that it has strictly complied with the conditions for the grant of the tax refund or credit."

"For failure to substantiate the alleged zero-rated sales, petitioner cannot claim for refund the input taxes attributable thereto," it added.

The 24-page decision was written by Associate Justice Jean Marie A. Bacorro-Villena with the concurrence of Presiding Justice Roman G. Del Rosario and Associate Justices Ma. Belen M. Ringpis-Liban, Catherine T. Manahan, Maria Rowena Modesto-San Pedro, Marian Ivy F. Reyes-Fajardo, Lanee S. Cui-David, Corazon G. Ferrer-Flores, and Henry S. Angeles.