THE Court of Tax Appeals (CTA) denied for lack of merit the tax refund claim of Carmen Copper Corp. worth P24.6 million representing its alleged excess input value-added tax (VAT).
The P24.6 million in claimed excess and unutilized input VAT attributable to zero-rated sales is part of the initial P47.2 million claim for the first quarter of 2014 before the Bureau of Internal Revenue (BIR) but only the amount of P22.6 million was recommended for refund by the bureau.
In the 23-page decision dated July 23, the court’s second division said the firm failed to prove that its sales are zero-rated.
“In fine, the pieces of evidence show that the total zero-rated sales reported by petitioner in the Amended 1st Quarterly VAT Return for TY 2014 must be disallowed for VAT refund purposes,” the court ruled.
“There being no valid zero-rated sales pursuant to Section 106(A)(2)(A)(l) of the NIRC of 1997, as amended, the claimed input VAT allegedly attributable thereto cannot be refunded,” it added.
According to the Tax Code, A VAT-registered entity claiming zero-rated export sales must present sales invoices, bills of lading or airway bills as proof of actual shipment, and bank credit advice or any other document proving payment.
However, the court said the examination of an independent certified public accountant of the supporting documents submitted by Carmen Copper led to the disallowance of the claimed zero-rated sales.
It ruled that such claimed sales levels cannot be verified by the supporting VAT sales invoice, while the inward remittances had deductions without supporting documents, while the VAT sales invoice supporting the claim of zero-rated sales had a date and amounts that were unreadable.
It also said some export documents showed that the goods were only shipped domestically with zero-rated sales unsupported by proof of foreign inward remittance.
The decision was written by Associate Justice Cielito N. Mindaro-Grulla and Associate Justice Juanito C. Castañeda, Jr. — Vann Marlo M. Villegas
