G.R. No. 172509, February 04, 2015 China Banking Corporation, Petitioner, V. Commissioner of INTERNAL REVENUE, Respondent
G.R. No. 172509, February 04, 2015 China Banking Corporation, Petitioner, V. Commissioner of INTERNAL REVENUE, Respondent
G.R. No. 172509, February 04, 2015 China Banking Corporation, Petitioner, V. Commissioner of INTERNAL REVENUE, Respondent
Tax Law; Statute of Limitations. A request for reinvestigation alone will not
suspend the statute of limitations. Two things must concur: there must be a
request for reinvestigation and the CIR must have granted it.
SERENO, C.J.
FACTS:
Petitioner CBC is a universal bank duly organized and existing under
the laws of the Philippines. For the taxable years 1982 to 1986, CBC was
engaged in transactions involving sales of foreign exchange to the Central
Bank of the Philippines (now Bangko Sentral ng Pilipinas), commonly
known as SWAP transactions. Petitioner did not file tax returns or pay tax
on the SWAP transactions for those taxable years. Thus, CBC received an
assessment from BIR of deficiency documentary stamp tax on the amount
of P11,383,165.50 plus increments accruing thereto.
ISSUE:
Whether or not the right of the BIR to collect the assessed DST from
CBC is already barred by prescription
HELD:
AFFIRMATIVE. The petition is granted on the ground that the right
of the BIR to collect the assessed DST is barred by the statute of limitations.
The BIR’s Answer in the case filed before the CTA could not, by any means,
have qualified as a collection case as required by law. Under the rule
prevailing at the time the BIR filed its Answer, the regular courts, and not
the CTA, had jurisdiction over judicial actions for collection of internal
revenue taxes. It was only on 23 April 2004, when Republic Act Number
9282 took effect, that the jurisdiction of the CTA was expanded to include,
among others, original jurisdiction over collection cases in which the
principal amount involved is one million pesos or more.
Furthermore, the fact that the taxpayer in this case may have
requested a reinvestigation did not toll the running of the three-year
prescriptive period.
Under Section 320 of the 1977 Tax Code, a request for
reinvestigation alone will not suspend the statute of limitations. Two
things must concur: there must be a request for reinvestigation and the
CIR must have granted it. Also, in the case of Republic vs. Gancayco, the
Court ruled that “(t)he act of requesting a reinvestigation alone does not
suspend the period. The request should first be granted, in order to effect
suspension”.
There is no showing from the records that the CIR ever granted the
request for reinvestigation filed by CBC. That being the case, it cannot be
said that the running of the three-year prescriptive period was effectively
suspended.
G.R. No. 198756 January 13, 2015
BANCO DE ORO, BANK OF COMMERCE, CHINA BANKING
CORPORATION, METROPOLITAN BANK & TRUST COMPANY,
PHILIPPINE BANK OF COMMUNICATIONS, PHILIPPINE NATIONAL
BANK, PHILIPPINE VETERANS BANK AND PLANTERS
DEVELOPMENT BANK, RIZAL COMMERCIAL BANKING
CORPORATION AND RCBC CAPITAL CORPORATION, CAUCUS OF
DEVELOPMENT NGO NETWORKS, vs. REPUBLIC OF THE
PHILIPPINES, THE COMMISSIONER OF INTERNAL REVENUE,
BUREAU OF INTERNAL REVENUE, SECRETARY OF FINANCE,
DEPARTMENT OF FINANCE, THE NATIONAL TREASURER AND
BUREAU OF TREASURY
LEONEN, J.:
FACTS:
ISSUE: Whether the PEACe Bonds are “deposit substitutes” and thus
subject to 20% final withholding tax under the 1997 National Internal
Revenue Code.
(b) All borrowings of the national and local government and its
instrumentalities including the Central Bank of the Philippines,
evidenced by debt instruments denoted as treasury bonds,
bills, notes, certificates of indebtedness and similar
instruments.
Taxation; Period Within Which Refund or Tax Credit of Input Taxes Shall
be Made. In proper cases, the Commissioner shall grant a refund or issue
the tax credit certificate for creditable input taxes within one hundred
twenty
(120) days from the date of submission of complete documents in support
of the application. The taxpayer can file an appeal in one of two ways: (1)
file the judicial claim within thirty days after the Commissioner denies the
claim within the 120-day period, or (2) file the judicial claim within thirty
days from the expiration of the 120-day period if the Commissioner does not
act within the 120-day period.
FACTS:
SPI filed on May 6, 1999 with the One-Stop Shop Inter-Agency Tax
Credit and Duty Drawback Center of the Department of Finance an
Application for Tax Credit/Refund of Value-Added Tax Paid covering the
Third Quarter of 1998 amounting to a sum of P25,531,312.83.
ISSUE: Whether or not SPI can claim its tax credit or refund.
HELD:
NEGATIVE. In the case of Commissioner of Internal Revenue v.
Mindanao II Geothermal Partnership, the Court, construing Section 112 of
the 1997 Tax Code in a series of cases, summarized the rules on
prescriptive periods for claiming credit or refund of input VAT, to wit:
In the present case, SPI filed on May 6, 1999 its administrative claim
for tax credit/refund of the input VAT attributable to its zero-rated sales
and on its purchases of capital goods for the Third Quarter of 1998. The
two- year prescriptive period for filing an administrative claim, reckoned
from the close of the taxable quarter, prescribed on September 30, 2000.
Evidently, SPI belatedly filed its judicial claim. It filed its Petition for
Review with the CTA 391 days after the lapse of the 120-day period
without the CIR acting on its application for tax credit/refund, way beyond
the 30- day period under Section 112 of the 1997 Tax Code.
Applying the said rules in the case at bar, Because the 30-day period
for filing its judicial claim had already prescribed by the time SPI filed its
Petition for Review with the CTA Division, the CTA Division never acquired
jurisdiction over the said Petition.
The Court stresses that the 120/30-day prescriptive periods are
mandatory and jurisdictional, and are not mere technical requirements.
The Court should not establish the precedent that noncompliance with
mandatory and jurisdictional conditions can be excused if the claim is
otherwise meritorious, particularly in claims for tax refunds or credit. Such
precedent will render meaningless compliance with mandatory and
jurisdictional requirements.
The SC also emphasized that a tax credit or refund, like tax
exemption, is strictly construed against the taxpayer. The taxpayer
claiming the tax credit or refund has the burden of proving that he is
entitled to the refund by showing that he has strictly complied with the
conditions for the grant of the tax refund or credit. Strict compliance with
the mandatory and jurisdictional conditions prescribed by law to claim
such tax refund or credit is essential and necessary for such claim to
prosper. Noncompliance with the mandatory periods, non-observance of
the prescriptive periods, and non-adherence to exhaustion of
administrative remedies bar a taxpayer’s claim for tax refund or credit,
whether or not the CIR questions the numerical correctness of the claim of
the taxpayer. For failure of Silicon to
comply with the provisions of NIRC, its judicial claims for tax refund or
credit should have been dismissed by the CTA for lack of jurisdiction.
G.R. No. 183531 March 25, 2015
REYES, J.:
FACTS:
ETPI seasonably filed its Quarterly VAT Returns for the year 1998
which were, however, simultaneously amended to correct its input VAT on
domestic purchases of goods and services and on importation of goods and
to reflect its zero-rated and exempt sales for said year.
ETPI then filed an administrative claim with the BIR for the refund of
the amount of P9,265,913.42 representing excess input tax attributable to
its effectively zero-rated sales in 1998 pursuant to Section 11 of the
Republic Act (R.A.) No. 8424, also known as the National Internal Revenue
Code of 1997 (NIRC).
Pending review by the BIR, ETPI filed a Petition for Review before
the CTA. In its Decision, the CTA denied the petition because the VAT
official receipts presented by ETPI to support its claim failed to imprint
the word “zero-rated” on its face in violation of the invoicing
requirements under Section 4.108-1 of RR No. 7-95 which reads:
ISSUE: Whether or not the CTA erred in denying ETPI’s claim for refund of
input taxes resulting from its zero-rated sales.
HELD:
NEGATIVE. The word “zero-rated” is required on the invoices or
receipts issued by VAT-registered taxpayers. VAT invoicing requirements
provided by tax laws and regulations is mandatory. A claim for unutilized
input taxes attributable to zero-rated sales will be given due course;
otherwise, the claim should be struck off for failure to do so, such as what
ETPI did in this case.
An applicant for a claim for tax refund or tax credit must not
only prove entitlement to the claim but also compliance with all the
documentary and evidentiary requirements. Consequently, the old CTA, as
affirmed by the CTA en banc, correctly ruled that a claim for the refund of
creditable input taxes must be evidenced by a VAT invoice or official
receipt in accordance with Section 110(A)(1) of the NIRC. Sections 237 and
238 of the same Code as well as Section 4.108-1 of RR No. 7-95 provide for
the invoicing requirements that all VAT-registered taxpayers should
observe, such as: (a) the BIR Permit to Print; (b) the Tax Identification
Number of the VAT-registered purchaser; and (c) the word “zero-rated”
imprinted thereon. Thus, the failure to indicate the words “zero-rated”
on the invoices and receipts issued by a taxpayer would result in the denial
of the claim for refund or tax credit.
Revenue Memorandum Circular No. 42-2003 pointed that the failure
by the supplier to comply with the invoicing requirements on the
documents
supporting the sale of goods and services will result to the disallowance of
the claim for input tax by the purchaser-claimant.
If the claim for refund/TCC is based on the existence of zero-rated
sales by the taxpayer but it fails to comply with the invoicing requirements
in the issuance of sales invoices (e.g. failure to indicate the TIN), its claim
for tax credit/refund of VAT on its purchases shall be denied considering
that the invoice it is issuing to its customers does not depict its being a
VAT- registered taxpayer whose sales are classified as zero-rated sales.