CTA Denies Zuellig Pharma's VAT Refund Claim Over Documentation Flaws

THE Court of Tax Appeals (CTA) en banc upheld the denial of Zuellig Pharma Asia Pacific Ltd. Phils. ROHQ’s P59.81-million value-added tax (VAT) refund claim after finding that the company failed to satisfy documentary requirements for zero-rated sales. In a decision promulgated on July 9, the tax court affirmed an earlier ruling denying the company’s claim for excess and unused input VAT for 2011. The CTA said Zuellig Pharma failed to prove that proceeds from all reported zero-rated sales were paid in acceptable foreign currency and properly accounted for under Bangko Sentral ng Pilipinas rules. It also found that the company’s VAT official receipts failed to comply with invoicing requirements under the National Internal Revenue Code. Court records showed that about P2.88 million worth of reported zero-rated sales lacked the required certificates of inward remittance. The court said the omission was fatal to the claim. It also rejected the company’s arguments based on VAT neutrality and an independent accountant’s findings, ruling that strict compliance with documentary requirements is mandatory in VAT refund cases. — Mark Joseph M. Sanchez