THE Court of Tax Appeals (CTA) has granted part of Dole Food Co., Inc.’s (DFCI) refund claim in the amount of P123.35 million representing its excess and unused input value-added tax (VAT) traced to zero-rated sales for the fiscal year 2018.
In a 67-page decision darted June 13 and made public on June 14, the tribunal said the firm was able to provide official invoices to back its claim. It disallowed sales that were not backed by enough documentary evidence.
The firm initially sought a total refund worth P325.28 million for the period evaluated.
“Well-settled is the rule that tax refunds or credits are strictly construed against the taxpayer, just like tax exemptions,” Associate Justice Lanee S. Cui-David said in the ruling.
DFCI primarily engages in acquiring, owning, and cultivating agricultural lands and plantations. It also processes products such as fruit and other agricultural crops.
Under the country’s tax code, companies registered with Philippine Economic Zone Authority are exempted from paying national taxes and local taxes.
Zero-rated sales are transactions made by VAT-registered taxpayers that do not translate to any output tax.
The tribunal said the firm was able to file its judicial claims within two years from the close of the taxable quarter when the zero-rated sales were made. It was also filed within the 90- and 30-day period mandated by law.
Under Tax Code amendments from the Tax Reform for Acceleration and Inclusion Law, the commissioner of internal revenue has 90 days to act on an administrative claim for a refund, while the taxpayer may appeal the claim with the CTA within 30 days.
The tax court also disallowed P47.17 million of DFCI’s exports during the period for failing to comply with invoicing requirements.
It added that the firm’s input VAT was not transitional input taxes, which cannot be refunded.
“The burden is on the taxpayer to show that he has strictly complied with the conditions for the grant of the tax refund or credit,” the tribunal said. — John Victor D. Ordoñez
