CTA EB No. 1895/1896, March 9, 2020.
CTA En Banc
Castaneda, Jr., J.:
Lessons Applicable: filing of the complete supporting documents by the taxpayer in connection with an administrative claim for VAT refund
Laws Applicable: Section 112 (C) of the NIRC of 1997
FACTS:
- October 31, 2013: Chevron Holdings, Inc. (CHI) filed with the Department of Finance One-Stop Shop Inter-Agency Tax Credit and Duty Drawback Center (DOF-OSS) an administrative claim for refund or issuance of TCC for unutilized input VAT for the 1st quarter of CY 2012 in the total amount of P16,165,791.62.
- January 16, 2014: CHI filed with DOF-OSS an administrative claim for refund or issuance of TCC for unutilized input VAT for the 2nd quarter of CY 2012 in the total amount of P19,732,044.98.
- February 17 and 27, 2014: CHI submitted additional documents required under the First Notice attached to the Letter of Authority (LOA) No. LOA-311-2013-0000050327 dated November 28, 2013.
- March 14, 2014: CHI received LOA No. LOA-411-2014-00000015 dated March 10, 2014.
- Due to CIR’s inaction on its administrative claims for refund, it filed a Petition for Review on March 28, 2014 for CTA Case No. 8790 and June 13, 2014 for CTA Case No. 8835.
- January 18 and July 10, 2018: CTA 1st Division issued the assailed decision
- August 14, 2018: CHI filed its Petition for Review in CTA EB No. 1895 and CIR filed his Petition for Review in CTA EB No. 1896.
1. W/N CTA has jurisdiction
2. W/N CHI is entitled to its entire refund claim.
HELD: Dismissed.
1. NO. CHI complied with the thirty (30) day period from the request of the BIR dated February 7, 2014 when it submitted its last batch of supporting documents on February 27, 2014. But, failed to observe the unqualified provision of law regarding the 120-day period which commences from the taxpayer’s submission of complete documents. In other words, while Chevron’s due process were observed following the pronouncement of the Supreme Court in the Total case, Chevron completely disregarded the BIR’s right to be afforded opportunity to review its claims. Thus, Chevron’s haste in elevating the instant case to the CTA is a blatant violation of the doctrine of exhaustion of administrative remedies as pronounced in the San Roque case.
- Subject provision works to protect both the taxpayer and the BIR from belated resolution of the claim and from prematurity of elevating the same to the proper courts, respectively.
- To be sure, it is the taxpayer who ultimately determines when complete documents have been submitted for the purpose of commencing and continuing the running of the 120-day period. Nevertheless, the Supreme Court also emphasized that the forgoing benefit given to taxpayer is not unbridled and, as such, is subject to limitations. Hence, based on the above-quoted portion of Pilipinas Total Gas, the filing of the complete supporting documents by the taxpayer in connection with an administrative claim for VAT refund is subject to the following rules:
b. If in the course of the investigation and processing of the claim, additional documents are required for the proper determination of the legitimate amount of the claim, the taxpayer-claimants shall submit such documents within thirty (30) days from request of the investigation/processing unit. Notice of the request for the submission of additional supporting document is required.
c. It is only upon the submission of the taxpayer that the 120-day period would begin to run.
d. In all cases, whatever documents a taxpayer intends to file to support his claim must be completed within the two-year period under Section 112 (A) of the NIRC.
2. NO.
- Chevon’s presentation of its clients’ (1) SEC Certificates of Non-Registration (2) screenshots of Chevron Subsidiary governance website and (3) Service Agreements, may have sufficed to prove that they were foreign corporations. However, these pieces of evidence are insufficient to prove that they are doing business outside the Philippines.
- Even if RMC No. 42-03 allows out-of-period claims of input VAT, the same cannot be adhered to, as it contravenes Section 110 (A)(2) of the NIRC OF 1997, as amended. It is clear from the foregoing provision that for purchases of goods, the corresponding input value added taxes of which is creditable to the purchaser upon the issuance of the corresponding invoice. On the other hand, for purchases of services, the corresponding input value added taxes of which is creditable to the purchaser upon payment of compensation, rental, royalty or fee, that is, upon the date of official receipt. Section 110 (A) is explicit – upon consummation, in the case of domestic purchases of goods, and upon payment, in the case of purchases of services. It does not provide any qualification.