The Court of Tax Appeals (CTA) on Wednesday ordered the Bureau of Internal Revenue (BIR) to refund or issue a tax credit certificate worth a total of P83.7-million in favor of Philex Mining Corporation (Philex), the country’s largest producer of gold and copper.
Philex, in its separate petitions, want a refund of P43,739,035.58 and P86,095,599.12 paid for the unutilized input value-added tax (VAT) for the first to third quarter of 2012.
Instead, the Tax Court second and third divisions partially granted Philex’s petition ordering the BIR to refund P25,811,450.88 and P57,910,100.80 paid for the unutilized input VAT for the first to third quarter of 2012.
Philex took its case to the CTA due to the inaction by the BIR.
Philex anchored its claim on Section 112(A) of the National Internal Revenue Code (NIRC) of 1997 which provides that a taxpayer engaged in zero-rated or effectively zero-rated sales is entitled to a refund or tax credit of unutilized input VAT.
BIR argued that to be able to avail of a tax refund or tax credit, Philex must comply with several requirements including registration as VAT taxpayer, invoicing and accounting requirements as well as filing and payment of VAT, submission of complete documents in support of its claim for tax refund, the input taxes paid were attributable to its zero-rated or effectively zero-rated sales and these have not been applied against any output tax and the claim was filed within two years after the close of the taxable quarter.
The CTA, in two separate decisions, said Philex timely filed its petition and submitted the required documents to show that it is entitled to a refund.
Both the second and third divisions of the CTA hired the services of an independent auditor to analyze the documents submitted by Philex.
For the first quarter of 2012, P8,581,978.50 and another P2,708,275.94 have been disallowed because it was not properly substantiated. Then, P216,871.69 has been applied for Philex’ output VAT liability for the first quarter of 2012. The CTA said only P25.8-million is attributable to the substantiated zero-rated sales.
For the second and third quarter, only the remaining input VAT of P67,475,180.91 can be attributed to the entire zero-rated sales declared by petitioner in the amount of P5,981,339,647.99 and only the input VAT of P57 ,910,100.80 is attributable to the valid zero-rated sales of P5,246,835,764.62. RAM
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