Sandoz Philippines Corporation vs. Commissioner of Internal Revenue

DECISION

MODESTO-SAN PEDRO, J.: The Case This Petition for Review filed on January 4, 2023, prays for the refund or issuance ofta)( credit certificate in the amount ofP81 ,970,841.12, allegedly representing petitioner's Value-Added Ta)( ("VAT") erroneously paid during the period January 1, 2021 to December 31, 2021 on its importations of prescription drugs and medicines for diabetes, high cholesterol and hypertension, as well as prescription drugs and medicine for cancer, mental illness and kidney diseases. 1 The Parties Petitioner Sandoz Philippines Corporation is a domestic corporation duly organized and existing under Philippine law,2 with principal office address at 5th- 6th Floor, Ayala North E)(change Tower 1, Ayala Avenue, cor. 1 Summary ofthe Case, Pre-Trial Order, Docket- Vol. I, p. 392. See Exhibit "P-1" (SEC Certificate of Filing of Amended Articles of Incorporation), Docket- Vol. II, p. 612.

~ DECISIOI\ CT A CASE NO. II 060 Page 2 of24 Salcedo and Amorsolo Streets, Makati City.3 It is also registered with the Bureau of Internal Revenue ("BIR") as a VAT taxpayer, with Taxpayer's Identification No. ("TIN") 220-706-109-00000.4 Respondent Commissioner of Internal Revenue is sued in his official capacity, having been duly appointed and empowered to perform the duties of his office, including, among others, the duty to act on and approve claims for refund as provided by law. He may be served with summons, notices and other court processes at the Legal Division, Bureau of Internal Revenue, RR8A- Makati City, 361h Fir. Exportbank Plaza Bldg., Sen. Gil Puyat Ave. cor. Chino Roces Ave., Makati City.5 The Facts On December 29, 2022, petitioner filed with the BIR a Letter and an Application for Tax Credits/Refunds (BIR Form No. 1914), based on Section 109(l)(AA) of the National internal Revenue Code of 1997, ("the Tax Code") as amended by Republic Act ("R.A. ")Nos. 114676 and 11534,7 for the taxable year ("TY") 2021 amounting to P81,970,841.12.8 The following summarizes petitioner's importations forTY 2021: Item Imported VAT Payment EKOSART !OOMG 30FCT VI PH

A V AMAX 80MG 30FCT UD PH

EKOSART IOOMG 30FCT VI PH

CRESART SDZ 40MG 30FCT UD PH

CRESART SDZ 20MG 30FCT UD PH

XANTOR I OMG I OOFCT PH

RITEMED OLMESARTAN 20MG 30FCT

UDPH

XANTOR40MG TAB IOOS

CARDJOV ASC I OMG TAB I OO'S

A V AMAX 80MG 30FCT UD PH

CARDIOVASC IOMG TAB IOO'S

RITEMED AMLODIPINE 5MG I OOT AB

VI PH

RITEMED AMLODIPINE 5MG lOOT AB

VI PH

RJTEMED AMLODIPINE 5MG IOOTAB

VI PH

Par. 3, Petition for Review, Docket- Vol. I, p. 8. 4 Exhibit "P-4", Docket- Vol. II, pp. 624 to 626. P561,768.53 188,046.13 286,226.37 65,150.83 71,230.29 136,758.78 32,138.74 272,616.57 692,783.35 198,375.14 689,108.08 183,640.96 169,724.54 176,127.28 SSDT No.9 Date of Payment (ddlmmlyyyy) R4400 05/01/2021 R4400 05/01/2021 R4400 05/01/2021

R 6695

06/01/2021

R 7925

07101/2021

R 7925

07/0112021

R 7925

07/01/2021

R 6697

06/01/2021

R 30207

18/01/2021

R 36139

20/0I/202I

R 44778

25/01/2021

R 44779

25/0112021

R 47420

26/0I/202I

R 44777

25/0I/202I 5 Par. 2, Summary of Admitted Facts, Joint Stipulation of Facts and Issues, Docket- Vol. I, p. 375. ( 6 An Act Amending Sections I 09,141, 142, 143,144, 14 7, 152, 263, 263-A, 265, and 288-A, and Adding a New Section 290-A to Republic Act No. 8424, as amended, Otherwise Known as the National Internal Revenue Code of 1997, and for Other Purposes. 7 An Act Reforming the Corporate Income Tax and Incentives System, Amending for the Purpose Sections 20, 22, 25, 27, 28, 29, 34, 40, 57, 109, 116,204 and 290 ofthe National Internal Revenue Code of 1997, as Amended, and Creating Therein New Title Xlll, and for Other Purposes, otherwise known as "Corporate Recovery and Tax Incentives for Enterprises Act" or "CREATE". 8 Exhibits "P-741" to "P-742", with sub-markings, Docket- Vol!!, pp. 628 to 722. 9 Exhibits "P-I 009-C.l" to "P-I 009-C.I85".

DECISIO~ CTA CASE NO. 11060 Page 3 of24

LODINE 5MG IOOPRT PH

RITEMED FELODIPINE 5MG IOOPRT UD

PH

RITEMED AMLODIPINE 5MG IOOTAB

VI CO-TAREG 80+12.5MG 28FCT PH

T AREG 80MG 28FCT PH

VERAL 240MG IOOPRT UD PH

RITEMED AMLODIPINE 1 OMG 1 OOT AB

VI PH

RITEMED AMLODIPINE 1 OMG I OOT AB

VI PH

CARDIOVASC 5MG IOOTAB VI PH

FREPAN 8MG 30TAB PH

RITEMED FELODIPINE 5MG IOOPRT UD

PH

TAREG 160MG 28FCT PH

T AREG 80MG 28FCT PH

CARDIOVASC 5MG IOOTAB VI PH

PROSTERA 5MG 30T AB PH

GLICLAZIDE 500KG

PROSTERA 2MG 90T AB PH

ROSAL T A 20MG 30FCT PH

RITEMED ROSUV AST A TIN 20MG

30FCT UD PH

RITEMED AMLODIPINE 5MG I OOT AB

VI PH

VIV ASARTAN 50MG 30FCT VI PH

A V AMAX 40MG I OOFCT PH

LOSARTAN POTASSIUM 50MG 30FCT

LOSARTAN POTASSIUM 50MG 30FCT

LOSARTAN POTASSIUM 50MG 30FCT

LOSARTAN POTASSIUM 50MG 30FCT

LOSARTAN POTASSIUM 50MG 30FCT

LOSARTAN POTASSIUM 50MG 30FCT

LOSARTAN POTASSIUM 50MG 30FCT

LOSARTAN POTASSIUM 50MG 30FCT

LOSARTAN POTASSIUM 50MG 30FCT

LOSARTAN POTASSIUM 50MG 30FCT

A V AMAX I OMG I OOFCT PH

RITEMED ROSUV AST A TIN I OMG

30FCT UD PH

FREPAN 16MG 30TAB PH

ROBEST AR I OMG 30FCT PH

XANTOR 20MG I OOFCT PH

IRBENOX 150MG 28FCT PH

RITEMED AMLODIPINE 5MG I OOT AB

VI PH

VIV ASART AN I OOMG 30FCT V2 PH

RITEMED AMLODIPINE 5MG IOOTAB

VI PH

RITEMED FELODIPINE 5MG IOOPRT UD

PH

RTM VERAPAMIL 240MG IOOPRT UD

PH

RM GLIMEPIRIDE 2MG

LOSARTAN POTASSIUM IOOMG 30FCT

LOSARTAN POTASSIUM 100MG 30FCT

LOSARTAN POTASSIUM 100MG 30FCT

GLICLAZIDE 30MG 60PRT PH

FREPAN 8MG 30TAB PH

- - 88,794.26

R 47070

26/01/2021 99,431.90

R 47070

26/01/2021 352,219.52

R 54312

05/02/2021 176,056.15

R 70840

05/02/2021 623,552.06

R 76066

08/02/2021 121,309.14

R 76068

08/02/2021 591,862.90

R 90163

15/02/2021 506,003.82

R 93209

16/02/2021 358,674.40

R 90366

15/02/2021 31,596.63

R 97541

18/02/2021 108,477.87

R 112945

26/02/2021 932,986.98

R 131654

08/03/2021 843,816.96

R 136365

10/03/2021 173,739.70

R 153230

17/03/2021 366,740.75

R 172862

24/03/2021 I 318,034.19

R 31246

22/03/2021 194,307.69

R 174665

25/03/2021 I 173,416.32

R 174665

25/03/2021 140,416.53

R 174665

25/03/2021 I I 270,852.73

R 183165

29/03/2021 I ' 120,141.10

R 185596

30/03/2021 433,147.51

R 36344

06/04/2021 253,131.43

R 203662

08/04/2021 249,369.19

R 203661

08/04/2021 252,169.43

R 226936

19/04/2021 254,195.80

R 226937

19/04/2021 251,436.42

R 226938

19/04/2021 252,229.73

R 226939

19/04/2021 251,011.02 R211442 12/04/2021 252,959.62

R 210918

12/04/2021 226,127.49 R211441 12/04/2021 97,064.10 R210642 12/04/2021 168,599.24 R210639 12/04/2021 165,386.64 R213748 13/04/2021 147,352.05

R 213748

13/04/2021 287,312.43 R213748 13/04/2021 208,550.39

R 213745

13/04/2021 140,708.97

R 228821

20/04/2021 444,636.74

R 232306

21/04/2021 615,064.68

R 232305

21/04/2021 442,384.05

R 232309

21/04/2021 74,298.13

R 232586

21/04/2021 112,588.04

R 232586

21/04/2021 129,771.30

R 232587

21/04/2021 324,361.89

R 235547

22/04/2021 293,106.64

R 238097

23/04/2021 292,472.49

R 245190

26/04/2021 77,656.40 R245192 26/04/2021 151, 188.21 R245192 26/04/2021 r

CTA CASE NO. 11060

PROLOHEX 100MG TAB IOO'S (IFG)

91,468.94

R 178603

29/04/2021

VIVASARTAN 50MG 30FCT VI PH

446,420.58

R 187757

05/05/2021

GLICLAZIDE 30MG 60PRT PH

69,517.78

R 300850

18/05/2021

PROSTERA 2MG 90T AB PH

I 0 I, 140.20

R 300850

18/05/2021

ROB EST AR 20MG 30FCT PH

306,069.80

R 300850

18/05/2021

CARDIOVASC 5MG 100TAB VI PH

794,560.72

R 291521

14/05/2021

EKOSART 50MG 30FCT VI PH

8,047.12

R 206199

18/05/2021

AMBESYL 5MG 30TAB VI PH

1,134,983.26

R 298292

17/05/2021

RIMEPRIL SDZ 2MG I OOT AB PH

175,123.32

R 304824

19/05/202 I

RITEMED AMLODIPINE IOMG IOOTAB

502,540.14

R 353984

07/06/2021

VI PH

V ALCAMP 80+5MG 7FCT PH

253,586.34 R260229 18/06/2021

V ALCAMP 160+5MG 7FCT PH

239,065.49

R 260229

18/06/2021

VALCAMP 160+10MG 7FCT PH

220,437.88

R 259706

17/06/2021

RITEMED AMLODIPINE IOMG 100TAB

507,450.78

R 367227

11/06/2021

VI PH

RITEMED AMLODIPINE I OMG I OOT AB

508,880.45

R 377566

15/06/2021

VI PH

RITEMED AMLODIPINE IOMG IOOTAB

507,502.63

R 377567

15/06/2021

VI PH

T AREG 160MG 28FCT PH

891,036.58 R380182 16/06/2021 Gliclazide 500 KG 311,874.55

R 260636

18/06/2021

RITEMED AMLODIPINE 5MG 1 OOT AB

605,496.85 R380185 16/06/2021

VI PH

RITEMED AMLODIPINE 5MG I OOT AB

406,726.17

R 380441

16/06/2021 i

VI PH

RITEMED BISOPROLOL 5MG I OOFCT

42,588.54

R 380440

16/06/2021 PH

TAREG 80MG 28FCT PH

I ,730,753.88

R 376920

15/06/2021 I

CARDIOV ASC I OMG TAB I OO'S

1,078,475.70

R 396175

22/06/2021 CO-TAREG 160+12.5MG 28FCT PH 391,839.25

R 410249

28/06/2021

RIMEPRIL SDZ 3MG 1 OOT AB PH

111,412.40

R 397990

23/06/2021 I

RITEMED BISOPROLOL 5MG I OOFCT

42,200.73

R 397990

23/06/2021 PH

RM GLIMEPIRIDE 3MG

41,648.89

R 397990

23/06/2021 I

AT AJEC 500MG 50FCT UD PH

195,812.34

R 423374

02/07/2021 EBW PACLITAXEL IOOMG/16,7ML 166,868.73

R 431451

05/07/2021

ILIVI PH

LOSARTAN POTASSIUM 50MG 30FCT

289,915.11

R 436633

07/07/2021 I

LOSARTAN POTASSIUM 50MG 30FCT

297,226.76

R 434229

06/07/2021

LOSARTAN POTASSIUM 50MG 30FCT

300,287.46

R 434232

06/07/2021

LOSARTAN POTASSIUM 50MG 30FCT

298,828.04

R 433784

06/07/2021

LOSARTAN POTASSIUM 50MG 30FCT

180,039.07

R 434233

06/07/2021

LOSARTAN POTASSIUM 50MG 30FCT

328,291.69

R 429919

05/07/2021

XALIPTINE 200MG/40ML I LIVI LF PH

263,226.31

R 436844

07/07/2021

RITEMED AMLODIPINE IOMG IOOTAB

969,311.51

R 451482

12/07/2021

VI PH

RIMST AR 4-FDC FCT 60'S (IFG)

275,814.38 R451461 12/07/2021

AMBESYL I OMG 30T AB VI PH

1,838,301.45

R 304825

15/07/2021

ARIZOPRESS I OMG 30T AB PH

530,629.24

R 454149

13/07/2021

LODINE 5MG IOOPRT PH

179,598.95

R 453524

13/07/2021

RITEMED FELODIPINE 5MG IOOPRT UD

231,985.99

R 453524

13/07/2021 PH

RM LOSARTAN 50MG 30FCT UD PH

768,616.38

R 296153

12/07/2021

RM LOSARTAN 50MG 30FCT UD PH

364,231.64

R 296995

12/07/2021

RM LOSARTAN IOOMG 30FCT UD PH

277,868.00

R 303222

I 5/07/2021

RM LOSARTAN IOOMG 30FCT UD PH

435,415.71

R 311023

21107/2021

RM LOSARTAN 50MG 30FCT UD PH

156,208.48

R 311023

21/07/2021

RM LOSARTAN 50MG 30FCT UD PH

774,402.10

R 309562

19/07/2021

RM LOSARTAN 50MG 30FCT UD PH

305,063.49

R 312870

21/07/2021

LOSARTAN POTASSIUM 50MG 30FCT

30 I ,251.75

R 457081

14/07/2021 I DECISIOI\ CTA CASE NO. 11060 Page 5 of24

XANTOR I OMG I OOFCT PH

ROBEST AR 20MG 30FCT PH

LOSARTAN POTASSIUM 50MG 30FCT

CARDIOV ASC 5MG I OOT AB VI PH

RITEMED AMLODIPINE I OMG I OOT AB

VI PH

A V AMAX 80MG 30FCT UD PH

RM LOSARTAN 50MG 30FCT UD PH

ZOFRAN 4MG/2ML 5LIAM PH

XANTOR 40MG TAB I OOS

GLICLAZIDE API

LOSART AN POTASSIUM I OOMG 30FCT

LOSARTAN POTASSIUM IOOMG 30FCT

LOSARTAN POTASSIUM IOOMG 30FCT

CARVEDILOL 25MG IOOTAB UD PH

XALIPTINE 200MG/40ML I LIVI LF PH

LOSARTAN POTASSIUM 50MG 30FCT

RITEMED AMLODIPJNE 10MG IOOTAB

VI PH

CARDIOVASC 5MG IOOTAB VI PH

XALIPTINE 50MG/IOML I LIVI LF PH

XALIPTINE IOOMG/20ML ILIVI LF PH

CRESART SDZ 40MG 30FCT UD PH

ESIT ALO I OMG 28FCT PH

RM GLIMEPIRIDE 2MG IOOTAB PH

RM GLIMEPIRIDE 3MG IOOTAB PH

LOSARTAN POTASSIUM 50MG 30FCT

LOSARTAN POTASSIUM 50MG 30FCT

LOSARTAN POTASSIUM 50MG 30FCT

LOSARTAN POTASSIUM IOOMG 30FCT

LOSARTAN POTASSIUM IOOMG 30FCT

LOSARTAN POTASSIUM 50MG 30FCT

RITEMED AMLODIPINE 5MG IOOTAB

VI PH

RITEMED FELODIPINE 5MG IOOPRT UD

PH

AMD CARVEDILOL 25MG IOOTAB UD

PH

VERAL 240MG 100PRT UD PH

ZARZIO 30MIU/0.5ML 5LISY BI PH

RIMEPRIL SDZ 2MG 1 OOT AB PH

T AREG 80MG 28FCT PH

ISORMED 60MG 50PRT PH

BIOCLAVID IOOOMG TAB 14'S

ROBEST AR 20MG 30FCT PH

A V AMAX 80MG 30FCT UD PH

XALIPTINE IOOMG/20ML ILlY! LF PH

SIMV AS 20MG UD TAB I OO'S PH

VIDASTA T 20MG UD TAB I OO'S

RITEMED AMLODIPINE 5MG IOOTAB

VI PH

ZENITH 500MG 30FCT PH

RITEMED AMLODIPINE 1 OMG I OOT AB

VI PH

RIMEPRIL SDZ 3MG IOOTAB PH

TAREG 160MG 28FCT PH

PAIZU 2,25G I PSOIJ PH

ZOFRAN 8MG/4ML 5LIAM PH

V ALCAMP I 60+ I OMG 7FCT PH

58,603.56

R 457077

I4/07/202I 4I4,89I .22

R 457077

I4/07/202 I

303,268. I I

R 457063

I4/07/2021 165,502.62

R 477646

21107/2021 546,962.51 R477646 21/07/2021 179,647.85 R483174 23/07/2021 160,989.66

R 327744

30/07/2021 536,826.42

R 509397

02/08/2021 373,518.57 R55I716 17/08/2021 344,382.18

R 92654

16/08/2021 571,429.22

R 357871

19/08/2021 565,316.89

R 358406

I 9/08/2021

562,110.70 R3584I4

I 9/08/2021

97,255.14

R 579323

27/08/2021 298,940.79

R 579862

27/08/2021 911,787.09

R 381988

03/09/2021 532,457.35

R 604188

07/09/2021 829,037.47

R 607228

08/09/202 I

143,496.21

R 623101

14/09/2021 334,594.54

R 62369I

I4/09/202 I

44,I48.5I R619587 13/09/2021 122,581.11

R 623168

14/09/2021 153,085.43

R 620127

I3/09/2021 33,549.26

R 620127

I3/09/2021 962,101.75

R 392124

09/09/2021 919,451.52

R 396259

13/09/2021 690,489.87

R 396255

13/09/2021 555,920.22

R 398972

14/09/2021 283,659.07

R 103637

13/09/2021 307,755.48

R 103637

I3/09/2021 640,993.63

R 627034

I 5/09/2021

I85,249.69

R 640810

20/09/2021 33,828.I6

R 640810

20/09/2021 127,004.79

R 640810

20/09/2021 805,992.88

R 627033

15/09/2021 195,I45.21

R 649098

23/09/2021 864,399.69

R 646906

22/09/2021 2 I0,652.05

R 666981

0 Ill 0/2021 114,301.94

R 677295

06/I0/2021 305,318.75

R 674682

05/10/2021 310,392.61

R 686904

11/10/2021 607,087.12

R 707129

20/1 0/202I

I03,574.49

R 680359

07/I0/2021 I 74, I07.65

R 680359

07/10/2021 656,329.04

R 678057

06/10/2021 4I8,998.35

R 704890

I 9/I 0/2021

I ,603,808.40

R 692774

13/I0/202I 53,588.87 R695011 14/10/2021 565,152.93

R 69I858

13/10/2021 150,638.72

R 710508

2I/I0/202I I ,450,9 I 8.82

R 7I IOI3

2 Ill 0/202 I I 09,382.60

R 720677

26/10/2021 !

CTA CASE NO. 11060

AMOCLA V 250MG+62.5MG/5ML 60ML

IPOS PH

AMOCLA V 125MG+ 31.25MG/5ML 60ML

IPOS PH

XANTOR 40MG TAB I OOS

V ALCAMP 160+5MG 7FCT PH

RITEMED AMLODIPINE 5MG I OOT AB

VI PH

CARDIOV ASC I OMG TAB I OO'S

ARINIB I MG 28FCT PH

AMD METOPROLOL I OOMG I OOT AB UD

PH

RITEMED AMLODIPINE 5MG I OOT AB

VI PH

AMBESYL 5MG 30TAB VI PH

RITEMED AZITHROMYCIN 500MG

30FCT PH

RITEMED AMLODIPINE 5MG IOOTAB

VI PH

CARDIOVASC 5MG IOOTAB VI PH

RITEMED AMLODIPINE I OMG I OOT AB

VI PH

ZARZIO 30MIU/0.5ML 5LISY Bl PH

A V AMAX 20MG I OOFCT PH

AZITHROMYCIN I HDR 500MG 3FCT PH

ROBESTAR 10MG 30FCT PH

A V AMAX 20MG I OOFCT PH

XANTOR 20MG TAB I OOS

FENAHEX 20MG 30FCT PH

RITEMED AMLODIPINE 5MG I OOT AB

VI PH

RITEMED AMLODIPINE 5MG I OOT AB

VI PH

RITEMED AMLODIPINE 5MG I OOT AB

VI PH

AMPICIN 250MG I PSOIJ PH

AMPICIN 500MG I PSOIJ PH

FREPAN 16MG 30TAB PH

XANTOR20MG TAB IOOS

A V AMAX 80MG 30FCT UD PH

AMLODIPINE BES I OMG I OOT AB C PH ZARZIO 30MIU/0.5ML 5LISY 81 PH

FREPAN 8MG 30TAB PH

A V AMAX 80MG 30FCT UD PH

AUMOX 625MG IOOFCT ST PH

V ALCAMP I 60+ I OMG 7FCT PH

RITEMED AMLODIPINE 5MG IOOTAB

VI PH

RM PREGABALIN 75MG 56HGC VI PH

GAB! 75MG 56HGC VI PH

RITEMED AMLODIPINE IOMG IOOTAB

VI PH

RM GLIMEPIRIDE 3MG IOOTAB PH

EBEDOXO 50MG/25ML I LIVI PH

ZOFRAN 8MG/4ML 5LIAM PH

RTM VERAPAMIL 240MG IOOPRT UD

PH

AMLODIPINE BES 5MG I OOT AB C PH

VIVASARTAN 50MG 30FCT VI PH

LOSARTAN POTASSIUM 50MG 30FCT

EKOSART 50MG 30FCT VI PH

- - - 61,508.53 R467511 27/10/2021 56,192.20 R467511 27110/2021 431,511.24

R 734670

02/1 1/202 I

83,975.32

R 734671

02/11/202 I

586,834.41

R 740895

04/11/2021 1,147,186.86

R 751437

09/11/2021 436,829.53

R 748417

08/1 1/2021 70,373.35

R 748417

08/11/2021 433,065.18

R 751660

09/11/2021 I ,207,790.93

R 754244

10/1 1/202 I

213,900.12

R 759661

12/11/2021 556,024.44

R 764732

I 5/11/202 I

I I ,008,590.06

R 759662

12111/2021 I, 164,648.79

R 764733

15/11/2021 J 625,937.62

R 765637

15/11/2021 558,937.54

R 773025

18/11/2021 J 471,548.76

R 784051

23/1 1/2021 I 280,931.41

R 780812

22/11/2021 887,558.46

R 789099

25/1 1/2021 I 130,841.85

R 780808

22/11/2021 116,653.49

R 776131

19/11/2021 I 465,050.80

R 780813

22/11/202 I

457,709.69

R 78081 I

22/11/2021 I 437,649.40

R 780814

22/11/2021 I 183,308.59

R 803972

02/12/202 I

I 504,497.83

R 529438

03/12/2021 I 77,647.82

R 812113

06/12/2021 I 04,533.42

R 812117

06/12/202 I

I 298,726.98

R 812115

06/12/2021 I, 193,260. I 8

R 812307

06/12/2021 254,052.10 R819528 09/12/2021 I 67,708.09 R818953 09/12/2021 143,331.33

R 826653

13/12/2021 648,582.55

R 826655

13/12/2021 I 16,427.25

R 826908

13/12/2021 200,749.47

R 828243

13/12/2021 71,709.56

R 832686

15/12/202 I

I 148,918.01

R 832686

15/12/2021 442,005.81

R 832687

15/12/2021 I 22,255.18

R 835463

16/12/202 I

I 104,274.74

R 833822

15/12/2021 592,301.62

R 838326

I 7112/2021

I I 113,321.69

R 844101

20/12/2021 I ,21 0,434.41

R 844353

20/12/2021 197,683.30

R 859400

28/12/2021 I 08,476.82

R 859400

28/12/2021 443,053.56

R 859400

28/12/2021 I r DECISIOl\ CTA CASE NO. 11060 Page 7 of24 CO-T AREG 80+ 12.5MG 28FCT PH

AROST ANIL 25MG 30FCT UD PH

TAREG 80MG 28FCT PH

Total 147,573.14

R 846234

21/12/2021 185,858.69

R 859402

28/12/2021 2,393,821.53

R 860344

28/12/202 I

PSI ,970,841.12 i Due to respondent's inaction on its claim for refund, petitioner filed a Petition for Review ("Petition") before this Court on January 4, 2023, 10 to which respondent filed his Answer on March 14, 2023 11 and transmitted to this Court the BIR Records of the case. 12 Respondent filed his Pre-Trial Brief on May 19, 2023, while petitioner filed its Pre-Trial Brief on May 22, 2023. 13 Thereafter, Pre-Trial Conference was held on September 28, 2023. 14 On October 27, 2023, the parties submitted their Joint Stipulation of Facts and Issues, 15 which was approved and adopted in the Pre-Trial Order issued and dated January 9, 2024. 16 Trial then ensued, with the parties presenting and offering their respective documentary and testimonial evidence. Petitioner offered the testimonies of the following individuals: (1) Ms. Cristina A. Alcantara, 17 petitioner's Financial Reporting and Accounting Head; (2) Mary Ann Evangelista, M.D., 18 petitioner's Head Medical Affairs & Patient Access; and (3) Mr. Enrico T. Pizzaro, 19 the Court-commissioned Independent Certified Public Accountant ("ICPA").20 The Report of the ICPA was submitted on February 19,2024.21 10 Docket- Vol. I, pp. 6 to 84. 11 /d.at179to186.

12 Compliance dated March I 3, 2023, id. at I 76 to I 77. 13 !d. at I 90 to I 92 and I 96 to 239, respectively. 14 Minutes of the hearing held on, and Order dated, September 28, 2023, !d. at 247 to 248. 15 !d. at 374 to 383. 16 !d. at 392 to 398. r 17 Exhibit "P-901 ",with accompanying USB containing the exhibits identified, Minutes of the hearing held on, and Order dated, February 15, 2024, id. at 286 to 342 and 410 to 41 0-A, respectively. 18 Exhibit "P-900", Minutes of the hearing held on, and Order dated, February 15,2024, id. at 134 to I67 and 4 I 0 to 41 0-A, respectively. 19 Exhibit "P-902", Minutes of the hearing held on, and Order dated, March I 9, 2024, id. at 427 to 546 and 556 to 558, respectively. 20 Oath of Commission dated January 18, 2024, Minutes of the hearing held on, and Order dated January 18, 2024, id. at 400 to 400-B.

CTA CASE NO. 11060

Petitioner filed its Formal Offer of Evidence on April 18, 202422with respondent's Comment filed on April25, 2024.23 The Court resolved the same in a Resolution dated November 11, 2024.24 On the other hand, respondent presented his sole witness, Revenue Officer Julie Ann Alcantara.25 He filed his Formal Offer of Evidence on February 26, 2025.26, with petitioner's Comment filed on March 10, 2025.27 The Court resolved the same in a Resolution dated July 8, 2025.28 Respondent manifested that he adopts all his prior pleadings in relation to this case as his memorandum,29 while petitioner's Memorandum was submitted on September 4, 2025.30 Thus, in a Minute Resolution dated October 1, 2025, the case was deemed submitted for decision. 31 Hence, this Decision. The Issue The lone issue stipulated by the parties is as follows: Whether or not the petitioner is entitled to its claim of tax refund or tax credit in the amount of Eighty-One Million Nine Hundred Seventy Thousand Eight Hundred Forty One and 12/100 Philippine Pesos (P81 ,970,841.12) allegedly representing erroneously paid VAT during the period of 01 January 2021 to 31 December 2021.32 Arguments of the Parties Petitioner's Arguments: Petitioner argues that its claim for the refund of erroneously paid VAT importations of prescription drugs and medicines for diabetes, high cholesterol and hypertension, as well as prescription drugs and medicine for 22 Docket- Vol. II, pp. 563 to 609. 23 !d. at 746 to 751. 24 !d. at 762 to 768. 25 Exhibit "R-7", Docket- Vol. I, pp. 252 to 265; Minutes of the hearing held on, and Order dated, February 20,2025, Docket- Vol. II, pp. 771 to 772. 26 Docket- Vol. 11, pp. 774 to 779. 27 !d. at 783 to 786. 28 !d. at 790 to 791. 29 Manifestation dated August 13, 2025, id. at 793 to 794. 3c !d. at 798 to 886. 31 /d.at887.

32 Statement of the Issues, JSFI, Docket- Vol. I, p. 375. r

CTA CASE NO. 11060 cancer, mental illness and kidney diseases for the period January l, 2021 to December 31, 2021 should be granted as these goods are exempted from VAT under Section 109(AA) of the Tax Code, as amended by R.A. Nos. 11467 and 11534 and is filed in accordance with Sections 204(C) and 229 of the same Code.

Respondent's Counter-arguments: Respondent counter-argues that petitioner is not entitled to the refund being claimed as it failed to comply with the requirements under Revenue Memorandum Circular ("RMC'') No. 36-2020 and failed to prove that its VAT payments were erroneously paid or illegally collected. The Ruling of the Court The Petition must be partially granted. The provisions that govern the present claim for refund of erroneously paid taxes are Sections 204(C) and 229 of the Tax Code, as amended, which read as follows:

SEC. 204. Authority of the Commissioner to Compromise, Abate and Refund or Credit Taxes.- The Commissioner may- (C) Credit or refund taxes erroneously or illegally received or penalties imposed without authority, refund the value of internal revenue stamps when they are returned in good condition by the purchaser, and, in his discretion, redeem or change unused stamps that have been rendered unfit for use and refund their value upon proof of destruction. No credit or refimd of taxes or penalties shall be allowed unless the taxpayer files in writing with the Commissioner a claim for credit or refund within two (2) years afier the payment of the tax or penalty: Provided, however, That a return filed showing an overpayment shall be considered as a written claim for credit or refund. SEC. 229. Recovery ofTax Erroneously or Illegally Collected. -No suit or proceeding shall be maintained in any courtfor the recovery ofany national internal revenue tax hereafter alleged to have been erroneously or illegally assessed or collected, or of any penalty claimed to have been collected without authority, of any sum alleged to have been excessively or in any manner wrongfully collected without authority, or of any sum alleged to have been excessively or in any manner wrongfully collected, until a claim for refund or credit has been duly filed with the Commissioner; but such suit or proceeding may be maintained, whether or not such tax, penalty, or sum has been paid under protest or duress. r

CTA CASE NO. 11060

In any case, no such suit or proceeding shall be .filed after the expiration of tvvo (2) years from the date of payment of the tax or penalty regardless of any supervening cause that may arise a/fer payment: Provided, however, That the Commissioner may, even without a written claim therefor, refund or credit any tax, where on the face of the return upon which payment was made, such payment appears clearly to have been erroneously paid.

(Italics, Ours.)

Based on the foregoing provisions, an erroneously paid or illegally collected tax may be refunded if: 1) the taxpayer files in writing with the CIR a claim for credit or refund within two years after the payment of the tax or penalty; 2) the claim for refund must first be filed before the CIR before maintaining a suit or proceeding in any court; and 3) such suit or proceeding shall be filed also within two years from the date of payment of the tax or penalty, regardless of any supervening cause that may arise after payment. As explained in Commissioner of Internal Revenue vs. Carrier Air Conditioning Philippines, Inc. 33 ("Carrier"): Section 204 refers to the Commissioner of Internal Revenue's administrative authority to credit or refund erroneously paid or illegally collected taxes. Under this provision, an administrative claim for refund or credit must be filed within two years from payment of the tax. Section 229, on the other hand, requires two conditions for the filing of judicial claims: (1) an administrative claim must be filed first; and (2) the judicial claim must be filed within two years after payment of the tax sought to be refunded.

Reading the two provisions together, both administrative and judicial claims must be .filed within the tvvo-year period. Furthermore, the administrative claim must be.filed before the judicial claim. This Court has previously declared that "[t}imeliness ofthefiling of the claim is mandatory and jurisdictional. The [Court of Tax Appeals] cannot take cognizance of a judicial claim for refund filed either prematurely or out of time." Thus, while both administrative and judicial claims must be filed within two years after the payment of the alleged erroneously paid or illegally collected tax, the filing of the administrative claim must still precede the filing ofjudicial claim. r 33 G.R. No. 226592, July 27, 2021.

DECISION CTACASENO.II060 Page II of24 Moreover, the tax subject of the refund under Sections 204(C) and 229 of the Tax Code, as amended, must be erroneously paid or illegally collected, that is it has been collected without authority, or that of any sum alleged to have been excessively or in any manner wrongfully collected without authority, or of any sum alleged to have been excessively or in any manner wrongfully collected. An "erroneous or illegal tax" is defined as one levied without statutory authority, or upon property not subject to taxation or by some officer having no authority to levy the tax, or one which is some other similar respect is illegal. 34 In summary, in order for the present claim for refund to prosper, petitioner must show that: 1) the administrative and judicial claims were filed within two years from the payment of tax; and 2) that the tax was erroneously or illegally paid or collected. Petitioner's administrative and judicial claims were timely filed; thus, the Court acquired jurisdiction in this case.

Petitioner alleges that it paid VAT on the importations of prescription drugs and medicines for diabetes, high cholesterol and hypertension, as well as prescription drugs and medicine for cancer, mental illness and kidney diseases from January 1, 2021 to December 31, 2021, which were supposedly exempt from VAT pursuant to Section 109(J)(AA) of the Tax Code, as amended by R.A. Nos. 11467 and 11534. Counting two years from the alleged earliest payment made, or from January 5, 2021,35 petitioner had until January 5, 2023 to file both its administrative and judicial claims for refund. Petitioner filed its Application for Tax Credits/Refunds with the BIRon December 29, 2022.36 and later filed its Petition before the Court on January 4, 2023.37 Clearly, petitioner timely filed both claims before the two-year prescriptive period lapsed. r

CTA CASE NO. 11060

Petitioner's VAT payments on importation of prescription drugs and medicines for diabetes, high cholesterol, hypertension, cancer, and mental illness for the period January 1, 2021 to December 31, 2021 were erroneous since these importations are exempt from VAT Section 109(1)(AA) of the Tax Code, as amended by R.A. Nos. 11467 and 11534, provides that: SEC. 109. Exempt Transactions.- (1) Subject to the provisions of Subsection 2 hereof, the following transactions shall be exempt from the value-added tax:

(AA) Sale or importation o.f prescription drugs and medicines for:

(i) Diabetes, high cholesterol, and hypertension beginning January 1, 2020; and (ii) Cancer, mental illness, tuberculosis, and kidney diseases beginning January 1, 2021. Provided, That the DOH shall issue a list of approved drugs and medicines for this purpose within sixty (60) days from the effectivity of this Act; Eventually, Revenue Regulations ("RR ") No. 04-21 was issued to implement the amendment to Section 109 introduced by R.A. No. 11534, as follows:

SEC. 4.109-1. VAT-Exempt Transactions.- (B) Exempt transactions.- ( aa) Sale or importation of prescription drugs and medicines for:

(i) Diabetes, high cholesterol, and hypertension beginning January 1, 2020; and (ii) Cancer, mental illness, tuberculosis, and kidney diseases beginning January 1, 2021. r DEC: lSI OJ\ CTA CASE NO. 11060 Page 13 of24 The exemption from VAT under this subsection shall only apply to the sale or importation by the manufacturers, distributors, wholesalers and retailer of drugs and medicines included in the "list of approved drugs and medicines" issued by the Department of Health (DOH) for this purpose. Based on the foregoing, the sale or importation of prescription drugs and medicines enumerated under Section 109(1)(AA) of the Tax Code, as amended by R.A. Nos. 11467 and 11534, are exempt from VAT if the following elements concur: 1) the products sold or imported are prescription drugs and medicines for treatment of diabetes, high cholesterol, hypertension, cancer, mental illness, tuberculosis, and kidn~y diseases; 2) the sale or importation was made on January 1, 2020 onwards for prescription drugs and medicines for treatment of diabetes, high cholesterol, and hypertension and on January 1, 2021 onwards for prescription drugs and medicines for treatment of cancer, mental illness, tuberculosis, and kidney diseases; and 3) the prescription drugs and medicines sold or imported must be included in the "list of approved drugs and medicines" issued by the Department of Health ("DOH")-Food and Drug Administration ("FDA").

However, petitioner alleges that it imported the following prescription drugs and medicines for diabetes, high cholesterol, hypertension, cancer, mental illness, and kidney diseases from January 1, 2021 to December 31, 2021, but still paid VAT thereon in the total amount of P81 ,970,841.12: Dosage Disease Brand Name Generic Name Strength and Treated Form Ambesyl Amlodipine 10 MG Tablet Hypertension 5 MG Tablet None (No Carvedilol 25 MG Tablet Hypertension Brand Name) None (No Metoprolol Tartrate 100MG Hypertension Brand Name) TABLET 10 MG Film Coated Tablet Avamax Atorvastatin 20 MG Film High Coated Tablet Cholesterol 40MGFilm Coated Tablet None (No Bisoprolol Fumarate 5 MG Film- Hypertension Brand Name) Coated Tablet Cardiovasc Amlodipine 10 MG Tablet r

CTA CASE NO. 11060

Co-Tareg Cresart Ekosart Frepan None (No Brand Name) Gabi None (No Brand Name) Gluconex Mr lrbenox Isormed Lifezar Lodine None (No Brand Name) Prolohex Prostera Rimepril None (No Brand) None (No Brand Name) None (No Brand) Valsartan+ Hydrochlorothiazide Olmesartan Medoxomil Losartan Potassium Candesartan Cilexetil Gliclazide Pregabalin Glimepiride Gliclazide lrbesartan Isosorbide Mononitrate Losartan Potassium Felodipine Losartan Potassium Metroprolol Tartrate Terazosin Glimepiride Felodipine Amlodipine Pregabalin 5 MG Tablet High Cholesterol 160112.5 MG Tablet Hypertension 80/12.5 MG Tablet 20 MG Film- Coated Table Hypertension 40 MG Film- Coated Tablet 100 MG Film- Coated Tablet Hypertension 50 MG Film- Coated Tablet 16 MG Tablet Hypertension 8 MG Tablet 30 MG Modified Diabetes Release Tablet 75 MG Capsule Nerve Pain- Hypertension 3 MG Tablet Diabetes 30MG Modified- Diabetes Released Tablet 150 MG Film- Hypertension Coated Tablet 60MG Chest pain- Sustained- Release Tablet Hypertension 100 MG Film- Coated Table Hypertension 50 MG Film- Coated Tablet 5 MG Modified- Hypertension Release Tablet 100 MG Film- Coated Tablet Hypertension 50 MG Film- Coated Tablet 100 MG Film- Hypertension Coated Tablet 2 MG Tablet Hypertension 5 MG Tablet 2 MG Tablet Diabetes 3 MG Tablet 5 MG Modified- Hypertension Release Tablet 10 MG Tablet High 5 MG Tablet Cholesterol 75 MG Capsule Diabetes r

CTA CASE NO. 11060

None (No Brand Name) None (No Brand) None (No Brand Name) None (No Brand Name) Robestar Rosalta None (No Brand Name) Simvas Tareg Valcamp Veral None (No Brand) Vidastat Vivasartan None (No Brand Name) Xantor Atajec C.- - Rosuvastatin Terazosin Terazosin Glimepiride Rosuvastatin Rosuvastatin Verapamil Hydrochloride Simvastatin Valsartan Amlodipine+ Valsartan Verapamil Hydrochloride Verapamil Hydrochloride Simvastatin Losartan Potassium Atorvastatin Atorvastatin Mycophenolate Mofetil 10 MG Film- Coated Tablet High 20 MG Film- Cholesterol Coated Tablet 2 MG Tablet Hypertension 5 MG Tablet Hypertension 2 MG Tablet Diabetes 3 MG Tablet 10 MG Film Coated Tablet High 20 MG Film Cholesterol Coated Tablet 20 MG Film High Coated Tablet Cholesterol 240MG Sustained Hypertension Released Tablet 20 MG Film- High Coated Tablet Cholesterol 160 MG Tablet Hypertension 80 MG Tablet

10 MG/160 MG

Film-Coated Tablet

5 MG/80 MG

Film-Coated Hypertension Tablet

5 MG/ 160 MG

Film-Coated Tablet 240MG Sustained- Hypertension Release Tablet 240MG Sustained- Hypertension Release Tablet 20 MG Film- High Coated Tablet Cholesterol 50 MG Film- Coated Tablet Hypertension 100 MG Film- Coated Tablet 40 MG Film- High Coated Tablet Cholesterol 20 MG Film- Coated Tablet 10 MG Film- High Coated Tablet Cholesterol 40 MG Film- Coated Tablet 50 MG Film- Kidney Coated Tablet Diseases r

CTACASEN0.11060

None (No Brand) Arizopress Zofran Xaliptine Esitalo Zarzio Bioclavid Zenith Paizu Amoclav Arinib None (No Brand) Azyth Fenahex Excillin Bioclavid Ebedoxo Arostanil Aumox Paclitaxel Aripiprazole Ondansetron Oxaliplatin Escitalopram Filgrastim Co-Amoxiclav Azithromycin Piperacillin+ Tazobactam Co-Amoxiclav Anastrozole Azithromycin Azithromycin Tamoxifen Ampicillin Co-Amoxiclav Doxorubicin Hydrochloride Exemestane Co-Amoxiclav+Clavulanic Acid

6 MG/ML

Cancer 10 MG TABLET Mental Illness

2 MG/ML

Solution for Cancer Injection (I.M./I.V.)

5 MG/ML

Cancer 10 MG Film- Mental Illness Coated Tablet 30 MU/0.5 ML Solution for Cancer Injection/Infusio n (SC/IV) 1 G Film- Kidney Disease Coated Tablet 500 MG Film- Kidney Disease Coated Tablet

2 G/250 MG

Powder for Kidney Disease Injection (I.V.)

156.25 MG/ 5 ML Powder for Kidney Disease Oral Suspension 312.5 MG/ 5 ML 1 MG Film- Cancer Coated Tablet 500 MG Film- Kidney Disease Coated Tablet 500 MG Film- Kidney Disease Coated Tablet 20 MG Tablet Cancer 250 MG Powder for Injection (I.M./I.V) Kidney Disease 500 MG Powder for Injection (I.M/I.V) 625 MG Film- Kidney Disease Coated Tablet

50 MG/25 ML

Solution for Cancer Injection 25 MG Film- Cancer Coated Tablet 625 MG Film- Kidney Coated Tablet Diseases r DECISIO:\ CTA CASE NO. 11060 Page 17 of24 In support of its claim, petitioner submitted the corresponding FDA- issued Certificates of Product Registration ("CPR"),38 commercial invoices,39 Single Administrative Documents ("SADs"),40 and Statements of Settlement of Duties and Taxes ("SSDTs"),41 which were all examined by the Court- commissioned ICPA.42 Testing petitioner's compliance with the first element, while it is notable that majority of commercial invoices and SADs submitted by petitioner reflects only the brand names, the corresponding generic names of each can, however, be cross-referred and verified in the FDA-issued CPRs of each brand, specifying the medicine's brand name, generic name, dosage, and form. In support thereto is the testimony of petitioner's witness Mary Ann Evangelista, M.D. ("Dr. Evangelista"), that the foregoing product brands, with their corresponding generic names, are used for treatment of diabetes, high cholesterol, hypertension, cancer, mental illness, and kidney disease.43 Further, compliance with the third element can also confirm if the foregoing medicines imported by petitioner are indeed used for treatment of diabetes, high cholesterol, hypertension, cancer, mental illness, and kidney disease, considering that the DOH-FDA provides a list of medicines which treat these particular diseases. Hence, We take reference from RMC No. 81- 2021, which circularized the List of VAT-Exempt Products issued by the FDA of the DOH on June 17, 2021. These listings were updated by RMC Nos. 103-2021, 5-2022, 124-2021 for the year 2021. However, the listings provided only the generic names, dosage, and forms of the VAT -exempt medicines.

Nevertheless, as noted earlier, the generic names of the medicine brands imported by petitioner can be confirmed from the medicine's FDA- issued CPR, which can then be matched with the DOH-FDA list of medicines.

Thus, in compliance with the third element, the foregoing medicines imported by petitioner, on the basis of the generic names either: (1) as reflected on the commercial invoices or SADs itself; or (2) as can be confirmed in the medicine brand's corresponding FDA-issued CPR, are verified to be included in the respective DOH-FDA lists of medicines for diabetes, high cholesterol, hypertension, cancer, and mental illness. r 38 Exhibits "P-771" to "P-809", "P-811" to "P-844", "'P-846" to "P-868" and "'P-1 007" (USB marked as Exhibit "P-903-2"); Exhibits "P-81 0" and "P-845'', Docket- V 01. II, pp. 741 to 743. 39 Exhibits "P-1009-A.1" to "P-1009-A.215". 40 Exhibits "P-1009-8.1" to "P-1009-8.185". 41 Exhibits "P-1 009-C.l" to "P-1 009-C.185". 41 As summarized in Exhibit "P-1 009''. 43 Exhibit "P-900" (Q&A No. 20, Judicial Affidavit of Mary Ann Evangelista, M.D.), Docket- Vol. I, pp. 141 to 155.

CTA CASE NO. 11060

Based on the foregoing, and after perusing the documents submitted by petitioner, the following disallowances on the following grounds, in the total amount of P18,321,551.91, were found by the Court:

1. VAT payments, aggregating P963,620.80, for the following medicine brands must be disallowed for failure of petitioner to provide their corresponding FDA-issued CPRs. Consequently, the Court cannot verify their respective generic names which can be cross-matched with the DOH-FDA list of VAT-exempt medicines.

Exhibit Exhibit | TEIRD/ | Exhibit Deseraion Pan ent Reference commensal Reference SAD Reference . spr P y No. ’ No. No. No. T RIMSTAR 4-FDC FCT | 275,814.38 | P19 | 4190620893 | P-!00% | g7ga1 | P1997 | Rp asiae1 | 07/12/2021 A.101 B.85 C.85

60'S (IFG)

AMPICIN 250MG 183,308.59 rene 4190642443 ee 158410 ee R 803972 | 12/02/2021 IPSOI PH “ue a AMPICIN 500MG 504,497.83 4190633882 377091 R 529438 | 12/03/2021

IPSOIJ PH

Total P963,620.80

2. VAT payments, aggregating P2,135,671.17, for importation of medicines allegedly for kidney disease must be disallowed as these medicines are not included in the DOH-FDA list of VAT- exempt medicines for kidney disease: Item VAT Exhibit Commercial Exhibit IEIRD/ Exhibit SSDT Description Payment Reference Invoice No Reference SAD Reference | SSDT No. Date P y No. , No. No. No. BIOCLAVID 1000MG P 114,301.94 P-1009- 4190633183 | P=!009- 130949 P-1009- R 677295 | 10/06/2021 : A.152 B.128 C.128

TAB 14'S

ZENITH 500MG 418,998.35 | P-!90% | aioge3ss75 | P7109 | 137008 | P2199 | p ao4go0 | 10/19/2021 > A.159 B.134 C.134

30FCT PH

PAIZU 2,25G 150,638.72 ee 4190636241 roe. 138550 re R 710508 | 10/21/2021 1PSOIJ PH “ee au co AMOCLAV 250MG+62.5 P-1009- MG/SML 61,508.53 | “A y¢< | 4190629529 331695 R 467511 | 10/27/2021

60ML IPOS

PH P-1009- P-1009-

AMOCLAV B.141 C.141 125MG+31.2 P-1009- SMG/SML 56,192.20 | “164 | 4190629530 331695 R 467511 | 10/27/2021

60ML 1POS

PH RITEMED AZITHROM 213,900.12 P-1009- 4190639429 P-1009- 148751 P-1009- R 759661 | 11/12/2021 CIN A.176 B.149 C.149 7

CT A CASE NO. II 060

500MG

30FCT PH

AZITHROM

YCIN IHDR

471,548.76 500MG

3FCT PH

P-1009- A.182 P-1009-

P-1 009-

4190640712 8.155 154130 C. I 55

R 784051

11123/2021 AUMOX 12113/2021 I 625MG 648,582.55

P-1 009-

4190645522 P-1009- 162922 P-1009-

R 826655

100FCT ST

A.199 8.172 C.172 PH Total Item Description GLICLAZIDE 500KG Gliclazide 500 KG GLICLAZIDE API Total Item Description RM PREGABALIN

75MG 56HGC

VI PH

GAB! 75MG

56HGC VI PH

Total P2, 135,671.17 3.

VAT payments, aggregating P974,290.92, from the importation of the following medicines must be disallowed as the description reflected in their respective commercial invoices and SADs, indicating the medicine's dosage in "5 00 kg", do not match the medicine's dosage as reflected on FDA-issued CPR,44 nor can said medicine dosage be verified in the DOH-FDA list of medicines on diabetes. - -· VAT Exhibit Commercial Exhibit IEIRD/ Exhibit SSDT SSDT Reference Reference SAD Reference Payment No.

Invoice No.

No.

No.

No.

No.

Date P318,034.19

P-1 009-

SDKY- P-1009- 25246

P-1 009-

R 31246

03/22/2021 A.30 20210227 8.25 C.25 311,874.55 P-1009- SDKY- P-1009- 184594 P-1009- R 06118/2021 A.81 20210511 8.67 C.67 260636 344,382.18 P-1009- SDKY-

P-1 009-

75093

P-1 009-

R 92654

08/16/2021 A.l23 20210713 8.103 C.I03 P974,290.92 4.

VAT payments, aggregating P220,627.57, from the importation of the following medicines must be disallowed as the description reflected in their respective commercial invoices and SADs, indicating the medicine's form in "56HGC VI", do not match the medicine's form as reflected on their respective FDA-issued CPRs,45 nor can said medicine form be verified in the DOH- FDA list of medicines on diabetes. VAT Exhibit Commercial Exhibit IEIRD/ Exhibit Payment Reference Invoice No.

Reference SAD Reference SSDT No.

No.

No.

No.

No.

SSDT Date p 71,709.56 P-1009- 4190645987 164375

R 832686

12/15/2021 A.202 P-1009-

P-1 009-

8.175 C.175 148,918.01

P-1 009-

4190645986 164375

R 832686

12/15/2021 A.203 P220,627.57 44 Exhibit "P-791 ".

45 Exhibits "P-811" and "P-792". I r DECISIOI\ CTA CASE NO. 11060 Page 20 of24 Item Description XANTOR IOMG

IOOFCT PH

XANTOR

40MG TAB

IOOS LODINE

5MG IOOPRT

PH CO-TAREG 80+12.5MG

28FCT PH

TAREG

80MG 28FCT

PH VERAL 240MG

IOOPRT UD

PH 5.

VAT payments, aggregating Pl2,487,755.50, for the importation of the following medicine brands must be disallowed as the description in their respective commercial invoices and SADs, indicating the medicine brand in "tablet", "film-coated tablet", or "prolonged-release tablet" forms, do not match the medicine forms as declared in their respective FDA- issued CPRs. As such, the Court cannot verify whether the following medicine brands exist in tablet, film-coated tablet, or prolonged-release tablet forms. Exhibit Ref.

Exhibit Exhibit IEIRD/ Exhibit for Commercial SSDT VAT Payment FDA- Ref.

Invoice No.

Ref.

SAD Ref.

No.

issued No.

No.

No.

No.

CPR P- P- P- SSDT Date p 136,758.78 P-835 1009- 4190590834 1009- 1756 1009-

R 7925

01/07/2021 A.6 B.3 C.3 P- P- P- 272,616.57 P-836 1009- 4190590841 1009- 1743 1009-

R 6697

01/06/2021 A.8 8.4 C.4 P- P- P- R 88,794.26 P-799 1009- 4190594467 1009- 9332 1008- 47070 01/26/2021 A.15 B.l1 C.11 P- P- P- R 176,056.15 P-784 1008- 4190595843 1009- 14494 1009- 70840 02/05/2021 A.l8 B.l3 C.l3 P- P- P- R 623,552.06 P-824 1008- 4190596126 1009- 15392 1009- 02/08/2021 A.l9 B.l4 C.l4 76066 P- P- P- 121,309.14 P-828 1008- 4190596650 1009- 15397 1009- R 02/08/2021 A.20 B.l5 C.l5 76068 I TAREG P- P- P- I 160MG 932,986.98 P-823 1009- 4190601081 1009- 27803 1009- R 03/08/2021 1

28FCT PH

A.26 B.21 C.21 131654 TAREG P- P- P- I

80MG 28FCT

843,816.96 P-824 1009- 4190601512 1009- 28991 1009- R 03/10/2021 136365 PH A.27 B.22 C.22 I XANTOR P- P- P- R 0411312021 1 20MG 208,550.39 P-834 1009- 4190606311 1009- 45199 1009- 213745

IOOFCT PH

A.51 B.42 C.42 PROLOHEX P- P- P- I R

IOOMG TAB

91,468.94 P-802 1009- 4190599577 1009- 124823 1009- 178603 04/29/2021

I OO'S (IFG)

A.64 B.53 C. 53 TAREG P- P- P- R 160MG 891,036.58 P-823 1009- 4190617084 1009- 74434 1009- 06/16/2021

28FCT PH

A.80 B.66 C.66 380182 TAREG P- 4190616922/ P- P- R

80MG 28FCT

1,730,753.88 P-824 1009- 4190616921 1009- 74079 1009- 376920 06115/2021 PH A.85 B.71 C.71 CO-TAREG P- P- P- R 160+12.5MG 391,839.25 P-783 1009- 4190618137 1009- 80130 1009- 410249 06/28/2021

28FCT PH

A.87 B.73 C.73 LODINE P- P- P-

5MG IOOPRT

179,598.95 P-799 1009- 4190621166 1009- 88220 1009- R 07/13/2021 PH A.l04 B.88 C.88 453524 r DECISIOI\ CTA CASE NO. 11060 Page 21 of24 XANTOR IOMG 58,603.56

IOOFCT PH

XANTOR

40MG TAB

373,518.57 IOOS VERAL 240MG

100PRT UD

127,004.79 PH TAREG

80MG 28FCT

864,399.69 PH ISORMED

60MG 50PRT

210,652.05 PH SIMVAS P- P-835 1009- 4190620143 A.114 P- P-836 1009- 4190627069 A.l22 P- P-828 1009- 4190630794 A.l47 P- P-824 1009- 4190631531 A.150 P- 20210927 P-796 1009- 001 A.l51 P- P- P- R 1009- 89007 1009- 457077 07/14/2021 8.96 C.96 P- P- R 1009- 105742 1009- 551716 08/17/2021 8.102 C.l02 P- P- R 1009- 122290 1009- 640810 09/20/2021 8.123 C.l23 P- P- R 1009- 124003 1009- 646906 09/22/2021 8.126 C.126 P- P- I R 1009- 128600 1009- 666981 10/01/2021 8.127 C.l27

20MG UD

103,574.49 P-822 1009- 4190633899 131875 R

I 0/07/2021

I TAB A. I 56 P- P- 680359

IOO'S PH

1009- 1009- VIDASTAT

20MG UD

TAB 100'S

TAREG 160MG

28FCT PH

XANTOR

40MG TAB

IOOS XANTOR

20MG TAB

IOOS XANTOR

20MG TAB

IOOS RTM VERAPAMIL 240MG

IOOPRT UD

PH CO-TAREG 80+12.5MG

28FCT PH

TAREG

80MG 28FCT

PH Total P- B.l32 C.l32 R I 174,107.65 P-830 1009- 4190633900 131875 680359

I 0/07/2021

I A. I 57 P- P- P- R 565,152.93 P-823 1009- 4190634947 1009- 134334 1009-

I 0/13/2021

A.l62 8.137 C.l37 691858 P- P- P- R 431,511.24 P-836 1009- 4190637669 1009- 143012 1009- 734670 11/02/2021 A.l68 8.142 C.142 P- P- P- R 130,841.85 P-834 1009- 4190639943 1009- 153002 1009- 780808 11/22/2021 A.l85 B. I 58 C.158 P- j)_ P- R I 04,533.42 P-834 1009- 4190643294 1009- 159717 1009- 812117 12/06/2021 A.l93 B.l66 C.l66 P- P- P- R 113,321.69 P-821 1009- 4190646351 1009- 166460 1009- 12/20/2021 A.208 8.180 C.l80 844101 P- P- P- R 147,573.14 P-784 1009- 4190646618 1009- 167037 1009- 846234 12/21/2021 A.213 8.183 C.l83 P- 4190646433/ P- P- R 2,393,821.53 P-823 1009- 4190646434 1009- 170036 1009- 860344 12/28/2021 A.215 8.185 C.l85 P12,487,755.50 6.

VAT payments, aggregating Pl ,318,520.04, for the importation of the following medicine brands must be disallowed as the description in their respective commercial invoices and SADs, indicating the medicine brand in "80mg" dosage, do not match the medicine dosage as declared in their respective FDA-issued CPRs (i.e. in lOmg, 20mg, and 40mg dosages).46 As such, the Court cannot verify whether the following medicine brands exist in 80mg dosage. r 46 Exhibits"P-776"to"P-778".

DECISIO:'>I CTA CASE NO. II 060 Page 22 of24 Item VAT Description Payment AVAMAX Exhibit Commercial Reference Invoice No.

No.

Exhibit IEIRD/ Exhibit SSDT Reference SAD Reference SSDT No.

Date No.

No.

No.

80MG p 188,046.13 P-1009- 4190582182 P-1009- 3785 P-1009- R4400 01/05/2021

30FCT UD

A.2 8.1 C. I PH AVAMAX 80MG

30FCT UD

PH AVAMAX 80MG

30FCT UD

PH AVAMAX 80MG

30FCT UD

PH AVAMAX 80MG

30FCT UD

PH AVAMAX 80MG

30FCT UD

PH Total 198,375.14 P-1009- 4190593286 P-1009- 7319 P-1009-

R 36139

01/20/2021 A.IO 8.6 C.6 179,647.85 P-1009- 4190622579 P-1009- 93747 P-1009-

R 483174

07/23/2021 A.119 8.99 C.99 310,392.61 P-1009- 4190634476 P-1009- 132909

P-1 009-

R 686904

I 0/11/2021

A. I 54 8.130 C.l30 298,726.98 P-1009- 4190643504 P-1009- 159716 P-1009-

R 812115

12/06/2021 A.l94 8.167 C.167 143,331.33 P-1009- 4190645414 P-1009- 162824 P-1009-

R 826653

12/13/2021 A.l98 8.171 C.l71 PI ,318,520.04 7.

Importation of Ritemed Felodipine 5mg prolonged-release tablet, with VAT due amounting to P108,477.87 per SAD,47 must be disallowed as the supporting SSDT does not reflect the amount ofVAT payment.48 8.

Importation of RTM Verapamil 240mg prolonged-release tablet, with VAT payment amounting to P112,588.04,49 must be disallowed as medicine's form (in prolonged-release tablet), based on its commercial invoice and SAD,50 is not included in the DOH-FDA list ofVAT-exempt medicine for hypertension. Finally, with respect to the second element, the documents show that the importations were made beyond January 1, 2020, for medicines used for treatment of diabetes, high cholesterol, and hypertension, and January 1, 2021, for medicines used for treatment of cancer, and mental illness, with January 5, 2021 as the earliest payment made based on petitioner's submitted SSDTs.

r 47 Exhibit "P-I 009-8.20". 48 Exhibit "P-1009-C.20". 49 Exhibit "P-1009-C.47". 50 Exhibits "P-1009-A.57" and "P-1009-8.47".

DECISIOI\ CTA CASE NO. 11060 Page 23 of24 In summary, out of the total VAT payment on importation of medicines for treatment of diabetes, high cholesterol, hypertension, cancer, mental illness, and kidney diseases being claimed for refund by petitioner amounting to P81,970,841.12 for the period January 1, 2021 to December 31, 2021, only the amount ofP63,649,289.21, as computed below, are proven to be exempt from VAT in accordance with Section 109(l)(AA) of the Tax Code, as amended by R.A. Nos. 11467 and 11534, and RR No. 04-2021. Total VAT payment made on importation of alleged VAT -exempt medicines Less: Disallowances by the Court VAT payment made on importation of VAT-exempt medicines as verified by the Court P81,970,841.12 18,321,551.91 P63,649,289.21 Meanwhile, as verified by the ICP A, the total VAT payments made on the importation ofthe foregoing VAT-exempt medicines were not declared in petitioner's quarterly VAT returns forTY 2021,51 thus negating the possibility of petitioner claiming the foregoing VAT payments as credits against any output tax.

Considering that there were VAT payments made, in the amount of P63 ,649,289.21, on supposedly VAT -exempt importation of medicines during the taxable year 2021, the same becomes erroneous and must indeed be refunded to petitioner. ACCORDINGLY, in light of the foregoing considerations, the Petition for Review is PARTIALLY GRANTED. Respondent is ordered to REFUND or ISSUE A TAX CREDIT CERTIFICATE in favor of petitioner its erroneously paid VAT, in the reduced amount of P63,649,289.21, on its importations of prescription drugs and medicines for diabetes, high cholesterol and hypertension, as well as prescription drugs and medicine for cancer and mental illness, during the period January 1, 2021 to December 31, 2021.

CTACASENO.ll060

WE CONCUR:

()...,. ~~.. ... .., 1-. MA. BELEN M. RINGPIS-LIBAN Associate Justice ~w-~~ CORAZ(SN.G. FERRER- Associate Justice CERTIFICATION Pursuant to Article VIII, Section 13 of the Constitution, 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.

i,. ..d,J:,. ,__.# ----- MA. BELEN M. RINGPIS-LIBAN Presiding Justice