The Court of Tax Appeals (CTA) has denied the P38.4 million tax refund sought by Sitel Philippines Corporation from the Bureau of Internal Revenue (BIR) for it zero-rated sales during the second quarter of 2017.

In its petition, Sitel told the CA that it was engaged in zero-rated export sale of services -- other than processing, manufacturing, or repacking goods -- during the second quarter of 2017 rendered to a non-resident person not engaged in business and who was outside the Philippines when the services were performed.

It said it was paid for in foreign currency and accounted for in accordance with Bangko Sentral ng Pilipinas (BSP) rules and regulations. But, it said, the BIR denied its refund with a ruling that it failed to substantiate its claim.

But the CTA denied its petition.  The tax court said that Sitel cannot be considered a VAT-registered person because the sales of its call center services in Palawan and Technopoint Facilities during the subject period were not registered with the BIR as a "branch."

Also, the CTA said that Sitel failed to establish that it was engaged in zero-rated sales or effectively zero-rated sales for the second quarter of 2017.

"An applicant for a claim for refund or tax credit must not only prove entitlement to the claim but also compliance with all the documentary and evidentiary requirements," the CTA said. "Unfortunately for petitioner, it has failed to prove such entitlement," it ruled.

The 32-page decision was written by Associate Justice Lanee S. Cui-David with the concurrence of Associate Justice Jean Marie A. Bacorro-Villena.