Rema Tip Top Philippines, Inc. vs. Commissioner of Internal Revenue

DECISION

CUI-DAVID, J.:

Before the Court is a Petition for Review 1 filed by petitioner Rema Tip Top Philippines, Inc. (Petitioner) on July 10, 2020, praying for the refund or issuance of a tax credit certificate in the amount of P4,434,530.00, allegedly representing its unutilized input value-added tax (VAT) attributable to zero-rated sales for the taxable year (TY) 2018.

THE PARTIES

Petitioner Rema Tip Top Philippines, Inc. is a domestic corporation duly organized and existing under Philippine laws. 2 It is registered with the Bureau of Internal Revenue (BIR) under Taxpayer Identification Number (TIN) 008-042- 655-000, with address at Unit 502 Richmonde Plaza, Ortigas, San Miguel Ave., Brgy. San Antonio, Ortigas Center, Pasig.3 1 Docket, pp. 7-40.

2 The Parties, Petition for Review, docket, p, 1 I. 3 Exhibit "P-1", Docket, p. 2419.

\1

Rema Tip Top Philippines, Inc. vs. Commissioner of Internal Revenue

Respondent is the Commissioner of Internal Revenue (CIR), the officer duly appointed and empowered by law to act on claims for refund or credit, with office address at the 5th Floor, BIR National Office Building, Agham Road, Diliman, Quezon City.4

THE FACTS AND THE PROCEEDINGS

During TY 2018, petitioner allegedly had aggregate sales in the amount of P162,794,001.62, broken down as follows:

Receipts Quarter’ Quarter® Quarter’ Quarter® Total

VATable

While generating the aforesaid VATable and zero-rated sales, petitioner purchased various materials, services, and capital goods in the aggregate amount of P66,132,806.23, details of which are as follows:

|_Purchases | "1" Quarter__[_2" Quarter 3" Quarter | 4" Quarter [Total —_— Capital P 9,375,000.00 P 9,375,000.00

Goods

Exceeding

1M

Local P= 214,339.55 106,983.16 | P 297,230.39! P 109,974.30 728,527.40

Purchases of

Goods

Importation $55,933.16 3,515,707.37 675,793.10 254,152.37 §,001,586.00

of Goods

Local 980,727.20 562,134.96 460,945.56 341,951.72 2,345,759.44

Purchases of

Services

Purchases 3,312,606.77 8,414,904.06 11,727,510.83 not Qualified

for Input Tax

8,473,527.33 | 13,344,639.59 9,194,926.86 5,941,328.78 | 36,954,422.56 Total P10,224,527.24 | P26,904,465.08 | _P13,941,502.68 | P15,062,311.23 | P66,132,806.23 Allegedly, out of petitioner’s total purchases, the amount of P36,954,422.56 is attributable or allocable to zero-rated sales, for which an input VAT amounting to P4,434,530.00 was paid. For purchases allocated to its VATable sales, petitioner paid the output tax in the aggregate amount of “ The Parties, Petition for Review, docket, p. 12. 5 Exhibit “P-10”. Docket. p. 2451.

° Exhibit “P-11”, Docket, p. 2453, 7 Exhibit “P-12”, Docket, p. 2455.

* Exhibit “P-13”, Docket, p. 2457.

Rema Tip Top Philippines, Inc. vs. Commissioner of Internal Revenue

P1,137,854.74. Petitioner added that all the foregoing input VAT for current transactions were reported in its Amended Quarterly VAT Returns forTY 2018.

On December 27, 2019, petitioner filed with the BIR - Revenue District Office (RDO) No. 43 an administrative claim9 for refund of its input VAT attributable to zero-rated sales made in TY 2018.

Alleging inaction, petitioner elevated its claim before the Court via the instant Petition for Review filed on July 10, 2020. In his Answer10 filed within the extension period given, respondent interposed, by way of Special and Affirmative Defense, that the Court has no jurisdiction over the instant case as petitioner prematurely filed its Petition for Review. According to respondent, petitioner's administrative refund claim was filed on December 27, 2019. However, additional documentary requirements were submitted on February 10, 17, 19, and March 6, 2020. Hence, according to respondent, the filing of the Petition for Review on July 10, 2020 was premature, considering that the counting of the 90 days to act should have commenced on March 6, 2020, and not December 27, 2019.

On November 10, 2020, the Court issued a Notice of Pre- Trial Conference, 11 informing the parties of the pre-trial conference set on February 8, 2021. Both parties filed their pre-trial briefs before the scheduled pre-trial conference on February 5, 2021. 12 After the Pre-Trial Conference, the parties filed their Joint Stipulation of Facts and Issues 13 on March 1, 2021, based on which a Pre-Trial Order14 was issued on March 8, 2021. The trial then ensued, during which petitioner presented its witnesses, namely: (1) Ms. Jennilyn U. Gaanan, its Director and Chief Finance Officer; and (2) Ms. Charlene Mae A. Monje, 9 Exhibit "P-9'", docket, p. 2448.

10 Docket, pp. 1932-1938.

11 Docket, pp.1940-1941.

"Docket, pp. 1985-2015 and pp. 2018·2021, respectively.

Rema Tip Top Philippines, Inc. vs. Commissioner of Internal Revenue the

Court-commissioned

Independent

Certified

Public

Accountant (ICPA).

By way of a Judicial Affidavit, 15 Ms. Jennilyn U. Gaanan testified that she is the Chief Finance Officer (CFO) and a member of petitioner's Board of Directors. As the CFO, she is in charge of preparing and maintaining petitioner's books of accounts and tax and financial records. She is familiar with the instant case because she caused the filing of the instant petition as authorized by petitioner's Board of Directors. Ms. Gaanan declared that the instant case is about petitioner's claim for a refund of input VAT attributable or properly allocated to zero-rated sales made in TY 2018. On December 27, 2019, petitioner filed an administrative claim for refund with the BIR-RDO No. 43, as evidenced by the Application for Claim for Tax Credit/Refunds, along with the complete documentary requirements covered by a Transmittal Letter dated December 26, 2019, with stamped "RECEIVED" by the BIRon December 27, 2019.

Ms. Gaanan further declared that petitioner is a VAT- registered taxpayer, as shown in its BIR Certificate of Registration (BIR Form No. 2303), and paid its Annual Registration Fee forTY 2018.

In 2018, petitioner had an aggregate sale of f'162,794,001.62, consisting of sales subject to 12% VAT m the amount of f'19,316,404.95 and zero-rated sales in the amount of f'143,477,596.67. The output tax due from the f'19,316,404.95 amounted to f'2,317,968.59. For the zero-rated sales of f'143,477,596.67 made to

Taganito HPAL Nickel Corporation and Coral Bay Nickel

Corporation, both registered with the PEZA, and Oceanagold (Philippines), Inc., an enterprise registered with the Bureau of Investments (BOI).

In the course of generating the total sales of f'162,794,001.62 for 2018, petitioner made purchases, both local and imported, amounting to f'66,132,806.23, of which the amount of f'36,954,422.56, were attributable to its zero- rated sales with corresponding input tax of f'4,434,530.00.

Rema Tip Top Philippines, Inc. vs. Commissioner of Internal Revenue

According to Ms. Gaanan, none of the P4,434,530.00 were applied against output tax due forTY 2018 and the succeeding periods, as evidenced by its Amended Quarterly VAT Returns for TYs 2018 and 2019.

Ms. Gaanan further declared that, for some time, they did not hear from the BIR about their administrative claim for refund. Thus, they made a follow-up, to which they were informed that a team had yet to be assigned to petitioner's administrative claim.

A new team was eventually assigned to process petitioner's application for refund. Said team requested again the documents petitioner initially filed on December 27, 2019, to which petitioner complied as evidenced by the stamped "RECEIVED" dated "FEB 10, 2020", on the face of the Transmittal Letter dated December 26, 20 19, signed by Jakereen L. Gonzalo, the same person who received it the first time on December 27, 2019.

After that, the BIR requested additional documents, which petitioner provided. The submissions of additional documents were enclosed in the following Transmittal Letters with the signature of the BIR Examiner receiving the documents:

1. Transmittal Letter dated February 17, 2020:

a. Alphalist of Suppliers of petitioner;

b. Copy of SEC Registration and By-Laws of petitioner; and

c. VAT Return for the 4th Quarter of the taxable year 2017.

2. Transmittal Letter dated February 19, 2020:

a. Certification from the Department of Finance One-Stop Shop Inter-Agency and Duty Drawback Center (OSS).

3. Transmittal Letter dated March 6, 2020:

a. VAT Relief for Sales in 2018;

b. VAT relief for Importations in 2018; and

c. VAT Relief for Purchases in 2018.

Rema Tip Top Philippines, Inc. vs. Commissioner of Internal Revenue

Ms. Gaanan continued that after receiving the requested additional documents, the BIR no longer contacted petitioner. As such, petitioner waited for the lapse of 90 days for the BIR to process its administrative claim for refund. However, the 90-day period was initially suspended when the Enhanced Community Quarantine (ECQ) was imposed in Metro Manila on March 17, 2020, and resumed on June 1, 2020, when the Modified ECQ was lifted, and restrictions in Metro Manila were downgraded to the General Community Quarantine (GCQ). Hence, the 90-day period for the BIR to process petitioner's administrative claim for refund ended on June 10, 2020. Petitioner had thirty (30) days from the lapse of the 90 days to file its judicial claim for refund. According to Ms. Gaanan, petitioner filed its judicial claim for refund on July 10, 2020.

ICPA Charlene Mae A. Monje, by way of an Amended

Judicial

Affidavit, 16 testified that she is the

ICPA

commissioned by the Court in the instant case to perform the duties and responsibilities of an ICPA under Rule 32 of the Rules of Court in relation to Rule 13 of the Revised Rules of the Court of Tax Appeals (RRCTA).

ICPA Monje declared that she, with the assistance of her team, prepared the required ICPA Report and Supplemental Report, and pertinent annexes based on the documents presented by petitioner, pre-marked the Exhibits and scanned said Report, attachments and Exhibits, and stored such copies into portable devices in the form of DVDs. ICPA Monje further declared that based on the results of the procedures they performed, applying applicable laws, rules, and regulations, the input tax that can be refunded in the instant case amounts to P4,440,970.03. There being no more witness to be presented, and upon the instance of petitioner's counsel, petitioner was granted fifteen (15) days from February 16, 2022, or until March 3, 2022, to file its Formal Offer of Evidence (FOE). Respondent was also given fifteen (15) days from receipt of petitioner's FOE to file his comment.

Further, and considering the manifestation of respondent's counsel that respondent will no

Rema Tip Top Philippines, Inc. vs. Commissioner of Internal Revenue longer present a witness in this case, the parties were granted thirty (30) days from receipt of the Court's Resolution on petitioner's FOE to file their respective memoranda. 17 On March 3, 2022, petitioner filed its Motion to Transfer

Marking of Exhibits and Formal Offer of Documentary

Exhibits, 1B which the Court partly admitted in the Resolution19 dated April4, 2022.

On June 22, 2022, the instant case was deemed submitted for decision considering the Report20 of the Records Division that both parties failed to file their respective memorandum within the period granted by the Court.2 1 Hence, this Decision.

THE ISSUE

The parties agreed to submit the following issue22 for the resolution of the Court:

WHETHER OR NOT PETITIONER IS ENTITLED TO A

REFUND OF INPUT VAT ATTRIBUTABLE OR PROPERLY

ALLOCATED TO ZERO-RATED SALES MADE IN TAXABLE

YEAR 2018 IN THE AGGREGATE AMOUNT OF FOUR

MILLION FOUR HUNDRED THIRTY-FOUR THOUSAND FIVE

HUNDRED THIRTY PESOS (1"4,434,530.00) PURSUANT TO

SECTION 112 OF NATIONAL INTERNAL REVENUE CODE

OF 1997.

Petitioner's Arguments:

Petitioner submits that to be entitled to a tax credit certificate or refund of excess input VAT attributable to zero- rated or effectively zero-rated sales, the following requisites must be present:

Rema Tip Top Philippines, Inc. vs. Commissioner of Internal Revenue

1. The taxpayer is VAT-registered;

2. The taxpayer is engaged in zero-rated or effectively zero-rated sales;

3. The input taxes are due or paid;

4. The input taxes are not transitional input taxes;

5. The input taxes have not been applied against output taxes during and in the succeeding quarters;

6. The input taxes claimed are attributable to zero-rated or effectively zero-rated sales;

7. For zero-rated sales under Sections 106 (A) (2) (1) and (2); 106 (B); and 108 (B) (1) and (2), the acceptable foreign currency exchange proceeds have been duly accounted for in accordance with BSP rules and regulations;

8. Where there are both zero-rated or effectively zero-rated sales and taxable or exempt sales, and the input taxes cannot be directly and entirely attributable to any of these sales, the input taxes shall be proportionately allocated on the basis of sales volume; and

9. The claim is filed within two years after the close of the taxable quarter when such sales were made.

According to petitioner, it has complied with the foregoing requirements. Hence, it is proper that the input tax in the aggregate amount of P4,434,530.00 be refunded by way of refund or issuance of a tax credit certificate.

Respondent's Arguments:

For his part, respondent submits that the instant Petition for Review should be dismissed, considering that the Court has no jurisdiction over petitioner's claim for refund or issuance of tax credit certificate. According to respondent, petitioner's administrative claim for refund was filed on December 27, 2019. However, additional documentary requirements were submitted on February 10, 17, 19, and March 6, 2020. Hence, the filing of the Petition for Review on July 10, 2020 was premature, considering that the counting of the 90 days to act should have commenced on March 6, 2020, and not December 27, 2019.

Rema Tip Top Philippines, Inc. vs. Commissioner of Internal Revenue

THE COURT'S RULING

Pertinent to the resolution of the instant case is Section 112(A) and (C) of the National Internal Revenue Code (NIRC) of 1997, as amended by Republic Act (RA) No. 10963,23 otherwise known as the Tax Reform for Acceleration and Inclusion Act (TRAIN), which reads as follows:

SEC. 112. Refunds or Tax Credits of Input Tax. - (A) Zero-Rated or Effectively Zero-Rated Sales. -

Any

VAT-registered person, whose sales are zero-rated or effectively zero-rated may, within two (2) years after the close of the taxable quarter when the sales were made, apply for the issuance of a tax credit certificate or refund of creditable input tax due or paid attributable to such sales, except transitional input tax, to the extent that such input tax has not been applied against output tax: Provided, however, That in the case of zero-rated sales under Section 106(A)(2)(a)(1),

(2) and (b) and Section 108(8)(1) and (2), the acceptable foreign currency exchange proceeds thereof had been duly accounted for in accordance with the rules and regulations of the Bangko Sentral ng Pilipinas (BSP): Provided, further, That where the taxpayer is engaged in zero-rated or effectively zero-rated sale and also in taxable or exempt sale of goods of properties or services, and the amount of creditable input tax due or paid cannot be directly and entirely attributed to any one of the transactions, it shall be allocated proportionately on the basis of the volume of sales: Provided, finally, That for a person making sales that are zero-rated under Section 108(8)(6), the input taxes shall be allocated ratably between his zero-rated and non-zero- rated sales.

XXX

XXX

XXX

(C) Period within which Refund of Input Taxes shall be Made. - In proper cases, the Commissioner shall grant a refund for creditable input taxes within ninety (90) days from the date of submission of the official receipts or invoices and other documents in support of the application filed in accordance with Subsections (A) and (B) hereof: Provided, That should the Commissioner find that the grant of refund is not proper, the Commissioner must state in writing the legal and factual basis for the denial.~ 23 AN ACT AMENDING SECTIONS 5, 6. 24, 25, 27, 31. 32, 33, 34. 51, 52, 56, 57, 58, 74, 79, 84, 86. 90, 91. 97, 99. 100, 101, 106, 107, 108, 109, 110, 112, 114, 116, 127, 128, 129, 145, 148, 149, 151, 155, 171, 174, 175, 177, 178, 179. 180. 181. 182. 183. 186, 188. 189. 190. 191. 192. 193. 194. 195. 196, 197,232.236.237,249,254,264,269, AND 288; CREATING NEW SECTIONS 51-A, 148-A, !50-A, 150-B, 237-A, 264-A, 264-B, AND 265-A; AND REPEALING SECTIONS 35, 62, AND 89; ALL UNDER REPUBLIC ACT NO. 8424, OTHERWISE KNOWN AS THE NATIONAL INTERNAL REVENUE CODE OF 1997, AS AMENDED, AND FOR OTHER PURPOSES.

Rema Tip Top Philippines, Inc. vs. Commissioner of Internal Revenue

In case of full or partial denial of the claim for tax refund, the taxpayer affected may, within thirty (30) days from the receipt of the decision denying the claim, appeal the decision with the Court of Tax Appeals: Provided, however, That failure on the part of any official, agent, or employee of the BIR to act on the application within the ninety (90)-day period shall be punishable under Section 269 of this Code." Based on the foregoing provision, jurisprudence 24 has laid down certain requisites the taxpayer-applicant must comply with to successfully obtain a credit/refund of input VAT. Said requisites may be classified into specific categories as follows:

As to the timeliness of the filing of the administrative and judicial claims:

1. The claim is filed with the BIR within two (2) years after the close of the taxable quarter when the sales were made;25

2. In case of full or partial denial of the refund claim, or the failure on the part of Respondent to act on the said claim within a period of ninety (90) days, the judicial claim must be filed with this Court, within thirty (30) days from receipt of the decision or after the expiration of the said 90-day period;

Concerning the taxpayer's registration with the BIR:

3. The taxpayer is a VAT-registered person;26 In relation to the taxpayer's output VAT:

4. The taxpayer is engaged in zero-rated or effectively zero- rated sales;27

5. For zero-rated sales under Sections 106(A)(2)(a)(l) and (3); and 108(8)(1) and (2), the acceptable foreign currency exchange proceeds have been duly accounted for in accordance with BSP rules and regulations;2" 24 Commissioner of Internal Revenue vs. Toledo Power Co., G.R. Nos. 195175 & 199645, 10 August 2015, 766 SCRA 20·33.

25 Intel Technology Philippines, Inc. vs. Commissioner of Internal Revenue, G.R. No. 166732, April 27, 2007; San Roque Power Corporation vs. Commissioner of Internal Revenue, G.R. No. 180345, November 25, 2009; and AT&T Communications Services Philippines, Inc. vs. Commissioner of Internal Revenue, G.R. No. 182364, August 3, 2010. 26 Intel Technology Philippines, Inc. vs. Commissioner of Internal Revenue. supra: San Roque Power Corporation vs. Commissioner of Internal Revenue. supra; and AT&T Communications Services Philippines, Inc., supra. 27 !d.

28 Par. 2, Sec. 4.112·l.(a) of RR No. 16·2005, as further amended by RR No. 13·20 18.

Rema Tip Top Philippines, Inc. vs. Commissioner of Internal Revenue

As regards the taxpayer's input VAT being refunded:

6. The input taxes are not transitional;29

7. The input taxes are due or paid;Jo

8. The input taxes claimed are attributable to zero-rated or effectively zero-rated sales.

However, where there are both zero-rated or effectively zero-rated sales and taxable or exempt sales, and the input taxes cannot be directly and entirely attributable to any of these sales, the input taxes shall be proportionately allocated on the basis of sales volume;JI and

9. The input taxes have not been applied against output taxes during and in the succeeding quarters.32 Relative thereto, it must be emphasized that in cases filed before this Court, which are litigated de novo, party-litigants must prove every minute aspect of their case. 33 Thus, it behooves petitioner to comply with the foregoing requisites. As a corollary, the absence of any of the said requisites is a valid ground to deny the refund claim.

The Court has jurisdiction over the instant Petition.

First and second requisites:

Petitioner's

administrative and judicial claims were timely filed.

The first requisite pertains to filing a claim for tax refund or tax credit of input VAT before the BIR within two (2) years from the close of the taxable quarter when the zero-rated or effectively zem-mted sales we" madv 29 Intel Technology Philippines, Inc. vs. Commissioner of Internal Revenue, supra; San Roque Power Corporation vs. Commissioner of Internal Revenue, supra; and AT&T Communications Services Philippines, Inc., supra. 30 /d.

31 Intel Technology Philippines, Inc. vs. Commissioner of Internal Revenue, supra; and San Roque Power Corporation vs. Commissioner of Internal Revenue, supra. 32 Intel Technology Philippines. Inc. vs. Commissioner of Internal Revenue, supra; San Roque Power Corporation vs. Commissioner of Internal Revenue, supra; and AT&T Communications Services Philippines, Inc., supra. 33 Edison (Bataan) Cogeneration Corporation vs. Commissioner of Internal Revenue, et seq., G.R. Nos. 201665 and 201668, August 30, 2017; Commissioner of Internal Revenue vs. Philippine National Bank, G.R. No. 180290, September 29. 2014: rommissioner of Internal Revenue VS. United Salva}:!e and Towage (Phils.). Inc .. G.R. No. 197515, July 2, 2014; Dizon vs. Court of Tax Appeals, et ol., G.R. No. 140944, April30, 2008; Atlas Consolidated Mining and Development Corporation vs. Commissioner of Internal Revenue, G.R. No. 145526, March 16, 2007; and Commissioner of Internal Revenue vs. Manila Mining Corporation, G.R. No. 153204, August 3 I, 2005.

Rema Tip Top Philippines, Inc. vs. Commissioner of Internal Revenue

The present claim covers the first, second, third, and fourth quarters of TY 2018, which closed on March 31, 2018, June 30, 2018, September 30, 2018 and December 31, 2018 respectively. Counting two (2) years from the said dates, petitioner had until March 31, 2020, June 30, 2020, September 30, 2020, and December 31, 2020, within which to fl.le its administrative claim for tax credit/refund for the respective quarters. By fl.ling its administrative claim with the BIR on December 27, 2019, petitioner has seasonably complied within the period provided by law. The second requisite is that the judicial claim must have been fl.led within thirty (30) days from receipt of respondent's decision or after the expiration of the 90 days under the afore- quoted Section 112(C) of the NIRC of 1997, as amended. In this case, petitioner fl.led its administrative claim on December 27, 2019. It also submitted additional documents upon respondent's request -the last being made on March 6, 2020. According to petitioner, the 90-day period began to run on December 27, 2019. However, on March 17, 2020, the BIR issued RMC No. 27-2020, which suspended the running of the 90 days, given the government's order placing Metro Manila under ECQ. The suspension of the 90-day period was lifted only on June 1, 2020, when the restriction in Metro Manila was downgraded to GCQ.

For petitioner, the 90 days for the BIR to act on its administrative claim for refund ended on June 10, 2020, considering that only nine (9) days had left when the suspension was imposed on March 17, 2020. Hence, for petitioner, it timely filed its judicial claim on July 10, 2020, within 30 days from the lapse of the 90 days for the BIR to act on its claim.

Respondent, however, disagrees.

According

to respondent, the 90-day period to process petitioner's claim for refund commenced on March 6, 2020, upon submitting petitioner's complete documents in support of its administrative claim. Counting 90 days from March 6, 2020, excluding the period from March 17, 2020 to June 1, 2020, the 90 days to act on petitioner's administrative claim for refund ended on August 19, 2020. Hence, for respondent, the filing of petitioner's judicial claim via the instant Petition for Review on July 10, 2020, was premature.\!'

Rema Tip Top Philippines, Inc. vs. Commissioner of Internal Revenue

The Court finds for petitioner.

One of the amendments introduced under the TRAIN law is found under Section 112 of the NIRC of 1997, as amended. More specifically, the period within which a claim for a refund or tax credit was shortened from 120 days to 90 days, commencing from the date of submission of the official receipts or invoices and other documents in support of the application for refund. It is also worth noting that the word "complete" from the phrase "from the date of submission of complete documents in support of the application" under the previous Section 112(D)34 of the NIRC of 1997, as amended, was deleted under the TRAIN law.

Significantly, and to keep up with the shortened time frame to process claims for VAT refund under the TRAIN law, the BIR issued Revenue Memorandum Circular (RMC) No. 04 7-19,35 providing, among others, that: I.

GENERAL POLICIES

XXX

XXX

XXX

5. The taxpayer-claimant shall ensure the completeness and authenticity of the documentary requirements upon filing of the application for VAT refund. Failure on the part of the taxpayer-claimant to submit the complete documents in support of the claim shall result in non- acceptance of the applications. Due to the very limited time for processing the VAT refunds, no additional document/s shall be subsequently requested/required from the taxpayer-claimant. Any unsupported claim shall be outrightly disallowed, resulting in full/ partial denial of the claim.

XXX

XXX

XXX

II.

DOCUMENTS TO BE SUBMITTED BY THE TAXPAYER-

CLAIMANTS UPON FILING OF THE APPLICATIONS FOR

VAT REFUND

XXX

XXX

XXX

"SECTION I I2. Refunds or Tax Credits of input Tax.~

XXX

XXX

XXX

(D)

Period within which Refund or Tax Credit of Input Taxes shall be Made. ~ In proper cases, the Commissioner shall grant a refund or issue the tax credit certificate for creditable input taxes within one hundred twenty ( 120) days from the date of submission of complete documents in support of the application filed in accordance with Subsections (A) and (B) hereof. 35 SUBJECT: Revised Guidelines and Mandatory Requirements for the Processing and Grant of Value-Added Tax (VAT) Refund Claims within the 90-day Period Pursuant to Section 112 of the Tax Code of 1997, as Amended.

Rema Tip Top Philippines, Inc. vs. Commissioner of Internal Revenue

6. The taxpayer-claimant shall attach a notarized sworn certification (Annex "B") attesting to the completeness of the documents submitted. Accordingly, the claim/s shall be processed based on the documents submitted. The books of accounts and accounting records shall be presented by the taxpayer-claimant upon written request of the assigned ROs.

Failure to present the books of accounts and accounting records relevant to the claim/s shall be a ground for denial of the claims. xx.x {Emphases supplied) Clear from the foregoing that an application for refund of input VAT shall only be accepted if the documents in support thereof are complete. Once received, it presupposes that the documents submitted in support thereof are already complete. The taxpayer-claimant must submit a notarized sworn certification stating that the documents in support of its application for refund are already complete. This means that upon receipt of the application for refund, the 90-day period begins to run.

Besides, jurisprudence 36 dictates that the taxpayer- claimant determines the completeness of the documents submitted for purposes of counting the 90-day provided under Section 112(C) of the NIRC of 1997, as amended. In the instant case, petitioner filed its administrative claim for refund on December 27, 2019, which the BIR received/ accepted on an even date. Hence, the 90-day period for the BIR to process petitioner's claim for refund commenced on December 27, 2019. Counting 90 days from December 27, 2019, respondent had until March 26, 2020 to act on petitioner's application for tax credit/ refund of input VAT. However, the 90-day period was suspended on March 17, 2020, when the ECQ was imposed in Metro Manila, and was lifted on June 1, 2020, when restrictions in Metro Manila were downgraded to GCQ.

As petitioner correctly pointed out, the 90-day period for the BIR to process its claim for refund ended on June 10, 2020. 37 As no decision on the administrative claim was received after the lapse of the 90 days, petitioner had until July 10, 2020, to appeal respondent's inaction before this Court.

36 Pilipinas Total Ga. 1nc. vs. rommissioner oflnternal Revenue. G.R. No. 207112, December 8. 2015. 37 From December 27, 2019 to March 17, 2020 (the period was suspended due to the ECQ). 81 days had lapsed. The ECQ was lifted on June 1, 2020 plus 9 days (remaining days to complete the 90-day period), the 901h day fell on June 10, 2020.

Rema Tip Top Philippines, Inc. vs. Commissioner of Internal Revenue

The present Petition for Review was timely filed on July 10, 2020.

Having settled that the Petition was timely filed, We likewise rule that the Court has the requisite jurisdiction to take cognizance of this Petition under Section 3(a)(1), Rule 438 of the RRCTA.

Third requisite: Petitioner is a VAT-registered person.

As for its compliance with the third requisite, petitioner presented its BIR Certificate of Registration No.

OCN

3RC0000758904 with TIN 008-042-655-000, indicating that it is liable to VAT, among other taxes.39 Fourth and fifth requisites:

Petitioner

had zero-rated sales/receipts during the TY 2018 but only in the amount ofP58,601,925.94.

The fourth and fifth requisites require that the taxpayer is engaged in zero-rated or effectively zero-rated sales and for zero-rated sales under Sections 106(A)(2)(a)(1) and (3), and 1 08(B)( 1) and (2) of the NIRC of 1997, as amended, the acceptable foreign currency exchange proceeds have been duly accounted for in accordance with the Bangko Sentral ng Pilipinas ("BSP") rules and regulations. In its amended Quarterly VAT Returns for the TY 2018, petitioner reported total sales/receipts in the amount of P162,794,001.62, consisting of VATable sales/receipts of P19,316,404.95 and zero-rated sales/receipts of P143,477,596.67, as shown below: i 38 Section 3. Cases Within the Jurisdiction of the Court in Divfsions. --The Court in Divisions shall exercise:

(a) Exclusive original or appellate jurisdiction to review by appeal the following: ( 1) Decisions of the Commi . .;;;sioner of Internal Revenue in cases involving disputed assessments. refunds of internal revenue taxes, fees or other charges, penalties in relation thereto, or other matters arising under the National Internal Revenue Code or other laws administered by the Bureau of Internal Revenue.

Rema Tip Top Philippines, Inc. vs. Commissioner of Internal Revenue

Sales/

1•• 2•• 3•• 4th

Receipts

Quarter<>

Quarter41

Quarter42

Quarter43

VA Table

I' 4,849, 145.77 p 4, 797,071.66 p 5,362 847.30 1'4 307,340.22

Zero-Rated

30,838 615.19 16,216,363.91 36,160,664.67 60 261,952.90

Total

1'35,687,760.96 1'21,013,435.57 1'41,523,511.97 1'64,569,293.12

Total

p 19,316,404.95 143,477,596.67 1'162, 794,001.62 In her amended Report, the ICPA Monje accounted petitioner's total zero-rated sales/receipts in the amount of P143,399,993.02, extracted and summarized as follows: 44

Zero-rated Sales

Amount

Sales to SOl-registered entity

FCF Minerals Corp

p 352,697.60 Sales to PEZA-registered entities

Coral Bay Nickel Corporation

I' 5,412,963.16

Taganito HPAL Nickel Corporation

59,186,887.69 64_,_599 ,850.85 Sales of goods to non-resident cort)orations Mee Wha Precision Ind. Co., Ltd

I'

623,981.98

Tip Top Japan Inc

99,413.25 723 395.23 Sales o_f services to non-resident cort)orations Rema Tip Top South Africa Pty Ltd.

1'61 436,414.88

Rema Tip Top Surface Protection Australia

16,287,634.46 77,724,049.34

Total Zero-rated Sales

1'143,399,993.02 Notably, the amount of P77,603.6545 pertaining to the zero-rated sales/receipts declared per amended Quarterly VAT Returns but was not adequately supported by documentary evidence is denied VAT zero-rating. Sales of goods and services to entities registered with PEZA and BOI whose products are 1 00% exported.

Petitioner claims that its sales of goods and services to entities registered with PEZA and BOI during TY 2018 are subject to zero percent (0%) VAT under Sections 106(A)(2)(a)(5) and (b), and 108(B)(3) of the NIRC of 1997, as amended, m "Exhibit "P-10'", Docket, p. 2451.

41 Exhibit "P-11 ", Docket, p. 2453. 42 Exhibit "'P-12", Docket, p. 2455. 43 Exhibit "P-13'", Docket, p. 2457. 44 Table V of No.3. Exhibit "P-120", Docket, p. 2307. 45 Total zero-rated sales/receipts As declared per amended Quarterly VAT Returns As accounted by ICPA

Discrepancy

tl

Amount

1'143,477,596.67 143,399,993.02 p 77,603.65

Rema Tip Top Philippines, Inc. vs. Commissioner of Internal Revenue relation to Section 4.106-5 of Revenue Regulations (RR) No. 13-2018.

Section 106(A)(2)(a)(5) and (b) of the NIRC of 1997, as amended, states:

"SEC. 106. Value-Added Tax on Sale of Goods or Properties. - (A) Rate and Base of Tax. - xxx

(2) The following sales by VAT-registered persons shall be subject to zero percent (0%) rate:

(a) Export Sales. - The term 'export sales' means:

XXX

XXX

XXX

(5) Those considered export sales under Executive

Order

No.

226, otherwise known as the Omnibus Investment Code of 1987, and other special laws; and

XXX

XXX

XXX

(b) Sales to persons or entities whose exemption under special laws or international agreements to which the Philippines is a signatory effectively subjects such sales to zero rate." (Boldfacing supplied) Section 1 08(B)(3) of the NIRC of 1997, as amended, provides as follows:

"SEC. 108. Value-added Tax on Sale of Services and Use or Lease of Properties. - (A) Rate and Base of Tax.- xxx

XXX

XXX

XXX

(B) Transactions Subject to Zero Percent (0%) Rate. - The following services performed in the Philippines by VAT- registered persons shall be subject to zero percent (0%) rate:

XXX

XXX

XXX

(3) Services rendered to persons or entities whose exemption under special laws or international agreements to which the Philippines is a signatory effectively subjects the supply of such services to zero percent (0%) rate;" (Boldfacing supplied) ~ Rema Tip Top Philippines, Inc. vs. Commissioner of Internal Revenue Relative thereto, Sections 4.106-5(a)(4), (b) and 4.108- 5(b)(3) of RR No. 13-2018, also provide: "SEC.

4.106-5. Zero-Rated Sales of Goods or Properties. - x x x The following sales by VAT-registered persons shall be subject to zero percent (0%) rate:

(a) Export sales. - 'Export Sales' shall mean:

XXX

XXX

XXX

(4)

Transactions

considered export sales under Executive Order No. 226, otherwise known as the Omnibus Investments Code of 1987, and other special laws. 'Considered export sales under Executive Order No. 226' shall mean the Philippine port F.O.B. value determined from invoices, bills of lading, inward letters of credit, landing certificates, and other commercial documents, of export products exported directly by a registered export producer, or the net selling price of export products sold by a registered export producer to another export producer, or to an export trader that subsequently exports the same: Provided, That sales of export products to another producer or to an export trader shall only be deemed export sales when actually exported by the latter, as evidenced by landing certificates or similar commercial documents: Provided, further, That without actual exportation the following shall be considered constructively exported for purposes of these provisions:

(1) sales to bonded manufacturing warehouses of export-oriented manufacturers; (2) sales to export processing zones; (3) sales to registered export traders operating bonded trading warehouses supplying raw materials in the manufacture of export products under guidelines to be set by the Board in consultation with the Bureau of Internal Revenue (BIR) and the Bureau of Customs (BOC); (4) sales to diplomatic missions and other agencies and/ or instrumentalities granted tax immunities, of locally manufactured, assembled or repacked products whether paid for in foreign currency or not.

For purposes of zero-rating, the export sales of registered export traders shall include commission income. The exportation of goods on consignment shall not be deemed export sales until the export products consigned are in fact sold by the consignee; and Provided, finally, that sales of goods, properties or services made by a VAT- registered supplier to a

HOI-registered

manufacturer/producer whose products are 100% "'portod ~ conoidered oxport oales. A cortillcatlon to~ Rema Tip Top Philippines, Inc. vs. Commissioner of Internal Revenue this effect must be issued by the Board of Investment

(BOI)

which shall be good for one year unless subsequently re-issued by the BOI.

XXX

XXX

XXX

(b) Sales to persons or entities whose exemption under special laws or international agreements to which the Philippines is a signatory effectively subjects such sales to zero rate." (Boldfacing supplied) "SEC. 4.108-5. Zero-Rated Sale of Services. -

XXX

XXX

XXX

(b) Transactions Subject to Zero Percent (0%) VAT Rate. - The following services performed in the Philippines by a VAT-registered person shall be subject to zero percent (0%) VAT rate:

XXX

XXX

XXX

(3) Services rendered to persons or entities whose exemption under special laws or international agreements to which the Philippines is a signatory effectively subjects the supply of such services to zero percent (0%) rate;" (Boldfacing supplied) RA No. 7916, as amended by RA No. 8748, otherwise known as "The Special Economic Zone Act of 1995, "provides for the creation of the PEZA and the treatment of special economic zones (Ecozones) as separate customs territory, Sections 8 and 24 thereof respectively provide as follows: "REPUBLIC ACT NO. 7916 (as amended by Republic Act No. 8748)

AN ACT PROVIDING FOR THE LEGAL FRAMEWORK

AND MECHANISMS FOR THE CREATION, OPERATION, ADMINISTRATION,

AND

COORDINATION

OF

SPECIAL

ECONOMIC ZONES IN THE PHILIPPINES, CREATING FOR

THIS

PURPOSE,

THE

PHILIPPINE

ECONOMIC

ZONE

AUTHORITY (PEZA) AND FOR OTHER PURPOSES.

XXX

XXX

XXX

SECTION 8. ECOZONE to be Operated and Managed as Separate Customs Territory. - The ECOZONE shall be managed and operated by the PEZA as separate customs territory.

Rema Tip Top Philippines, Inc. vs. Commissioner of Internal Revenue

The PEZA is hereby vested with the authority to issue certificates of origin for products manufactured or processed in each ECOZONE in accordance with the prevailing rules of origin, and the pertinent regulations of the

Department of Trade and Industry and/ or the

Department of Finance.

XXX

XXX

XXX

SECTION 24. Exemption from National and Local Taxes. -Except for real property taxes on land owned by developers, no taxes, local and national, shall be imposed on business establishments operating within the ECOZONE. xxx" (Boldfacing supplied) Since the Ecozone is viewed as a foreign territory by legal fiction, sales of goods and services made by a VAT-registered person in the Philippine customs territory to an entity registered and operating within an Ecozone are considered export sales to a foreign country subject to zero percent (0%) VAT. This was elucidated by the Supreme Court in the case of Commissioner of Internal Revenue vs. Toshiba Information Equipment (Phils.}, Inc., 46 to wit: "This Court agrees, however, that PEZA-registered enterprises, which would necessarily be located within ECOZONES, are VAT-exempt entities, not because of Section 24 of Rep. Act No. 7916, as amended, which imposes the five percent (5%) preferential tax rate on gross income of PEZA-registered enterprises, in lieu of all taxes; but, rather, because of Section 8 of the same statute which establishes the fiction that ECOZONES are foreign territory.

xxx An ECOZONE or a Special Economic Zone has been described as - xxx [S]elected areas with highly developed or which have the potential to be developed into agro-industrial, industrial, tourist, recreational, commercial, banking, investment and financial centers whose metes and bounds are fixed or delimited by Presidential Proclamations. An ECOZONE may contain any or all of the following: industrial estates (IEs), export processing zones (EPZs), free trade zones and tourist/recreational centers.

Rema Tip Top Philippines, Inc. vs. Commissioner of Internal Revenue

The national territory of the Philippines outside of the proclaimed borders of the ECOZONE shall be referred to as the Customs Territory.

Section 8 of Rep. Act No. 7916, as amended, mandates that the PEZA shall manage and operate the ECOZONES as a separate customs territory; thus, creating the fiction that the ECOZONE is a foreign territory. As a result, sales made by a supplier in the Customs Territory to a purchaser in the ECOZONE shall be treated as an exportation from the Customs Territory. Conversely, sales made by a supplier from the ECOZONE to a purchaser in the Customs Territory shall be considered as an importation into the Customs Territory.

Given the preceding discussion, what would be the VAT implication of sales made by a supplier from the Customs Territory to an ECOZONE enterprise? The Philippine VAT system adheres to the Cross Border Doctrine, according to which, no VAT shall be imposed to form part of the cost of goods destined for consumption outside of the territorial border of the taxing authority. Hence, actual export of goods and services from the Philippines to a foreign country must be free of VAT; while those destined for use or consumption within the Philippines shall be imposed with ten percent (10%) VAT. 47 (Boldfacing supplied) Meanwhile, pursuant to Revenue Memorandum Order (RMO) No. 9-2000, 48 sales of goods, properties, or services made by a VAT-registered supplier to a HOI-registered entity whose products are 100% exported shall be accorded automatic VAT zero-rating, subject to the following reportorial and documentary requirements, prescribed under Section 3 thereof, viz:

"SECTION 3.

Sales of goods, properties or services made by a VAT registered supplier to a SOl-registered exporter shall be accorded automatic zero-rating, i.e., without necessity of applying for and securing approval of the application for zero-rating as provided in Revenue Regulations No. 7-95, subject to the following conditions: (1) The supplier must be VAT-registered; (2) The SOl-registered buyer must likewise be VAT- registered;

47 Now at 12% VAT rate.

48 SUBJECT: Tax Treatment of Sales of Goods, Properties and Services Made by VAT -registered Suppliers to SOl- registered Manufacturers-Exporters With 100% Export Sales.

Rema Tip Top Philippines, Inc. vs. Commissioner of Internal Revenue

(3) The buyer must be a

BOI-registered

manufacturer/producer whose products are 100% exported. For this purpose, a Certification to this effect must be issued by the Board of Investments (BOI) and which certification shall be good for one year unless subsequently re-issued by the BOI;

(4) The DOl-registered buyer shall furnish each of its suppliers with a copy of the aforementioned DOl Certification which shall serve as authority for the supplier to avail of the benefits of zero-rating for its sales to said DOl-registered buyers; and (5) The VAT-registered supplier shall issue for each sale to BOI-registered manufacturer/exporters a duly registered VAT invoice with the words 'zero-rated' stamped thereon in compliance with Sec. 4.108-1(5) of Revenue Regulations No. 7-95. The supplier must likewise indicate in the VAT-invoice the name and BOI-registry number of the buyer." (Emphasis supplied) Based on the foregoing, sales of goods and services by a VAT-registered taxpayer, such as petitioner, to entities located in the ECOZONEs, as well as to BOI-registered entities whose products are 100% exported, are considered "export sales" subject to VAT zero-rating pursuant to Sections 106(A)(2)(a)(5) and (b); and 108(B)(3) of the NIRC of 1997, as amended, and as implemented by Sections 4.106-5(a)(4), (b) and 4.108-5(b)(3) ofRR No. 13-2018.

A. Sales to SOl-registered entity

Petitioner

avers that its sales to

FCF

Minerals

Corporation, an enterprise registered with the BOI and whose products are 100% exported, are subject to zero percent (0%) VAT, pursuant to Section 106(A)(2)(a)(5) and (b) of the NIRC of 1997, as amended, in relation with Section 4.106-5 of RR No. 13-2018 and Section 3 of RMO No. 9-2000. As extracted from petitioner's Schedule of Zero-Rated Sale ofGoods, 49 the zero-rated sales in the amount of'P352,697.60, as detailed below, pertains to its sales of goods to FCF M;nemls Co,-poration' wJ

Rema Tip Top Philippines, Inc. vs. Commissioner of Internal Revenue

SINo.

Date

Amount

Exhibit

1815

15-Jan-18

I' 14,960.00 "P-223"; "P-595" 1815

15-Jan-18

4,360.00

"P-223"· "P-595"

1815

15-Jan-18

25,836.00 "P-223"; "P-595" 1815

15-Jan-18

18 715.20 "P-223"; "P-595" 1969

23-May-18

36,492.00 "P-224"; "P-596" 1969

23-May-18

58,564.00 "P-224"; "P-596" 2016

25-Jun-18

14,960.00

"P-225"

2016

25-Jun-18

4,360.00

"P-225"

2056

23-Jul-18

17,952.00 "P-226"; "P-598" 2056

23-Jul-18

5,232.00 "P-226"; "P-598" 2085

10-Aug-18

89,760.00

"P-227"

2085

10-Aug-18

26 160.00

"P-227"

2171 3-0ct-18 22 118.40

"P-228"

2171 3-0ct-18 5 232.00

"P-228"

2171 3-0ct-18 7,996.00

"P-228"

Total Sales to BOI-registered entity 1'352,697 .60 A perusal of the BOI Certificate shows that the exported sales of FCF Minerals Corporation pertain to its sales for the year 2017, before the period of claim, despite its validity for the year 20 18. so Hence, the whole amount ofP352,697.60 pertaining to its sales without BOI Certification to the effect that FCF Minerals Corporation is a BOI-registered entity whose products are 100% exported for the TY 2018, shall be denied VAT zero- rating.

B. Sales to PEZA-registered entities To prove that its clients are duly registered with the PEZA, petitioner submitted various Certifications issued by the said agency. Listed below are the clients of petitioner for the TY 2018 with the corresponding proof of VAT zero rating:

Proof of VAT

Certification

Name of CUent

zero-rating

Exhibit

Period

Coral Bay

Certificate No.

for the year

Nickel Corporation

2018-0784

"P-1009"

2018

Taganito HPAL

Certificate No.

for the year Nickel ColJl.oration 2018-0206

"P-lOJI"

2018 Accordingly, petitioner's sales to Coral Bay Nickel

Corporation (CBNC) and Taganito HPAL Nickel Corporation

(THPAL) for the TY 2018 qualify for VAT zero-rating under Sections 106(A)(2)(a)(5), (b), and 108(B)(3) of the NIRC of 1997, 50 Exhibits "P-1010'" to "P-1010-1 ",Exhibit "P- 129" (USB flash drive). i

Rema Tip Top Philippines, Inc. vs. Commissioner of Internal Revenue as amended, and as implemented by Sections 4.106-5(a)(4), (b) and 4.108-5(b)(3) of RR No. 13-2018, provided that the same are properly supported by VAT zero-rated sales invoices (Sis) [for sales of goods] and official receipts (ORs) [for sales of services] in accordance with Section 113(A) and (B) of the NIRC of 1997, as amended, which provides: "SEC. 113. Invoicing and Accounting Requirements for VAT-registered Persons.- (A) Invoicing Requirements. -A VAT-registered person shall issue:

(1) A VAT invoice for every sale, barter or exchange of goods or properties; and

(2) A VAT official receipt for every lease of goods or properties, and for every sale, barter or exchange of services. (B) Information Contained in the VAT Invoice or VAT Official Receipt. - The following information shall be indicated in the VAT invoice or VAT official receipt:

(1) A statement that the seller is a VAT-registered person, followed by his Taxpayer's Identification Number (TIN);

(2) The total amount which the purchaser pays or is obligated to pay to the seller with the indication that such amount includes the value-added tax: Provided, That:

(a) The amount of the tax shall be shown as a separate item in the invoice or receipt;

(b) If the sale is exempt from value-added tax, the term 'VAT-exempt sale' shall be written or printed prominently on the invoice or receipt;

(c) If the sale is subject to zero percent (0%) value- added tax, the term 'zero-rated sale' shall be written or printed prominently on the invoice or receipt;

(d) If the sale involves goods, properties or services some of which are subject to and some of which are VAT zero-rated or VAT-exempt, the invoice or receipt shall clearly indicate the break-down of the sale price between its taxable, exempt and zero-rated components, and the calculation of the value-added tax on each portion of the sale shall be shown on the invoice or receipt: Provided, That the seller may issue separate invoices or receipts for the taxable, exempt, and zero-rated components of the sale.

Rema Tip Top Philippines, Inc. vs. Commissioner of Internal Revenue

(3) The date of transaction, quantity, unit cost and description of the goods or properties or nature of the service; and

(4) In the case of sales in the amount of One thousand pesos (P1,000) or more where the sale or transfer is made to a VAT-registered person, the name, business style, if any, address and Taxpayer Identification Number (TIN) of the purchaser, customer or client." (Boldfacing supplied) The foregoing provisions are further implemented by Section 4.113-l(A) and (B) of RR No. 16-2005, as amended, which are all quoted hereunder:

"SEC. 4.113-1.

Invoicing Requirements. - (A) A VAT-registered person shall issue:-

(1) A VAT invoice for every sale, barter or exchange of goods or properties; and

(2) A VAT official receipt for every lease of goods or properties, and for every sale, barter or exchange of services. Only VAT-registered persons are required to print their TIN followed by the word "VAT" in their invoice or official receipts. Said documents shall be considered as a "VAT Invoice" or "VAT official receipt." All purchases covered by invoices/receipts other than VAT

Invoice/VAT Official

Receipt shall not give rise to any input tax. VAT invoice/official receipt shall be prepared at least in duplicate, the original to be given to the buyer and the duplicate to be retained by the seller as part of his accounting records.

(B) Information contained in VAT invoice or VAT official receipt. - The following information shall be indicated in VAT invoice or VAT official receipt:

(1) A statement that the seller ts a VAT-registered person, followed by his TIN;

(2) The total amount which the purchaser pays or is obligated to pay to the seller with the indication that such amount includes the VAT, Provided, That:

(a) The amount of tax shall be shown as a separate item in the invoice or receipt;

Rema Tip Top Philippines, Inc. vs. Commissioner of Internal Revenue

(b) If the sale is exempt from VAT, the term "VAT- exempt sale" shall be written or printed prominently on the invoice or receipt;

(c) If the sale is subject to zero percent (0%) VAT, the term "zero-rated sale" shall be written or printed prominently on the invoice or receipt;

(d) If the sale involves goods, properties or services some of which are subject to and some of which are VAT zero-rated or VAT-exempt, the invoice or receipt shall clearly indicate the break-down of the sale price between its taxable, exempt and zero-rated components, and the calculation of the VAT on each portion of the sale shall be shown on the invoice or receipt. The seller has the option to issue separate invoices or receipts for the taxable, exempt, and zero-rated components of the sale.

(3) In the case of sales in the amount of one thousand pesos (Pl,OOO.OO) or more where the sale or transfer is made to a VAT-registered person, the name, business style, if any, address and TIN of the purchaser, customer or client, shall be indicated in addition to the information required in (1) and (2) of this Section."

In addition to the above requirements, the Sis and ORs must be duly registered with the BIR as prescribed under Section 237, in relation to Section 238 of the NIRC of 1997, as amended, to wit:

"SEC. 237. Issuance of Receipts or Sales or Commercial Invoices. - All persons subject to an internal revenue tax shall, for each sale or transfer of merchandise or for services rendered valued at Twenty-five pesos (P25.00) or more, issue duly registered receipts or sale or commercial invoices, prepared at least in duplicate, showing the date of transaction, quantity, unit cost and description of merchandise or nature of service: xxx

XXX

XXX

XXX

SEC. 238. Printing of Receipts or Sales or Commercial Invoices. - All persons who are engaged in business shall secure from the Bureau of Internal Revenue an authority to print receipts or sales or commercial invoices before a printer can print the same No authority to print receipts or sales or commercial invoices shall be granted unless the receipts or invoices to be printed are serially numbered and shall show, among other things, the name, business style, Taxpayer Identification Number (TIN) and business address of the person or entity to i

Rema Tip Top Philippines, Inc. vs. Commissioner of Internal Revenue use the same, and such other information that may be required by rules and regulations to be promulgated by the Secretary of Finance, upon recommendation of the Commissioner.”

To prove compliance with the VAT invoicing requirements under the aforementioned provisions and_ regulations, petitioner submitted its Schedules of Zero-Rated Sales of Goods and Services5! and the related SIs, ORs, collection receipts and billing statements5? in support of its zero-rated sales/receipts to PEZA-registered entities of P64,599,850.85, which the ICPA duly examined.

Upon examination of the submitted SIs and ORs in support of petitioner’s sales of goods and services to PEZA- registered entities, the amount of P5,997,924.91, as detailed below, shall be denied VAT zero-rating due to the following reasons:

OR No. Date Buyer Amount

1. Sales of goods not supported by VAT SI (SIs were among those denied5# admission by the Court for failure to present the originals for comparison); supported only by collection receipts 1838 “P-232"; “P-602” 1838 “P-23”; “P-602” 1840 “P-233"; “P-602” 1840 “P.233"; “P-602” 1840 “P-233”; “P-602” 1838 “P-232”; “P-602” 1838 “P.232”; “P-602” 1838 “P_232"; “P-602”

1838 “P-232": “P-602”

1982 “P-240"; “P-605” 1982 “P-240"; “P-605” 1982 “P-240”; “P-608” 1982 “P-240"; “P-605” 1983 “P-241”; “P-605” 1983 “P_241”; “P-605” 1983 “P-241"; “P-605”

2. Sales of goods without supporting documents (SIs and collection receipts were among denied5* admission by the Court for failure to present the originals for comparison 2097 17-Aug-18 P 74,070.00 |_ “P-246”; “P-609” 2097 17-Aug-18 | THPAL 135,165.00 | “P-246”; “P-609” 5! Annexes “A” and “B”, Exhibit “P-120”, Docket, pp. 2318 to 2324.

$2 Exhibits “P-200” to “P-201”, “P-203” to “P-205”, “P-207” to “P-213”, “P-215” to “P-231", “P-234” to “P-239", “P- 242” “P-245”, “P-247” to “P-252”, “P-254” to “P-255”, “P-257" to “P-260", “P-553” to “P-557”, “P-559” to “P- 573”, “P-574”, “P-577" to “P-578", “P-580" to “P-587”, “P-595” to “P-598”, “P-601" to “P-606", “P-931" to “P- 933” and “P-939” to “P-986”, Exhibit “P-129” (USB flash drive).

Rema Tip Top Philippines, Inc. vs. Commissioner of Internal Revenue

17-Aug-18 | THPAL 56,700.00 2097 17-Aug-18 | THPAL 8,056.00 | “P-246”; “P-609” “P-246”; “P-609” “P-246”; “P-609” “P-246"; “P-609” “P-246”; “P-609” “P-246". “P-609” “P-253”; “P-612” “P-253"; “P-612” “P-253”; “P-612” “P-253"; “P-612" “P-253”; “P-612” “P-253”; “P-612” “P-253”; “P-612” “P-253”; “P-612” “P-256”; “P-613" “P.256”; “P-613” “P-256”; “P-613” “P-256”; “P-613” 2218 30-Oct-18 20,190.50 | “P-256"; “P-613” 2218 30-Oct-18 35,149.50 | “P-256”; “P-613” 2218 31-Oct-18 | THPAL 9,350.00 | “P-256”; “P-613” Pn Subtotat | 23,413,876.59

3. Sales of goods not supported by VAT SI; supported only by collection receipts JV#201801-0017 | 31-Jan-18 | THPAL P 743.66 “P.602” JV#201801-0017 | 31-Jan-18 7,784.84 “P_602” JV#201801-0017 | 31-Jan-18 69,736.83 “P.602” P 78,265.33 Total zero-rated sales to PEZA registered scores] entity not properly substantiated P5,997,924.91 Thus, out of the zero-rated sales/receipts to PEZA- registered entities in the total amount of P64,599,850.85, only the amount of P58,601,925.94,55 qualify for VAT zero-rating under Sections 106(A)(2)(a)(5), (b) and 108(B)(3) of the 1997 NIRC as amended, in relation to Sections 4.106-5(a)(4), (b) and 4.108-5(b)(3) of RR No. 13-2018.

C. Sales of goods to non-resident Corporations Petitioner states that for sales to non-resident foreign corporations (NRFC), one of the requirements to qualify as zero-rated sales is that the payments by or collections from these NRFCs should be made in foreign currency.*® Petitioner posits that its sales of goods to NRFCs are subject to zero percent (0%) VAT, pursuant to Section 106(A)(2)(a)(3) of the NIRC of 1997, as amended, which provides:

55 P64,599,850.85 less P5,997,924.91. 5® No. 4, Exhibit “P-120", Docket, p. 2307.

Rema Tip Top Philippines, Inc. vs. Commissioner of Internal Revenue

"SEC. 106. Value-Added Tax on Sale of Goods or Properties. - (A) Rate and Base of Tax. - xxx

XXX

XXX

XXX

(2) The following sales by VAT-registered persons shall be subject to zero percent (0%) rate:

(a) Export Sales. -The term 'export sales' means:

XXX

XXX

XXX

(3) Sale of raw materials or packaging materials to a nonresident buyer for delivery to a resident local export- oriented enterprise to be used in manufacturing, processing, packing or repacking in the Philippines of the said buyer's goods and paid for in acceptable foreign currency and accounted for in accordance with the rules and regulations of the Bangko Sentral ng Pilipinas (BSP);" The alleged zero-rated sales of goods to

NRFCs

amounting to P723,395.23, as extracted and summarized from petitioner's Schedule of Zero-Rated Sale of Goods, are as follows:57

Sl

Exhibit

No.

Date

Name of Buyer

Amount

No.

1802

4-Jan-18

MEE WHA PRECISION IND. CO., LTD I' 126265.41 "P-200"; "P-577'' 1802

4-Jan-18

MEE WHA PRECISION IND. CO., LTD 271 877.93 "P-200"; "P-577" 1802

4-Jan-18

MEE WHA PRECISION IND. CO., LTD 81,701.I4 "P-200"; "P-577" 1802

4-Jan-18

MEE WHA PRECISION IND. CO., LTD 23 719.69 "P-200"; "P-577" 1803

8-Jan-18

MEE WHA PRECISION IND. CO. LTD 93,323.80

"P-201"· "P-578"

1803

8-Jan-18

MEE WHA PRECISION IND. CO., LTD 27,094.01 "P-201"; "P-578" 2247

26-Nov-18

TIP TOP JAPAN INC

99,413.25

"P-202"· "P-579"58

Total Sales of Goods to Non-resident Corporation

1'723 395.23 However, other than the Sis and collection receipts issued to Mee Wha Precision Ind. Co., Ltd, SEC Certificates of Non-Registration of Corporation/Partnership, 59 Bank of the Philippine Islands settlement advice, 60 and Reconciliation of Export Sales and Foreign Currency Remittances on Zero-rated Sale of Goods for the period January to December 2018;61 no other documents were submitted to prove that its alleged zero-. _ / 57 Annex "A". Exhibit "P-120", Docket, pp. 2318 to 2321.

W

Rema Tip Top Philippines, Inc. vs. Commissioner of Internal Revenue rated sales of goods to NRFCs were sales of raw materials or packaging materials to a nonresident buyer for delivery to a resident local export-oriented enterprise to be used m manufacturing, processmg, packing or repacking in the

Philippines

of the said buyer's goods under

Section

1 06(A)(2)(a)(3) of the NIRC of 1997, as amended. Moreover, even the ICPA ascertained that the zero-rated sales of goods to non-resident corporations in the amount of P723,395.2362 are not valid as zero-rated sales. Thus, the alleged zero-rated sales of goods to NRFCs amounting to P723,395.23 shall be denied VAT zero-rating. D. Sales of services to non-resident foreign corporation Out of petitioner's zero-rated sales/receipts in the aggregate amount of P143,399,993.02 as accounted by the ICPA for the four quarters of TY 2018, P77,724,049.34 pertains to sales of services to NRFCs, as follows:63

In Foreign

Customer Name

Currency

Amount

Rema Tip Top South Africa Ptv Ltd.

$992,516.10 I' 61,436,414.88

Rema Tip Top Surface Protection Australia

260,247.00 16,287 634.46

Total

P77,724 049.34 Pertinent to the determination of whether the sales of services to a NRFC qualify for VAT zero-rating, Section 1 08(B)(2) of the NIRC of 1997, as amended, states: "SEC. 108. Value-added Tax on Sale of Services and Use or Lease of Properties.-

XXX

XXX

XXX

(B) Transactions Subject to Zero Percent (0%) Rate. - The following services performed in the Philippines by VAT- registered persons shall be subject to zero percent (0%) rate:

(1) Processing, manufacturing or repacking goods for other persons doing business outside the Philippines which goods are subsequently exported, where the services are paid for in acceptable foreign currency and accounted for in

Rema Tip Top Philippines, Inc. vs. Commissioner of Internal Revenue accordance with the rules and regulations of the Bangko Sentral ng Pilipinas (BSP);

(2) Services other than those mentioned in the preceding paragraph rendered to a person engaged in business conducted outside the Philippines or to a non- resident person not engaged in business who is outside the

Philippines

when the services are performed, the consideration for which is paid for in acceptable foreign currency and accounted for in accordance with the rules and regulations of the Bangko Sentral ng Pilipinas (BSP);" Based on the foregoing prov1s1on, certain essential elements must be present for a sale or supply of services to be subject to a VAT rate of zero percent (0%) under Section 108(B)(2) of the NIRC of 1997, as amended, to wit:

1. The recipient of the services is a foreign corporation, and the said corporation is doing business outside the Philippines or is a nonresident person not engaged in business who is outside the Philippines when the services were performed;64

2. The services fall under any of the categories under Section 108(B)(2), 65 or simply, the services rendered should be other than "processing, manufacturing or repacking goods" ;66

3. The services must be performed in the Philippines67 by a VAT- registered person; and

4. The payment for such services should be in acceptable foreign currency accounted for in accordance with BSP rules.68 Relative to the first essential element, to prove that its client is a NRFC for purposes of VAT zero-rating under Section 1 08(B)(2) of the NIRC of 1997, as amended, petitioner must establish that: (1) the client was established under the laws of a foreign country; and, (2) it is not engaged in trade or business in the Philippines. There must be sufficient proof of these requirements to establish that a client is a foreign corporation and is not doing business in the Philippines. 69 i 64 Site! Philippines Corporation (Formerly Clientlogic Phils. Inc.) vs. Commissioner of Internal Revenue, G.R. No. 201326, February 8, 2017; Commissioner of Internal Revenue vs. Burmeister and Wain Scandinavian Contractor Mindanao, Inc., G.R. No. 153205, January 22, 2007; Accenture, Inc. vs. Commissioner of Internal Revenue, G.R. No. 190102. July 11.2012.

65 Commissioner of Internal Revenue vs. American Express International, Inc. (Philippine Branch), G.R. No. 152609, June 29. 2005.

66 Commissioner of Internal Revenue vs. Burmeister and Wain Scandinavian Contractor Mindanao, Inc., supra. 67 Commissioner of Internal Revenue vs. Burmeister and Wain Scandinavian Contractor Mindanao, Inc .. supra; rommissioner of Internal Revenue vs. American Rxpress International. Inc. (Philippine Branch). supra. 68 Commissioner of Internal Revenue vs. Burmeister and Wain Scandinavian Contractor Mindanao, Inc., supra; Commissioner of Internal Revenue vs. American Express International, Inc. (Philippine Branch), supra.

Rema Tip Top Philippines, Inc. vs. Commissioner of Internal Revenue

Thus, petitioner must submit for each NRFC client, at the very least, both: (1) the SEC Certificate of Non-Registration of Corporation/Partnership; and (2) Proof of Certificate/ Articles of

Foreign

Incorporation/ Association

showing the state/province/country where the entity was organized. 70 The SEC Certificate of Non-Registration shows that the foreign client is not engaged in trade or business in the Philippines. On the other hand, the Certificate/ Articles of Foreign Incorporation/ Association proves that the client was established under the laws of a foreign country. Together, these two (2) documents prove the two (2) requisites necessary to establish the NRFC status of a client. Upon review of the records, it is shown that petitioner was able to present the SEC Certificates of Non-Registration of Corporation/Partnership71 for all its NRFC entities. However, petitioner failed to submit the Certificate/ Articles of Foreign Incorporation/ Association to prove the NRFC status of its foreign clients.

Moreover, as ascertained by the ICPA, petitioner was unable to secure authenticated copies of their respective certificates of registration in their places of residence but obtained only a photocopy of the Certificate of the Company Information as support for zero-rating. 72 Examination of petitioner's formally offered exhibits disclosed that the same were among those denied73 admission by the Court per Resolution 74 dated April 4, 2022. Thus, petitioner failed to comply with the first essential element. Concerning the second essential element, no evidence was presented by petitioner to prove that the services it rendered fall under any of the categories under Section 108(B)(2). As such, petitioner failed to comply with the second essential element as it was not able to establish that the services it provided to its clients were not in the same category as "processing, manufacturing or repacking of goods." v 7° Commissioner of Internal Revenue vs. CJTCO International Support Services Limited-Philippine ROHQ, CT A EB No. 2018. November 29, 2019.

71 Fxhihits "P-37R9" to "P<n90". Exhihit "P-129" (liSA fiash drive).

Rema Tip Top Philippines, Inc. vs. Commissioner of Internal Revenue

Neither did petitioner show proof that the purported services rendered were performed in the Philippines. As such, the third essential element was also not complied with. As regards the fourth essential element, petitioner presented its Reconciliation of Export Sales and Foreign Currency Remittances on Zero-Rated Sale of Services for the period

January

to

December

2018, 75 bank statements/settlement advice/passbook page 76 purportedly showing the foreign currency remittances of its clients to petitioner.

Considering the foregoing, petitioner fell short in establishing that the amount ofP77,724,049.34 declared sales of services to NRFC for the TY 2018 qualify for VAT zero-rating under Section 108(B)(2) of the NIRC of 1997, as amended. In sum, out of the total reported zero-rated sales/receipts of P143,477,596.67, only the sales of goods and services to PEZA-registered entities in the total amount of P58,60 1 ,925. 94 qualify for VAT zero-rating for the TY 2018. Thus, for the fourth requisite, the Court finds that petitioner had VAT zero-rated sales/receipts for the TY 2018, but only in the amount ofP58,601,925.94. As for the fifth requisite, which is to the effect that petitioner must prove that the acceptable foreign currency exchange proceeds have been duly accounted for in accordance with BSP rules and regulations under Sections 106(A)(2)(a)(l) and (3); and, lOS(B)(l) and (2), all of the NIRC of 1997, as amended, since the legal basis for petitioner's zero- rated sales of P58,60 1, 925.94 is Sections 106(A)(2)(a)(5), (b) and 108(8)(3) of the NIRC of 1997, as amended, the instant case need not comply with the said fifth requisite. In this connection, while petitioner alleges that it has sales of services to certain NRFC, the Court need not determine whether there was compliance with the same fifth requisite since it was not duly proven, as above shown, that the said sales of goods and services qualify for

VAT

zero-rating under

Sections

106(A)(2)(a)(3) and 108(B)(2) of the NIRC of 1997, as amended. v

Rema Tip Top Philippines, Inc. vs. Commissioner of Internal Revenue

Having found that petitioner had VAT zero-rated sales in the total amount ofP58,601,925.94 for the TY 2018, the Court shall proceed to determine whether petitioner complied with the following remaining requisites:

a. Sixth requisite: the input taxes are not transitional;

b. Seventh requisite: the input taxes are due or paid;

c. Eighth requisite: the input taxes claimed are attributable to zero-rated or effectively zero-rated sales. However, where there are both zero-rated or effectively zero-rated sales and taxable or exempt sales, and the input taxes cannot be directly and entirely attributed to any of these sales, the input taxes shall be proportionately allocated on the basis of sales volume; and

d. Ninth requisite: the input taxes have not been applied against output taxes during and in the succeeding quarters.

Sixth

requisite:

The input taxes being claimed are not transitionaL The claimed input taxes do not appear to be transitional, as understood under Section 111 (A) of the NIRC of 1997, as amended, to wit:

"SEC.lll. Transitional/ Presumptive Input Tax Credits. - (A) Transitional Input Tax Credits. - A person who becomes liable to value-added tax or any person who elects to be a VAT-registered person shall, subject to the filing of an inventory according to the rules and regulations prescribed by the Secretary of Finance, upon recommendation of the Commissioner, be allowed input tax on his beginning inventory of goods, materials and supplies equivalent to two percent (2%) of the value of such inventory or the actual value-added tax paid on such goods, materials and supplies, whichever is higher, which shall be creditable against the output tax."

~

Rema Tip Top Philippines, Inc. vs. Commissioner of Internal Revenue

Parenthetically, trar~sitional input tax credit operates to benefit newly VAT-registered persons, whether they previously paid taxes in the acquisitions of their beginning inventory of goods, materials, ar~d supplies. During the trar~sition period from non-VAT to VAT status, the trar~sitional input tax credit serves to alleviate the impact of the VAT on the taxpayer. 77 Since there is no showing that the claimed input are trar~sitional, petitioner has complied with the requisite for the grar~t of ar1 input VAT refund.

Seventh

requisite:

Not

all input VAT being claimed are due or paid.

taxes sixth Anent the seventh requisite in claiming VAT refund, it is of fatal importar~ce for petitioner to provide supporting documents proving that the input taxes claimed during the four quarters of TY 2018 were due or paid in accordar~ce with Section llO(A) of the NIRC of 1997, as amended, which provides that:

"SEC. 110. Tax Credits.- (A) Creditable Input Tax. -

(1) Any input tax evidenced by a VAT invoice or official receipt issued in accordance with Section 113 hereof on the following transactions shall be creditable against the output tax:

(a) Purchase or importation of goods:

(1) For sale; or (ii) For conversion into or intended to form part of a finished product for sale including packaging materials; or (iii) For use as supplies m the course of business; or (iv) For use as materials supplied m the sale of service; or ~

Rema Tip Top Philippines, Inc. vs. Commissioner of Internal Revenue

(v) For use in trade or business for which deduction for depreciation or amortization is allowed under this Code.

(b) Purchase of services on which a value-added tax has actually been paid.

(2) The input tax on domestic purchase or importation of goods or properties by a VAT-registered person shall be creditable:

(a) To the purchaser upon consummation of sale and on importation of goods or properties; and

(b) To the importer upon payment of the value-added tax prior to the release of the goods from the custody of the Bureau of Customs.

Provided, That the input tax on goods purchased or imported in a calendar month for use in trade or business for which deduction for depreciation is allowed under this Code, shall be spread evenly over the month of acquisition and the fifty-nine (59) succeeding months if the aggregate acquisition cost for such goods, excluding the VAT component thereof, exceeds One million pesos (P1,000,000): Provided, however, That if the estimated useful life of the capital good is less than five (5) years, as used for depreciation purposes, then the input VAT shall be spread over such a shorter period: Provided, further, That the amortization of the input VAT shall only be allowed until December 31, 2021 after which taxpayers with unutilized input VAT on capital goods purchased or imported shall be allowed to apply the same as scheduled until fully utilized: Provided, finally, That in the case of purchase of services, lease or use of properties, the input tax shall be creditable to the purchaser, lessee or licensee upon payment of the compensation, rental, royalty or fee." The above provisions are implemented by Sections 4.110- 1 to 4.110-3 of RR No. 16-2005, as further amended under RR No. 13-2018, which provide as follows: "SECTION 4.110-1. Credits For Input Tax.- "Input tax" means the VAT due on or paid by a VAT-registered person on importation of goods or local purchases of goods, properties, or services, including lease or use of properties, in the course of his trade or business. It shall also include the transitional input tax and the presumptive input tax determined in a~onl=oe with Sec. 111 of tho T~ Code. v

Rema Tip Top Philippines, Inc. vs. Commissioner of Internal Revenue

It includes input taxes which can be directly attributed to transactions subject to the VAT plus a ratable portion of any input tax which cannot be directly attributed to either the taxable or exempt activity.

Any input tax on the following transactions evidenced by a VAT invoice or official receipt issued by a VAT-registered person in accordance with Sees. 113 and 237 of the Tax Code shall be creditable against the output tax:

(a) Purchase or importation of goods

(1) For sale; or

(2) For conversion into or intended to form part of a finished product for sale, including packaging materials; or

(3) For use as supplies in the course of business; or

(4) For use as raw materials supplied in the sale of services; or

(5) For use in trade or business for which deduction for depreciation or amortization is allowed under the Tax Code,

(b) Purchase of real properties for which a VAT has actually been paid;

(c) Purchase of services in which a VAT has actually been paid;

(d) Transactions "deemed sale" under Sec. 106 (B) of the Tax Code;

(e) Transitional input tax allowed under Sec. 4.111 (a) of these Regulations;

(f) Presumptive input tax allowed under Sec. 4.111 (b) of these Regulations;

(g) Transitional input tax credits allowed under the transitory and other provisions of these Regulations. SECTION 4.110-2. Persons Who Can Avail of the Input Tax Credit. -The input tax credit on importation of goods or local purchases of goods, properties or services by a VAT- registered person shall be creditable:

(a) To the importer upon payment of VAT prior to the release of goods from customs custody; ~

Rema Tip Top Philippines, Inc. vs. Commissioner of Internal Revenue

(b) To the purchaser of the domestic goods or properties upon consummation of the sale; or

(c) To the purchaser of services or the lessee or licensee upon payment of the compensation, rental, royalty or fee.

SECTION 4.110-3. Claims for Input Tax on Depreciable Goods. - Where a VAT-registered person purchases or imports capital goods, which are depreciable assets for income tax purposes, the aggregate acquisition cost of which (exclusive of VAT) in a calendar month exceeds One Million pesos (P1,000,000.00), regardless of the acquisition cost of each capital good, shall be claimed as credit against output tax in the following manner:

(a) If the estimated useful life of a capital good is five (5) years or more - The input tax shall be spread evenly over a period of sixty (60) months and the claim for input tax credit will commence in the calendar month when the capital good is acquired. The total input taxes on purchases or importations of this type of capital goods shall be divided by 60 and the quotient will be the amount to be claimed monthly.

(b) If the estimated useful life of a capital good is less than five (5) years- The input tax shall be spread evenly on a monthly basis by dividing the input tax by the actual number of months comprising the estimated useful life of the capital good. The claim for input tax credit shall commence in the calendar month that the capital goods were acquired. Where the aggregate acquisition cost (exclusive of VAT) of the existing or finished depreciable capital goods purchased or imported during any calendar month does not exceed One million pesos (P1,000,000.00), the total input taxes will be allowable as credit against output tax in the month of acquisition.

Capital goods or properties refers to goods or properties with estimated useful life greater than one (1) year and which are treated as depreciable assets under Sec. 34(F) of the Tax Code, used directly or indirectly in the production or sale of taxable goods or services. The aggregate acquisition cost of depreciable assets in any calendar month refers to the total price, excluding the VAT, agreed upon for one or more assets acquired and not on the payments actually made during the calendar month. Thus, an asset acquired on installment for an acquisition cost of more than P1,000,000.00, excluding the VAT, will be subject to the amortization of input tax despite the fact that i

Rema Tip Top Philippines, Inc. vs. Commissioner of Internal Revenue the monthly payments/installments may not exceed P1,000,000.00."

Further, Section 4.110-8 of RR No. 16-2005 provides for the substantiation requirements of input tax credits on domestic purchases of goods, properties, and services, as follows:

"SECTION 4.110-8. Substantiation of Input Tax Credits.

(a) Input taxes for the importation of goods or the domestic purchase of goods, properties, or services is made in the course of trade or business, whether such input taxes shall be credited against zero-rated sale, non-zero-rated sales, or subjected to the 5% Final Withholding VAT, must be substantiated and supported by the following documents, and must be reported in the information returns required to be submitted to the Bureau:

(1) For the importation of goods- import entry or other equivalent document showing actual payment of VAT on the imported goods.

(2) For the domestic purchase of goods and properties - invoice showing the information required under Sees. 113 and 237 of the Tax Code.

(3) For the purchase of real property - public instrument i.e., deed of absolute sale, deed of conditional sale, contract/ agreement to sell, etc., together with VAT invoice issued by the seller.

(4) For the purchase of services - official receipt showing the information required under Sees. 113 and 237 of the Tax Code.

A cash register machine tape issued to a registered buyer shall constitute valid proof of substantiation of tax credit only if it shows the information required under Sees. 113 and 237 of the Tax Code."

It is categorically mentioned in the above provisions that to be entitled to input tax credits, the same must be evidenced by VAT Sis (for domestic purchases of goods or properties) or ORs (for domestic purchases of services) issued in accordance with Sections 113 and 237 of the NIRC of 1997, as amended, which were quoted earlier.

vi

Rema Tip Top Philippines, Inc. vs. Commissioner of Internal Revenue

Thus, to prove entitlement to credits for input taxes due or paid, petitioner must not only present the supporting documents prescribed under Section 4.110-8 of RR No. 16- 2005, but more importantly, these documents must comply with the invoicing requirements under Sections 113(A) and (B), 237 and 238 of the NIRC of 1997, as amended, and as implemented by Section 4.113-1(A) and (B) ofRR No. 16-2005, as further amended under RR No. 13-2018. In its amended Quarterly VAT Returns for the TY 2018, petitioner reported input taxes from its amortization of input VAT on capital goods exceeding P1Million, domestic purchases and importation of goods other than capital goods, and domestic purchases of services in the total amount of 1"5,572,385.45 out of which the amount of 1"4,434,530.7078 as reflected in "Others," specifically under Line 210, is the subject of petitioner's claim for refund, to wit:

Nature of

1•• 2••

Transaction

Q_uarter79

Quarterso

Input Tax

Deferred on

Capital Goods

exceeding PI Million from

the Previous

Quarter

(Line 20B)

- -

Add: Input

Taxon

Purchase of

Capital Goods

exceeding

PI Million

(Line 21D)

- I 125,000.00

Less: Input

Taxon

Purchases of

Capital Goods

exceeding

PI Million

deferred for the succeeding period

(Line 23A)

- (1,068,750.00)

Input Tax

Amortized

for the period -

I'

56,250.00

Add: Current Input Taxes

78 With PO. 70 discrepancy against the amount of claim. 79 Exhihit "P-I 0". Docket. pp. 2451 to 2452. 80 Exhibit "P-11 ", Docket, pp. 2453 to 2454. 81 Exhibit "P-12", Docket, pp. 2455 to 2456. 82 Exhibit "P-13", Docket, pp. 2457 to 2458. 3•• 4th

Quarter81

Quarter8~

Inout Tax

p 56,250.00 I' 56,250.00 I' 112,500.00 - - I 125,000.00 - - (I 068,750.00)

I'

56,250.00 p 56,250.00

I'

168,750.00

Rema Tip Top Philippines, Inc. vs. Commissioner of Internal Revenue

Domestic

Purchases of

Goods Other

than Capital

Goods

(Line 21F)

p 25,720.75

I'

12,837.98 p 35,667.65 I' 13,196.92

Importation of Goods

Other than

Capital Goods

(Line 21Hi

66,711.98 421,884.88 81,095.17 30,498.28

Domestic

Purchase of

Services

(Line 21J)

117,687.26 67,456.20 55,313.47 41,034.21

Others

(Line 210)

1 016 823.28 1 601 356.75 1 103 391.22 712 959.45

Total

Input Taxes

P1 226 943.27 1'2 159,785.81 P1,331 717.51 P853,938.86

I'

87,423.30 600 190.31 281,491.14 4 434 530.70 P5 572,385.45 The input VAT of P4,434,530.70, as reported in "Others" (Line 210) in the Quarterly VAT Returns of TY 2018, was determined by petitioner83 and the ICPA84 to be composed of input VAT on purchases of goods and services directly attributable to zero-rated sales, and input VAT on purchases of goods and services allocable to zero-rated sales, as follows:

Purchases

1•• Quarter

2nd Quarter

3•• Quarter

4th Quarter

Total

Purchases

allocated to

Zero-Rated

Sales

1'7,952,193.25 1'12,867,698.84 1'8, 740,582.03 1'5,565, 155.70 1'35, 125,629.8185

Purchases

Directly

Attributable to Zero-

Rated Sales

521,334.08 476,940.75 454,344.83 376,173.08 1,828,792.7586

Total

Purchases

Directly

Attributable

or allocated

to Zero-

Rated Sales

P8 473 527.33 P13 344 639.59 P9 194 926.86 P5 941,328.78 P36 954,422.56 0.12 Total Input VAT on Purchases Directly Attributable or allocated to Zero-Rated

Sales

p 4,434 530.71 However, upon verification by the Court, it was found that petitioner failed to prove that certain domestic purchases and importation of goods other than capital goods, purchase of capital goods exceeding Pl million, and domestic purchase of services in the total amount of P1,828,792.75 were directly attributable to zero-rated sales made during the four quarters of TY 2018. Thus, the Court is constrained to consider the 81 Pars. 23 and 24. Petitinnfor Review. Docket. pp. 14 to 15. 84 Table I, Exhibit "P-120", Docket, p. 2298. 85 With PO.Ol difference per footing. 86 With P'O.Ol difference per footing. i

Rema Tip Top Philippines, Inc. vs. Commissioner of Internal Revenue whole amount of P5,572,385.45 as petitioner's total input VAT on amortization of capital goods exceeding P1 million, domestic purchases and importation of goods other than capital goods, and domestic purchase of services, subject to proportional allocation between VATable, VAT-exempt, and VAT zero-rated sales under Section 112(A) of the NIRC of 1997, as amended.

In support of its input taxes due or paid, petitioner submitted its Schedule of Local Purchases with Input Tax, 87 Schedule of Importations, 88 various sales invoices, ORs, and importation documents,89 which the ICPA examined. Based on the !CPA's Schedule of Local Purchases with Input Tax, 90 the input VAT in the amount ofP472,611.41 shall be disallowed for failure to meet the invmcmg and substantiation requirements under Sections 110(A), 113(A), and (B), and 237 of the NIRC of 1997, as amended, in relation to Sections 4.110-1, 4.110-2, 4.110-8 and 4.113-1 of RR No. 16-2005, as amended.

In addition to the above disallowances, the following input VAT amounting to P2,274,264.72 shall likewise be disallowed for failure to meet the invoicing and substantiation requirements prescribed under the VAT law and regulations, vzz:

Exhibit

Input

No.

Registered Name of Supplier

VAT

1. Input VAT on purchases of goods/services supported by documents that were among those denied91 admission by the Court for failure to present the originals for comparison

"P-1205"

HONEYLEMON FOODS INC

"P-1376"

HONEYLEMON FOODS INC

"P-1490"

SUPERVALUEINC

"P-1633"

TOYOTA BUTUAN CITY

"P-1634"

MULTI STORE CORP

"P-1640"

E ZARATE HOSPITAL

"P-1641"

CHJCKIE SARAP FOODS CORP

DIAMANT VELOURS FOOD

"P-1840"

CORP

"P-1841"

E ZARATE HOSPITAL

CIPCON PETROL VENTURES

"P-1860"

INC

87 Annex "D", Docket. pp. 2340 to 23 76. 88 Annex ''E'', Docket. pp. 2377 to 237&. 89 Exhibits "P-1021" to "P-3788" and submarkings. 90 Annex "D", Docket, pp. 2340 to 2376. " Resolution dated April 4, 2022, Docket. pp. 2689 to 2690.

I'

37.18 53.36 40.29 1,161.65 70.50 431.79 27.64 253.50 2 742.32 10.71

Rema Tip Top Philippines, Inc. vs. Commissioner of Internal Revenue

"P-1861"

BALIWAG LECHON MANOK INC

"P-1880"

THE BELLEVUE MANILA (RPJ DEVELOPMENT INC)

"P-188I"

THE BELLEVUE MANILA (RPJ DEVELOPMENT INC)

"P-1988"

NUSERY CARE CORP

"P-2006"

K3CP CORPORATION

"P-2045"

SUPERVALUEINC

"P-2046"

PALAWAN JOLLY FOODS CORP

"P-2047"

GRANDIOSA CORP.

"P-2048"

PALAWAN JOLLY FOODS CORP

"P-2049"

PHILIPPINE PIZZA INC

"P-2050"

GOOD GRUB INC

TRAVELBEE MANAGEMENT

"P-2062"

CORPORATION

M YAMZON INTERNATIONAL TRADING

"P-2063"

CORP

TRAVELBEE MANAGEMENT

"P-2064"

CORPORATION

"P-2248"

SOUTHGATEFOODSINC

"P-2691"

SANFORD MARKETING CORPORATION

FREEMONT FOODS CORPORATION

"P-2692"

(JOLLIBEE)

"P-2693"

NEY SHELL SERVICE STATION

"P-2694"

ROBINSONS HANDYMAN INC

"P-2695"

SHUKEY KEY SERVICES & TRADING

"P-2696"

CEBU PRIMEGRILL CORP

"P-2697"

SHUKEY KEY SERVICES & TRADING

TOP SPRING PURIFIED DRINKING WATER & DIST

"P-2698"

SERVICES

AEROPHINE ENTERPRISES &

"P-2699"

co.

FREEMONT FOODS CORPORATION

"P-2701"

(JOLLIBEEI

"P-2702"

KINGS MULTI PARTS GENERAL SALES

CEBU ORIGINAL LECHON

"P-2705"

BELLY

"P-2706"

SANFORD MARKETING CORPORATION

"P-2707"

NEY SHELL SERVICE STATION

"P-2708"

ESPRUTINGKLE GAS & SERVICE INC

"P-2709"

CEBU PRIMEGRILL CORP

M YAMZON INTERNATIONAL TRADING

"P-2710"

CORP

"P-2711"

LECIANN VENTURES INC

"P-2714"

SANFORD MARKETING CORPORATION

M YAMZON INTERNATIONAL TRADING

"P-2715"

CORP

"P-2719"

GRAND RESTO INC

"P-2720"

CEBU PRIMEGRILL CORP

"P-2753"

U-FREIGHT PHILS INC

KARTON BUSINESS

"P-2755"

VENTURES INC

AL & TL FOOD FRANCHISE

"P-2760"

CORP

"P-2762"

KALREJ CORPORATION

"P-2763"

SUPERVALUEINC

"P-2764"

TOOLBOX TRADING

72.75 3,796.39 1,667.92 248.55 326.89 804.24 20.04 33.11 14.36 127.93 299.14 467.14 214.29 467.14 57.64 2!.19 39.64 319.74 92.31 10.71 267.86 96.43 10.71 214.29 39.64 165.00 231.43 102.06 321.43 2,475.42 335.28 37.50 17.91 44.89 I 07.14 428.04 675.54 204.42 21.43 28.71 78.00 54.24 471.43

Rema Tip Top Philippines, Inc. vs. Commissioner of Internal Revenue

"P-2765"

INFINITY SHELL GAS STATION

RUST AN COFFE CORP (STARBUCKS

"P-2892"

COFFEE)

"P-2893"

RUST AN SUPERCENTERS INC

EASYGAS CONVENIENCE

"P-2894"

STATION

"P-2895"

AVALON SCION FOODS CORPORATION

"P-2896"

GOLDEN ARCHES DEVELOPMENT CORP

"P-2898"

FRONTLAKEINC

"P-2899"

RUST AN SUPERCENTERS INC

"P-2901"

HARBOUR CITY DIMSUM HOUSE INC

"P-2902"

FRIJOLES CORPORATION

"P-2903"

SOUTHROAD GRILL CORP

"P-2904"

CHOWFUN INC

"P-2905"

PERSIAN KEBAB TANDOORI CUISINE

"P-2906"

S&R PIZZA INC

"P-2907"

HANDSBURY INC

"P-2918"

WENDYS ALL PLATINUM RETAILERS INC

"P-2946"

COCHINILLO INC

FREEMONT FOODS CORPORATION

"P-2950"

(JOLLIBEEI

"P-2958"

BALIWAG LECHON MANOK INC

"P-2959"

KALREJ CORPORATION

"P-2960"

BALIWAG LECHON MANOK INC

INTELLIGENT E PROCESSES

"P-2961"

TECHNOLOGIES

MICHAEL PAUL NOODLE

"P-2962"

HOUSE

"P-2963"

SUPERVALUEINC

"P-2965"

BRITE TOWN AUTO PARTS

DHL EXPRESS (PHILIPPINES)

"P-3114"

CORP

"P-3122"

MANDAUE CONSTELLATION BUSINESS PLAZA INC.

RUST AN COFFE CORP (STARBUCKS

"P-3316"

COFFEE I

"P-3422"

FILLER UP GASOLINE STATION

"P-3462"

ESPRUTINGKLE GAS & SERVICE INC

"P-3466"

YUNITED CORP

"P-3467"

AKROASIA PETRON SERVICE STATION

BEERY HAPPY FOOD

"P-3499"

SERVICES

BEERY HAPPY FOOD

"P-3500"

SERVICES

TOYOTA MANDAUE SOUTH

"P-3753"

CEBU

Subtotal

5.36 184.29 38.06 53.57 17.68 17.36 17.57 73.15 17.36 61.61 145.07 20.36 24.64 12.32 26.79 184.29 125.63 17.14 27.32 107.14 48.64 24.00 44.25 148.58 75.00 328.82 7 920.00 17.68 14.40 2,182.52 111.43 204.31 11.25 5.79 583.13 !' 33 255.37

2. Input VAT on purchases of goods/services supported by documents that were among those dented•• admission by the Court for being unreadable

"P-1329"

MANDAUE TRADE CENTER

!' 12.86

"P-1540"

ACE HARDWARE PHILS INC

20.87

"P-3021"

ACE HARDWARE PHILS INC

23.55

Rema Tip Top Philippines, Inc. vs. Commissioner of Internal Revenue

Subtotal

,.

3. Input VAT on purchases of goods/services supported by unreadable/blurred documents

"P-1226"

ACE HARDWARE PHILS INC

p

"P-1275"

MERCURY DRUG

"P-1599"

SOLIDMARK INC

"P-1888"

CEBU PORT AUTHORITY

"P-1890"

CEBU PORT AUTHORITY

"P-1951"

ROBINSONS HANDYMAN INC

RUST AN COFFE CORP (STARBUCKS

"P-1984"

COFFEE)

"P-3174"

ZUBUFOODS INC.

"P-3496"

MULTI STORE CORP

"P-3497"

MULTI STORE CORP

"P-3498"

SANFORD MARKETING CORPORATION

LAUGHING BUDDH FOOD

"P-3685"

CORP

Subtotal

,.

57.28 1 I 1.30 83.71 972.77 220.32 112.44 21.30 127.50 48.75 109.39 204.37 136.74 11.79 2 160.38

4. Input VAT on purchases ofaoods/services suoported by photocopied03 documents

I'

"P-1544"

THE BELLEVUE MANILA (RPJ DEVELOPMENT INC)

198.21

"P-1545"

MAJOR SHOPPING MANAGEMENT CORP

157.50

"P-2690"

GLOBAL VIEW TRAVEL & TOURS CORP

803.57

"P-3718"

GLOBAL SECURITY SOLUTIONS INC.

461.60

Subtotal

,.

1 620.88

5. Over-claimed input VAT from purchases of goods/services Input VAT amounts per per OR claim

"P-1233"

ALAIN ASIA TRADING CORP

I' 321.43 I' 312.43

I'

9.00

MINDANAOAN MARKETING &

"P-1373"

AUTO PARTS

31.07 26.78 4.29

GAISANO CAPITAL-SURIGAO

(TAl-

"P-1600"

PAN DEVELOPMENT INCI

101.03 100.02 1.01

"P-1681"

ARMY NAVY BURGER INC

31.45 30.54 0.9!

MOTHERS CHOICE SUR! GAO

"P-1807"

INC

853.32 844.80 8.52

SANFORD MARKETING

"P-I 987"

CORPORATION

151.56 2.36 149.20 GA!SANO CAPITAL-SUR!GAO

(TAl-

"P-2428"

PAN DEVELOPMENT INC)

140.49 48.74 91.75

GAISANO CAPITAL-SURIGAO

(TAl-

"P-2444"

PAN DEVELOPMENT INC)

487.68 474.39 13.29

Subtotal

,.

277.97

6. Input VAT on purchases of goods/services suoported b.'ll computer-generated VAT

Rema Tip Top Philippines, Inc. vs. Commissioner of Internal Revenue invoices/official receipts with alterations/insertions TIN/address without the countersignature of the Issuer of petitioner's

FAST WHEEL SHELL GAS

"P-1051"

STATION

FAST WHEEL SHELL GAS

"P-1052"

STATION

"P-1054"

INFINITY SHELL GAS STATION

"P-1057"

DAVAO CITIHARDWARE INC

"P-1059"

FPG INSURANCE CO., INC

FAST WHEEL SHELL GAS

"P-1078"

STATION

ABACUS BOOK AND CARD CORP (NATIONAL

"P-1083"

BOOKSTORE)

"P-1084"

NEY SHELL SERVICE STATION

ABACUS BOOK AND CARD CORP (NATIONAL

"P-1085"

BOOKSTORE)

EASYGAS CONVENIENCE

"P-1088"

STATION

"P-1099"

NEY SHELL SERVICE STATION

"P-1100"

NEY SHELL SERVICE STATION

ICED PETRON SERVICE

"P-1107''

STATION

FAST WHEEL SHELL GAS

"P-1120"

STATION

"P-1125"

GARNTLINE INC

"P-1133"

INFINITY SHELL GAS STATION

ABACUS BOOK AND CARD CORP (NATIONAL

"P-1135"

BOOKSTORE)

"P-1138"

INFINITY SHELL GAS STATION

"P-1145"

NATIONAL BOOK STORE INC

GA!SANO CAPITAL-SUR!GAO (TAl-PAN

"P-1186"

DEVELOPMENT INC)

"P-1194"

CHARTER PING AN INSURANCE CORP

"P-1200"

SANFORD MARKETING CORPORATION

FAST WHEEL SHELL GAS

"P-1211"

STATION

"P-1213"

INFINITY SHELL GAS STATION

MANDAUE BEST FUEL DEPOT

"P-1223"

INC

FREEMONT FOODS CORPORATION

"P-1228"

IJOLLIBEE)

"P-1229"

LVC FOODS

"P-1231"

NEY SHELL SERVICE STATION

"P-1240"

CUBIXOOFFICE INC

"P-1241"

OFFICE WAREHOUSE INC

"P-1245"

CUBIXOOFFICE INC

"P-1246"

CUBIXOOFFICE INC

"P-1250"

CUBIXOOFFICE INC

"P-1251"

GOLDEN ARCHES DEVELOPMENT CORP

ANCECAR SPECIALTY FOODS

"P-1255"

INC

"P-1256"

MAJOR SHOPPING MANAGEMENT CORP

"P-1265"

CUBIXOOFFICE INC

XPRESSFILL SERVICE

"P-1294"

STATION

"P-1304"

INFINITY SHELL GAS STATION

"P-1305"

TRI OKTO SHELL GASOLINE STATION

name and/or

I'

200.11 107.15 171.43 2,764.23 17,904.60 10.71 27.62 17.15 9.80 17.86 321.43 107.14 13.70 10.71 20.36 10.71 25.69 10.71 14.28 11.68 20,327.29 85.00 198.40 214.29 17.60 9.64 4.29 321.43 8.73 13.71 7.95 16.07 3.75 9.86 149.46 157.50 4.47 70.29 32.14 10.71

Rema Tip Top Philippines, Inc. vs. Commissioner of Internal Revenue

ICED PETRON SERVICE

"P-1318"

STATION

ICED PETRON SERVICE

"P-1323"

STATION

"P-1324"

NEY SHELL SERVICE STATION

"P-1327"

SANFORD MARKETING CORPORATION

"P-1333"

CUBIXOOFFICE INC

"P-1337"

CUBIXOOFFICE INC

"P-1344"

NATIONAL BOOK STORE INC

"P-1346"

CUBIXOOFFICE INC

"P-1349"

JOINT VENTURE

"P-1353"

CUBIXOOFFICE INC

GAISANO CAPITAL-SURIGAO (TAl-PAN

"P-1378"

DEVELOPMENT INC)

"P-1383"

LAVENDER SHELL SERVICE STATION & GEN MDSE

FAST WHEEL SHELL GAS

"P-1413"

STATION

"P-1415"

INFINITY SHELL GAS STATION

FAST WHEEL SHELL GAS

"P-1416"

STATION

FAST WHEEL SHELL GAS

"P-1417"

STATION

"P-1450"

PROTON MICROSYSTEM

XPRESSFILL SERVICE

"P-1456"

STATION

"P-1460"

NEY SHELL SERVICE STATION

"P-1462"

AKROASIA PETRON SERVICE STATION

EASYGAS CONVENIENCE

"P-1468"

STATION

"P-1469"

NEY SHELL SERVICE STATION

ICED PETRON SERVICE

"P-1473"

STATION

"P-1475"

NEY SHELL SERVICE STATION

"P-1477"

SANFORD MARKETING CORPORATION

"P-1480"

HONDA MOTOR WORLD INC

"P-1481"

HONDA MOTOR WORLD INC

"P-1491"

MAJOR SHOPPING MANAGEMENT CORP

"P-1509"

ACE HARDWARE PHILS INC

"P-1510"

LAVENDER SHELL SERVICE STATION & GEN MDSE

GAISANO CAPITAL-SURIGAO (TAl-PAN

"P-1513"

DEVELOPMENT INC)

LATINUS FOODS

"P-1516"

INCORPORATED

"P-1549"

GOLDEN GREAT VALUE PROPERTIES INC

GAISANO CAPITAL-SURIGAO (TAl-PAN

"P-1554"

DEVELOPMENT INC)

CLYBROS MERCHANDISING

"P-1555"

INC

GAISANO CAPITAL-SURIGAO (TAl-PAN

"P-1569"

DEVELOPMENT INC)

C!Tl HARDWARE BACOLOD

"P-1602"

INC

"P-1642"

INFINITY SHELL GAS STATION

ICED PETRON SERVICE

"P-1643"

STATION

-- -·

FAST WHEEL SHELL GAS

"P-1647"

STATION

FAST WHEEL SHELL GAS

"P-1648"

STATION

16.07 10.71 322.62 44.55 1.61 11.79 24.64 64.61 11.68 3.00 6.27 214.29 203.57 137.76 203.58 160.72 42.86 10.71 321.44 17.58 15.11 214.29 16.71 293.37 509.97 48.21 94.29 21.43 32.12 32.14 24.62 29.69 1.07 45.36 9.93 28.77 26.57 192.86 140.68 179.49 203.58

Rema Tip Top Philippines, Inc. vs. Commissioner of Internal Revenue

"P-1665"

HARI-RAYA COFFEE SHOP INC

"P-1678"

GOLDEN ARCHES DEVELOPMENT CORP

"P-1693"

INGUSAN GASOLINE STATION

"P-1703"

GRANA TINA FOOD CORP

"P-1711"

NEY SHELL SERVICE STATION

"P-1715"

SANFORD MARKETING CORPORATION

"P-1718"

SANFORD MARKETING CORPORATION

"P-1727''

NEY SHELL SERVICE STATION

"P-1729"

SEATTLE'S BEST COFFEE

EASYGAS CONVENIENCE

"P-1741"

STATION

ICED PETRON SERVICE

"P-1743"

STATION

NEW VENTURES SHELL

"P-1748"

STATION

"P-1751"

NEY SHELL SERVICE STATION

"P-1752"

NEY SHELL SERVICE STATION

MANDAUE FOAM INDUSTRIES

"P-1753"

INC

"P-1766"

HONEYLEMON FOODS INC

"P-1773"

ASEANA HOLDINGS INC

"P-1774"

ASEANA HOLDINGS INC

"P-1775"

GOLDEN LION FOODS (SUR! GAO II) CORPORATION

FREEMONT FOODS CORPORATION

"P-1776"

(JOLLIBEE)

FREEMONT FOODS CORPORATION

"P-1777"

(JOLLIBEE)

SILICON VALLEY COMPUTER GROUP

"P-1781"

PH!LS INC

"P-1796"

SANFORD MARKETING CORPORATION

"P-1810"

SAM HIRANAND FOOD CORPORATION

"P-1812"

CUBIXOOFFICE INC

"P-1825"

MIA MAISON HOME INC

GOLDILOCKS BAKESHOP HAPPY FOODS

"P-1827"

CORP

"P-1828"

MAJOR SHOPPING MANAGEMENT CORP

ANCECAR SPECIALTY FOODS

"P-1835"

INC

CIT! HARDWARE BACOLOD

"P-1837"

INC

"P-1842"

CUBIXOOFFICE INC

"P-1856"

CUBIXOOFFICE INC

MM YAMAT MOTORIST

"P-1859"

CENTER

"P-1863"

INFINITY SHELL GAS STATION

FAST WHEEL SHELL GAS

"P-1864"

STATION

"P-1867"

INFINITY SHELL GAS STATION

"P-1869"

CUBIXOOFFICE INC

"P-1914"

FOUR A PETROLEUM STATION

"P-1917"

SANFORD MARKETING CORPORATION

"P-1918"

MISTER DONUT

"P-1921"

NEY SHELL SERVICE STATION

"P-1929"

NEY SHELL SERVICE STATION

"P-1934"

ABACUS BOOK AND CARD CORP (NATIONAL

650.91 40.50 10.71 13.39 107.14 94.29 33.35 321.43 2.68 10.71 13.04 16.09 289.77 53.57 134.60 31.82 2.68 2.68 9.11 10.93 10.50 649.29 57.51 27.96 3.21 166.50 33.00 107.12 197.68 577.98 43.07 48.27 10.71 192.86 203.58 160.72 I 583.04 10.71 47.57 34.29 321.48 20.32 5.30

Rema Tip Top Philippines, Inc. vs. Commissioner of Internal Revenue

BOOKSTORE)

"P-1936"

SANFORD MARKETING CORPORATION

"P-1940"

LECIANN VENTURES INC

"P-1941"

NEY SHELL SERVICE STATION

ABACUS BOOK AND CARD CORP (NATIONAL

"P-1943"

BOOKSTORE)

"P-1944"

MULTI STORE CORP

"P-1946"

NEY SHELL SERVICE STATION

ICED PETRON SERVICE

"P-1956"

STATION

"P-1959"

NEY SHELL SERVICE STATION

"P-1981"

UNIVERSITY OF CEBU MEDICAL CENTER

"P-1986"

BELMONT INDUSTRIAL TOOL CENTER

GA!SANO CAPITAL-SURIGAO (TAl-PAN "P-20!2"

DEVELOPMENT INC)

CONTEMPORIAN FOODS INC (JCO DONUTS &

"P-2019"

COFFEE)

FAST WHEEL SHELL GAS

"P-2053"

STATION

FAST WHEEL SHELL GAS

"P-2054"

STATION

"P-2056"

INFINITY SHELL GAS STATION

LAMUAN SHELL GAS STATION

"P-2086"

INC

"P-2092"

KALREJ CORPORATION

CIT! HARDWARE BACOLOD

"P-2102"

INC

ICED PETRON SERVICE

"P-2103"

STATION

"P-2107"

JMR GOLDEN FOOD VENTURES INC

"P-2120"

NEY SHELL SERVICE STATION

"P-2125"

JMR GOLDEN FOOD VENTURES INC

FREEMONT FOODS CORPORATION

"P-2126"

IJOLLIBEE)

GA!SANO CAPITAL-SURIGAO (TAl-PAN

"P-2137"

DEVELOPMENT INCI

"P-2163"

NEY SHELL SERVICE STATION

EASYGAS CONVENIENCE

"P-2164"

STATION

GAISANO CAPJTAL-SURIGAO (TAl-PAN

"P-2175"

DEVELOPMENT INC)

GA!SANO CAPITAL-SURIGAO (TAl-PAN

"P-2182"

DEVELOPMENT INC)

"P-2192"

ONG KIN KING & CO INC

"P-2198"

ZUBUFOODS, INC.

"P-2209"

INFINITY SHELL GAS STATION

RUST AN COFFE CORP (STARBUCKS

"P-2215"

COFFEE!

"P-2217"

INNOVACHOWS CORP

"P-2244"

LECJANN VENTURES INC

"P-2252"

INFINITY SHELL GAS STATION

"P-2254"

INFINITY SHELL GAS STATION

FAST WHEEL SHELL GAS

"P-2255"

STATION

FAST WHEEL SHELL GAS

"P-2256"

STATION

FAST WHEEL SHELL GAS

"P-2257"

STATION

"P-2260"

CUB!XOOFFICE INC 18.08 21.45 21.45 99.00 143.44 213.18 16.50 335.59 51.84 304.18 27.80 143.04 202.56 234.62 166.62 15.32 74.89 80.33 19.72 15.11 318.07 15.32 10.07 15.00 319.78 10.71 42.27 29.29 41.04 25.71 13.93 57.32 6.86 21.50 160.74 128.63 179.29 231.00 202.55 499.82

Rema Tip Top Philippines, Inc. vs. Commissioner of Internal Revenue

"P-2296"

KALREJ CORPORATION

"P-2297"

GOLDEN ARCHES DEVELOPMENT CORP

NEW VENTURES SHELL

"P-2316"

STATION

CANELLE FOOD

"P-2318"

CORPORATION

"P-2320"

SCOOBYS GAS DEPOT

"P-2323"

MANDAUE BOLT CENTER

"P-2328"

NATIONAL BOOK STORE INC

"P-2329"

NATIONAL BOOK STORE INC

ACHIEVERS FUEL & SERVICE CENTER

"P-2340"

CORP

"P-2354"

INFINITY SHELL GAS STATION

YDLAZAVON PANCIT HABHAB

"P-2356"

INC

"P-2361"

RED RIBBON BAKESHOP INC

"P-2364"

NEY SHELL SERVICE STATION

"P-2368"

MANDAUE BOLT CENTER

"P-2376"

NEY SHELL SERVICE STATION

"P-2380"

MULTI STORE CORP

"P-2392"

DIVI MART CORP

"P-2424"

TOYOTA BUTUAN CITY

"P-2474"

MULTI STORE CORP

"P-2487"

INFINITY SHELL GAS STATION

LVV (LITTLE VIN-VIN) FOOD

"P-2518"

CORPORATION

"P-2536"

NEY SHELL SERVICE STATION

"P-2542"

AKROASIA PETRON SERVICE STATION

LATINUS FOODS

"P-2552"

INCORPORATED

SILICON VALLEY COMPUTER GROUP

"P-2564"

PHILS INC

"P-2568"

MAJOR SHOPPING MANAGEMENT CORP

"P-2576"

PANCAKE HOUSE 3PEAS IN A POD INC

FAST WHEEL SHELL GAS

"P-2577"

STATION

"P-2583"

ISLAND SOUVENIR INC

OCTAGON COMPUTER SUPERSTORE PROTON

"P-2594"

MICROSYSTEMS

GAISANO CAPITAL-SURIGAO (TAl-PAN

"P-2596"

DEVELOPMENT INC)

FREEMONT FOODS CORPORATION

"P-2611"

(JOLLIBEE)

THE SM STORE MINDANAO SHOPPERS DAILY

DESTINATION

"P-2653"

CORP

"P-2676"

NCCC SUPERMARKET LTS RETAIL SPECIALIST INC

"P-2687"

NEY SHELL SERVICE STATION

"P-2689"

MULTI STORE CORP

FAST WHEEL SHELL GAS

"P-2722"

STATION

"P-2728"

CUBIXOOFFICE INC

"P-2729"

CUBIXOOFFICE INC

"P-2732"

MAJOR SHOPPING MANAGEMENT CORP

"P-2775"

WS AND LANDIN INC

"P-2779"

SANFORD MARKETING CORPORATION

20.68 14.46 10.71 19.29 21.43 9.64 65.36 44.92 13.93 10.71 46.50 37.50 318.20 9.16 265.09 42.64 12.32 952.86 56.76 148.22 18.75 314.66 16.07 37.51 482.14 105.00 68.78 15.00 99.62 85.61 44.20 10.71 12.29 324.68 319.73 145.50 235.72 I ,330. 71 1,069.29 133.90 18.21 62.14

Rema Tip Top Philippines, Inc. vs. Commissioner of Internal Revenue

ABACUS BOOK AND CARD CORP (NATIONAL

"P-2780"

BOOKSTORE)

ALL FRESH FOOD PRODUCTS

"P-2784"

INC

"P-2790"

SANFORD MARKETING CORPORATION

ICED PETRON SERVICE

"P-2794"

STATION

"P-2795"

NEY SHELL SERVICE STATION

"P-2796"

NEY SHELL SERVICE STATION

"P-2799"

SANFORD MARKETING CORPORATION

"P-2800"

AKROASIA PETRON SERVICE STATION

ABACUS BOOK AND CARD CORP (NATIONAL

"P-2805"

BOOKSTORE)

"P-2819"

OFFICE WAREHOUSE INC

"P-2824"

INFINITY SHELL GAS STATION

"P-2831"

SUPERVALUEINC

"P-2833"

4S HIRANAND FOOD CORPORATION

"P-2835"

CUBIXOOFFICE INC

GAISANO CAPITAL-SURIGAO (TAl-PAN

"P-2849"

DEVELOPMENT INC)

GAISANO CAPITAL-SURIGAO (TAl-PAN

"P-2853"

DEVELOPMENT INC)

"P-2888"

LAVENDER SHELL SERVICE STATION & GEN MDSE

FAST WHEEL SHELL GAS

"P-2920"

STATION

"P-2932"

TWO FOUR ENTERPRISES

XPRESSFILL SERVICE

"P-2943"

STATION

"P-2977"

CEBU BELMONT INC

"P-2984"

NEY SHELL SERVICE STATION

"P-2996"

MULTI STORE CORP

"P-3003"

LECIANN VENTURES INC

"P-3020"

SUPERVALUE INC

"P-3029"

ARMY NAVY BURGER INC

"P-3030"

HIGH HAVEN SPIRITS & CIGAR INC.

"P-3032"

INFINITY SHELL GAS STATION

LATINUS FOODS

"P-3041"

INCORPORATED

FAST WHEEL SHELL GAS

"P-3115"

STATION

FAST WHEEL SHELL GAS

"P-3116"

STATION

XPRESSFILL SERVICE

"P-3131"

STATION

"P-3 I 38"

FEDERAL BRENT RETAIL INC

ABACUS BOOK AND CARD CORP (NATIONAL

"P-3159"

BOOKSTORE!

"P-3165"

SCOOBYS GAS DEPOT

"P-3167"

AKROASIA PETRON SERVICE STATION

"P-3181"

CEBU BELMONT INC

ICED PETRON SERVICE

"P-3182"

STATION

"P-3187"

NEY SHELL SERVICE STATION

"P-3189"

PHILIPPINE TOYOKO INN INC.

"P-3194"

DIVI MART CORP

"P-3206"

CHOWFUN INC

56.25 53.57 418.47 22.40 351.86 107.14 49.20 10.71 93.40 48.21 12.86 21.40 35.12 487.40 17.24 28.83 107.14 300.01 12.86 16.07 104.57 214.29 58.87 214.29 3.43 19.82 123.75 10.71 26.79 314.84 203.60 53.57 19.29 38.09 19.29 214.29 22.61 19.34 214.29 214.29 17.09 22.93

Rema Tip Top Philippines, Inc. vs. Commissioner of Internal Revenue

"P-3225"

PALAWAN BAKER'S HILL CORP

FAST WHEEL SHELL GAS

"P-3279"

STATION

FAST WHEEL SHELL GAS

"P-3280"

STATION

"P-3322"

AKROASIA PETRON SERVICE STATION

"P-3336"

SUPERVALUEINC

"P-3338"

WONDERFOODS INC (SIZZLING PLATES)

PRESAM SHELL SERVICE

"P-3339"

CENTER

"P-3343"

KERWIN MINIMART

KAKJNG SHOPPING CENTER

"P-3346"

INC

CEBU BUENA VICTORIA TRADING

"P-3347''

COMPANY INC

"P-3356"

ROBINSON INCORPORATED

"P-3357"

SUYEN CORPORATION

"P-3364"

SOLID MARK INC

SBARRO FRESH ITALIAN

"P-3366"

COOKING

"P-3368"

SUPERVALUEINC

"P-3405"

ROSE PHARMACY INC

"P-3411"

JOLLIBEE FOODS CORP

"P-3412"

MANG !NASAL PACIFIC MALL

"P-3415"

ARJANNA GAS STATION INC

"P-3427"

FIRST GLOBAL PREMIUM DEALER CO LTD

"P-3450"

TOYOTA BUTUAN CITY

"P-3469"

SUPERVALUE INC

"P-3479"

GOLDEN GREAT VALUE SPECIALIST INC

FAST WHEEL SHELL GAS

"P-3480"

STATION

FAST WHEEL SHELL GAS

"P-3481"

STATION

"P-3495"

BALTE FOOD CORP

BAAN SHELL SERVICE

"P-3509"

STATION

SOLARIE SERVICE STATION (SOLARIE VENTURES CO

"P-3518"

LTD)

CLYBROS MERCHANDISING

"P-3548"

INC

"P-3549"

GOLDEN GREAT VALUE PROPERTIES INC

"P-3550"

GOLDEN GREAT VALUE PROPERTIES INC

"P-3556"

SANFORD MARKETING CORPORATION

"P-3557"

GOLDEN GREAT VALUE PROPERTIES INC

"P-3558"

GOLDEN GREAT VALUE PROPERTIES INC

"P-3559"

GOLDEN GREAT VALUE PROPERTIES INC

"P-3560"

GOLDEN GREAT VALUE PROPERTIES INC

"P-3562"

GOLDEN GREAT VALUE PROPERTIES INC

"P-3563"

GOLDEN GREAT VALUE PROPERTIES INC

"P-3564"

GOLDEN GREAT VALUE PROPERTIES INC

"P-3570"

GOLDEN GREAT VALUE PROPERTIES INC

"P-3575"

7 ELEVEN

"P-3576"

7 ELEVEN

"P-3579"

GOLDEN GREAT VALUE PROPERTIES INC

122.68 244.57 171.48 194.23 189.13 30.54 92.85 32.68 37.39 56.68 48.08 96.05 570.64 57.43 123.59 30.35 20.36 26.57 6.86 375.00 469.73 55.29 8.04 139.29 181.54 18.96 75.00 107.14 23.14 1.07 1.07 5.73 1.07 1.07 1.07 1.07 1.07 1.07 1.07 1.07 5.36 3.21 1.07

Rema Tip Top Philippines, Inc. vs. Commissioner of Internal Revenue

"P-3580"

GOLDEN GREAT VALUE PROPERTIES INC

"P-3619"

GOLDEN GREAT VALUE PROPERTIES INC

"P-3643"

HAPCHAN TEA HOUSE

"P-3647"

RUST AN COFFE CORP

CG & E SHELL SERVICE

"P-3648"

STATION

DEMP RETAIL MANAGEMENT

"P-3653"

CORPORATION

"P-3662"

NORWEN PARKING SERVICES

FREEMONT FOODS

"P-3668"

CORPORATION

BEERY HAPPY FOOD

"P-3689"

SERVICES

"P-3690"

GOLDEN GREAT VALUE PROPERTIES INC

PHILIPPINE SEVEN

"P-3693"

CORPORATION

"P-3694"

PRINCITY INC

"P-3696"

SCOOBYS GAS DEPOT

ROBINSON LAND

"P-3699"

CORPORATION

"P-3700"

NORWEN PARKING SERVICES

"P-3704"

PROMO LABELS INC

"P-3706"

MAKATI PARKING AUTHORITY

BEERY HAPPY FOOD

"P-3742"

SERVICES

BEERY HAPPY FOOD

"P-3744"

SERVICES

"P-3747"

GOLDEN GREAT VALUE PROPERTIES INC

"P-3754"

TRIM FOOD VENTURES

"P-3755"

A-D 7 ENTERPRISE

"P-3762"

SUPERVALUEINC

"P-3765"

JOLY-RED CEBU INC

"P-3770"

PHILIPPINE PORTS AUTHORITY

"P-3781"

FRONTLAKE INC

AJL ASIA-PACIFIC FOODS

"P-3784"

CORP

"P-3785"

PALAWAN JOLLY FOODS CORP

Subtotal

7. Input VAT on purchases of services dated outside the period of claim

CARAG ZABALLERO LLAMADO & ABIERA LAW

"P-3270"

OFFICE

CARAG ZABALLERO LLAMADO & ABIERA LAW

"P-3271"

OFFICE

CARAG ZABALLERO LLAMADO & ABIERA LAW

"P-3409"

OFFICE

Subtotal

8. Input VAT on purchases of goods not supported by VAT sales invoices

"P-3363"

ROMANEL ENTERPRISES

"P-3374"

TT & COMPANY INC

"P-3375"

CLYBROS MERCHANDISING

INC

"P-3406"

TT & COMPANY INC

"P-3407"

TT & COMPANY INC

1.07 1.07 180.00 56.25 139.56 147.86 2.14 33.75 12.21 1.07 5.79 127.98 10.71 2.14 2.14 9.43 3.21 16.61 5.79 1.07 54.70 65.14 5.01 53.57 2.37 32.14 68.04 29.36

F

74,497.98 p 12,939.60 30,288.86 7,714.29

F

50,942.75

I'

910.71 468.64 42.96 49.50 1,236.99

Rema Tip Top Philippines, Inc. vs. Commissioner of Internal Revenue

"P-3408"

TT & COMPANY INC

"P-3461"

TT & COMPANY INC

"P-3527"

TT & COMPANY INC

"P-3529''

TT & COMPANY INC

"P-3532"

TT & COMPANY INC

Subtotal

9. Input VAT on purchases of goods/services supported by VAT receipts without petitioner's name and/or TIN/address

"P-1091"

LBC EXPRESS INC

TOP SPRING PURIFIED DRINKING WATER & DIST

"P-1108"

SERVICES

"P-1113"

LBC EXPRESS INC

"P-1114"

LBC EXPRESS INC

DHL EXPRESS (PHILIPPINES)

"P-1118"

CORP

"P-1119"

LBC EXPRESS INC

"P-1122"

LBC EXPRESS INC

"P-1123"

LBC EXPRESS INC

"P-1148"

LBC EXPRESS INC

"P-1292"

SUPERVALUE INC

"P-1449"

DONICA CORPORATION

"P-1713"

LBC EXPRESS INC

"P-1816"

LBC EXPRESS INC

"P-1848"

LBC EXPRESS INC

LINCOLN REALTY

"P-1874"

CORPORATION

"P-1925"

LBC EXPRESS INC

"P-1 947"

LBC EXPRESS INC

"P-2004"

LBC EXPRESS INC

"P-2008"

FIRST GLOBAL PREMIUM DEALER CO LTD

"P-2024"

LBC EXPRESS INC

"P-2099"

ATS AIR TECHNIC SERVICES

MEGA TECH SURVEILLANCE AND COMPUTER

TECHNOLOGIES

"P-3011"

CORP.

"P-3016"

MOTORCENTRAL SALES CORP

"P-3027"

LBC EXPRESS INC

"P-3028"

LBC EXPRESS INC

"P-3118"

DHL GLOBAL FORWARDING (PHILS) INC.

"P-3268"

LBC EXPRESS INC

"P-3420"

LBC EXPRESS INC

"P-3421"

LBC EXPRESS INC

"P-3449"

LBC EXPRESS INC

"P-3456"

LBC EXPRESS INC

"P-3578" to

ATLAS COPCO (PHILIPPINES)

"P-3578-2"

INC

"P-3722"

SURIGAO DEL NORTE ELECTRIC COOPERATIVE, INC.

Subtotal

1,268.57 1,012.06 I 01.25 1,I18.18 752.95 !' 6961.81 invoices/ofjicial !' 38.57 53.57 16.61 17.14 135.54 82.50 20.89 20.89 20.89 118.09 26.89 20.89 9.11 37.50 3,214.29 20.89 20.89 20.89 214.18 20.89 2,550.18 890.36 29.01 17.89 17.89 551.25 21.43 23.04 25.18 21.43 21.43 168,750.00 3,542.21 !' 180,592.41

10. Input VAT on purchases of services wherein the nature of the service is not

Rema Tip Top Philippines, Inc. vs. Commissioner of Internal Revenue indicated

"P-1064"

KUEHNE + NAGEL INC

"P-1065",

"P-1066"

PEARL ENTERPRISES

"P-1065",

"P-1066"

PEARL ENTERPRISES

"P-1081"

TOYOTA ALABANG HILLS

"P-1094"

MOREDONE VENTURES INC

"P-1096"

MOREDONE VENTURES INC

"P-1104"

MOREDONE VENTURES INC

"P-1166''

PARKWAY CLYBROS MERCHANDISING INC

"P-1270"

INSIGHT PRINTING PERFECTION INC

LINCOLN REALTY

"P-1280"

CORPORATION

''P-1334"

VDCU PRINCE HOTEL INC

"P-1422"

GLOBAL SECURITY SOLUTIONS INC.

LINCOLN REALTY

"P-1428"

CORPORATION

"P-1435"

PEARL ENTERPRISES

"P-1436"

PEARL ENTERPRISES

''P-1441"

GAC PHILIPPINES INC

"P-1518"

PILJPINAS TELESERV INC

"P-1523"

PHILIPPINE POSTAL CORPORATION

"P-1653"

GLOBALVJEW TRAVEL & TOURS CORP

"P-1662"

GAC PHILIPPINES INC

''P-1871''

GLOBAL VIEW TRAVEL & TOURS CORP

"P-1883"

GAC PHILIPPINES INC

"P-1911"

PHILIPPINE PIZZA INC

INQUIRER PUBLICATIONS,

"P-1924"

INC.

"P-2044"

GLOBAL VIEW TRAVEL & TOURS CORP

"P-2084"

TOYOTA ALABANG INC

"P-2150"

GLOBALCARS INC

"P-2281"

DB SCHENKER PHILS INC

"P-2282"

GAC PHILIPPINES INC

"P-2283"

GAC PHILIPPINES INC

"P-2284"

GAC PHILIPPINES INC

"P-2287''

GAC PHILIPPINES INC

FEDERAL EXPRESS PACIFIC

"P-2288"

LLC

"P-2290"

GAC PHILIPPINES INC

"P-2291"

GAC PHILIPPINES INC

LAT!NUS FOODS "P-2397''

INCORPORATED

"P-2503"

GLOBAL SECURITY SOLUTIONS INC.

"P-2512"

GAC PHILIPPINES INC

"P-2733"

RICHMONDE HOTEL ORTIGAS

"P-2750"

GAC PHILIPPINES INC

"P-2754"

GAC PHILIPPINES INC

"P-2929"

CONPAC WAREHOUSING INC

ORIENT FREIGHT

"P-2931"

INTERNATIONAL

I'

I,734.3I 47,460.00 103,260.00 1 992.24 653.57 37.50 653.57 680.79 1,264.29 3,214.29 143.68 425.85 3,214.29 71,190.00 114 425.00 74,591.52 79.83 12.00 14,449.80 27,547.03 11 018.30 31 784.65 63.96 44.57 23,301.22 1,315.84 214.29 336.00 1 231.80 1,140.00 1 543.80 1,591.80 566.40 3,600.00 2,550.32 29.89 372.25 7 580.73 26.25 10,356.90 21,403.80 622.68 1,914.38

Rema Tip Top Philippines, Inc. vs. Commissioner of Internal Revenue

"P-3163"

CHOOBI CHOOBI FLAVORS CORPORATION

"P-3216"

BACOLOD CHICKEN !NASAL

"P-3291"

EGYP MOBILE COMMUNICATION CORP

"P-3311"

CONPAC WAREHOUSING INC

SAN PEDRO COUNTRY FARM RESORT & EVENT

"P-3352"

CENTER INC

"P-3370"

STA FE BEACH CLUB INC

"P-3487"

GAC PHILIPPINES INC

BY A'S LOUNGE CAFE (ANNABELLE

"P-3505"

BORJALI

"P-3642"

SARSALEJO SECURITY AGENCY INC

Subtotal

11.Input VAT on the purchase of service on the vat-exempt transaction

"P-1980"

UNIVERSITY OF CEBU MEDICAL CENTER

Subtotal

78.21 50.79 316.07 2 565.72 1,179.64 150.00 19,599.04 69.21 2,000.00 !' 615,648.07 p 64.29 !' 64.29

12. Input VAT on purchase of goods supported by VAT invoice wherein the VAT amount was not separately indicated therein

"P-3679"

SUPERVALUEINC

p 16.66

Subtotal

!' 16.66

13. Input VAT on purchases of goods/services supported by VAT invoices/official receipts with incorrect TIN of petitioner/with correction on TIN but without the countersignature of the issuer

TOYOTA MANDAUE SOUTH

"P-2502"

CEBU

p I, 723.71

TOYOTA MANDAUE SOUTH

"P-2811"

CEBU

48.00

TOYOTA MANDAUE SOUTH

"P-3119"

CEBU

2 279.32

TOYOTA MANDAUE SOUTH

"P-3682"

CEBU

583.13

TOYOTA MANDAUE SOUTH

"P-3750"

CEBU

395.71

Subtotal

!' 5 029.87

14. Input VAT on importations supported by documents that were among those denied94 admission by the Court for failure to present the originals for comparison

"P-1024" to

"P-I 024-12"

REMA TIP TOP AG

p 221,791.00

"P-1025" to

"P-1025-7"

GMA GARNET GROUP

123,429.00

"P-1027" to

TIP TOP OBERFLANCHENSHUTZ ELBE

"P-1027-7"

GMBH

7,337.00 "P-103l"to

TIP TOP OBERFLANCHENSHUTZ ELBE

"P-1031-8"

GMBH

23791.00

"P-1032" to

TIP TOP OBERFLANCHENSHUTZ ELBE

"P-1032-9"

GMBH

4,430.00

"P-1033" to

"P-1033-8"

AME INTERNATIONAL

9,116.00

"P-1034" to

"P-1034-5"

AME INTERNATIONAL

3,932.00

"P-1035" to

"P-I 035-7"

HAMATON AUTOMOTIVE TECHNOLOGY CO LTD

6,106.00

Rema Tip Top Philippines, Inc. vs. Commissioner of Internal Revenue

"P-1037" to

"P-1037-12"

REMA TIP TOP AG

188,154.00

"P-1039" to

"P-1 039-9"

TIP TOP JAPAN INC

22,692.00

"P-1040" to

"P-1 040-16"

REMA TIP TOP AG

112 498.00

"P-1041" to

"P-1041-10"

HAMATON AUTOMOTIVE TECHNOLOGY CO LTD

9 898.00

"P-1044" to

TIP TOP OBERFLANCHENSHUTZ ELBE

"P-1044-11"

GMBH

296 849.00 "P-1045";

"P-1045-2" to

"P-1 045-11"

AME INTERNATIONAL

9 597.00

"P-1046" to

TIP TOP OBERFLANCHENSHUTZ ELBE

"P-1046-9"

GMBH

9,123.00

"P-1047" to

TIP TOP OBERFLACHENSCHUTZ ELBE

"P-1047-7"

GMBH

102,100.00

"P-1048" to

"P-1048-11"

REMA TIP TOP AG

57,517.00

"P-1049" to

"P-1049-5"

REMA TIP TOP AG

4 481.00

"P-1050" to

"P-1 050-12"

REMA TIP TOP AG

25,154.00 "P-1021";

"P-1021-2" to

"P-1021-7''

HAMATON AUTOMOTIVE TECHNOLOGYY CO LTD

15,721.00

"P-1023" to

"P-1023-11"

TIP TOP JAPAN INC.

12631.00

Subtotal

!' 1 266,347.00

15. Input VAT on importation supported by documents not pertaining to the transaction

"P-1026" to

"P-1 026-5"

REMA TIP TOP AG

p 36,792.00

Subtotal

!' 36 792.00

Total

p 2,274 264.72 Thus, in compliance with the seventh requisite, only the amount of P2,825,509.32, as computed below, is duly substantiated and shall be considered valid input VAT, to wit: Reported input VAT per amended Quarterly VAT Returns forTY 2018 p 5,572,385.45

Less: Disallowances

Per !CPA's Amended Report 1'472,611.41 Per this Court's further 2,274,264.72 2, 746,876.13 verification Valid input VAT P2,825,509.32

Rema Tip Top Philippines, Inc. vs. Commissioner of Internal Revenue

Eighth requisite: Since there are both zero-rated and taxable sales subject to 12% VAT, the valid input VAT of P2,825,509.32 shall be proportionately allocated based on petitioner's sales volume.

To reiterate, the eighth requisite is that the input taxes claimed are attributable to zero-rated or effectively zero-rated sales. However, where there are both zero-rated or effectively zero-rated sales and taxable or exempt sales, and the input taxes cannot be directly and entirely attributable to any of these sales, the input taxes shall be proportionately allocated based on sales volume.

As stated earlier, petitioner declared taxable sales/receipts subject to 12%

VAT

and zero-rated sales/receipts, reflecting total sales/receipts of P162,794,001.62 forTY 2018, as shown below:

Particulars

Amount

VA Table Sales I Receipts

p 19,316,404.95

Zero-Rated Sales/Receipts

143,4 77,596.67

Total Sales/Receipts

p 162,794,001.62 In the present case, only P58,601,925.94 qualified for VAT zero-rating of sales of goods and services to PEZA- registered entities. Out of the total reported input VAT of P5,572,385.45 attributable to both twelve percent (12%) VAT- able and zero-rated transactions, only P2,825,509.32 was substantiated with VAT official receipts and invoices. Since petitioner's input VAT cannot be directly or entirely attributed to any of the transactions, the valid input VAT of P2,825,509.32 shall be allocated proportionately based on the volume of petitioner's total reported sales/receipts of P162,794,001.62. Consequently, only the portion of input VAT amounting to P1,017,115.41 is attributable to the valid zero- rated sales/receipts ofP58,601,925.94, computed as follows: Valid zero-rated sales/receipts forTY 2018 I' 58,601,925.94 Divided by: Total reported sales/receipts forTY 2018 162,794,001.62 Multiplied by: Valid input VAT not directly attributable to any activity 2,825,509.32 Valid input VAT attributable to valid zero-rated sales/receipts Pl,017 115.41

Rema Tip Top Philippines, Inc. vs. Commissioner of Internal Revenue

Thus, regarding petitioner's compliarice with the eighth requisite, only the amount of !'1,017,115.41 represents petitioner's valid input VAT directly attributable arid allocable to its valid zero-rated sales/receipts for the TY 2018.

Ninth

requisite:

Petitioner

failed to establish that the subject claim was not carried over nor applied against any output tax in the succeeding quarters.

Having determined that petitioner had valid input VAT attributable to its zero-rated sales/receipts, the Court shall now determine whether the same was not applied against its output VAT liability during arid in the succeeding quarters, relative to the ninth requisite for the successful prosecution of ari input VAT refund claim.

At this juncture, it is worth mentioning the recent pronouncement of the Supreme Court in the case of Chevron Holdings, Inc.

(Formerly

Caltex Asia Limited)

vs.

Commissioner of Internal Revenue,95 where it held that the input tax attributable to zero-rated sales may, at the option of the VAT-registered taxpayer, be: (1) charged against output tax from regular 12% VAT-able sales, arid ariY unutilized or "excess" input tax may be claimed for refund, or the issuarice of a tax credit certificate; or (2) claimed for refund or tax credit in its entirety, arid such option is vested with the taxpayer- claimarit.

In the instarit case, petitioner claims for refund arid/ or issuarice of tax credit certificate of its alleged unutilized input VAT attributable to zero-rated sales in its entirety, thus, availing of the option (2) as mentioned above. Concerning the ninth requisite, petitioner submitted in evidence its amended Quarterly VAT Returns for the 4th quarter of TY 2017 to the 1st quarter of TY 2020.96 However, the Court find' the p<eced;ng document' ;mufficient.~ 95 G.R. No. 215159, July 5, 2022.

96 Exhibits "P-I 0" to "P-13", "P-94" to "P-97", "P-I 0 12" to "P-1020-1 ", and, "P-3 796 and submarkings", Docket, pp. 2451 to 2458, 2630 to 2637 and USB.

Rema Tip Top Philippines, Inc. vs. Commissioner of Internal Revenue

While petitioner's Quarterly VAT Returns for the four quarters of TY 2018 97 show that the claimed input taxes attributable to zero-rated sales/receipts were not credited against output taxes98 because of the substantial amount of input tax carried over from the previous period, 99 petitioner failed to prove that the claimed input taxes were not applied against any output tax in the succeeding quarters. It must be emphasized that although petitioner is allowed under Section llO(B) of the NIRC of 1997, as amended, to carry over the excess input VAT of a given quarter to the succeeding quarter(s), petitioner is required to deduct the claimed input taxes from its accumulated input VAT as of the quarter when it opted to file a claim therefor as provided under Section 11 O(C) of the NIRC of 1997, as amended, to wit: "SEC. 110. Tax Credits

XXX

XXX

XXX

{C) Detennination of Creditable Input Tax. - The sum of the excess input tax carried over from the preceding month or quarter and the input tax creditable to a VAT-registered person during the taxable month or quarter shall be reduced by the amount of claim for refund or tax credit for value-added tax and other adjustments, such as purchase returns or allowances and input tax attributable to exempt sale. xxx" {Boldfacing supplied) The deduction ensures that the claimed input VAT shall not be carried-over nor applied against any output tax in the succeeding quarter(s).

In this case, the ICPA alleged that the tracing of petitioner's Quarterly VAT Returns for the TY 2018 and subsequent returns filed with the BIR in TYs 2019 and 2020 (Annexes "F" and "G") shows that while petitioner reported its purchases allocated to zero-rated sales in its VAT Returns 97 Exhibits "P-I 0" to "P-13", Docket, pp. 2451 to 2458.

9S

Exhibit

fLine 198, Docket- Vol. V, no. 2451 to 2458.)

"P-10"

"P-11"

"P-12"

"P-13"

Output VAT per amended Quarterly VAT Returns 99 1'8,446,334.93, Line 20A, Exhibit "P-I 0", Docket. pp. 2451 to 2452.

TY 2018

Amount

1st Quarter p 581,897.49 znd Quarter 575,648.60 3rd Quarter 643,541.68 41h Quarter 516,880.83 1'2,317,968.60

Rema Tip Top Philippines, Inc. vs. Commissioner of Internal Revenue

(Line 21N), the corresponding amount of input tax on said purchases (Line 21 0) allocated to zero-rated sales for each period and the carry-over from the previous period (Line 20E) were deducted as VAT Refund in said VAT Returns (Line 23D). The net effect of this computation is zero. Thus, the ICPA asserts that it can be said that the amount of input tax allocated to zero-rated sales in TY 2018 was not utilized by petitioner in TYs 2019 and 2020.100 A perusal of petitioner's Quarterly VAT Returns for TY s 2018 and 2019 shows that petitioner habitually carried over the cumulative amount of "VAT Re.fund/TCC Claimed" (Line 23D) from the previous period as allowable input tax "Others" for the succeeding period (Line 20E). Simultaneously, the sum of the previous period's "VAT Re.fund/TCC Claimed" (Line 23D) or each quarter's "Others" (Line 20E) and each quarter's input tax allocated to zero-rated sales ("Others," Line 210) was reported as a deduction from input tax as "VAT Re.fund/TCC claimed" (Line 23D) for the current quarter, from one period to another, detailed as follows: Amended Quarterly VAT Returns forTY 2018: Exhibit No.

"P-10"

«P-11"

"P-12"

"P-13"

Docket-Vol. V pp.

2451-2452 2453-2454 2455-2456 2457-2458

TY2018

l•t Quarter

2•• Quarter

3"d Quarter

4•• Quarter

Output Tax Due

(Line 19B)

p 581 897.49 p 575,648.60 p 643,541.68 p 516,880.83 Less: Allowable In out Tax

Input Tax

Carried

Over from

Previous

Period (Line 20A)

I' 8,446 334.93 I' 8,074,557.43 I' 8,057,337.89 I' 7,642,122.50

Input Tax

Deferred on Capital Goods

Exceeding

!'!Million from Previous

Quarter (Line

20B)

- - 56 250.00 56,250.00

Others (Line 20E)

7 275 535.75 8 292 359.03 9 893 715.78 10 997 107.00

Total (Line 20F)

(Sum of Items

20A, 20B&

20EJ

P15,721,870.68 P16 366 916.46 P18 007,303.67 P18 695 479.50

Current Transactions

Purchase of

Capital

Goods exceeding !'!Million

(Line 21D)

I'

- p 1 125,000.00

I'

-

I'

-

Rema Tip Top Philippines, Inc. vs. Commissioner of Internal Revenue

Nona n none ee eo nnn nee en nn nnn nnn ncn ne tr nnn nn een nn nen nner nas x

Domestic

Purchases of

Goods

Other than

Capital

25,720.75 12,837.98 35,667.65 13,196.92

Importation of

Goods Other

than

Capital Goods

Domestic

Purchase of Services

‘Line 21J, 117,687.26 67,456.20 55,313.47 41,034.21 Others (Line 210, 1,016,823.28 1,601,356.75 1,103,391.22 712,959.45

Total Available

Input Tax (Line

22) (Sum of Items

20F, 21D, 21F, 21H, 21d & 210) | P16,948,813.95 | P19,595,452.27 | P19,282,771.18 | P19,493, 168.36 Less: Deductions from Input Tax a = P_1,068,750.00

Purchases of

Capital Goods

8,292 ,359.03 9,893,715.78 10,997,107.00 P 8,292,359.03 | P10,962,465.78 | ?10,997,107.00 exceeding

P1 Million

? 8,656,454.92 | P 8,632,986.49 | P 8,285,664.18 ?(8,074,557.43) | P(8,057,337.89) | P(7,642,122.50 deferred for the Amended arterly VAT Retums for TY 2019:

succeeding period

Line 23A

VAT Refund /

TCC

claimed (Line 23D,

Total (Line 23F)

(Sum of Items

11,710,066.46 P11,710,066.46

Total Allowable

Input Tax

(Line 24) (Item 22

less Item 23F) P 7,783,101.90

Tax Overpayment

(Lines 25, 27 & 29) (Item 19B less ?(7,266,221.07 Exhibit No.

Docket-Vol. V, pp. 2630-2631 2632-2633 2634-2635 2636-2637 | _TY¥2019 —|_—sIst Quarter {2nd Quarter | 3rd Quarter | 4th Quarter Line 19B P 450,755.27 | P 675,202.18 | P 427,165.62 | P 667,443.14

Less: Allowable Input Tax a

Input Tax Carried

P 7,266,221.07 | P7,263,932.66!0!

Over from

Previous

‘01 With P0.01 difference from previous quarter’s tax overpayment. 102 With P0.01 difference from previous quarter’s tax overpayment.

P

7,332,206, ] } 102 Period (Line 20A P 7,143,316,02

Rema Tip Top Philippines, Inc. vs. Commissioner of Internal Revenue

Kerra nnn nnn nnn te nnn re nnn nn nn nn nn ncn cnn nnn c renee eee x

Input Tax

Deferred on Capital Goods

Exceeding

P1 Million

from Previous

Quarter (Line

20B, 56,250.00 56,250.00 56,250.00 56,250.00 Others (Line 20E, 11,710,066.46 13,262,694.77 14,407,043.09 16,020,993.31

Total (Line 20F)

(Sum of Items

20A, 20B & 20E) ?19,032,537.53 | ?20,582,877.43 | P21,795,499.20

Current Transactions

ie Po

Capital

Goods exceeding

P1Million

Line 21D

Domestic

Purchases of

Goods

Other than

Capital

18,537.06 30,006.80 17,257.82 51,756.86

Importation of

Goods Other than

Capital Goods

Domestic

Purchase of Services

‘Line 21d, 45,861.58 116,548.36 42,431.70 97,699.75 Others (Line 210, 1,552,628.32 1,144,348.31 1,613,950.22 1,160,500,00

Total Available

Input Tax (Line

22) (Sum of Items

20F, 21D, 21F, 21H, 213 & 210 P20,977,382.71 | ?22,414,451.37 | P23,591,474.95 | P24,870,716.23 Less: Deductions from Input Tax

Input Tax on

Purchases of

13,262,694.77 16,020,993.31

Total (Line 23F)

(Sum of Items

23A & 23D, ?13,262,694.77 | P14,407,043.09 | P16,020,993.31 | P17,181,493.30

Capital Goods

em “onus ‘sseansnsn P 7,714,687.94 | Pf 8,007,408.28 | P_7,570,481.64 | P_7,689,222.93 exceeding

P1 Million

Input Tax

(Line 24) (Item 22

P(7,263,932.67) | P(7,332,206.10) | P(7,143,316.02) | P(7,021,779.79 deferred for the succeeding period

Tax Overpayment

(Lines 25, 27 & 29) (Item 19B less

Rema Tip Top Philippines, Inc. vs. Commissioner of Internal Revenue

From the foregoing, the cumulative figures of "VAT Refund/TCC claimed" (Line 23D) reported for TYs 2018 and 2019 included the input VAT claim of P4,434,530.00 which was deducted as part of the "VAT Refund/TCC Claimed" for the four quarters of TY 2018. Said amount is determined as follows: 103

VAT Refund/

Less:

VAT Refund/

Exhibit

TCCclaimed

Others

TCC claimed No.

TY 2018

(Line 23D}

(Line :ZOE}

for the quarter

"P-10"

1" Quarter

1'8,292,359.03 I' 7,275,535.75 I' 1,016,823.28

"P-11"

2nd Quarter 9,893,715.78 8,292,359.03 1,601,356.75

"P-12"

3•d Quarter 10,997,107.00 9,893 715.78 I, 103,391.22

"P-13"

4th Quarter 11,710,066.46 10,997 107.00 712,959.46

Total

1"4,434,530. 71 Based on petitioner's amended Quarterly VAT Returns, as mentioned earlier, the tax overpayment for each quarter to be carried over to the succeeding quarter matched from the 1st quarter ofTY 2018 to the 4th quarter ofTY 2019. However, the tax overpayment in the amount of P7,021,779.79 104 for the 4th quarter of TY 2019 does not tally with the reported "Input Tax Carried Over from Previous Period" in the amount of P16,542,149.83105 for the 1st quarter of TY 2020. The "Input Tax Carried Over from Previous Period" for the 1st quarter of TY 2020 is way higher than the tax overpayment from the 4th quarter ofTY 2019 by P9,520,370.04106, shown as follows: Exhibit No.

Docket-Val. V, pp.

Period

Output Tax Due (Line 19B}

Less: Allowable Input Tax

Input Tax Carried Over from Previous Period (Line

20Aj

Input Tax Deferred on Capital Goods exceeding

1'1 Million

from Previous Quarter (Line 20B)

Others (Line 20E)

Total !Line 20FJ (Sum of Items 20A 20B and 20EJ

Current Transactions

Purchase of Capital Goods exceeding P1 Million (Line

21D)

Domestic Purchases of Goods Other than Capital

Goods

(Line 21F)

Importation of Goods Other than Capital Goods (Line

21Hi

Domestic Purchase of Services (Line 21J)

103 With rounding-off difference of PO. 71: Docket. pp. 2451 to 2458. 104 Line 29, Exhibit "P-97", Docket, p. 2637. 105 Line 20A, Exhibit "P-3796", Exhibit "P-129" (USB flash drive). 106 1'16,542, 149.831ess 1'7.021,779.79.

«P-97"

"P-3796"

2636-2637

USB

4th Quarter l•t Quarter ofTY 2019 ofTY2020 p 667,443.14 p 576,445.77

I'

7,143,316.02

I"

16 542 149.83 56,250.00 56,250.00 16,020 993.31 11,710,066.46 P23 220 559.33 p 28 308 466.29 p - p - 51,756.86 19,930.80 340,200.29 99 789.35 97,699.75 120,086.86

Rema Tip Top Philippines, Inc. vs. Commissioner of Internal Revenue

Services Rendered by Non-residents (Line 21L)

- Others !Line 21 OJ 1,160,500.00

Total Available Input Tax (Line 22)

{Sum of Items 20F, 21D, 21F, 21H, 21J, 21L & 210) P24,870 716.23 Less: Deductions from In out Tax Input Tax on Purchases of Capital Goods exceeding PI Million deferred for the succeeding period (Line

23A)

- VAT Refund/TCC claimed [Line 23D) 17 181,493.30 Total (Line 23F) (Sum o.f Items 23A & 23DJ P17 181,493.30

Total Allowable Input Tax (Line 24)

(Item 22 lessltem 23FJ p 7 689 222.93 Tax Overpayment (Lines 25, 27 & 29) litem 19B less Item 24 1'17 021 779.791 180,205.71 I 638,277.08 p 30,366,756.09 - 13 348,343.62 p 13 348 343.62 p 17 018 412.47 Pjl6,441 966.701 The ICPA noted that the amount of VAT refund carried over in the 1st quarter of TY 2020 (Line 20E) pertains to the amount of VAT refund per VAT Return for the 4th quarter ofTY 2018 instead of the amount of VAT refund per VAT Return for the 4th quarter of TY 2019. Petitioner claims that this was their presentation since it will no longer claim for VAT refund the input VAT for zero-rated sales for the TY 2019. 107 Moreover, the ICPA points out that the input tax allocated to zero-rated sales, first presented in Line 20E "Others" of the 1st quarter VAT Return forTY 2019, amounted to P11,710,066.46. This amount consists of P7,275,535.75, which is the amount of input tax allocated to zero-rated sales as of the 4th quarter of TY 2016, and P4,434,530.71, which is the amount of input tax allocated to zero-rated sales for TY 2018 and the subject matter of this Petition.I08 Nevertheless, the Court cannot ascertain whether the discrepancy in the amount of P9,520,370.04 between the tax overpayment ofP7,021,779.79109 for the 4th quarter ofTY 2019 vis-a-vis the "Input Tax Carried Over from Previous Period" of P16,542,149.83110for the 1st quarter ofTY 2020 does not include the claimed amount of P4,434,530.00. Albeit the input VAT claimed amount of P4,434,530.00 formed part of the cumulative figures of both "Others" (Line 20E) and "VAT Refu.nd/TCC claimed" (Line 23D), in the respective amounts of P11,710,066.46 and P13,348,343.62, for the 1st quarter of TY 2020, nonetheless, the "Input Tax Carried Over from Previous Period" of P16,542,149.83III for the 1st quarter of TY 2020 remains excessive. Moreover, even if the input VAT allocated

Rema Tip Top Philippines, Inc. vs. Commissioner of Internal Revenue for zero-rated sales for TY 20 19 in the total amount of P5,471,426.85 112 is to be added back to the overpayment of P7,021,779.79 113 for the 4th quarter of TY 2019, the resulting amount of P12,493,206.64 114 is still lower than the actual "Input Tax Carried Over from Previous Period" in the amount of P16,542,149.83 115 for the l•t quarter of TY 2020 by P4,048,943.19.1 16 Hence, the subject claim may still form part of the Pl6,542,149.83 carried over to the l•t quarter of TY 2020 and, consequently, be applied to the output VAT liability in the said quarter and the succeeding taxable quarters. In sum, notwithstanding that out of the total claim of P4,434,530.00, petitioner was able to prove that the amount of P1,017,115.41 represents unutilized input VAT attributable to its zero-rated sales/receipts for the TY 2018, the latter amount cannot be granted since petitioner failed to establish that it was not carried-over nor applied against any output tax in the succeeding quarters.

It bears to stress that statutes that grant tax exemptions are construed strictissimi juris against the taxpayer and liberally in favor of the taxing authority. 117 Tax refunds in relation to the VAT are in the nature of tax exemptions. 118 Thus, the taxpayer claiming the tax credit or refund has the burden of proving that he/she is entitled to the refund or credit, in this case, input VAT, by submitting evidence that he/she has complied with the requirements laid down in the Tax Code and the BIR's Revenue Regulations under which such privilege of credit or refund is accorded.1 19 However, in this case, petitioner failed to discharge the said burden fully.

WHEREFORE, premises considered, the instant Petition for Review is DENIED for lack of merit. '"Sum ofPI,552,628.32; 1'1,144,348.31; 1'1,613,950.22; and, 1'1,160.500.00; "Others" (Line 210), Exhibits "P-94" to "P-97", Docket, pp. 2630 to 2637. '"Line 29, Exhibit "P-97", Do eke~ p. 2637. '" Sum of1'5,47 I ,426.85 and 1'7,02 I, 779.79. '" Line 20A, Exhibit "P-3796", Exhibit "P-I 29" (USB flash drive). "'PI 6,542, I 49.83 less PI 2,493,206.64. 117 rnmmissioner nf!nterna! Revenue vs. Seagate Technoln[zy (Philippines.). G.R. No. 153R66. February 11.2005. 118 Panasonic Communication Imaging Corporation of the Philippines (formerly Matsushita Business Machine Corporation of the Philippines) vs. Commissioner of Internal Revenue, G.R. No. 178090, February 08,2010.

Rema Tip Top Philippines, Inc. vs. Commissioner of Internal Revenue

Associate Justice

I CONCUR:

•

ATTESTATION

I attest that the conclusions in the above Decision were reached in consultation before the case was assigned to the writer of the opinion of the Court's Division. •

JEANMA

Rema Tip Top Philippines, Inc. vs. Commissioner of Internal Revenue

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution, and the Special 2nd Division Chairperson's Attestation, it is hereby certified that the conclusions in the above Decision were reached in consultation before the case was assigned to the writer of the opinion of the Court's Division. ROMAN G. DEL ROSARIO

Presiding Justice