THE Court of Tax Appeals (CTA) has stood by its decision to grant part of Axelum Resources Corp.’s refund claim in the amount of P12.82 million representing its excess and unused input value-added tax traced to zero-rated sales for the period covering April to June 30, 2016.

In a nine-page decision dated June 13 and made public on June 16, the CTA full court said the court-approved certified public accountant’s validation of the presented documents and official receipts backed the firm’s entitlement to the reduced amount.

“Indeed, the findings and conclusions of the independent certified public accountant (ICPA) are recommendatory,”  Associate Justice Marian Ivy F. Reyes-Fajardo said in the ruling.

“However, upon validation thereof, the court may totally or partially adopt said findings and conclusions.”

Axelum initially sought a refund in the total amount of P43.71 million, which the court granted in the reduced amount of P12.82 million after the documents were evaluated.

Under the Tax Code, taxpayers that engage with foreign firms doing business outside the Philippines are entitled to zero-rated sales that do not translate to output tax.

The term “zero-rated sale” must be written in the taxpayer’s official receipts.

The firm is primarily engaged in manufacturing coconut water and other coconut-based products for the domestic and international markets.

The commissioner of internal revenue (CIR), who asked the court to overturn the refund, argued that the CTA Second Division, which previously granted the amount, should not have solely relied on the court-approved accountant’s report.

The CIR claimed Axelum was only entitled to a P2.77 million amount, which was recommended by the Bureau of Internal Revenue.

The CTA en banc disagreed saying its second division was not wrong in relying on the accountant’s report, saying it should have been disputed when ICPA was presented as a witness. — John Victor D. Ordoñez