REFUND & ABATEMENT

Abatement

It is the reduction of duties and taxes payable on imported goods due to loss, damage, shortage, defect, or similar circumstances defined by law.

Duty-Drawback

It is the refund or credit of duties, and possibly internal revenue taxes, actually paid for importation, in whole or in part.

Refund

The return, in whole or in part, of duties and taxes overpaid, erroneously paid, or overcharged due to an assessment error.

Tax Credit Certificate (TCC)

A certificate issued by the Commissioner or authorized representative recognizing the grantee-importer’s legal entitlement to a tax credit usable for customs duties/taxes or convertible to cash refund.

Tax Debit Memorandum (TDM)

A document authorizing use of a TCC to pay the grantee-importer’s customs duties or tax obligations.

No. A duly approved TDM is required.

Can a TCC be used to pay duties or taxes without an approved TDM?

Administrative Order No. 4, dated February 20, 2023

Which Administrative Order abolished the OSS Inter-Agency Tax Credit and Duty Drawback Center?

Within 90 working days from the Order’s effectivity.

Within how many working days must the Secretary of Finance fully implement the OSS Center’s abolition?

BIR received processing and issuance of TCCs; BOC received processing and issuance of duty drawbacks.

Which agencies received the OSS Center’s tax-credit and duty-drawback processing functions?

The Department of Finance (DOF)

Who must approve the BIR and BOC procedures for controls against fraudulent tax-credit and duty-drawback claims?

To the BIR and BOC accordingly.

Where are the OSS Center’s relevant files, documents, and records transferred?

To the DOF, subject to auditing laws and regulations; cash separately held in trust or otherwise is remitted directly to the National Treasury.

Where are other OSS Center assets and liabilities transferred?

They are separated from service with applicable separation benefits unless appointed to other government positions; vacant positions are abolished.

What happens to OSS Center personnel under the Order?

Up to 99% of the duty imposed by law.

Under CMTA Sections 900–902, what is the maximum drawback for fuel used to propel sea vessels engaged in international trade?

Up to 99%, if the vessel is temporarily authorized by MARINA or another government agency to engage in international trade.

What fuel-duty drawback may be claimed for sea vessels engaged in coastwise trade?

Up to 50% of the duty imposed by law, when sold directly or indirectly, in the same form or after processing, for electric-power generation and manufacture of city gas.

What is the maximum drawback for qualifying petroleum oils/bituminous oils and crude oil imported by non-electric utilities and supplied to electric utilities?

The refund or credit must not exceed 100% of duties paid on the imported materials used, subject to the module’s recyclable-wastage condition.

What is the drawback limit for duties paid on imported materials used in exported products?

Within one year after importation of the materials.

Within what period must goods made using imported materials be exported for duty drawback?

Within six months from the date of exportation.

When must a duty-drawback claim for exported manufactured goods normally be filed?

On an equitable basis.

How are duties apportioned when the same imported materials produce two or more products?

If not filed within one year from the date of importation.

When does the duty-drawback claim prescribe for categories 1 and 2 in the module?

Six months from exportation.

What is the ordinary filing period for category 3 duty drawback?

Yes, for another six months, if requested 30 days before the original six-month period expires; actual filing cannot exceed one year from exportation.

Can the filing period for a category 3 duty-drawback claim be extended?

From the first importation or first exportation, as applicable.

For a category 3 claim involving multiple importations or exportations, when is the prescriptive period counted?

The date customs duties and taxes are paid.

From what date is the prescriptive period reckoned for importations?

The date of loading, certified by PID, AOD, CCCD, or equivalent units.

From what date is the prescriptive period reckoned for exports?

The date of the delivery receipt.

From what date is the prescriptive period reckoned for constructive exports?

Within 60 days, but not more than 120 days, after receipt of properly completed claims and validated complete supporting documents.

Within what period should eligible duty-drawback claims be processed and paid/granted?

Older claims

If one company has multiple duty-drawback claims, which are prioritized?

Tax Credit Certificates (TCCs), unless otherwise provided in the special provision of the GAA.

What is the usual form of payment for approved duty-drawback claims?

Five years, subject to revalidation for another five years; total validity cannot exceed ten years.

What is the usual validity of a TCC issued for duty drawback?

The Bureau must inspect the company, plant, and facilities to establish local manufacturing or processing from imported raw materials into exported products.

What must happen before first-time duty-drawback claims are processed?

Yes, if necessary.

Can the Bureau inspect a company that has previously claimed duty drawback?

The TCC Committee recommends it to the Commissioner of Customs.

Who recommends creation of a task group for a duty-drawback inspection?

SEC or DTI Registration Certificate.

What one-time registration document is required for a first duty-drawback application?

Board Resolution or notarized Secretary’s Certificate authorizing specific individuals to process the claim.

What authorization document is required for the first duty-drawback application?

LPSR or DPSR, if applicable.

What additional proof of importation may be required for packing-material claims involving bulk/break-bulk shipments?

Latest Formula of Conversion using the ITDI rate issued by DOST.

What fuel-claim document shows the latest conversion formula?

Certificate of Non-Availment of Incentives under RA 5186 or RA 6135, issued by the concerned BOI office.

What incentives-related certificate is required for fuel duty-drawback claims?

With the Tax Credit Committee (TCC), attention: TCC Secretariat.

Where are duty-drawback claims filed?

Within 24 hours.

Within how long after creating the duty-drawback CCPS ticket must hard copies be submitted?

Customer Care Center, Gate 3, South Harbor, Port Area, Manila.

Where does the module direct submission of duty-drawback hard copies?

Immediately transmits them to the TCC Secretariat.

What does the Customer Care Center do with duty-drawback documents?

Confirms receipt through the ticket, assigns a docket number, and has the Head Secretariat assign a Customs officer to check completeness.

What does the TCC Secretariat do after receiving duty-drawback documents?

Verifies that the duties claimed were paid and remitted to the Bureau of the Treasury (BTr).

What payment verification does the TCC Secretariat perform for duty drawback?

Calculate duty paid per raw-material unit, then multiply it by the quantity of raw material used for the verified export quantity.

How is the duty-drawback amount computed?

From verified export documents, less disallowances due to prescriptive periods and timing differences.

How is allowable export quantity determined for duty drawback?

Using the latest ITDI Formula of Conversion; it cannot exceed the imported quantity established by verified import documents, less applicable disallowances.

How is the quantity of imported raw materials used in exported products determined?

The TCC Secretariat prepares an Evaluation Report/Disposition Form and a TCC Resolution recommending approval or disapproval to the Commissioner of Customs.

What report and resolution are prepared after duty-drawback evaluation?

Only when the claimant receives the issued TCC evidencing payment of the refund amount.

When is a duty-drawback CCPS ticket closed?

File a Motion for Reconsideration with the TCC within 10 days.

What is the remedy if a duty-drawback claim is disapproved by the TCC?

Within 30 days.

Within how long must the Commissioner decide on the duty-drawback remedy described in the module?

Within 30 days.

If the Commissioner denies the duty-drawback claim, when may the claimant appeal to the CTA?

₱5,000; claims below that amount are not granted

What is the minimum amount for a refund claim under the module?

In writing within 12 months from payment of duties and taxes.

Within what period must a refund claim be filed with BOC?

360 days.

How many days are treated as 12 months under the module’s Civil Code note?

At the Office of the District Collector (ODC) of the port where duties and taxes were paid

Where is a refund claim for duties and taxes filed?

At the port where the duties and taxes were paid.

Where is the refund processing fee paid?

Within 60 days, counted only after all mandatory documentary requirements are submitted.

Within how long are eligible refund claims processed, paid, or granted?

With the BIR.

Where should a claim for purely internal revenue taxes, such as VAT or excise tax, be filed?

monthly

How often the refund-application information does ODC report to PCAG

Cash, if included in the Bureau’s budget and allowed under applicable laws and rules.

What is the preferred payment form for refund of duties and taxes?

When the claimant elects TCC payment or cash payment is not legally authorized.

When may a refund be paid through a TCC instead of cash?

No; a TCC issued in the claimant’s name is non-transferable.

Can a TCC issued for a refund be assigned or transferred?

The Commissioner of the BIR.

Who must be informed when internal revenue taxes are refunded through a drawback or refund claim?

Through a Special Power of Attorney; for a corporation, through a duly notarized Secretary’s Certificate.

How may a representative sign a refund application?

RAD

Who verifies the refund claim whether duties and taxes were actually paid and remitted to the Bureau of the Treasury.

Within 3 days of receiving the request.

Within how long does RAD normally transmit the Certificate of Payment?

5 days

How long does RAD have to verify voluminous SSDTs or BCORs?

Within 2 days after receiving the request.

Within how long does Collection Service transmit the Certificate of No Obligation?

Within 5 days

Within how long must ODC approve or disapprove the refund after receiving the docket with the Law Division’s Disposition Form and Statement of Refund?

Office of District Collector

Who signs the Statement of Refund and forwards it with the entire docket to OCOM for automatic review within 5 days from promulgation.

To OCOM within 30 days from receipt of the denial.

When may a claimant appeal ODC’s full or partial denial of a refund?

To the Legal Service, Revenue Collection and Monitoring Group (RCMG), for review.

Where does OCOM send a refund docket received on automatic review or appeal?

15 days from receipt of the docket.

How long does Legal Service have to review the ODC refund decision and issue a Disposition Form?

Within 10 days of receipt.

Within how long must OCOM approve or disapprove the Legal Service Disposition Form?

Within 5 days from promulgation.

If OCOM approves a refund claim, when must it be elevated to DOF for automatic review?

The claim is automatically elevated to DOF for review.

What happens if OCOM fails to decide on a refund claim within 30 days from receipt of records?

Within 30 days from receipt of OCOM’s decision.

Within what period may a claimant appeal OCOM’s denial of a refund claim to CTA?

Tax Credit Secretariat asks the claimant to renew/update the Certificate of No Outstanding Obligation if necessary.

What is the first step in cash payment after final approval of a refund?

Tax Credit Secretariat sends the docket to RAD for a Journal Entry; Accounting Division/FMO then prepares a request for BTr Certification.

What happens after the claimant updates the Certificate of No Outstanding Obligation for cash refund?

A Notice of Cash Allocation (NCA) from DBM

What does FMO request after receiving BTr Certification for a cash refund?

FMO prepares the Disbursement Voucher and forwards it to the Cashier to prepare the check.

What happens after FMO receives the NCA for a cash refund?

15 days from receipt to check completeness, resolve legal questions if any, and issue a Disposition Form.

How long does Legal Service have to review a refund from a final protest/civil-case decision?

The original grantee, or a duly authorized representative.

Who files a request to utilize a TCC?

A notarized Request for Utilization of TCC.

What form is required to request TCC utilization?

Collection Service verifies no outstanding obligation; FMO verifies the TCC’s authenticity and balance.

Which two verifications are initiated after complete TCC utilization documents are submitted?

Within 2 days of receiving the request.

Within how long must Collection Service transmit the no-obligation certificate for TCC utilization?

Within 2 days of receiving the request.

Within how long must FMO transmit the TCC authenticity-and-balance certificate?

30%, 50%, or 100%.

What utilization percentages are given as examples in the module?

Within 60 days prior to expiration, according to the module’s revalidation procedure.

When should the original TCC grantee request revalidation if the TCC is not fully used?

The Tax Credit Committee issues a Disposition Form and forwards its recommendation to OCOM for approval.

Who reviews and recommends action on a TCC revalidation request?

60 days.

How long is a TDM valid under the common provisions?

Within 60 days after receipt of properly completed claims.

Within what period are eligible tax-credit, refund, and duty-drawback claims generally processed under the common provisions?

Within a reasonable time, but not later than 3 months from exportation.

What is the deadline for re-importing defective goods exported from the Philippines?

An examination report describing discovered discrepancies and causing the corresponding adjustment to the goods declaration.

What report must a Customs Officer submit in all abatement or refund cases?

Within 30 days from receipt of the denial, whether the denial is full or partial.

Within how long may an importer appeal an ODC denial of refund or abatement to the Commissioner?