THE Court of Tax Appeals (CTA) has partially granted Mitsui & Co.’s refund claim in the amount of P25.75 million representing its excess input tax for the period covering April 1, 2008 to March 31, 2015.
In a 35-page decision on April 18 and made public on April 20, the tribunal said Mitsui presented sufficient evidence to show its input tax carried over from April 1 to June 30, 2008.
“The burden of evidence thus shifted to the Bureau of Internal Revenue (BIR), who has the burden to show that the petitioner’s input tax carried over from the previous period does not exist or is invalid,” it said.
The petitioner is the Philippine branch of the Japan-based trade company.
Under the country’s revenue code, unutilized or unused input tax may be traced to zero-rated sales that do not translate to any output tax.
Citing prior Supreme Court jurisprudence, the tribunal noted that Mitsui canceled its registration of business in the Philippines in 2011, which in effect canceled its registration for value-added tax (VAT).
“Thus, after a judicious examination of the invoices and receipts and the computation of both parties, we rule that the petitioner is entitled to a partial grant of its claim for refund of unused input VAT upon cancellation of registration under the National Internal Revenue Code of 1997,” the tax court said.
In a separate dissenting opinion, Associate Justice Jean Marie A. Bacorro-Villena said the rule on granting a tax refund on the basis of the cancellation of VAT registration cannot be applied in the case.
She said other taxpayers would be given the option to accumulate creditable input only to recover them through a refund claim.
Ms. Bacorro-Villena noted the previous High Court ruling cited by the tax court specifically dealt with excess input VAT traced to zero-rated sales, while Mitsui’s case sought to refund “any unused input VAT” due to the cancellation of VAT registration.
“Thus, notwithstanding the similarities in phraseology as highlighted in the ponencia, the Court En Banc is precluded from applying the ruling in Chevron to the herein case,” the magistrate said. — John Victor D. Ordoñez
