Question & AnswerQ&A (BOC CUSTOMS MEMORANDUM ORDER NO. 28-2014)
The main objective is to implement the provisions for cash refund of input VAT on importations attributable to zero-rated transactions under Section 112 of the National Internal Revenue Code, as amended, and to provide the procedure for such cash refunds.
The memorandum covers all claims for refund of input VAT on importations attributable to zero-rated transactions under Section 112 of the National Internal Revenue Code, as amended.
The TCS must check for: (1) Copy of claimant's application for VAT refund pursuant to Section 112 of the NIRC; (2) BIR endorsement to the BOC determining validity of the VAT refund claim with authority for BOC to issue credit/refund; (3) Original or certified true copies of Import Entry and Internal Revenue Declarations (IEIRDs), BOC Official Receipts or Statement of Settlement of Duties and Taxes, Single Administrative Documents, and List of Importations for the claim period.
RAD verifies the payments of duties and taxes for the claim, ensures that if cash payments were made they were remitted to the Bureau of Treasury, and issues a Certification attesting to the payment and remittance.
The Accounting Division validates and computes the amount of refund based on RAD’s certification, issues an Evaluation Report, and then the Secretariat determines if the claimant will receive cash refund or a Tax Credit Certificate (TCC).
The release of cash refunds is subject to the availability of funds appropriated for this purpose and compliance with existing budgeting laws, rules, and regulations in consultation with the Department of Budget and Management (DBM).
Claimants must secure a Clearance from the Collection Service certifying that they have no outstanding liabilities with the Bureau of Customs. If there are liabilities, these must be settled before processing the VAT refund claim.
Yes, claimants with pending applications or those who have not yet received their TCCs can choose to apply for cash refunds by submitting a formal letter to the Secretariat expressing their preference for payment of cash refund instead of issuance of tax credit certificates.
They must submit monthly reports to the Commissioner and Tax Credit Approving Authority on the utilization of appropriated cash refund amounts, and quarterly reports which will be submitted to the DBM, and Congressional committees for budget evaluation and consideration.
The order took effect immediately upon signing on December 17, 2014.