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.