Panasonic v. CIR (2010)
G.R. No. 178090 February 8, 2010
ABAD, J.
Lessons Applicable: invoice requirements
Laws Applicable:
FACTS:
- Petitioner Panasonic, a VAT-registered enterprise who believing that its export sales are zero-rated sales, paid input VAT.
- Since its input VAT is unutilized, it filed a claim for refund on tax credit.
- CTA denied since its invoice was not printed with "zero-rated"
HELD: petition is DENIED. NO.
- VAT is a tax on consumption, an indirect tax that the provider of goods or services may pass on to his customers. Under the VAT method of taxation, which is invoice-based, an entity can subtract from the VAT charged on its sales or outputs the VAT it paid on its purchases, inputs and imports.
- Under the 1997 NIRC, if at the end of a taxable quarter the seller charges output taxes equal to the input taxes that his suppliers passed on to him, no payment is required of him. It is when his output taxes exceed his input taxes that he has to pay the excess to the BIR. If the input taxes exceed the output taxes, however, the excess payment shall be carried over to the succeeding quarter or quarters. Should the input taxes result from zero-rated or effectively zero-rated transactions or from the acquisition of capital goods, any excess over the output taxes shall instead be refunded to the taxpayer.
- Under RMC 42-2003, failure to comply with invoicing requirements will result in the disallowance of his claim for refund. Since Section 4.108-1 of RR 7-95 is effective then, it should comply with word zero-rated for zero-rated sales covered by its receipts or invoices.
- It also became part of 1997 NIRC on November 1, 2005 not diminishing the binding force of the prior enactment.
- The requirement is reasonable and in accord with efficient collection of VAT preventing false claims and help segregate sales.