The Court of Tax Appeals (CTA) has ordered the Bureau of Internal Revenue (BIR) to return to sugar planters in Negros Occidental some P10.8 million in advance value-added tax (VAT) on its sales of refined sugar from 2007 to 2008.
In an en banc decision, the tax court presided by Justice Juanito Castaneda Jr. affirmed the decision of its first division that the VAT was erroneously collected from the Negros Sugar Farmers Multi-Purpose Cooperative.
The BIR regional office in Bacolod City had refused to refund the VAT on the ground that the cooperatives failed to present documents to substantiate its refund claims on the sale of refined sugar.
The CTA said the cooperative has been granted tax exemption privileges by Cooperative Development Authority and that its sale of refined sugar to its members is tax free.
The court added that the cooperative members were the ones who planted the sugar canes which were later milled into refined sugar, thus they are also exempted from paying the VAT on sales of the commodity even to non-members of the organization.