CTA Case No. 5191 (Decision)

REPUBLIC OF THE PHILIPPINES COURT OF TAX APPEALS QUEZON CITY BENGUET CORPORATION, C.T.A. CASE NO 5191 Petitioner, - versus - COMMISSIONER OF INTERNAL REVENUE, Respondent X - --- - - DE CISION 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. It is a VAT registered taxpayer with VAT Registration No. 31-9-000027 (Exh. "A" , Pet. ; p. 7, CTA rec. > � It app I ied for VAT zero rate on its saIe of goods to persons or entities which are effectively zero rated and its application was approved on May 04, 1988 (p. 8, CTA rec.). 8). '!

DECI SION C.T.A. CASE NO. 5 1 9 1 - 2- For the period February 1, 1993 to March 31, 1993, petitioner filed its VAT retur n <Exh. "B", Pet.; p. 10, CTA rec.), dec lar i ng therei n the following data: 1. VAT Sales in the total amount of P 43 9 ,60 2,147.23 consi sting of zero-rated sales amounti ng to P424,881,912.83 and 10% rated sales with a v alue of P14,720,234.40; 2. VAT Output Tax in the amou nt of P 1,472,023.44; 3. VAT Input Tax in the tota I sum of whi c h i s as P 57,21 2,878.30, break down of fo I Iows: 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 P1,472,0 23.44, there was an ex cess VAT c redit amounting to P55,740,854.86, which was c a r r ied o v er to the suc c eeding q uarter. For the perio d Ap ril to June 1993, petitioner also filed its VAT retu rn (Exh. "B-1", Pet.; p. 11, CTA rec.) showi ng the following ent ries: 1. VAT Sales in the total amount of of P400,837, 210.70 which is c o m p rised and P383,834,009 . 00 worth of zero rated sales P17,003,201.70 v alue o f 10% rated sales; 2. VAT Output Tax in the amount of P1,700,3 20.17; 8''1 :_,

DECISION C.T.A. CASE NO. 5 191 - 3- 3. VAT Input Tax in the s um of of which are as .P 75,393,430.70, details fo I I ows: a. Carried over from previous quarter P55,740,854.S6 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 Ag a in, as the VAT output tax was on Iy in the amount of P1, 700,320.1 7, there was a n exces s VAT credit in the s um of P 73,693,110.53. This amount became the s ubject of s eparate claims for refund/ tax credit filed with the One- Stop Shop Inter-Agency Tax Credit and Duty Drawback C enter of the D epartment of Finance and Petitions for Re view filed with this Court. Thus: Amount of Claim CTA Cas e No. P 2 3,224,040.80 and 5133 516 7 -/I a , 855,121. 79 5191 12,682, 819.02 1 7,904,908.12 P 72,666,969. 73 The las t two amounts m entioned abo ve are the s ubject of the ins tant petition. The claim for the firs t amo u nt of P12,6 82,819.02 perta ining to the period February to March 1993 was adminis trat i vely filed with, and recei ved by, the Departm ent of Finance on October 10, 1994 <Exh. "C", Pet.; pp. 12-13, CTA rec.). '(l. f �� ' '.J r. I

DECISION C.T.A. CASE NO. 5191 -4- The claim for the second amount of P17,904,908.12 corresponding to the period April to June 1993, wa_ 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 IeveI, petitioner lodged them i.n 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. On ApriI 21, 1995, respondent fiIed her Answer (pp. 25-26, CTA rec.) stating, among others, her usuaI speciaI and affirmative defenses, to wit: "8) In an action for refund, the taxpayer has the burden to show that the taxes paid were erroneousIy or iIIegaIIy coIIected and faiIure to do so is fatal to the action; 9) Claims for tax refunds are strictly Taxpayer- construed against the taxpayer. petitioner has no cause of action." While the case was pending trial before this Court, in a Manif e station dated August 13, 1996 (pp. 89-90, CTA stated that respondent has issued in I rec.) , petitioner its favor a Tax Credit Certificate (No. S N 006073) in the amount of P12,897,478.76. However, as this amount represents only a portio of P30,587,727.14 which is the total amount of its claim for tax credit involved in this case, it wiII stiII pursue the instant case for the 8- l J ,_,

DECISION C.T.A. CASE NO. 5191 - 5- appropriate I itigation of the balance pertaining to the disallowed input VAT in the amount of P17,690,248.3JL 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 aI I the documents/exhibits presented and submitted, the Court finds only that the sum of P15,921,941.88 corresponding to input taxes shou I d be va I id I y refunded to petitioner. The computation of which is as fo I I ows: 9 9 Total Feb. to Mar. Apr. to June P30,587, 727.14 Amount originally claimed P17,904,908.12 309,576.93 101,535.31 Less exceptions tade by the p 102,465.34 182,535.84 42,360.91 independent CPA (Exh. El 125,714.13 567,825.02 a. purchases not supported by 291,267.66 40,694.86 proper documents p 207,111.59 40,507.50 35,226.18 59,174.40 b. purchases not supported by 56,821.71 31,047.60 530,712.36 p 1,768,306.50 original docuents 276,557.36 515,715.81 P28,819,420.64 p 1I1491078.95 c. purchases of services supported 387.36 P16,755,829.17 12,897,478.76 4,178.58 P15,9211941.88 only by provisional receipts 14,996.55 d. purchases of goods & services supported by non-VAT invoices/ offcial receipts e. purchases of goods & services supported by invoices/official receipts not in the name of the company f. purchases supported by invoices/ official receipts without printer's BIR pernit g. nong tu base used (portion of contract price not supported by VAT official receipt) Total P 619,227.55 Allowable refund of input taxes P12,063,591.47 Less TCC issued by the SIR (SN 0060731 AMOUNT REFUNDABABLE Q \' C1 ...,_ '�

DECISION C.T.A. CASE NO. 5191 -6- 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 L& ERNESTO D. ACOSTA Presiding Judge �J;:f'rf� RAMON 0. DE VE Associate Judge ( CERT F CATION hereby certify that this decision was reached after due consultation with the members of the Court of Tax Appeals in accordance with Section 13, Article VIII of the Constitution. lS<-Q ERNESTO D. ACOSTA Presiding Judge