Petitioner, a domestic corporation registered as an Ecozone Export Enterprise at the Rio Tuba Export Processing Zone, filed on 05 August 2003 its Amended VAT Return declaring unutilized input tax from its domestic purchases of capital goods, other than capital goods and services, for the third and fourth quarters of 2002. On 14 June 2004, it filed with the BIR its Application for Tax Credits/Refund together with supporting documents.
Due to the alleged inaction of the respondent, petitioner elevated its claim to the CTA on 08 July 2004 by petition for review. The CTA in Division however on 10 March 2008 denied petitioner’s claim for refund on the ground that petitioner was not entitled to same. CTA En Banc also denied the petition.
Whether or not petitioner is entitled to the refund of its unutilized input taxes for purchases of goods and services that were destined for consumption within the ecozone.
NO. The purchases of goods and services by petitioner that were destined for consumption within the ecozone should be free of VAT; hence, no input VAT should then be paid on such purchases, rendering petitioner not entitled to claim a tax refund or credit. Verily, if petitioner had paid the input VAT, its proper recourse was not against the Government but against the seller who had shifted to it the output VAT.