CIR v Mirant Pagbilao Corp.; G.R. No. 172129; 12 Sep 2008

in Legal Chyme by

Respondent secured the services of Mitsubishi Corporation of Japan but opted not to immediately pay the VAT component of the progress billings from Mitsubishi for the period covering 07 April 1993 to 06 September 1996. It was only on 14 April 1998 when respondent paid Mitsubishi the VAT component for said progress billings.

On 25 August 1998, it filed its quarterly VAT return for the second quarter of 1998 where it reflected an input VAT, including that which was paid on 14 April 1998. On 20 December 1999, respondent filed an administrative claim for refund of unutilized input VAT.

Whether or not respondent’s claim for refund or tax credit for creditable input VAT payment has prescribed.

YES. Unutilized input VAT payments not otherwise used for any internal revenue tax due the taxpayer must be claimed within two years reckoned from the close of the taxable quarter when the relevant sales were made pertaining to the input VAT regardless of whether said tax was paid or not. When a zero-rated VAT taxpayer pays its input VAT a year after the pertinent transaction, said taxpayer only has a year to file a claim for refund or tax credit of the unutilized creditable input VAT.

Given that the last creditable input VAT due for the period covering the progress billing of 06 September 1996 is the third quarter of 1996 ending on 30 September 1996, any claim of unutilized creditable input VAT refund or tax credit for said quarter prescribed on 30 September 1998. Consequently, respondent’s claim for refund or tax credit filed on 10 December 1999 had already prescribed.

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