The Bureau of Internal Revenue (BIR) is reminding everyone that Section 112 of the National Internal Revenue Code, as amended (NIRC), governs the period relating to the processing of VAT refund/credit. This has been in existence since January 1, 1998, the year the NIRC took effect.
Section 112 (C) of the NIRC provides that xxx the Commissioner shall grant a refund or issue the tax credit certificate xxx within one hundred twenty (120) days from the date of submission of complete documents xxx. In case of full or partial denial of the claim for tax refund or tax credit, or the failure on the part of the Commissioner to act on the application within the period prescribed above, the taxpayer affected may, within thirty (30) days from the receipt of the decision denying the claim or after the expiration of the one hundred twenty-period, appeal the decision or the unacted claim with the Court of Tax Appeals (CTA). xxx
Therefore, the NIRC provides that in the event the BIR does not act on the claim within 120 days, the taxpayer has the remedy to elevate the case to the CTA. Revenue Memorandum Circular (RMC) No. 54-2104 merely implements the said provision of law.
Since the implementation of RMC 54-2014 up to the end of September 2014, the BIR received one hundred thirty-four (134) applications for VAT refund/credit, processed for approval 68 applications for tax credit, 3 applications for refund and 2 applications for BOC (purely importation), and denied 31 applications.
RMC No. 54-2104 merely seeks to address the various complaints received by the BIR with respect to the length of time the agency takes to process claims for refund/credit and complaints that the BIR keeps on asking for additional documents. With the said RMC, the BIR commits itself to process all applications in 120 days and provided certainty to the resolution of the claims of taxpayers.
The RMC now enumerates all the documents that must be submitted to support the application for VAT refund/credit. Upon submission of the claim and its supporting documents, the claim shall be processed and no other documents shall be accepted/required from the taxpayer. A decision shall be rendered by the Commissioner based only on the documents submitted by the taxpayer. The application for tax refund/credit shall be denied where the claimant failed to submit the complete supporting documents.
Another purpose of the RMC is to minimize if not eliminate taxpayer interaction with revenue personnel to avoid collusion between them and to prevent corruption.
