MOSCOW, April 6 (RAPSI) – Russia’s Supreme Court has dismissed an appeal filed by Mostovik construction firm against rulings of lower courts regarding refusal to refund the company with nearly 717.9 million rubles (about $12.8 million) of value added tax, the court’s ruling reads on Thursday.

On June 2, 2016 the Moscow Commercial Court dismissed the company's claim asking to invalidate the decision of the Interregional Inspectorate of the Federal Tax Service on the largest taxpayers, which refused to refund the tax. On September 9 of the same year, the Ninth Commercial Court of Appeals upheld the ruling and so did the Moscow District Commercial Court on November 29.

In August 2014, Mostovik submitted an updated declaration on the value-added tax for the second financial quarter of 2014 to the inspection. The inspection conducted an audit of this declaration and on May 7, 2015, the tax authority refused to refund the value added tax for the amount of 717.9 million rubles.

Mostovik believes that this tax refund is claimed legitimately. The company argued that advance payments were returned to its counteragents by banks under bank guarantees, and therefore the obligations to return advance payments ceased.

The court, on the other hand, noted that the obligation to reimburse banks for the amounts paid by them to the beneficiaries under the bank guarantee was not fulfilled by the taxpayer, that no advance payments were made and that contracts were not canceled.

Mostovik was declared bankrupt in June 2015.