THE Court of Tax Appeals partially granted the petition of Carmen Copper Corp., granting the refund of P10.6 million out of its P36.1 million claim.
In a 27-page ruling dated Oct. 28, the court’s second division said the company only proved its entitlement to the said amount.
“In fine, petitioner has sufficiently proven its entitlement to a refund or issuance of Tax Credit Certificate (TCC) in the amount of P10,585,608.98, representing its unutilized excess input VAT for the 3rd quarter of TY 2016 (which is attributable to its zero-rated sales/receipts for the same period),” the ruling of the second division read.
Carmen Copper initially filed a refund claim of P48.2 million with the Bureau of Internal Revenue, but was only granted a refund of P12 million. The company raised the denied amount of P36.1 million to the court.
The company reported zero-rated sales for the third quarter in the amount of P2.6 billion supported by various documents such as sales invoices, export documents, and certificate of inward remittances.
However, the court said upon independent verification sales amounting to P1.8 billion do not qualify for VAT zero-rating as some were dated outside the period of claim and some with VAT sales invoice and export documents cannot be properly traced to certificate of inward remittances.
Only the amount of P816.6 million is allowed as valid-zero rated sales, it said.
The court also said that the total valid input VAT of the company for the said quarter is at P47.3 million out of the P49.2 million reported.
The excess input VAT allocated to zero-rated sales amounted to P34.5 million upon applying remaining output VAT liability and the partially granted amount of the BIR.
“However, out of the said excess input VAT allocated to total zero-rated sales, only the remaining input VAT of P10,585,608.98 is attributable to its valid zero-rated sales of P816,678,736.39,” it said.
The court added that there are no other output tax liability that may be credited against the input VAT and the company did not carry-over any output tax in the succeeding quarters.
The company said that it complied with the requisites for refund claimed and the denial letter of the BIR failed to identify from the list of input tax the items that were granted and denied.
It said that the denial letter “hardly complied with the due process requirement” as there was no schedule indicating the reason for denial of specific input tax, according to the court.
The BIR, on the other hand, said the petition should be dismissed for failure to substantiate its administrative claim for refund.
The court said the denial letter should be invalidated, despite a law mandating the commission to state the basis of denial. It said the letter, although not as detailed as the petitioner expected, could not be deemed as “outright void.”
It does not find its “brevity violative of petitioner’s right to due process.” The court said it conducts trials and claimants for refund must prove “every minute detail of their case.” — Vann Marlo V. Villegas
