Oceanagold, Inc. v. CIR

 

Oceanagold, Inc. v. CIR

CTA EB NO. 2358

Doctrine:

A claim for refund or tax credit for unutilized input VAT may  be allowed only if the following requisites concur, namely: 

(a) the  taxpayer is VAT -registered; 

(b) the taxpayer is engaged in zero-rated  or effectively zero-rated sales; 

(c) the input taxes are due or paid; 

(d)  the input taxes are not transitional input taxes;

(e) the input taxes  have not been applied against output taxes during and in the  succeeding quarters; 

(f) the input taxes claimed are attributable to  zero-rated or effectively zero-rated sales; 

(g) for zero-rated sales  under Section w6(A)(2)(1) and (2); 106(B); and w8(B)(1) and (2), the acceptable foreign currency exchange proceeds have been duly  accounted for in accordance with the rules and regulations of the Bangko Sentral ng Pilipinas; (h) where there are both zero-rated or  effectively zero-rated sales and taxable or exempt sales, and the  input taxes cannot be directly and entirely attributable to any of  these sales, the input taxes shall be proportionately allocated on the  basis of sales volume; and 

(i) the claim is filed within two years after the close of the taxable quarter when such sales were made.

Facts:

Petitioner is seeking for refund of the excise taxes paid to respondent's bureau for the period covering February to June 2013 on the theory that it is still under the recovery period when the taxes were paid as provided in its FTAA, DENR AO No. 1995-23, as reiterated in DENR AO No. 2010-21, DENR AO No. 1999-56 and BIR Ruling No. 10-2007.

Issues:

Whether or not the denial of petitioner’s claim for refund of P54.4M was proper.

Held: 

No. Petitioner anchors its claim for refund on Section no(B), in relation to Section n2(A) and {C) of the National Internal Revenue Code (NIRC) of 1997, as amended by Republic Act (RA) No. 1096345 , otherwise known as Tax Reform for Acceleration and Inclusion  (TRAIN Law). A claim for refund or tax credit for unutilized input VAT may  be allowed only if the following requisites concur, namely: (a) the  taxpayer is VAT -registered; (b) the taxpayer is engaged in zero-rated  or effectively zero-rated sales; (c) the input taxes are due or paid; (d)  the input taxes are not transitional input taxes; (e) the input taxes  have not been applied against output taxes during and in the  succeeding quarters; (f) the input taxes claimed are attributable to  zero-rated or effectively zero-rated sales; (g) for zero-rated sales  under Section w6(A)(2)(1) and (2); 106(B); and w8(B)(1) and (2), the acceptable foreign currency exchange proceeds have been duly  accounted for in accordance with the rules and regulations of the  Bangko Sentral ng Pilipinas; (h) where there are both zero-rated or  effectively zero-rated sales and taxable or exempt sales, and the  input taxes cannot be directly and entirely attributable to any of  these sales, the input taxes shall be proportionately allocated on the  basis of sales volume; and (i) the claim is filed within two years after  the close of the taxable quarter when such sales were made.

FIRST (J5T) REQUISITE:  PETITIONER IS A VALUE-ADDED TAX  (VAT)-REGISTERED ENTITY.

NINTH (9TH) REQUISITE:  PETITIONER'S ADMINISTRATIVE AND  JUDICIAL CLAIMS WERE FILED  WITHIN THE PRESCRIPTIVE PERIOD.

SECOND (2ND) AND SEVENTH (7TH)  REQUISITES: 

PETITIONER IS ENGAGED IN ZERO RATED OR EFFECTIVELY ZERO-RATED  SALES AND FOR WHICH THE  ACCEPTABLE FOREIGN CURRENCY  EXCHANGE PROCEEDS HAVE BEEN  DULY ACCOUNTED FOR IN  ACCORDANCE WITH THE RULES AND  REGULATIONS OF THE BANGKO  SENTRAL NG PILIPINAS (BSP).

THIRD (3RD). FOURTH). FIFTH  (5TH), and EIGHTH (8TH) REQUISITES:  PETITIONER INCURRED EXCESS AND  UNUTILIZED INPUT VALUE-ADDED  TAX (VAT) ATTRIBUTABLE TO ITS  ZERO-RATED SALES.

As regards the 4th requisite, in petitioner's amended 2nd, 3rd, and 4th quarterly VAT Returns for CY 20168', it declared excess and  unutilized input VAT ofPs4.431,590.09, after deducting output VAT on  its importations and amortization of deferred input VAT.

As for the 8th requisite, the same does not apply as petitioner  does not claim any to excess input VAT resulting from tax-exempt  sales.  In sum, petitioner has sufficiently proven its entitlement to the  refund of the lesser amount of 1"23,596,992.30, representing the  unutilized input VAT attributable to its zero-rated sales for the 2nd, 3rd,  and 4th quarters of CY 2016.