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Supreme Court upholds Cargill VAT refund 

THE SUPREME COURT (SC) has affirmed a tax court ruling that granted Cargill Philippines, Inc.’s refund claim worth P1.78 million representing its excess input value-added tax (VAT) for the period March 2003 to August 2004.   

In a 12-page decision on Jan. 30 and made public on May 19, the tribunal rejected the tax commissioners petition that claimed the firm failed to prove its VAT was traced to its zero-rated sales.  

It said the Court of Tax Appeals (CTA) did not commit an error when it granted the firm a partial refund despite not attributing its sales to 0% VAT.  

“The law does not require direct attributability of the input VAT from the purchase of goods to the finished product whose sale is zero-rated in order for such input VAT to be refundable,” SC Associate Justice Japar B. Dimaampao said in the ruling.  

Under the Tax Code, taxpaying entities are entitled to zero-rated sales that do not translate to any output tax.  

Cargill is the Philippine branch of an American firm engaged in trading agricultural products related to animal nutrition. 

The firm initially sought a P22.2-million refund for its unused input VAT for the period. The CTA only granted part of the claim due to lack of evidence supporting the remaining amount of its unused VAT. John Victor D. Ordoñez

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