Condonation of the Penalties in Case of Underpayment of GRT

March 19, 1987 BIR RULING NO. 083-87 220 000-00 083-87 Gentlemen : This refers to your letter dated February 10, 1987 stating that the closing of your books of accounts was delayed because of the initial implementation of your Rehabilitation Program particularly in the transfer of assets and liabilities to the National Government at the end of 1986; that your effort to file the correct gross receipts tax (GRT) return for the last quarter of 1986 was negated because of the computation of the Bank's tax liabilities; that in order to observe the deadline prescribed under the Tax Code you have to use the tentative financial statements and reports coming from your field offices in arriving at the percentage tax due for the period; and that you intend to file an amended return after the closing of your books to rectify whatever discrepancy you may have committed in the tentative return. You now request this Office for (1) condonation of the penalties in case of underpayment of the gross receipts tax (GRT) as determined after filing the amended return or (2) automatic application, as tax credit of overpaid gross receipts tax (GRT) as computed in the amended return against the gross receipts tax (GRT) in succeeding taxable quarters. In reply, please be informed that inasmuch as your failure to file on time the gross receipts tax return as required under Section 220 of the Tax Code was due to a reasonable cause, your aforesaid request is hereby granted. Accordingly, no penalty shall be imposed against you in the event of underpayment of the gross receipts tax as determined after you have filed the amended return. However, with regard to the excess gross receipts tax (GRT) which may arise after you have filed the amended gross receipts tax return, you should file with this Bureau, Attn.: Chief, Appellate Division, a written claim for tax credit within two (2) years from payment thereof pursuant to Section 246(3) (formerly Section 295(3) of the Tax Code as amended. Automatic off-setting of the excess gross receipts tax against similar taxes on succeeding taxable calendar quarters is not authorized by law. Your question as to whether Revenue Regulations No. 1-84 is still in effect is answered in the negative. The filing of the gross receipts tax return showing the amount of gross income derived by a bank during the preceding calendar quarter should be made within twenty days after the close of each calendar quarter, pursuant to Section 222 of the Tax Code, as amended by P.D. No. 1994. Very truly yours, (SGD.) BIENVENIDO A. TAN, JR. Commissioner