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96.BM - Conflicting VAT-Refund Doctrines.06.18.09
96.BM - Conflicting VAT-Refund Doctrines.06.18.09
period to claim for refund of unutilized input tax, from the time the company made its purchases of goods and services. This is not in consonance with the letter of the law which states that refund of unutilized input tax prescribes two years from the end of the close of the taxable quarter when the sales were made. Naturally, purchases by a company are made before it sells goods and services since it is assumed that the goods and services that it sells are made out of such purchases. If the reckoning period of the two-year prescription is at the time of sale, it follows that as far as refund of unutilized input tax is concerned, the period of limitation is beyond the close of the taxable quarter when input VAT is recorded, i.e. purchases are made. 2. A correct interpretation of Sec 112 is: The BIR shall have 120 days from submission of documents to decide on the application. A taxpayer has 30 days to appeal before CTA upon denial,. A taxpayer has 30 days to appeal before CTA upon inaction,.
In cases where a taxpayer files an application with the BIR close to the expiration of the two-year period, Justice Acosta maintains that the 120-day waiting period and 30-day appeal period will be rendered useless. He further asserts that the Court becomes a processor of administrative claim instead of a decision-maker. However, this opinion runs contrary to the prevailing SC doctrine that claims for refund with the BIR and the subsequent appeal to the CTA must be filed within the two-year period. In other words, as long as the administrative claim for refund and the appeal to the CTA are filed within the two-year period, it is considered as having been seasonably filed. Doctrines are being overturned and justices have differing opinions as regards prescription on claims for VAT refund. It would be for the benefit of both the taxpayers and the government if the SC finally resolves these issues.