Appellate tax court grants part of Philip Morris’ refund claim

THE COURT of Tax Appeals (CTA) has granted part of a refund claim of Philip Morris Philippines Manufacturing, Inc. in the amount of P32.04 million representing its unused input value-added tax (VAT) traced to zero-rated sales in 2015.

In a 16-page ruling dated Oct. 17, the CTA full court said Philipp Morris was able to prove its entitlement to the amount by proving the sales invoices it submitted were actual shipments from the Philippines to foreign countries for export sales.

“The court finds that even without the reopening of the trial at the Division level, the submissions made by Philip Morris clarifying certain tabular presentations/summaries of its alleged zero-rated sales may already be reconsidered,” Associate Justice Catherine T. Mahan said in the ruling.

Zero-rated sales are transactions made by VAT-registered taxpayers that do not translate to any output tax. Taxpayers must present official receipts that are attributable to a specific fiscal period, with the term “zero-rated” being written on them to qualify for a 0% rating.

Philip Morris earlier sought a total refund worth P90 million covering excess input VAT for 2015. The CTA Third Division partially granted the petition, ordering the commissioner of internal revenue (CIR) to issue a refund worth P31.18 million to the firm.

Citing its own rules, the CTA said the firm submitted its appeal on time since the court granted its motion for a 15-day extension to file the petition.

The tax court said the CIR failed to present new arguments that would call for a dismissal of Philip Morris’ plea.

The CIR argued that the CTA should have rejected the firm’s appeal since it claimed the export sales were not proven to be paid in acceptable foreign currency in line with the Bangko Sentral ng Pilipinas rules.

The tribunal disagreed, saying Philip Morris had submitted airway bills and bills of lading which showed that the subject shipment of goods during the period was paid for in acceptable foreign currency. — John Victor D. Ordoñez