Benguet Corporation vs. Commissioner of Internal Revenue

DECISION

This case involves a claim for tax credit of value added tax (VAT> input taxes paid during the period February to June 1993 in P30,587,727.14.

Petitioner engaged in exploration, is a domestic mining business development, and the total amount of registered corporation which includes the operation of mining properties for purposes of commercial production, and the marketing of marketable mine products produced by it. It is a VAT registered taxpayer with VAT Registration No.

31-9-000027 (Exh. "A" , Pet. ;

p.

7, CTA r ec. > • It app I i ed for VAT zero rate on its sa I e of goods to persons or entities which are effectively zero rated and its application was approved on May 04, 1988 (p.

8, CTA rec.).

8)' .

!

DECI SION

C.T.A.

CASE NO.

5 1 9 1 - 2 - For the period February 1, 1993 to March 31, petitioner filed its VAT retur n <Exh.

"B", Pet.;

p.

CTA rec.), dec lari ng therei n the following data:

1.

VAT Sales in the total amount P 43 9 ,60 2,147.23 consisting of zero-rated amounting to P424,881,912.83 and 10% sales with a v alue of P14,720,234.40;

2.

VAT Output P 1,472,023.44;

3.

VAT Input P 57,21 2,878.30, fo I I ows:

Tax in the amou nt Tax in the tota I sum breakdown of which is of sales rated of of as a.

Carried over from previous quarter P42,209,914.30 b.

c.

Imposed on domestic purchases of goods/services Imposed on Importation of goods 12,412,470.00 2,590,494.00 P57,212,878.30 1993, 10, As the VAT output tax was only in the amount of P1,472,0 23.44, there was an excess VAT c redit amounting to P55,740,854.86, suc ceeding q uarter.

which was carr ied o v er to the For the period April to June 1993, petitioner also filed its VAT return (Exh. "B-1", Pet.;

p. 11, CTA rec.)

showing the following entries:

1.

VAT Sales in the total amount of P400,837, 210.70 which is comprised of P383,834,009. 00 worth of zero rated sales and P17,003,201 .70 v alue o f 10% rated sales;

2.

VAT Output P1 ,700,3 20.17;

Tax in 8'1 ' :_, the amount of DECISION C.T.A.

CASE NO.

5 191 - 3 - 3.

VAT Input Tax in .P 75,393,430.70, details of fo I I ows:

the sum which are of as a.

Carried over from previous quarter P55,740,854.S6 b.

c.

Imposed on domestic purchases of goods/services Imposed on importation of goods 14,721,228.84 4,931,347.00 P75 , 393,430.70 Ag a in, as the VAT output tax was on I y in the amount of P1, 700,320.1 7, there was a n exces s VAT credit in the sum of P73,693,110.53. This amount became the subject of s eparate claims for refund/ tax credit filed with the One- Stop Shop Inter-Agency Tax Credit and Duty Drawback C enter of the Department of Finance and Petitions for Re view filed with this Court.

Amount of Claim P23,224,040.80 -/I a , 855, 121 . 79 12,682, 819.02 and 1 7,904,908.12 P 72,666,969. 73 Thus:

CTA Cas e No.

5133 516 7 5191 The las t two amounts mentioned abo ve are the subject of the ins tant petition.

The claim for the firs t amo u nt of P12,682,819.02 perta ining to the period February to March 1993 was adminis trat i vely filed with, and recei ved by, the Departm ent of Finance on October 10, 1994 <Ex h.

"C", Pet.;

pp. 12-13, CTA rec.). 'l f •• ' (.

r. I '.J DECISION C.T.A. CASE NO.

5191 - 4 - The claim for the second amount of P17,904,908.12 corresponding to the period April to June 1993, wa_D filed with and received by, the Department of Finance on November 14, 1994 <Exh. "D", Pet.;

pp. 15-16, CTA rec.).

As the claims were not acted upon in the administrative I eve I, petitioner lodged them

i. n this Court on January 27, 1995 in order to suspend the running of the two-year prescriptive period for claiming a refund or tax credit.

On Apr i I 21, 1995, respondent f i I ed her Answer (pp.

25-26, CTA rec.) stating, among others, her usua I spec i a I and affirmative defenses, to wit:

"8) In an action for refund, the taxpayer has the burden to show that the taxes paid were erroneous I y or iII ega I I y co I I ected and fa i I ure to do so is fatal to the action; 9) Claims for tax refunds are construed against the taxpayer.

petitioner has no cause of action."

strictly Taxpayer- While the case was pending trial before this Court, in a Manifestation dated August 13, 1996 (pp.

89-90, CTA I rec. ) , petitioner stated that respondent has issued in its favor a Tax Credit Certificate (No.

the amount of P12,897,478.76.

However, S

N 006073)

in as this amount represents only a portioE of P30,587,727.14 which is the total amount of its claim for tax credit involved in this case, it w iII st i I I pursue the instant case for the 8- l J ,_, DECISION C.T.A. CASE NO.

5191 - 5 - appropriate I itigation of the balance pertaining to the disallowed input VAT in the amount of P17,690,248.3JL The lone issue, therefore, needing ventilation in this case is whether or not petitioner is entitled to a tax credit of the remaining balance in the amount of P17,690,248.38.

After a careful perusal of documents/exhibits presented and submitted, a I I the the Court finds only that the sum of P15,921,941.88 corresponding to input taxes shou I d be va I i d I y refunded to petitioner.

The computation of which is as fo I I ows:

9 9 Feb. to Mar.

Amount originally claimed Less exceptions tade by the independent CPA (Exh. El

a. purchases not supported by proper documents p 207,111.59

b. purchases not supported by original docuhents 59,174.40

c. purchases of services supported only by provisional receipts 56,821.71

d. purchases of goods & services supported by non-VAT invoices/ official receipts 276,557.36

e. purchases of goods & services supported by invoices/official receipts not in the name of the company 387.36

f. purchases supported by invoices/ official receipts without printer's BIR pernit 4,178.58

g. nong tu base used (port ion of contract price not supported by VAT official receipt) 14,996.55 Total P 619,227.55 Allowable refund of input taxes P12,063,591.47 Less TCC issued by the SIR (SN 0060731

AMOUNT REFUNDABABLE

Q \'

C1 ...._, '· Apr. to June P17,904,908. 12 p 102,465.34 42,360.91 125,714.13 291,267.66 40,507.50 31,047.60 515,715.81 p 1 I 1491078.95 P16,755,829.17 Total P30,587, 727.14 309,576.93 101,535.31 182,535.84 567,825.02 40,694.86 35,226.18 530,712.36 p 1,768,306.50 P28,819,420.64 12,897,478.76 P15,9211941.88 ( DECISION C.T.A.

CASE NO.

5191 - 6 - The claim for refund was seasonably filed within the reglementary period of two years pursuant to Section 106(b) of the Tax Code.

WHEREFORE, based on the abovementioned computation, the Court GRANTS only the amount of P15,921,941.88 and hereby ORDERS respondent certificate in such amount to ISSUE a tax credit in favor of petitioner as input taxes for the period February to June 1993.

L&

ERNESTO D. ACOSTA Presiding Judge F CATION hereby certify that this decision was reached after due consultation with the members of the Court of Tax Appeals in accordance with Section 13, Article VIII of the Constitution.

lS<-Q ERNESTO D. ACOSTA Presiding Judge