Practice question
A VAT-registered seller has P20,000 output VAT and P30,000 allowable input VAT. No special refund ground or other adjustment applies. What ordinarily happens to the P10,000 excess input?
- It is automatically paid in cash immediately.
- It becomes additional output tax.
- It must be added to the selling price retroactively.
- It is forfeited solely because it exceeds output VAT.
- It is carried over to succeeding quarters.
Legal references
- NIRC Section 110(A)–(C), as amended; https://lawphil.net/statutes/repacts/ra1997/ra_8424_1997.html
- RA 11976 Sections 19 and 21, input VAT and invoicing; https://lawphil.net/statutes/repacts/ra2024/ra_11976_2024.html
Answer this question in flashcards to review your response and continue practicing.