THE Supreme Court (SC) has upheld a tax court ruling that granted Procter & Gamble Asia Pte. Ltd. (P&G) a P26.07-million refund representing its excess input value-added tax (VAT) traced to zero-rated sales covering the period July to December 2005.
In a resolution dated March 16 and made public on Oct. 14, the SC Third Division said the company failed to present a valid reason for the court to review the findings of the Court of Tax Appeals (CTA).
“Considering that the issues at hand had already been passed upon and appreciated in full by the CTA, a special court exercising expertise on the subject of tax,” it said.
It added that the findings of the tax court are regarded as “final, binding, and conclusive” by the High Court.
The petitioner is the Philippine regional operating headquarters of a multinational firm registered in Singapore.
P&G argued in its plea that the CTA erred in considering allegedly hearsay evidence in reducing its original claim of P53.62 million.
The tax tribunal earlier disagreed with this notion, saying the firm did not object to the evidence presented after it was formally offered.
An objection to the evidence presented will be considered waived if it is not raised in a timely manner, it noted citing Supreme Court jurisprudence.
It ruled P&G was not able to substantiate its original claim of zero-rated sales due to a lack of documents.
The country’s tax code mandates that a sale subject to 0% VAT be written as a “zero-rated sale” on the company’s official receipts.
A zero-rated sale is a transaction made by VAT-registered taxpayers that do not translate to any output tax.
“In any event, petitioner failed to adduce any special reason or argument that would otherwise impel the court to review the factual findings of the CTA en banc or recalibrate the evidence record,” said the High Court. — John Victor D. Ordoñez
