COMMISSIONER OF INTERNAL REVENUE vs. MANILA
MINING CORPORATION
G.R. No. 153204 August 31, 2005
Facts:
1. In 1991, respondents sales of gold to the Central Bank amounted to P200,832,364.70.
2. Respondent, relying on a from then BIR Deputy that: under Sec. 2 of E.O. 581 as amended, gold sold to the Central Bank is considered an export sale which under Section 100(a)(1) of the NIRC, as amended by E.O. 273, is subject to zero-rated if such sale is made by a VAT registered person, filed on April 7, 1992 with the CIR, an application for tax refund/credit of the input VAT.
3. As the CIR failed to act upon respondent’s application within sixty days from the dates of filing, it filed a Petition for Review against the CIR before the CTA.
4. CTA denied respondents claim for refund of input VAT for failure to prove that it paid the amounts claimed as such for the year 1991, no sales invoices, receipts or other documents as required under Section 2(c)(1) of RR No. 388 having been presented.
5. The CTA explained that a mere listing of VAT invoices and receipts, even if certified to have been previously examined by an independent certified public accountant, would not suffice to establish the truthfulness and accuracy of the contents of such invoices and receipts unless offered and actually verified by it (CTA) in accordance with CTA Circular No. 195, as amended by CTA Circular No. 1097, which requires that photocopies of invoices, receipts and other documents covering said accounts of payments be premarked by the party concerned and submitted to the court.
Issue:
Whether respondent adduced sufficient evidence to prove its claim for refund of its input VAT
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Ruling:
The BIR issued several VAT rulings to the effect that sales of gold to the Central Bank by a VAT registered person or entity are considered export sales.
As export sales, the sale of gold to the Central Bank is zero-rated, hence, no tax is chargeable to it as purchaser. Zero rating is primarily intended to be enjoyed by the seller respondent herein, which charges no output VAT but can claim a refund of or a tax credit certificate for the input VAT previously charged to it by suppliers.
For a judicial claim for refund to prosper, however, respondent must not only prove that it is a VAT registered entity and that it filed its claims within the prescriptive period. It must substantiate the input VAT paid by purchase invoices or official receipts.
This respondent failed to do.
Under Section 8 of RA 1125, the CTA is described as a court of record. As cases filed before it are litigated de novo, party litigants should prove every minute aspect of their cases. No evidentiary value can be given the purchase invoices or receipts submitted to the BIR as the rules on documentary evidence require that these documents must be formally offered before the CTA.
A sales or commercial invoice is a written account of goods sold or services rendered indicating the prices charged therefor or a list by whatever names it is known which is used in the ordinary course of business evidencing sale and transfer or agreement to sell or transfer goods and services.
A receipt on the other hand is a written acknowledgment of the fact of payment in money or other settlement between seller and buyer of goods, debtor or creditor, or person rendering services and client or customer.
These sales invoices or receipts issued by the supplier are necessary to substantiate the actual amount or quantity of goods sold and their selling price, and taken collectively are the best means to prove the input VAT payments.
Respondent contends, however, that the certification of the independent CPA attesting to the correctness of the contents of the summary of suppliers invoices or receipts which were examined, evaluated and audited by said CPA in accordance with CTA Circular No. 195 as amended by CTA Circular No. 1097 should substantiate its claims.
There is nothing, however, in CTA Circular No. 195, as amended by CTA Circular No. 1097, which either expressly or impliedly suggests that summaries and schedules of input VAT payments, even if certified by an independent CPA, suffice as evidence of input VAT payments.
The circular, in the interest of speedy administration of justice, was promulgated to avoid the time-consuming procedure of presenting, identifying and marking of documents before the Court. It does not relieve respondent of its imperative task of premarking photocopies of sales receipts and invoices and submitting the same to the court after the independent CPA shall have examined and compared them with the originals. Without presenting these premarked documents as evidence from which the summary and schedules were based, the court cannot verify the authenticity and veracity of the independent auditors conclusions.
There is, moreover, a need to subject these invoices or receipts to examination by the CTA in order to confirm whether they are VAT invoices. Under Section 21 of Revenue Regulation No. 587, all purchases covered by invoices other than a VAT invoice shall not be entitled to a refund of input VAT.
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