THE Supreme Court (SC) has affirmed the Court of Tax Appeals’ (CTA) decision for the internal revenue commissioner to refund Taganito Mining Corp.’s reduced amount of P4-million unutilized input value added tax (VAT) on purchases of capital goods attributable to its zero-rated sales for the calendar year 2008.
In its ruling on Dec. 7 last year and made public on March 23, the high court said that the petitions of the both parties lacked merit, thus it affirmed the CTA en banc decision in 2015.
Taganito Mining is a domestic corporation engaged in exploring, producing, and exporting nickel and other metals along with their by-products. It exports and ships 100% of its ores to foreign countries.
The mining company earlier asked the Bureau of Internal Revenue (BIR) for a refund of P42 million of excess VAT for 2008. It then filed an appeal to the CTA after the BIR failed to take action on the refund claim.
The tax court partially granted the appeal with a reduced refund of P4 million of the company’s input VAT.
The high court affirmed the CTA’s ruling, citing a provision in the country’s tax code that states “if the aggregate acquisition cost of capital goods exceeds P1 million, the claim for input VAT would be spread over 60 months or the estimated useful life of the capital goods, whichever is shorter.”
After spreading the company’s purchases of capital goods over 60 months, the court ruled that only P4 million of its purchases of capital goods could be refunded for 2008.
The commissioner of internal revenue (CIR) argued that the company’s judicial claim was premature as the 120-day period mandated by the amended Tax Code of 1997 had not started.
“Since [Taganito Mining] did not submit the complete documents as required under the Revenue Memorandum Order, the CIR posits that the 120-day period has not yet commenced, thus, also depriving the CIR of the opportunity to examine and evaluate its claim for refund,” the high court said, citing the CTA case.
Citing the tax code, it also said the company timely failed the claim within two years from the close of the taxable quarters in question.
It said that the taxpayer decides when complete documents have been submitted to start the 120-day period, as it “enjoys relative freedom to submit such evidence” to prove a claim.
“It is the taxpayer who has that right and the burden of providing any and all documents that would support his claim for tax credit or refund,” it said. “After all, in a claim for tax credit or refund, it is the taxpayer who has the burden to prove his cause of action. — John Victor D. Ordoñez
