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    Cir v. Sekisui

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    Francis Xavier Sinon
    1. The respondent, a company registered with the Philippine Export Zone Authority, applied for a refund of unutilized input taxes amounting to PHP 3,033,142.29 paid on domestic purchases of capital goods and services. 2. The Court of Tax Appeals and subsequently the Court of Appeals ruled that the respondent was entitled to the refund, as 144% of its products were exported, making all its transactions export sales subject to VAT zero-rating. 3. As the respondent had no output tax against which it could claim input tax credits, and it filed its claim within the two-year prescriptive period, it was entitled to a refund of the excess input VAT charged by its suppliers.

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    Cir v. Sekisui

    Uploaded by

    Francis Xavier Sinon
    187 views1 page
    1. The respondent, a company registered with the Philippine Export Zone Authority, applied for a refund of unutilized input taxes amounting to PHP 3,033,142.29 paid on domestic purchases of capital goods and services. 2. The Court of Tax Appeals and subsequently the Court of Appeals ruled that the respondent was entitled to the refund, as 144% of its products were exported, making all its transactions export sales subject to VAT zero-rating. 3. As the respondent had no output tax against which it could claim input tax credits, and it filed its claim within the two-year prescriptive period, it was entitled to a refund of the excess input VAT charged by its suppliers.

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    Tax; VAT Zero-rate Transactions

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    1. The respondent, a company registered with the Philippine Export Zone Authority, applied for a refund of unutilized input taxes amounting to PHP 3,033,142.29 paid on domestic purchases of capital goods and services. 2. The Court of Tax Appeals and subsequently the Court of Appeals ruled that the respondent was entitled to the refund, as 144% of its products were exported, making all its transactions export sales subject to VAT zero-rating. 3. As the respondent had no output tax against which it could claim input tax credits, and it filed its claim within the two-year prescriptive period, it was entitled to a refund of the excess input VAT charged by its suppliers.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as DOC, PDF, TXT or read online from Scribd
    Download as doc, pdf, or txt
    187 views1 page

    Cir v. Sekisui

    Uploaded by

    Francis Xavier Sinon
    1. The respondent, a company registered with the Philippine Export Zone Authority, applied for a refund of unutilized input taxes amounting to PHP 3,033,142.29 paid on domestic purchases of capital goods and services. 2. The Court of Tax Appeals and subsequently the Court of Appeals ruled that the respondent was entitled to the refund, as 144% of its products were exported, making all its transactions export sales subject to VAT zero-rating. 3. As the respondent had no output tax against which it could claim input tax credits, and it filed its claim within the two-year prescriptive period, it was entitled to a refund of the excess input VAT charged by its suppliers.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as DOC, PDF, TXT or read online from Scribd
    Download as doc, pdf, or txt
    of 1

    Business enterprises registered with the Philippine Export Zone Authority (PEZA) may choose between two fiscal

    incentive schemes: (1) to pay a five percent preferential tax rate on its gross income and thus be exempt from all other taxes; or (b) to enjoy an income tax holiday, in which case it is not exempt from applicable national revenue taxes including the value-added tax (V !)" !he present respondent, which availed itself of the second tax incentive scheme, has proven that all its transactions were export sales" #ence, they should be V ! $ero-rated"

    CIR VS. Sekisui Jushi Philippines, Inc. .R. !". #$%&'#, Jul( )#, )**&

    Tax; VAT Zero-rated Transactions +rancis ,a-ier Sinon

    +ACTS. Respondent is a do/estic corporation duly organized and existing under and by virtue of the laws of the Philippines with principal office located at the Special Export Processing Zone, Laguna Technopar , !i"an, Laguna# Se isui $ushi is a P0ZA entit( engaged in %anufacture and export of strapping bands and other pac aging %aterials see ing for refund of unutilized input taxes# &aving registered with the !ureau of 'nternal Revenue (!'R) as a value*added tax (+,T) taxpayer, respondent filed its -uarterly returns with the !'R, reflecting therein input taxes in the a%ount of P.,/01,102#34 paid by it in connection with its do%estic purchase of capital goods and services# Said input taxes re%ained unutilized since respondent has not engaged in any business activity or transaction for which it %ay be liable for output tax and for which said input taxes %ay be credited# 5n 6ove%ber 11, 1778, respondent filed with the 5ne*Stop*Shop 'nter*,gency Tax 9redit and :uty :rawbac 9enter of the :epart%ent of ;inance (9E6TER*:5;) two (2) separate applications for tax credit<refund of +,T input taxes paid# There being no action on its application for tax credit<refund under Section 112 (!) of the 1773 6ational 'nternal Revenue 9ode (Tax 9ode), as a%ended, private respondent filed, within the two (2)*year prescriptive period under Section 227 of said 9ode, a petition for review with the 9ourt of Tax ,ppeals# The 9T, ruled that respondent was entitled to the refund# =hile the co%pany was registered with the PEZ, as an ecozone and was, as such, exe%pt fro% inco%e tax, it availed itself of the fiscal incentive under Executive 5rder 6o# 22/# 't thereby sub>ected itself to other internal revenue taxes li e the +,T# The 9T, then found that only input taxes a%ounting to P.,033,142#2/ were duly substantiated by invoices and 5fficial Receipts# The 9ourt of ,ppeals upheld the :ecision of the 9T,# ,ccording to the 9,, respondent had co%plied with the procedural and substantive re-uire%ents for a clai% by 1) sub%itting receipts, invoices, and supporting papers as evidence? 2) paying the sub>ect input taxes on capital goods? 0) not applying the input taxes against any output tax liability? and .) filing the clai% within the two*year prescriptive period under Section 227 of the 1773 Tax 9ode# &ence, this Petition# ISS10. =hether the respondent is entitled to the refund or issuance of tax credit certificate in the a%ount of P.,033,142#2/ as alleged unutilized input taxes paid on do%estic purchase of capital goods and services# 2034. 50S. Since 144 percent of the products of respondent are exported, all its transactions are dee%ed export sales and are thus +,T zero*rated# 't has been shown that respondent has no output tax with which it could offset its paid input tax# Since the su67ect input tax it paid 8or its do/estic purchases o8 capital 9oods and ser-ices re/ained unutili:ed, it can clai/ a re8und 8or the input VAT pre-iousl( char9ed 6( its suppliers. The a%ount of P.,033,142#2/ is excess input taxes that >ustify a refund# 6otably, while an ecozone is geographically within the Philippines, it is dee%ed a separate custo%s territory and is regarded in law as foreign soil# Sales by suppliers fro% outside the borders of the ecozone to this separate custo%s territory are dee%ed as exports and treated as export sales# These sales are zero*rated or sub>ect to a tax rate of zero percent#

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