CTA declines to review marketing firm’s refund claim


THE Court of Tax Appeals (CTA) has denied TKH Marketing’s appeal to refund an item shipment due to an excess value-added tax (VAT) payment worth P1.5 million.

In a 15-page decision on Aug. 8 and made public on Aug. 15, the CTA Special Third Division said it did not have jurisdiction to decide on the refund claim.

“Clearly, petitioner (TKH Marketing) failed to fulfill the requirements of the law in claiming a VAT refund, thereby resulting in the lack of jurisdiction of this court,” CTA Associate Justice Maria Belen M. Ringpis-Liban said in the ruling.

“In other words, the burden of collecting the subject VAT remains with the CIR (commissioner of internal revenue). As such, it is the CIR who has the authority to decide on the refund claim of petitioner pursuant to Section 4 of the NIRC of 1997.”

A district collector granted a refund of the excess VAT payment in the amount of P958,725 and required the firm to properly liquidate and apply for a tax credit certificate pending the approval of the commissioner of customs (CoC).

The CoC affirmed the district collector’s decision and forwarded the appeal to the CIR.

The refund claim was then reviewed by the CIR, which the official denied since the appeal was filed beyond the two-year prescriptive period under the country’s revenue code.

“As stipulated therein, recovery of tax erroneously or illegally collected may, within 2 [sic] years after the payment of the tax or penalty was made, be claimed as tax credit or refund,” the CIR said in a letter to the CoC.

Under the country’s revenue code, refund of taxes or penalties are allowed unless the taxpayer files the administrative claim in writing with the CIR within two years after the payment.

The marketing firm argued the tax court and the Bureau of Customs had jurisdiction over the issue.

The court noted that the protest filed with the district collector cannot be treated as a claim for a refund since only the CIR has jurisdiction over these claims.

In a separate letter, the Bureau of Internal Revenue said the CTA did not have jurisdiction over the petition, reiterating the late filing of the claim.

“If the court has no jurisdiction over the nature of an action, its only jurisdiction is to dismiss the case. The court could not decide the case on the merits,” said the tribunal. — John Victor D. Ordoñez