The Court of Tax Appeals (CTA) has denied the petition of Rema Tip Top Philippines, Inc. (RTTPI) which sought a P1.37 million tax refund representing its input value added tax (VAT) for the fourth quarter of 2015.

RTTPI assailed the decision and resolution of the CTA’s third division which denied its refund claim and challenged the ruling before the CTA’s full court on Oct. 12, 2022.

The court’s third division had ruled that RTTPI failed to establish that it had unutilized input tax that may be refunded in its favor, while RTTPI insisted that its zero-rated sales were properly substantiated.
RTTPI “is a subsidiary of REMA TIP TOP AG, a globally operating system provider of services and products in the field of conveying and processing technology as well as tire repair.”

In denying its petition, the CTA as a full court ruled that there was no sufficient reason to reverse the third division's decision. While RTTPI managed to establish the zero-rated character of its sales, the CTA en back said it was only partially.

RTTPI said it made sales to non-resident foreign corporations (NRFCs) such as Evonik Methionine Sea Pty Ltd., Tip Top Japan, Inc. and Veolia Water Technologies Deutschland.

However, the CTA said the firm failed to prove these corporations' NRFC status, so RTTPI could not be accorded zero-rating to the sales made.

"A judicious review of the records reveals that RTTPI failed to declare in its VAT return for the fourth quarter of 2015 the input taxes subject of the instant claim. RTTPI's failure to declare input taxes that may have arisen from such other purchases in 2015 casts doubt upon the due and paid character thereof," it said.

The 18-page decision was written by Associate Justice Marian Ivy F. Reyes-Fajardo with the concurrence of Presiding Justice Roman G. Del Rosario and Associate Justices Ma. Belen M. Ringpis-Liban, Catherine T. Manahan, Maria Rowena Modesto-San Pedro, Lanee S. Cui-David, Corazon G. Ferrer-Flores, and Henry S. Angeles.