A UNIT of Nickel Asia Corp. has won a Value Added Tax (VAT) refund from the Bureau of Internal Revenue (BIR) worth about P2.9 million on more than P3 billion worth of zero-rated sales.
In an amended decision dated July 27, the Court of Tax Appeals (CTA) partially granted petitioner Taganito Mining Corp.’s (TMC) Petition to Review an earlier CTA ruling ordering the BIR to refund P2,863,631.56 to TMC.
“Accordingly, respondent is ORDERED to refund to petitioner the amount of P2,946,937.07, representing its excess/unutilized input VAT paid on its importation of capital goods with aggregate acquisition cost exceeding P1 million, which are attributable to its zero-rated sales for taxable year 2013,” the Amended Decision added.
In the CTA’s April 5, 2017 decision, TMC petitioned for a BIR refund of P8,326,025.84 in excess/unutilized input VAT. CTA partly granted the reduced amount of P2,863,631.56 in refundable input VAT.
In the amended decision, CTA said “Consequently, only the input VAT of P2,946,937.07 is attributable to the valid zero-rated sales of P3,242,247,906.69.”
BIR said about the court’s earlier ruling in granting the P2,863,631.56 refund that there was “no evidence” presented by TMC “to prove that the input tax on importation is directly attributable to export sales.”
TMC said it “complied with the substantiation requirements to prove that the input tax paid on its importation and domestic purchases of capital goods are directly attributable to its zero-rated sales for taxable year 2013.”
Based on Section 12 (A) of the Tax Code, the CTA declared that the law “does not decree that the input tax be directly attributable to petitioner’s zero-rated sales” and found BIR’s claim “bereft of merit.”
In the earlier ruling, TMC’s valid zero-rated sales amounted to P3,150,594,396.73, making the refundable input tax P2,863,631.56.
In the amended decision, the substantiated zero rated sales was changed to P3,242,247,906.69 after additional evidence provided by TMC showed it also had VAT zero-rated sales worth P91,653,509.96.
The CTA stated in its amended decision “the input VAT on importation of capital goods, which are undeniably necessary for the production of petitioner’s exports, are attributable to its zero-rated sales.”
TMC is one of Nickel Asia’s four operating mines and exports saprolite and limonite ore. According to Nickel Asia’s website, the Surigao del Norte-based mine is the “exclusive supplier of limonite ore to Taganito HPAL Nickel Corporation (THPAL), the Philippines’ second hydrometallurgical nickel processing plant.” — Gillian M. Cortez