Fort Bonifacio Development Corporation vs. CIR (En Banc Resolution)

FORT BONIFACIO DEVELOPMENT CORPORATION, Petitioner, vs. COMMISSIONER OF INTERNAL REVENUE and REVENUE DISTRICT OFFICER, REVENUE DISTRICT NO. 44, T AGUIG and PATEROS, BUREAU OF INTERNAL REVENUE, Respondents.

G.R. No. 173425 | 2013-01-22

Knowledge entry

Taxation Law; Value-Added Tax; Sources of input tax

Prior payment of taxes is not necessary before a taxpayer could avail of the 8% transitional input tax credit
A transitional input tax credit is not a tax refund per se but a tax credit
Prior payment of taxes is not required in order to avail of a tax credit
Section 112 of the Tax Code does not prohibit cash refund or tax credit of transitional input tax in the case of zero-rated or effectively zero-rated VAT registered taxpayers, who do not have any output VAT
A taxpayer who erroneously or excessively pays his output tax is still entitled to recover the payments he made either as a tax credit or a tax refund

EN BANC

R E S O L U T I O N

DEL CASTILLO, J.:

This resolves respondents' Motion for Reconsideration.¹ Respondents raise the following arguments: "1) Prior payment of tax is inherent in the nature and payment of the 8% transitional input tax;² 2) Revenue Regulations No. 7-95 providing for 8% transitional input tax based on the value of the improvements on the real properties is a valid legislative rule;³ 3) For failure to clearly prove its entitlement to the transitional input tax credit, petitioner's claim for tax refund must fail in light of the basic doctrine that tax refund partakes of the nature of a tax...