BIR Ruling [DA-415-00]

December 6, 2000 BIR RULING [DA-415-00] MEMORANDUM FOR: Atty. Marcelinda Omila Yap Head Revenue Executive Assistant Collection Service This refers to your memorandum dated October 10, 2000 requesting for formal instruction whether or not the requests for revalidation of taxpayers hereinbelow listed could still be processed as allegedly the same have already prescribed based on Revenue Regulations No. 5-2000. Taxpayers (TCCs)/Tax Debit Memos Date of Issue Amount (TCMs)No. 1. Virjen Shipping Corp. 002516 May 3, 1994 P33,601.26 (bal) 2. Phil. Animation Studio, Inc. 001906 June 29, 1993 213,842.72 (bal) 002547 May 26, 1994 382,606.72 3. Rohm Electronics, Inc. 001936 July 5, 1993 15,262,383.32 (bal) 002234 Feb. 13, 1995 4,104,457.55 (bal) 4. Clarson Enterprises, Inc. 000138 April 1, 1992 389,289.34 5. Ablaza Const. & Finance Corp. 00377 Nov. 4, 1987 17,762.93 (bal) 6. Avenue Realty Inc. 00270 Aug. 2, 1985 338,189.39 7. Phil. Pyrotechnics, Inc. 001780 Oct. 29, 1992 62,903.13 001947 July 16, 1993 143,002.96 8. Isla del Pacifico Marine 002628 Aug. 17, 1994 189,164.32 Products Corp. 9. Tatake Sports Products, Inc. 002625 Aug. 11, 1994 102,082.92 (bal) 10. North Davao Mining Corp. 001799 Nov. 17, 1992 6,985,490.69 001922 June 23, 1993 1,040,164.04 001800 Nov. 17, 1992 10,178,377.20 Pursuant to Section 230(C) of the Tax Code , Tax Credit Certificates (TCC) which remain unutilized or has a creditable balance as of January 1, 1998, shall be presented for revalidation with the Commissioner or his duly authorized representative on or before June 30, 1998 . The above-referred law was implemented by Section 3 of Revenue Regulations No. 7-98 , pertinent portion of which states: "SEC. 2. Forfeiture of Tax Credit . A Tax Credit Certificate issued in accordance with the pertinent provisions of the Code, which shall remain unutilized after five (5) years from the date of issue shall, unless revalidated, be considered invalid and shall not be allowed as payment for internal revenue tax liabilities of the taxpayer, and the amount covered by the Certificate shall revert to the General Fund. Section 3. Revalidation . A Tax Credit Certificate issued by the Commissioner or his duly authorized representative prior to January 1, 1998, which remains unutilized or has a creditable balance as of said date, shall be presented for revalidation with the Commissioner or his duly authorized representative on or before August 31, 1998 . . . ." (Emphasis supplied.) aDcETC Moreover, Section 5(c) of Revenue Regulations No. 5-2000 specifically provides that: "SEC. 5. PERIOD OF VALIDITY, CONVERSION AND REVALIDATION . xxx xxx xxx c) Revalidation Period . In general, a TCC may be revalidated prior to the expiration of its validity period. Provided, however, that any TCC issued prior to January 1, 1998 in which the grantee's holding period therefor as of said date is less than five (5) years from date of issue, may be submitted for revalidation by the holder within six (6) months prior to the end of the fifth (5th) year . For example, a TCC issued on December 31, 1997 shall be presented for revalidation within the six-month period prior to expiration, i.e., from July 1 to December 31, 2002. xxx xxx xxx" Therefore, if a TCC was issued prior to January 1, 1998 in which the grantee's holding period is more than five (5) years counted from date of issue, then the said TCC should have been presented for revalidation with the Commissioner or his duly authorized representative on or before August 31, 1998. Upon the other hand, if a TCC was issued prior to January 1, 1998 in which the grantee's holding period is less than five (5) years counted from date of issue, then the said TCC may be presented for revalidation within the six-month period prior to the end of the fifth (5th) year. Failure to revalidate the said TCC within the period provided above would render it invalid, and the amount thereof would revert to the General Fund. It appears from the records that the said taxpayers had filed their respective application for the revalidation of their TCCs or TCMs on the following dates: Taxpayers Date of Issue Holding Period Date of Application 1. Virjen Shipping Corp. May 3, 1994 3yrs., 8mos. Oct. 1, 1998 2. Phil. Animation Studio, Inc. June 29, 1993 4 yrs., 7 mos. Aug. 27, 1998 May 26, 1994 3 yrs., 8 mos. -do- 3. Rohm Electronics, Inc. July 5, 1993 4 yrs., 6 mos. June 18, 1998 Feb. 13, 1995 2 yrs., 11 mos. -do- 4. Clarson Enterprises, Inc. Apr. 1, 1992 5 yrs., 9 mos. Dec. 3, 1999 5. Ablaza Const. & Finance Corp Nov. 4, 1987 10 yrs., 2 mos. Nov. 23, 1998 6. Avenue Realty Inc. Aug. 2, 1985 12 yrs. 5 mos. Aug. 31, 1998 7. Phil. Pyrotechnics, Inc. Oct. 29, 1992 5 yrs., 3 mos. June 29, 1998 July 16, 1993 4 yrs., 6 mos. -do- 8. Isla del Pacifico Marine Prod. Corp. Aug. 17, 1994 3 yrs., 5 mos. Aug. 27, 1998 9. Tatake Sports Products, Inc. Aug. 11, 1994 3 yrs., 5 mos. June 29, 1998 10. North Davao Mining Corp. Nov. 17, 1992 5 yrs., 2 mos. Aug. 31, 1998 June 23, 1993 4 yrs., 7 mos. -do- Nov. 17, 1992 5 yrs., 2 mos. -do- Accordingly, except for Clarson Enterprises, Inc., and Ablaza Const. & Finance Corp, all of the above taxpayers have seasonably filed their application within the deadline set forth in RR 7-98, as amended by RR 5-2000. ADHcTE (SGD.) LILIAN B. HEFTI Deputy Commissioner Legal & Inspection Group