CTA junks P10.4-M tax refund sought by FMC Switzerland for 2019
The Court of Tax Appeals (CTA) has denied for lack of jurisdiction the petition of FMC Switzerland II GMBH which sought P10.49 million tax refund from the Bureau of Internal Revenue (BIR) for 2019.
FMC Switzerland filed before the BIR an administrative claim for valued-added tax (VAT) refund of P10,497,680.23 for its alleged unutilized input taxes that are allocable and directly attributable to its VAT zero-rated transactions from April 1 to Dec. 31, 2019.
However, the claim was denied by the BIR in a letter dated Oct. 20, 2021. The company subsequently filed a petition for review before the CTA on Feb. 2, 2022. It argued that the recipient of its services is a foreign corporation doing business outside the Philippines when the services were performed.
It also claimed that it was able to satisfy all of the elements in claiming excess input VAT by submitting the necessary documents such as the official receipts and sales invoice to the BIR.
In its decision, the CTA pointed out that there was an "obvious inaction" on the part of the BIR to act on the refund claim of FMC Switzerland, which should have been done until Oct. 15, 2021.
"Such being the case, petitioner should have appealed the said inaction, which is already deemed as a denial of its refund claim, within a period of 30 days from Oct. 15, 2021 or until Nov. 15, 2021," the decision said.
The CTA further explained that the right to appeal is "not a natural right or a part of due process, but is merely a statutory privilege that may be exercised only in the manner prescribed by law."
"It must be pointed out that the failure to perfect an appeal within the prescribed period is not a mere technicality but jurisdictional," the tax court also said.
"If the court has no jurisdiction over the nature of an action, its only jurisdiction is to dismiss the case. The court could not decide the case on the merits."
The 16-page decision was written by Associate Justice Catherine T. Manahan with the concurrence of Associate Justices Marian Ivy F. Reyes-Fajardo and Henry S. Angeles.