Republic of the Philippines MINISTRY OF FINANCE May 18, 1979 MINISTRY ORDER NO. 19 SUBJECT: Procedures Governing the Application of Excess Tax Credits Against Advance Sales Tax Liabilities of Manufacturers or Producers T0
: The Commissioner of Internal'Revenue, The Commissioner of Customs, and All Others Concerned.
Pursuant to the provisions of Sections 194, 195, 196, 197 199, and 201 of the National Internal Revenue Code of 1975, as amended, in case the total tax paid on the raw materials, part or accessory or other articles used in the manufacture of another article sold and forming part thereof, exceeds the amount of the sales tax due on such finished product, the excess may be used as a tax credit against any sales tax liability of the manufacturer or producer for the succeeding taxable quarter or quarters. In order to provide for a uniform procedure in the application of excess tax credits against advance sales tax liabilities, the following rules and regulations are hereby promulgated: Section 1. - Application for Tax Credit Certificates Any manufacturer or producer who intends to utilize his excess sales tax credits against his advance sales tax liabilities shall first secure a Tax Credit Certificate (TCC) from the Bureau of Internal Revenue. A Tax Credit Certificate shall be issued by the Commissioner of Internal Revenue, upon compliance with the following requirements: a)
The applicant shall file an application under (Annex oath in the prescribed BIR Form No. "A"), with the Indirect Taxes Division Bureau of Internal Revenue; and
b)
The applicant shall attach to the application a copy of the percentage return duly filed for the quarter or quarters in which the excess tax credit was determined.
A lication.- All applications Section 2. - Processin for tax credit certificates s of a 9e processed by the Indirect Taxes Division, Bureau of Internal Revenue. If by all indica. tions the application appears to be in order, the Indirect Taxes Division shall prepare the Tax Credit Certificate (BIR Form No. Annex "B") for the signature of the Commissioner of Internal Revenue or his duly authorized representative. Section 3.- Issuance of the Tax Credit Certificate.- The Tax Credit Certificate shall be serially -v'num er ,,an preparedw in quadruplicate to be distributed as follows:
e
9.
2 a)
Original
- to the applicant-taxpayer;
b)
Duplicate
- to the Bureau of Customs;
c)
Triplicate
d)
Quadruplicate
to the Indirect Taxes Division (SIR); and - to the Receivable Accounts Division (BIR)
Section 4.- Registry of Tax Credit Certificate.- The Inax Credit Certidirect Taxes Division shall keep a registry o ficate issued which shall contain the name and address of the taxpayer-grantee, the TCC number, its date of issuance and the amount of tax credit.
An abstract of the data contained in the registry shall be furnished the Receivable Accounts Division (BIR) at the end of every month. Section 5.- Use of the Tax Credit Certificate.- A Tax Credit Certificate issued pursuant to this Order is nontransferable. It may be used only by the grantee named therein and only for the payment of advance sales tax directly due from him. The use of a Tax Credit Certificate shall in no case result in a refund, whether directly or indirectly. A manufacturer shall not be allowed to offset excess tax credits APPLIED FOR OR MAY HAVE already BEEN covered by a Tax Credit Certificate/Certificates against any sales tax liability OF THE APPLICANT/GRANTEE. A violation of this provision SHALL BE TREATED A FRAUD CASE AND shall result in a forfeiture or loss of the privilege of tax credit to the extent of the amount credited without prejudice to a criminal prosecution for perjury. However, should the grantee retire his privilege tax receipt (C-14) as.an importer, he may apply with the Indirect Taxes Division for conversion of the Tax Credit Certificate or any unused balance thereof into ordinary tax credit, which may be used against his sales tax liabilities.
Section 6.- Procedures in the Application for Payment of Advance Sales Tax. e following procedures are ere by prescribed or compliance by all concerned. a. The Grantee.- The grantee of a Tax Credit Certififor the payment of his advance sales tax cate may use sane a liabilities upon compliance with the following: (1) If Manila is the port of entry of his importation where the goods are to be released from the Customshouse thereat or from a customs bonded warehouse located within the Metro Manila Area, the importer (grantee) shall first present his Tax Credit Certificate to the Chief, Receivable Accounts Division, Bureau of Internal Revenue, accompanied by a letter request for the application thereof in payment of his advance sales tax liabilities, indicatin the (a) description of the goods imported (kind, volume)jnumber and value); (b) the import entry number and (c) the amount of advance sales tax due on the importation.
3 (2) If the port of entry of his importation is other than at Manila or the goods are to be released from a Customs Bonded Warehouse outside the Metro Manila Area, the importer ( rantee) shall submit the documents required in No. a.(), above, to the Chief, Collection Branch of the BIR Regional Office having jurisdiction where the port of entry or the Customs bonded warehouse is located. b. The Bureau of Internal Revenue.- The Chief, Receivlection Branch conable Accounts Division or the Chief, cerned, as the case may be, shall issue a Tax Debit Certificate (BIR Form No. Annex "C") in the amount applied for to the importer (grantee stating therein the following:
(1)
Name of the importer-grantee;
(2) Tax Credit Certificate number against which the Tax Debit Certificate is being drawn; (3)
Description of the goods imported; and
(4)
Import entry number of the importation.
The Tax Debit Certificate shall be prepared in quadruplecats to be distributed as follows: (1)
Original
- To the applicant-taxpayer;
(2)
Duplicate
- To the Bureau of Customs where the goods are to be released; to be sent by mail or by personal delivery;
(3)
Triplicate
- Data Processing Center (BIR) thru the Receivable Accounts Division; and
(4)
Quadruplicate - To be retained by the issuing unit for its file.
The Commissioner of Internal Revenue shall issue appropriate guidelines in order to install an effective system of recording and control of the issuance of Tax Credit and Tax Debit Certificate. c. The Bureau of Customs.- Upon presentation of a duly issued ax Debit erti icate, the Bureau of Customs shall accept the same as payment of advance sales tax due on the imported goods of the taxpayer named therein. The Bureau of Customs is hereby authorized to take up as income in its statement of performance the amount of tax credits applied in payment of advance sales tax even if no_cash remittance is involved. The Commissioner of Customs shall issue:'appropriate guidelines for the proper recording and control of Tax Debit Certificates applied in payment of advance sales tax liabilities made pursuant to this Order. A monthly summary of the Tax Debit Certificates accepted in payment of advance sales tax shall be furnished the Commissioner of Internal Revenue: Attn: Chief, Receivable Accounts Division, stating therein
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the name of the importer, the Tax Debit Certificate number and amount applied and the Bureau of Customs Receipt issued therefor. Section 7.- As soon as the amount appearing on the Tax Credit Certificate shall have been fully utilized in payment of advance sales tax, the some shall be surrendered to the Chief, Receivable Accounts Division or the Chief, Collection Branch concerned of the Bureau of Internal Revenue. Section 8.- At the end of each semester, the Chief, Receivable Accounts Division or the Chief, Collection Branch of the Bureau of Internal Revenue shall prepare a report of Tax Credit Certificates utilized showing therein the corresponding Tax Debit Certificates issued, the distribution of which shall be: a)
Original
- Chief, Accounting Division, BIR
b)
Duplicate
- Bureau of Customs
c)
Triplicate
- Chief, Indirect Taxes Division
d)
Quadruplicate
- File, issuing offices concerned.
Section 9.- The Bureau of Customs shall upon receipt of the semestral report referred to in the preceding section, review its records to check the authenticity of the Tax Debit Certificates presented to it by importers. Section 10.- All regulation, order or ruling previously issued which are inconsistent with this order are deemed repealed or superceded. Section 11.- This order shall take effect immediately.
CESAR A. VIRATA Minister of Finance
ANNEX "A" epublic of the Philippin' Ministry of Finance!
BUREAU OF INTERNAL REVENUE Quezon City APPLICATION FOR TAX CREDIT CERTIFICATE FOR THE QUARTER ENDING t 19
(FOR ADVANCE SALErTXr O L )
TAN:
Name of Manufacturer/Producer: Business Name/Style Address
Amount:
Date
PTR No.
Amount of Tax Credit Applied for How Determined:
Gross Sales Tax Liability for the Quarter . P Less:
Percentage, specific or mining tax paid on raw materials, part or other article forming part of finished product sold . . . . . . F
Excess Tax Credit . . . . . . . . .' Enclosures:
Certified true copy of percentage tax returns filed for this quarter or quarters in which the excess tax credit was determined.
I hereby declare under oath : 1. That all the information set forth above including the attached document are true and correct of my own personal knowledge; 2. That the tax credit certificate to be issued in my favor shall be used only by me; and 3. That any AMOUNT OF tax credit HEREIN APPLIED FOR OR covered by a Tax Credit Certificate(s) issued in my name shall not be availed of as an offset against any sales tax liability nor shall it be made the basis of a claim for tax refund.
Done in
, 19
on
.
anufacturer Producer Subscribed and sworn to before me this
day of
19 in giant exhibiting to me his Residente Certificate o. issued at
Doe. No. Page No. Book No. Series off'
on
Notary
.
lic or Officer u horized to Administer Oath -
ANNEX "B"
REPUBLIC OF THE PHILIPPINES
No .
wowo.TRY OF PINANCr
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3UREAU OF INTERNAL REVENUE OUEZON CITY
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TAX CREDIT CERTIFICATE
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( FOR ADVANCE SALES TAX ONLY)
Granted Pursuant to P4inistry Order No.____
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Date AMOUNT CoveRea BY TK/s CERr/F/C4TE (/N V3OIW$)
4,y7OUNr:
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I gDORESS:
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I TAXPAYER AOCOUNT NO.
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A grantee who is appfaying the omouat covered by-this cr.Ttifica^e za pagmeat 'Ofhls III
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advance -sates tax ZzabiWztjes shall present Chas cer?zfzcate to the ChIef, Receivable Accounts Diviszoiz. for Z-he -preparation and zesuance of fhe correspoezdeng Tax Debit Certificate ff the imported articles are lobe re?eased from Mtge Bureau of Customs in Metro Manila or to Me Chief, Co?Zection Branch oftlie BiR Regional Office havinugJurzsdzc?zon if the imported commodiHes are outside Metro Manila,
(AL EFREN 1. PLAN A j
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ACTING C OMMIS910h1ER CF IN7bRNgL RLyENUc - --
(BIR FORM NO.
`SERIAL NO. Republic of the Philippines Ministry of Finance BUREAU OF INTERNAL REVENUE Quezon City TAX DEBIT CERTIFICATE (FOR ADVANCE SALES TAX ONLY) TDC CONTROLL NO. Date NUMERIC CODE
Gentlemen: We have debited you for the following:
Your tax credit indicated below is partially utilized against the payments of your advance sales tax in the amount for the of following shipment:
Amount in Words XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
per letter of request dated of
NOTE : Original TCC No. dated surrendered in the original amount of
EFREN I. PLANA Acting Commissioner By:
TAX CREDIT TAX DEBIT
F THEMISTOCLES R. MONTALBAN Chief, Receivable Accounts Division TAN: M5349-M2127-A-8
BALANCE •
Prepared by: F-I-D
Checked by:
