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Manila Bulletin devider Philippines devider National devider CTA orders BIR to refund P305.8M to tobacco company

CTA orders BIR to refund P305.8M to tobacco company

Published Sep 19, 2023 06:32 am

The Court of Tax Appeals (CTA) has ordered the Bureau of Internal Revenue (BIR) to refund to British American Tobacco, Limited P305.8 million representing the unutilized advanced deposit in Internal Revenue Stamp Integrated System (IRSIS) and on credits for unused, spoiled, and bad order internal revenue stamps from December 2016 to May 2017.

British American Tobacco, a corporation organized and existing under the laws of the United Kingdom with a License to Transact Business in the Philippines, is engaged in the importation of tobacco products.

As part of its compliance with Revenue Regulations No. 7-2016, firm had to pay in advance the corresponding excise tax on internal revenue stamps ordered through IRSIS for subsequent placement on cigarette packs to be imported.

But on Dec. 13, 2017, the firm's head office passed a resolution for the cessation of all operations and closure of its branch in the Philippines as of Dec. 31, 2017. Because of this, it sought the refund the remaining balance of advance deposits of P154,865,436 and the credit back for short deliveries and spoiled stamps of P157,454,199 or a total of P312,319,635.  It filed a total claim for only P305,823,304.

In its decision dated Sept. 12, 2023, the CTA granted the firm's claim for refund. "The Court concludes that petitioner has sufficiently substantiated the claimed amount of P305,823,304 consisting of the Unapplied Excise Taxes prepaid on May 18, 2017 at the earliest and Credit Back of Bad Orders and Spoiled Stamps during the periods of 2017 and 2018 (for 2017 Orders)," the CTA said.

The CTA said that British American Tobacco's payment of P305,823,304 represents erroneous or illegal excise taxes.

"Petitioner was able to show that it has ceased its business operation in the Philippines and it has already obtained the required tax clearance in connection therewith. Such being the case, any balance reflected on petitioner's ledger relative to internal revenue stamps (as it can no longer be utilized), may be refunded as long as the same has been duly substantiated," the decision stated.

The decision was written by Associate Justice Jean Marie A. Bacorro-Villena with the concurrence of Associate Justice Lanee S. Cui-David.

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tax refund Bureau of Internal Revenue court case court of tax appeals
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