QuestionsQuestions (BOC CUSTOMS MEMORANDUM ORDER NO. 28-2014)
It prescribes the procedure for the cash refund of input VAT on importations attributable to zero-rated transactions under Section 112 of the NIRC, as amended, for which an appropriation has been set aside.
It is issued pursuant to Section 608 of the Tariff and Customs Code of the Philippines, as amended, and it implements related provisions of applicable laws/joint circulars mentioned in the Order.
It covers all claims for refund of input VAT on importations attributable to zero-rated transactions under Section 112 of the NIRC, as amended.
The Tax Credit Secretariat (TCS) receives the docket from the BIR and checks whether required supporting documents are attached.
Examples include: (1) the claimant’s application for VAT refund under Sec. 112 of the NIRC; (2) BIR endorsement to the BOC with BIR’s determination and authority for BOC to issue VAT credit/refund; and (3) originals or certified true copies of Import Entry and Internal Revenue Declarations (IEIRDs) and related documents such as BOC official receipts (BCORs) or statement of settlement of duties and taxes.
TCS endorses the entire docket to the Chief, Revenue Accounting Division (RAD) for verification of payments of duties and taxes, using Tax Credit or confirming cash payments remitted to the Bureau of Treasury (BTr).
RAD verifies the payments of duties/taxes and issues a certification attesting to collection and remittance to the BTr of the payment/s made.
The Financial Management Office (FMO) validates and computes the amount to be refunded based on RAD’s certification, and issues an Evaluation Report.
After receiving the docket and Evaluation Report from FMO, the Secretariat determines whether the claimant will avail of cash refund or for issuance of TCC.
Payment of cash refund or issuance of a Tax Credit Certificate (TCC).
No. Cash release is subject to availability of funds appropriated for the purpose.
It adopts the procedure under COA-DBM-DOF Joint Circular No. 1-97 (Guidelines for transfer of cash balances to the National Treasury), including treatment relevant to release of funds to cover tax refunds.
FMO opens and maintains an MDS-Sub account for trust receipts with an MDS Government Servicing Bank; RAD issues a Journal Entry Voucher (JEV) to transfer fund from General Fund to Trust Fund; FMO requests BTr certification and JEV adjustment to ensure the amount is set aside under BOC’s trust liabilities account.
Within five (5) days from receipt of the endorsement authorizing payment of the cash refund.
The cash check is released only to the claimant himself or his authorized representative upon presentation of a Special Power of Attorney executed in favor of the representative; for corporations, it requires a Secretary’s Certificate and Board Resolution.
They must secure a Clearance from the Collection Service attesting that the importer-claimant has no outstanding liability with the BOC; this clearance must be submitted to the Secretariat before preparation of the endorsement authorizing payment.