CTA rejects Philip Morris refund claim

THE Court of Tax Appeals (CTA) has dismissed a claim by Phillip Morris Philippines Manufacturing, Inc. for a refund worth over P152 million, citing procedural faults like a lapsed filing deadline.
According to the decision dated Aug. 3, the tobacco company filed a Petition for Review against the Bureau of Internal Revenue (BIR) seeking “the refund or issuance of tax credit certificate in the total amount of P152,877,472.10 corresponding to the excise tax allegedly advanced or deposited by it on tobacco and cigarette products it exported.”
The decision, signed by CTA Associate Justice Cielito N. Mindaro-Grulla, said that review petition was denied “for lack of merit.”
In 2014, Phillip Morris filed an administrative claim for the refund of more than P150 million which allegedly represents “excise tax advanced or deposited by petitioner on tobacco and cigarette products it exported for the period covering January 12, 2009 to December 31, 2009.”
It added that it “has not been replenished or refunded under RR No. 3-08 including Product Replenishment Certificates (PRCs) with outstanding balances and Product Replenishment Debit Memo (PRDM) for replenishment.”
According to the BIR website, RR No. 3-08 “Amends certain provisions of existing Revenue Regulations on the granting of outright Excise Tax exemption on removal of excisable articles intended for export or sale/delivery to international carriers or to tax-exempt entities/agencies and prescribes the provisions for availing claims for product replenishment.”
The CTA ruled that the tobacco company’s claim for refund “is already barred by prescription pursuant to Sections 204(C) and 229 of the NIRC of 1997” which states that no tax credit or refund is allowed unless the petitioner files a claim to the BIR within two years since the payment of the tax or penalty.
According to Sections 204(C) of the NIRC of 1997, “No credit or refund of taxes or penalties shall be allowed unless the taxpayer files in writing with the Commissioner a claim for credit or refund within two (2) years after the payment of the tax or penalty.”
Section 229 states: “In any case, no such suit or proceeding shall be filed after the expiration of two (2) years from the date of payment of the tax or penalty.”
CTA’s decision stressed, “Taxpayers are not left without recourse. Remedies were provided under the regulations.”
The court added, “Petitioner failed to comply with the required procedure when it belatedly filed the claim for refund or issuance of tax credit certificate.” — Gillian M. Cortez