CTA orders P17.6-M refund to Honda Cars Makati, Inc.

THE COURT of Tax Appeals (CTA) ordered the Bureau of Internal Revenue to issue P17.6 million in tax refund to Honda Cars Makati, Inc. upon finding merit in the filed petition for review.

The CTA’s Second Division ordered the BIR to “refund or issue a tax credit certificate… in the amount of P17,614,110.27” for the calendar tax year of 2011, partially granting petitioner Honda Cars Makati, Inc.’s petition.

Honda Cars Makati, Inc. had petitioned the tax court in seeking an issuance of P22,415,723.00 representing excess and unutilized creditable withholding taxes (CWT) for 2011.

The tax court weighed in the merits of the petition on three requisites.

On the first requisite, the CTA ruled that the Petition for Review was timely filed. It noted that the petitioner electronically filed its Annual Income Tax Return (ITR) on July 24, 2012, and an administrative claim for refund on April 2, 2014 — which was well within the two-year prescriptive period provided by law.

On the second prerequisite, the Court examined the Schedule of Creditable Taxes Withheld for CY 2011 and various Certificates of Creditable Tax Withheld submitted by the petitioner. Upon assessing the said documents, the Court “found that the CWTs in the amount of P55,072.35 [from the P22,415,723.00 claim] should be disallowed.”

The amount was deducted due to the documents filed but with incorrect period and without the authorized signature of the issuer/payor.

On the third requisite, “petitioner must prove that the income payments from which the substantiated CWTs of P22,360,650.65 were withheld were included in the reported amount of income in its Annual ITR for CY 2011.”

The CTA assessed the general ledgers and/ or invoices, journal vouchers, official receipts, production reports and check vouchers, and held further deductions on the petitioner’s claim of CWTs.

“In sum, petitioner has sufficiently proven compliance with the three requisites for the refund of the unutilized CWTs, but only to the extent of P17,614,110.27 out of the total claimed CWTs of P22,415,723.00 for CY 2011,” the Court ruled.

The 15-page decision dated June 27, was penned by Associate Justice Juanito C. Castañeda, Jr.