Benguet Corp. v. Commissioner of Internal Revenue

[C.T.A. CASE NO. 5191. August 13, 1997.] BENGUET CORPORATION , petitioner , vs . COMMISSIONER OF INTERNAL REVENUE , respondent . D E C I S I O N This case involves a claim for tax credit of value added tax (VAT) input taxes paid during the period February to June 1993 in the total amount of P30,587,727.14. Petitioner is a domestic registered corporation engaged in mining business which includes the exploration, development, and operation of mining properties for purposes of commercial production, and the marketing of marketable mine products produced by it. LLjur It is a VAT registered taxpayer with VAT Registration No. 31-9-000027 (Exh. "A", Pet.; p. 7, CTA rec.). It applied for VAT zero rate on its sale of goods to persons or entities which are effectively zero rated and its application was approved on May 04, 1988 (p. 8, CTA rec.). For the period February 1, 1993 to March 31, 1993, petitioner filed its VAT return (Exh. "B", Pet.; p 10, CTA rec.), declaring therein the following data: 1. VAT Sales in the total amount of P439,602,147.23 consisting of zero-rated sales amounting to P424,881,912.83 and 10% rated sales with a value of P14,720,234.40; 2. VAT Output Tax in the amount of P1,472,023 44; 3. VAT Input Tax in the total sum of P57,212,878.30, breakdown of which is as follows: a. Carried over from previous quarter P42,209,914.30 b. Imposed on domestic purchases of goods/services 12,412,470.00 c. Imposed on Importation of goods 2,590,494.00 P57,212,878.30 ============ As the VAT output tax was only in the amount of P1,472,023.44, there was an excess VAT credit amounting to P55,740,854.86, which was carried over to the succeeding quarter. 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 value of 10% rated sales; 2. VAT Output Tax in the amount of P1,700,320.17; 3. VAT Input Tax in the sum of P75,393,430.70, details of which are as follows: a. Carried over from previous quarter P55,740,854.86 b. Imposed on domestic purchases of goods/services 14,721,228.84 c. Imposed on importation of goods 4,931,347.00 P75,393,430.70 ============ Again, as the VAT output tax was only in the amount of P1,700,320.17, there was an excess VAT credit in the sum of P73,693,110.53. This amount became the subject of separate claims for refund/tax credit filed with the One-Stop Shop Inter-Agency Tax Credit and Duty Drawback Center of the Department of Finance and Petitions for Review filed with this Court. Thus: Amount of Claim CTA Case No. P23,224,040.80 5133 18,855,121.79 5167 12,682,819.02 and 17,904,908.12 5191 P72,666,969.73 =========== The last two amounts mentioned above are the subject of the instant petition. The claim for the first amount of P12,682,819.02 pertaining to the period February to March 1993 was administratively filed with, and received by, the Department of Finance on October 10, 1994 (Exh. "C", Pet.; pp. 12-13, CTA rec.). The claim for the second amount of P17,904,908.12 corresponding to the period April to June 1993, was 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 level, petitioner lodged them in 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. cdlex On April 21, 1995, respondent filed her Answer (pp. 25-26, CTA rec.) stating, among others, her usual special and affirmative defenses, to wit: "8) In an action for refund, the taxpayer has the burden to show that the taxes paid were erroneously or illegally collected and failure to do so is fatal to the action; 9) Claims for tax refunds are strictly construed against the taxpayer. Taxpayer-petitioner has no cause of action." While the case was pending trial before this Court, in a Manifestation dated August 13, 1996 (pp. 89-90, CTA rec.), petitioner stated that respondent has issued in its favor a Tax Credit Certificate (No. SN 006073) in the amount of P12,897,478.76. However, as this amount represents only a portion of P30,587,727.14 which is the total amount of its claim for tax credit involved in this case, it will still pursue the instant case for the appropriate litigation of the balance pertaining to the disallowed input VAT in the amount of P17,690,248.38. 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 all the documents/exhibits presented and submitted, the Court finds only that the sum of P15,921,941.88 corresponding to input taxes should be validly refunded to petitioner. The computation of which is as follows: 1 9 9 3 Feb. to Mar. Apr. to June Total Amount originally claimed P12,682,819.02 P17,904,908.12 P30,587,727.14 Less exceptions made by the independent CPA (Exh. E) a. purchases not supported by proper documents P207,111.59 P102,465.34 P309,576.93 b. purchases not supported by original documents 59,174.40 42,360.91 101,535.31 c. purchases of services supported only by provisional receipts 56,821.71 125,714.13 182,535.84 d. purchases of goods & services supported by non-VAT invoices/ official receipts 276,557.36 291,267.66 567,825.02 e. purchases of goods & services supported by invoices/official receipts not in the name of the company 387.36 40,507.50 40,894.86 f. purchases supported by invoices/ official receipts without printer's BIR permit 4,178.58 31,047.60 35,226.18 g. wrong tax base used (portion of contract price not supported by VAT official receipt) 14,896.55 515,715.81 530,712.36 Total P619,227.55 P1,149,078.95 P1,768,306.50 Allowable refund of input taxes P12,063,591.47 P16,755,829.17 P28,819,420.64 =========== =========== Less TCC issued by the BIR (SN 006073) 12,897,478.76 AMOUNT REFUNDABLE P15,921,941.88 =========== 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 to ISSUE a tax credit certificate in such amount in favor of petitioner as input taxes for the period February to June 1993. SO ORDERED. ERNESTO D. ACOSTA Presiding Judge WE CONCUR: RAMON O. DE VEYRA Associate Judge AMANCIO Q. SAGA Associate Judge