2024 CDP Review: Diagnostic Exam in

Abatement and Refund

EXAM PROPER
36 of 47 points

What action does the Bureau take if internal revenue taxes are included
in a refund claim?

The Bureau issues the refund immediately.

The Bureau notifies the applicant to provide additional documentation.

The Bureau requests certification from the Bureau of Internal Revenue (BIR) before
issuing the refund.

The Bureau refunds the internal revenue taxes separately from the customs duties.

What is the prescription period for filing a claim and application for Duty
Drawback?

Six (6) months from the date of importation

One (1) year from the date of importation

Six (6) months from the date of exportation

One (1) year from the date of exportation

Under what circumstances can an importer apply for a refund of duties

and taxes?

When there is a change in customs procedure permitted by the Bureau

When there are manifest clerical errors on an invoice or entry

When there are errors in the distribution of charges on invoices involving questions
of law

When there is an error in the assessment or goods declaration

What condition must be met by the claimant before the Bureau approves
the claim?
 The claimant must settle any outstanding obligations with the Bureau

The claimant must have no pending legal disputes with the Bureau

The claimant must submit a detailed financial report to the Bureau

The claimant must demonstrate substantial financial hardship

What is a prerequisite for claiming Duty Drawback for a sea vessel

engaged in coastwise trade?

Authorization from the National Economic and Development Authority (NEDA)

Certification from the Maritime Industry Authority (MARINA)

Approval from the Department of Transportation (DOTr)

Registration with the Bureau of Customs

Within what period should eligible claims for tax credit or refund and
duty drawback be processed, paid, or granted?

30 days

45 days

60 days

90 days

Under what condition can an importer claim Duty Drawback for

petroleum oils and oils obtained from bituminous materials, crude oil,
when sold to electric utilities for the generation of electric power and for
the manufacture of city gas?

The duties refunded or credited shall not exceed 75% of duties paid on the
imported materials used.

There must be a determination by the National Economic and Development

Authority (NEDA) certifying the non-availability of locally-produced competitive
substitutes for the imported materials.

The exportation should be made within one (1) year after the importation of
materials used.

An apportionment shall be made if two or more products result from the use of the
same imported materials.
What is the procedure for claiming a refund that includes internal
revenue taxes

The Bureau of Customs issues the refund without any additional requirements.

The Bureau of Internal Revenue (BIR) certifies the claim before the Bureau of
Customs processes the refund.

The applicant submits the claim to both the Bureau of Customs and the Bureau of
Internal Revenue simultaneously.

The Commissioner of the BIR directly informs the applicant of the refund

Within what period must the Commissioner render a decision upon

receiving all the necessary documents supporting the appeal?

15 days

30 days

45 days

60 days

Under what circumstances can an importer apply for Abatement or

Refund of duties and taxes for missing packages?

If the package is found to contain goods different from those listed on the invoice

If the package is missing from the manifest or bill of lading or air way-bill

If the package is damaged during transit

If the package is not inspected by customs officials

When will no abatement of duties be made on account of damage

incurred or deterioration suffered during the voyage of importation?

If the damage occurred due to negligence during loading

If the damage occurred during customs inspection

If the damage is not recoverable

If the damage is recoverable and the importer covers the repair costs

If an importer's claim is denied by the Commissioner, within what period

can the importer appeal to the Court of Tax Appeals (CTA)?
 15 days

30 days

45 days

60 days

What is the key characteristic of "Duty Drawback"?

It only applies to internal revenue taxes.

It is a refund or credit of duties paid for importation.

It is a cash refund for overpaid taxes.

It exclusively involves partial refunds of duties.

Who has the authority to adjust the minimum amount for refund?

The Commissioner of the Bureau of Customs

The Secretary of Finance, in consultation with the Commissioner

The Philippine Statistics Authority

The President of the Philippines

Are Tax Credit Certificates (TCCs) transferable?

Yes, they can be transferred to any person or entity

No, they cannot be transferred to any person or entity

Yes, but only under certain conditions

No, but they can be reassigned under special circumstances

What distinguishes a "Tax Credit Certificate (TCC)" from a "Tax Debit

Memorandum (TDM)"?

TCC is used for customs duties, while TDM is used for internal revenue taxes.

TCC is issued by customs authorities, while TDM is issued by tax authorities.

TCC acknowledges a tax credit, while TDM authorizes the utilization of that credit.
 TCC can only be converted into cash refunds, while TDM can only be used for duty
payments.

For Duty Drawback, what is the initial period within which the claim
must be filed from the date of exportation?

Six (6) months

One (1) year

Three (3) months

Two (2) years

What is NOT considered a valid reason for refund?

Errors in the distribution of charges on invoices involving questions of law

Errors in the distribution of charges on invoices not involving any question of law

Manifest clerical errors made on an invoice or entry

Errors in the return of weight, measure, and gauge

What is the consequence if no decision is rendered by the

Commissioner within the prescribed period or if the decision rendered
by the Commissioner is adverse to the Government?

The case is automatically dismissed

The case is automatically elevated to the Court of Tax Appeals (CTA)

The records of the case are automatically elevated to the Secretary of Finance for
review

The Commissioner's decision becomes final and binding

How may approved claims for tax credit or refund be paid?

Only through the issuance of Tax Credit Certificates (TCC)

Only in cash

Through the issuance of TCC or in cash, subject to budgetary requirements, laws,

rules, and regulations
 Through direct bank transfer to the claimant's account

Under what condition shall no Tax Debit Memorandum (TDM) be issued?

If the applicant has outstanding obligations

If the applicant has insufficient funds in their account

If the applicant's TCC is expired

If the applicant's claim is under review

Under what circumstances would the declarant neither be required to

pay the duties and taxes nor be entitled to a refund?

If the goods are destroyed or lost due to negligence during transit

If the goods are destroyed or rendered commercially valueless while under customs
control

If there are shortages due to the nature of the goods

If the goods are damaged during the voyage of importation

Under what conditions can an importer apply for Abatement or Refund

of duties and taxes for defective goods?

If the goods are found to be defective after three (3) months from importation

If the goods are returned to the supplier within three (3) months from importation

If the goods have been repaired or used in the country of importation

If the use of the goods was indispensable to discover the defects

What is the consequence for the importer if defective goods are

expressly abandoned or destroyed without defraying the costs?

The importer is entitled to a refund regardless of the circumstances.

The importer will be penalized with additional duties and taxes.

The importer will not be entitled to an abatement or refund.

The importer will be granted an extension to cover the costs later.

What is the exception to refund?

The refund is not granted if the importer fails to provide sufficient evidence of the
error.

The refund is not granted if the amount of duties and taxes involved is less than
Five Thousand Pesos (P5,000.00).

The refund is not granted if the error occurred more than one year ago.

The refund is not granted if the Secretary of Finance does not approve it.

What requirement must be fulfilled by the Customs Officer concerned in

all cases of Abatement or Refund of duties and taxes?

Submit an importation report

Issue a penalty notice to the importer

Prepare an examination report indicating any discovered discrepancies

Provide a certificate of compliance to the importer

What is the maximum percentage of duties paid on imported materials

that can be refunded or credited upon exportation of the goods
manufactured or produced?

25%

50%

75%

100%

How many days are equivalent to twelve (12) months when it comes to
filing a claim for refund?

365 days

360 days

330 days

300 days

What is the deadline for re-exportation or re-importation of defective

goods for the purpose of claiming Abatement or Refund?

Six (6) months from importation

Three (3) months from exportation

 One (1) year from exportation

Three (3) months from importation

What information should the monthly summary list provided to the Post
Clearance Audit Group (PCAG) contain?

Name of importer or claimant, date of application, and amount of claim

Name of importer or claimant, entry number, and amount of claim

Name of importer or claimant, type of goods, and amount of claim

Name of importer or claimant, port of entry, and amount of claim

Under what circumstances would a registered enterprise be prohibited

from claiming Duty Drawback?

If it has applied for tax credits based on customs duties paid on imported raw
materials and supplies under any investment incentives act

If it has previously claimed Duty Drawback for the same importation subsequently
processed and re-exported

If it has not filed a claim within six months from the date of exportation

If it has not obtained certification from the appropriate government agency

Can a claimant request an extension to file the claim for Duty Drawback
and if so, for how long?

Yes, for one (1) year

Yes, for six (6) months

Yes, for three (3) months

No, extensions are not allowed

Which of the following best defines "Abatement"?

Reduction of duties and taxes due to changes in market conditions

Reduction of duties and taxes on imported goods due to various specified

circumstances

Reduction of internal revenue taxes on imported goods

Reduction of customs duties on exported goods

Which of the following documents is NOT required as proof of
importation for applications for refund?

Import Entry

Bill of Lading

Certificate of Origin

Commercial Invoice

What is the validity period of a Tax Debit Memorandum (TDM) issued for
the utilization of Tax Credit Certificates (TCCs)?

30 days

45 days

60 days

90 days

Under what circumstances can an importer apply for Abatement or

Refund of duties and taxes for goods lost or destroyed after arrival?

If goods are lost due to natural disasters only

If goods are lost during transit from the port of entry to any port in the Philippines

If goods are lost due to theft, destruction through fire, or any other cause, while
under customs custody

If goods are lost after release under sufficient security for export

Which situation would NOT result in a "Refund"?

Overpayment of duties and taxes

Erroneous payment of duties and taxes

Undercharged duties and taxes due to assessment errors

Overcharged duties and taxes due to an error in assessment

Which of the following documents is NOT required as proof of
importation for applications for abatement or refund?

Import Entry

Bill of Lading

Certificate of Origin

Commercial Invoice

What condition must be met for an importer to apply for Abatement or

Refund of duties and taxes for dead or injured animals?

The importer must certify that the animals were injured due to negligence during
transit

The importer must provide proof that the animals were unfit for consumption

The importer must certify under penalty of falsification or perjury, and provide
satisfactory proof to the Bureau

The importer must obtain certification from the regulatory agency prior to
importation

What is the deadline for an importer to file an appeal with the

Commissioner if their claim for Refund or Abatement is denied by the
District Collector?

15 days

30 days

45 days

60 days

What condition must be met for an importer to apply for Abatement or

Refund of duties and taxes for deficiency in contents of packages?

The importer must prove that the deficiency occurred during transit

The deficiency must be certified by customs officers concerned

The importer must provide proof that the package was never received

The importer must certify that the goods were destroyed prior to arrival in the
Philippines
What is the validity period of Tax Credit Certificates (TCCs) issued
pursuant to this CAO?

Two (2) years

Five (5) years, with no possibility of revalidation

Five (5) years, with the possibility of revalidation for another five (5) years

Ten (10) years, with no possibility of revalidation

What is the maximum percentage of duty imposed by law that an

importer can claim for Duty Drawback for all fuel imported into the
Philippines used for propulsion of scheduled international airlines?

50%

75%

99%

100%

Which document is necessary for utilizing a Tax Credit Certificate (TCC)

as payment for customs duties or tax obligations?

Tax Return Form

Tax Invoice

Tax Debit Memorandum (TDM)

Tax Clearance Certificate

What action must an importer take to apply for Abatement or Refund of

duties and taxes for goods lost or destroyed after arrival?

Provide proof that the goods were lost due to negligence

Submit a written request to the Bureau of Customs

Present satisfactory proof of loss under specified circumstances

Obtain certification from the Bureau of Internal Revenue

What verification process does the Bureau undertake prior to approving
claims for duty drawback or refund?

Verification of the claimant's outstanding obligations

Verification that all duties and taxes subject to the claim were duly paid and
remitted to the Bureau of Treasury

Verification of the claimant's financial statements

Verification of the claimant's compliance with customs regulations

If a decision by the District Collector is adverse to the Government, what

action is automatically taken by the Commissioner?

The Commissioner must render a decision within 15 days

The records of the case are elevated to the Commissioner within 5 days

The Commissioner must review the decision within 45 days

The decision is automatically elevated to the Secretary of Finance