THE Court of Tax Appeals (CTA) partially granted the tax refund claim of Taganito Mining Corp. for P28.93 million in excess input value added tax (VAT) attributable to zero-rated sales for 2014, but approved only P25.95 million while finding the remainder without documentary support.
In a decision dated Dec. 6, the CTA special second division said the miner only proved its entitlement to P25.95 million as it failed to comply with some requirements.
“In fine, petitioner has sufficiently proven its entitlement to a refund in the amount of P25,946,279.40 representing its unutilized excess input VAT for the four quarters of CY (calendar year) 2014 which is attributable to its zero-rated sales/receipts for the same period,” the court said.
Taganito Mining claimed that it is entitled to excess input tax refund of P28.93 million, after it recorded P8.8 billion worth of zero-rated sales in 2014, P7-billion of which were export sales to non-resident foreign companies. The exported commodities were nickel saprolite and limonite ore. It also generated sales from other exploration activities.
According to the National Internal Revenue Code (NIRC) of 1997, a VAT-registered entity may claim a refund on any input tax attributable to zero-rated sales, provided that the input taxes were not applied against any output VAT liability and the claim was filed during the prescribed period.
NIRC classifies export sales paid for in an acceptable foreign currency or its equivalent goods or services accounted for in line with the regulations of the Bangko Sentral ng Pilipinas as zero-rated sales.
Exports must be supported with various proofs of sale, such as bills of lading or airway bills, as proof of shipment and any document proving the payment for goods in an acceptable foreign currency.
For sales of services, meanwhile, the service must be other than processing, manufacturing or repackaging of goods, the payment must be in an acceptable foreign currency, and the client must be doing business outside the country. — Vann Marlo M. Villegas