The Court of Tax Appeals (CTA) has denied the petition filed by FCF Minerals Corporation (FCF) -- a firm engaged in the exploration, development, and commercial operation of mineral claims -- to refund the P57.8 million taxes it paid for its imported equipment.

In 2009, FCF and the government entered into a Financial or Technical Assistance Agreement (FTAA). FCF, as FTAA contractor, was to provide large-scale operation, development, and commercial utilization of minerals in Quezon, Nueva Vizcaya, in exchange for the exclusive right to conduct mining operations in the said area. The project was called the "Runruno Gold Molybdenum Project."

On Feb. 15, 2013, the Bureau of Internal Revenue (BIR) issued Revenue Memorandum Circular (RMC) No. 17-2013, declaring that FTAA contractors are liable to pay taxes due under the National Internal Revenue Code (NIRC), the 1997 Tax Code.

FCF Minerals imported several capital equipment on different dates. The Bureau of Customs (BOC) collected value added tax (VAT) and fees from FCF amounting to P57,896,506.

The firm filed letters of protests with the district collector of the BOC which denied them. i

The case reached the CTA on March 28, 2014, but the tax court denied it for lack of merit on June 21, 2016. The CTA ruled that the FTAA contractor is exempt from payment of VAT and customs fees on importation of capital equipment during the recovery period.

The CTA also found that FCF was not able to present sufficient evidence to prove that the disputed charges were imposed and paid by FCF during the recovery period.

With the denial of its motion for reconsideration on Feb. 20, 2017, FCF appealed the case before the CTA as a full court (en banc). It said it is entitled to the refund of VAT and fees without need to prove the non-availability of the imported equipment locally.

But the CTA as a full court said: FCF's exemption is "inherently confined to its right to import such capital equipment. In other words, petitioner (FCF) is required to meet the conditions laid down by the FTAA on its right to import the subject capital equipment before it could even claim the entitlement to exemption from payment of VAT and fees due thereon."

Because FCF's evidence do not prove compliance with the requirements, the CTA said that "petitioner has no right and thus cannot avail itself of the benefits provided in the FTAA if at least one of the aforementioned requisites is not complied with."

The 19-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, and Corazon G. Ferrer-Fores.