Article 115p. 115

NATIONAL INTERNAL REVENUE CODE TAXATION, TARIFF and CUSTOMS LAWS

SECTION 904. Abatement of Duties and Taxes. —

When goods have not yet been released for consumption

or have been placed under another customs procedure,

provided that no other offense or violation has been

committed, the declarant shall neither be required to pay

the duties and taxes nor be entitled to refund thereof in

any of the following cases:

(a) When, at the request of the declarant, the goods

are abandoned, or as determined by the Bureau, the

goods are destroyed or rendered commercially valueless

while under customs control. Any cost herein incurred

shall be borne by the declarant;

(b) When goods are destroyed or irrecoverably lost by

accident or force majeure , the remaining waste or scrap

after destruction, if taken into consumption, shall be

subject to the duties and taxes that would be applicable

on such waste or scrap if imported in same state; and

(c) When there are shortages due to the nature of the

goods.

SECTION

905. Abatement for Damage Incurred

during Voyage. — Except as otherwise provided, no

abatement

of

duties

shall

be made on account of

damage incurred or deterioration suffered during the

voyage of importation; and duties will be assessed on the

actual quantity imported as determined by the customs

officers concerned.

SECTION 906. Abatement or Refund of Duty on

Missing Package. — When any package appearing on

the manifest or bill of lading or airway bill is missing, an

abatement or refund of the duty shall be made if it is

certified by the importer or consignee, under pain of

penalty for falsification or perjury, and upon production of

proof satisfactory to the Collector concerned, that the

package in question has not been unlawfully imported

into the Philippines.

SECTION 907. Abatement or Refund for Deficiency

in Contents of Packages. — If, upon opening of any

package, a deficiency in the quantity of the goods is

found to exist based upon the invoice, such deficiency

shall be certified, under pain of penalty for falsification or

perjury, by the customs officers concerned and upon the

production of proof showing that the shortage occurred

before the arrival of the goods in the Philippines. Upon

sufficient proof thereof, the proper abatement or refund

of the duty shall be made.

SECTION 908. Abatement or Refund of Duties on

Goods Lost or Destroyed after Arrival. — The Bureau

may abate or refund the amount of duties accruing or

paid on any goods that have been lost due to injury, theft,

destruction through fire or through any other causes,

upon satisfactory proof of the same, under any of the

following circumstances:

(a) While within the territory of any port of entry, prior

to unloading under the Bureau's supervision;

(b)

While

remaining

in

customs

custody

after

unloading;

(c) While in transit from the port of entry to any port

in the Philippines; and

(d) While released under sufficient security for export

except in case of loss by theft.

SECTION 909. Abatement and Refund of Defective

Goods.

—

Under

conditions

to

be

set

by

the

Commissioner, and with the approval of the Secretary of

Finance, an abatement and refund shall be granted on

imported or exported goods which are found defective or

otherwise

not

in

accordance

with

the

agreed

specifications at the time of importation or exportation

and are returned either to the supplier or to another

person

designated

by

the

supplier,

subject

to

the

following conditions:

(a) The goods have not been worked, repaired, or

used in the country of importation, and are reexported

within a reasonable time; and

(b) The goods have not been worked, repaired, or

used in the country to which they were exported, and are

reimported within a reasonable time.

Use of the goods shall, however, not hinder the

refund if such use was indispensable to discover the

defects

or

other

circumstances

which

caused

the

reexportation or reimportation of the goods.

As an alternative to reexportation or reimportation,

the goods may be expressly abandoned or destroyed or

rendered commercially valueless under customs control

as the Bureau may decide. In such case, the importer

shall not be entitled to an abatement or a refund if it does

not defray the costs of such abandonment, destruction,

or rendition.

SECTION

910.

Abatement

of

Duty

on Dead or

Injured Animals. — Where it is certified, under pain of

penalty for falsification or perjury, and upon production of

proof satisfactory to the Bureau that an animal subject of

importation dies or suffers injury before arrival, or while in

customs custody, the duty due thereon shall be abated

provided that its carcass on board or in customs custody

is removed in the manner required by the Bureau and at

the expense of the importer.

SECTION 911. Investigation Required in Case of

Abatements

and

Refunds.

—

The

Customs

Officer

concerned shall, in all cases of abatement or refund of

duties, submit an examination report as to any fact

discovered which indicates any discrepancy and cause

the corresponding adjustment on the goods declaration.

SECTION 912. Refund Arising from Correction of

Errors. — Manifest clerical errors made on an invoice or

entry, errors in return of weight, measure and gauge,

when duly certified under penalties of falsification or

perjury by the surveyor or examining officer when there

are such officers at the port, and errors in the distribution

of charges on invoices not involving any question of law

and certified under penalties of falsification or perjury by

the examining customs officer, may be corrected in the

computation of duties, if such errors are discovered

before the payments of duties, or if discovered within one

(1) year after release from customs custody of imported

goods upon written request and notice of error from the

importer, or upon statement of error certified by the

District Collector.

For the purpose of correcting errors specified in the

next preceding paragraph, the Bureau is authorized to

make refunds within the statutory time limit.

SECTION 913. Claims for Refund. — All claims and

application for refund of duties and taxes shall be made

in writing and filed with the Bureau within twelve (12)

months from the date of payment of duties and taxes.

If, as a result of the refund of duties, a corresponding

refund of internal revenue taxes on the same importation

becomes due, the Bureau shall cause the refund of

internal revenue taxes in favor of the importer after

issuance of a certification from the Commissioner of

Internal Revenue, when applicable.

The importer may file an appeal of a denial of a claim

for refund or abatement, whether it is a full or partial

denial, with the Commissioner within thirty (30) days

from

the

date

of

the

receipt

of

the

denial.

The

Commissioner shall render a decision within thirty (30)

days from the receipt of all the necessary documents

supporting the application. Within thirty (30) days from

receipt of the decision of the Commissioner, the case may

also be appealed to the CTA.

Notwithstanding

the provisions in the preceding

paragraphs, the filing of claims for refund of national

internal revenue taxes shall be governed by the provisions

provided under the NIRC of 1997 , as amended.

TITLE X Post Clearance Audit

SECTION 1000. Audit and Examination of Records.

— Within three (3) years from the date of final payment of

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