Tax court denies refund claim of manning agency

THE COURT of Tax Appeals (CTA) has denied BSM Crew Service Centre Philippines’ refund claim worth P4.79 million in supposed excess value-added tax (VAT) on zero-rated sales for 2017.

In a 24-page decision on March 29 and made public on March 31, the CTA Special Third Division said the firm did not show why the commissioner of internal revenue (CIR) should not have denied its refund claim.

“When a judicial claim for refund or tax credit in the CTA is an appeal of an unsuccessful administrative claim, the taxpayer has to convince the CTA that the CIR had no reason to deny its claim,” Associate Justice Maria Belen M. Ringpis-Liban said in the ruling.

“In sum, the petitioner (BSM Crew Service Centre Philippines) failed to prove that its administrative claim should have been granted in the first place.”

The court added the firm failed to establish that its clients were not engaged in trade or business in the Philippines.

“Verily, petitioner fell short in establishing that its sales of services qualify for VAT zero-rating under the National Internal Revenue Code of 1997,” the tribunal said.

BSM Crew Service Centre Philippines is a seafarer manning agency based in Manila, Philippines. As of Jan. 3, the agency is managing about 8,397 active seafarers and 503 maritime vessels, according to its website.

Under the country’s tax code, zero-rated sales are transactions made by VAT-registered taxpayers with foreign clients not doing business in the Philippines. — John Victor D. Ordoñez