CTA denies Melco Resort VAT refund claim

CTA denies Melco Resort VAT refund claim

THE Court of Tax Appeals (CTA) has upheld its decision to reject Melco Resorts Leisure Corp.’s appeal for a refund of P45.5 million in allegedly wrongly paid value-added tax (VAT) on local purchases of goods and services, along with P47.26 million in VAT on services passed on by its suppliers during the first and second quarters of 2017.

In a 45-page decision dated Jan. 9, the CTA said that it found no reason to overturn its second division’s ruling, as the firm was only entitled to a P9,373 VAT refund.

“We affirm the Second Division’s judgement that on the whole, respondent, according to the documents presented was only able to prove that it is entitled to a refund in the amount of P9,737 representing VAT on its importation of goods other than capital goods,” said the ruling penned by Associate Justice Belen M. Ringpis-Liban.

“Considering all these pronouncements and there being no reversible error committed by the court, we find no cogent reason to reverse or modify the assailed decision and assailed resolution.”

The court agreed that Melco’s suppliers should not have passed on the VAT to the firm but maintained that only P9,737 of the wrongly paid VAT was backed by evidence.

Melco argued that it is exempt from paying VAT on its purchases related to its gaming operations, citing Presidential Decree No. 1869.

Under the decree and the Philippine Amusement and Gaming Corp.’s (PAGCOR) charter, the firm enjoys a 0% VAT rate on its provided goods and services, besides a 5% franchise tax on its gross revenue.

The tax tribunal noted that it could not determine whether the firm’s VAT claim on its local purchases of goods and services was timely filed, as there is no record of its suppliers filing and paying the VAT returns.

“Petitioner’s (Melco) suppliers were the ones who paid the VAT to the ogvernment, and as such, the date of their filing and payment will be the start of the two-year prescriptive period,” it said.

“Moreover, there is no record of any proof of date of suppliers’ filing and the payment of VAT returns.” — John Victor D. Ordoñez