Court of Tax Appeals

Benguet Corporation vs. Commissioner of Internal Revenue and Commissioner of Customs

CTA Case No. 5934 January 25, 2002

BENGUET

REPUBLIC OF THE PHILIPPINES

COURT OF TAX APPEALS

QUEZON CITY

CORPORATION,

Petitioner,

-versus-

C.T.A. CASE NO. 5934

THE COMMISSIONER OF INTERNAL

REVENUE and THE COMMISSIONER

Promulgated:

OF CUSTOMS,

Respondents.

JAN 2 5 ~

#~~

X---------------------------------------------------------~

DECISION

Before Us is a Petition for Review filed on September 29, 1999 claiming for the refund or issuance of a tax credit certificate in the aggregate amount ofP16,185,725.99, allegedly representing the excess net creditable VAT input for the third and fourth quarters ended September 30, 1997 and December 31, 1997, respectively. Petitioner is a domestic corporation duly organized and existing under Philippine laws with principal office located at One Corporate Plaza, 845 Arnaiz A venue, 1223 Makati City.

It is primarily engaged in the mining business, which includes the exploration, development and operation of mining properties for purposes of commercial production, and also the marketing of marketable mine products. It is likewise registered with the BIR as a Value-Added Tax (VAT) taxpayer in accordance with Section 107 of the old Tax Code (now Section 236 par. H of the 1997 Tax Code) as evidenced by a VAT Registration Certificate No. 94-410-002700 wherein it has been issued Registration/Tax

Identification Number 410-000-051-03 7 VAT on the sale of its goods effective June 30, 1994 (see Annex A, Petition for Review). On May 4, 1988, Petitioner filed with the BIR an Application for Zero Rate on Sale of its goods to persons or entities. On October 20, 1997, Petitioner filed with the BIR its third quarter VAT Return for the period ended September 30, 1997 (Exhibit "A"), reflecting a total creditable VAT input of P30,539,755.22 of which P13,088,027.83 was generated from its domestic purchases of goods and services and importation of goods for the said quarter, computed as follows:

Carried over from previous quarter Domestic purchases of goods and services Importation of goods (Exhibits A, A-1)

VAT INPUT TAX

P17,451 ,727.39 10,398,968.89 2,689,058.94 P30.539.755.22 On January 20, 1998, Petitioner filed its fourth quarter VAT Return (Exhibit "C") for the period ended December 31 , 1997 with the BIR showing a total creditable VAT input ofP34,546,845.61 of which P4,661 ,448.12 was generated from domestic purchases of goods and services and importation of capital goods for the said quarter, computed as follows:

Carried over from previous quarter Domestic purchases of goods and services Importation of goods Total (Exhibits C, C-1)

VAT INPUT TAX

P29,885,397.49 4,501 ,492.12 159,956.00 P34.546.845 .61

On July 1, 1999 and September 3, 1999, Petitioner filed with the Tax and Revenue Group of One-Stop Shop Inter-Agency Tax Credit and Duty Drawback Center of the Department of Finance (DOF), its applications for tax credit/refund of its excess or unapplied net creditable VAT inputs for the third quarter ended September 30, 1997 and fourth quarter ended December 31, 1997, in the amount of P12,592.011.34 and P3,593,714.65, respectively (Exhibit B-1 and Annex F). Since the aforementioned claims for refund m the aggregate amount of P16,185,725.99 was not acted upon by the Respondent and in order to preserve its right to judicially claim the same, Petitioner filed its appeal before this Court by way of Petition for Review on September 29, 1999. In his Answer, Respondent Commissioner of Customs raised the following Special and Affirmative Defenses, to wit: "4.

The petition states no cause of action as it does not allege the dates when the taxes sought to be refunded were actually paid (Manufacturer's Bank and Trust Co., etc. vs. Commissioner of Internal Revenue, Ledesma, 31 SCRA 95; Manila Electric Co. vs. Commissioner of Internal Revenue, 67 SCRA 35); 5.

It is incumbent upon Petitioner to show compliance with the provision of Section 230 ofthe Tax Code, as amended; 6.

Claims for refund are construed strictly against the claimant for the same partakes of the nature of an exemption from taxation (Commissioner of Internal Revenue vs. Ledesma, 31 SCRA 95); 7.

Taxation is one of the inherent powers of the state and taxes are considered the lifeblood of the nation. Hence, the burden is upon the taxpayer to prove that he actually paid the taxes in question and that he is entitled to the refund sought, and failure to do so, is fatal to the action for refund·."

Moreover, Respondent Commissioner of Internal Revenue, in his Answer, raised the following Special and Affirmative Defenses, thus: "5.

Petition states no cause of action as it does not allege the dates when the taxes sought to be refunded were actually paid; 6.

Pursuant to Section 112(D) of the National Internal Revenue Code, the Commissioner shall grant a refund or issue the tax credit certificate for creditable input taxes within 120 days from the date of submission of complete documents in support of the application filed and not 60 days as alleged by Petitioner; 7.

It is incumbent upon herein Petitioner to show that it has complied with the provision of Section 229 ofthe Tax Code; 8.

Claims for refund are construed strictly against the claimant, the same being in the nature of exemption from taxes (Commissioner of Internal Revenue vs. Ledesma, 31 SCRA 95; Manila Electric Co. vs. Commissioner of Internal Revenue, 67 SCRA 35); 9.

One who claims to be exempt from payment of a particular tax must do so under clear and unmistakable terms found in the statute (Asiatic Petroleum vs. Llanes, 49 Phil 466; Union Garment Co. vs. Court of Tax Appeals, 4 SCRA 304); 1 0.

In (sic) action for refui1d, the burden is upon the taxpayer to prove that he is entitled thereto, and failure to S'lstain the same is fatal to the action for tax refund." In the Joint Stipulation of Facts and Restatement of Issues which was concluded between Petitioner and Respondent Commissioner of Internal Revenue, the following issues were agreed upon: "(a) Whether or not Petitioner has unutilized creditable VAT inputs for the period July 1, 1997 to December 31, 1997 in the aggregate amount of P16,185,725.99 arising from its domestic purchases of goods and services, and importation of capital goods which is a proper subject of a claim for refund pursuant to Section 112 of the National Internal Revenue Code (Tax Code), as amended; (b) Whether or not the said creditable VAT inputs of the Petitioner for the period July 1, 1997 to December 31 , 1997 are substantiated by

PAGES documentary evidence in the form of invoices, official receipts and other acceptable supporting documents; and (c) Whether or not said unutilized creditable VAT inputs of the Petitioner for the period July 1, 1997 to December 31, 1997 was carried forward to the succeeding taxable quarter and applied against any output VAT of the Petitioner for the said period. We rule in favor of Petitioner. The instant case is not one of first impression. Quoted hereunder are the pertinent provisions of the 1997 Tax Code on the refund of excess input VAT paid on domestic purchases of goods and services and from importation of capital goods attributable to zero-rated or effectively zero-rated sales, thus: "Section 100. Value Added Tax on sale of goods or properties.- (a) Rate and Base of Tax.- There shall be levied, assessed and collected on every sale, barter or exchange of goods or properties, a value-added tax equivalent to 10% of the gross selling price or gross value in money of the goods or properties sold, bartered or exchanged, such tax to be paid by the seller or transferor. X X X X X X

(2) The following sales by VAT-register ~d persons shall be subject to 0%:

(A) Export Sales.- The term "export sales" means: "(i) The sale and actual shipment of goods from the Philippines to a foreign country, irrespective of any shipping arrangement that may be agreed upon which may influence or determine the transfer of ownership of the goods so exported and paid for in acceptable foreign currency or its equivalent in goods or services, and accounted for in accordance with the rules and regulations of the Bangko Sentral ng Pilipinas (BSP)." "Section 106. Refunds or Tax credits of creditable input tax. - (a) 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 1 OO(a)(2)(A)(i), (ii) and (b) and Section 102 (b )(1) and (2), the acceptable foreign currency exchange proceeds thereof had been duly accounted for in accordance with the regulations of the Bangko Sentral ng Pilipinas (BSP): x x x." (b) Capital Goods. - A VAT -registered person may apply for the issuance of a tax credit certificate or refund of input taxes paid on capital goods imported or locally purchased, to the extent that such input taxes have not been applied against output taxes. The application may be made only within two (2) years after the close of the taxable quarter when the importation or purchase was made." In sum, the following basic requisites must be complied with in order for tax refunds or credits of excess input VAT paid may be granted as provided in Section 100(a)(2)(A)(i) ofthe 1997 Tax Code, thus: 1.

That there be a sale of goods; 2.

That the sale be made by a VAT -registered person; 3.

That the sale qualifies as export sale as defined by law; 4.

That the foreign exchange proceeds of said export sales were properly accounted for in accordance with the rules and regulations of the Bangko Sentral ng Pilipinas. On the other hand, Section 106(a) and (b) of the 1997 Tax Code specifically provides for the following requisites before a claim for refund can be granted, thus: 1.

That the application of a tax credit or refund has been made within the two-year prescriptive period from the filing of the quarterly VAT return as provided under Section 4.106-2(c) of Revenue Regulations No. 2-95; 2.

That the claimed input taxes on domestic purchases of taxable goods and services are directly attributable to its zero-rated sales;

That the claimed input taxes were not offset/applied against any output tax nor carried over to the succeeding months/quarter. It is undisputed that Petitioner is a VAT -registered entity. (par. 4, Joint Stipulation of Facts, CTA Records, p. 54). Records reveal that Petitioner actually generated export sales and the foreign currency exchange proceeds thereof were inwardly remitted in accordance with the rules and regulations of the Bangko Sentral ng Pilipinas (BSP). This is evidenced by the various export sales invoices, export declarations, airway bills, bills of lading, bank credit/memo(s) and official receipts which have been pre-marked by the independent CPA (Exhibit E). Considering that Petitioner's export sales qualify as zero-rated, it is not liable to pay the output tax due thereon. Petitioner's right to refund or credit the input VAT paid on its purchases of goods, properties or services related to such zero-rated sales is provided under Section 4.102 of Revenue Regulations No. 7-95 in relation to Section 106(a) of the 1997 Tax Code. Moreover, the right to refmd or credit the input tax paid is likewise applicable on its importation of capital goods as sanctioned by Section 1 06(b) of the same code.

With regard to the timeliness of Petitioner's action both in the administrative and judicial levels, this Court finds that prescription had not yet set in. Records reveal that Petitioner filed its 1997 third and fourth quarterly VAT returns on October 20, 1997 and January 20, 1998, respectively. The administrative claims were filed on July 1, 1999 and September 3, 1999 for the third and fourth quarterly VAT returns, respectively, while the Petition for Review was filed on September 29, 1999. H.~nce, both the administrative and judicial claims were filed within the two-year prescriptive period provided under Section

PAGE& 4.106-2(C) of Revenue Regulations No. 7-95. The said regulation provides that the application for the refund or credit of input taxes paid on capital goods imported or locally purchased shall be made within two years after the close of the taxable quarter when the importation or purchase was made. Petitioner declared the following in its third and fourth quarterly VAT returns for the year 1997, to wit: QTR.

ZERO-RATED DOMESTIC INPUT INVOLVED EXHIBIT SALES PURCHASES IMPORTATIONS VAT 3RD QTR.

NA-l P26 I ,926,296.66 PI03,989,688.90 P26,890,589.40 PI3,088,027.83 4TH QTR.

C/C- 1

169,296,479.55 45,0 I 4,921.20 I ,599,560.00 4,661 ,448. I 2 TOTAL £131 222 ZZ6. 21

£112 QQH1Q 1Q

£28 12Q 1121Q

£1Z Z121Z5 25

Petitioner's applications for credit/refund of value added tax paid, declared the amounts of P12,592,011.34 (Exhibit B-1) and P3,593,714.65 (Annex F) for the third and fourth quarters, respectively, as input taxes being claimed for an aggregate amount of P16,185,725.99. However, the total claim for refund as declared in Petitioner's third and fourth quarterly VAT returns is P17,749,475.95. Upon examination of Petitioner's 1997 third and fourth quarterly VAT returns (Exhibits A and C), the Court finds that the claimed input taxes were already net of Petitioner's output tax liabilities for the same quarters. Thus, the claimed input taxes on its purchases of taxable goods and services are directly attributable to its zero-rated sales. Records, likewise, reveal that the unutilized input taxes for the third and fourth quarters were carried-over up to the third quarter of taxable year 1998 (Exhibit D-5) but were nevertheless deducted from the total available input taxes for the fourth quarterly VAT of 1998 (Line 27, Exhibit D-6, CTA Records, p. 134).

Due to the voluminous nature of the evidence presented, Petitioner engaged the services of an independent accounting firm to conduct an audit and evaluation of the documents pertinent to the input VAT claimed for the period. The findings of the independent CPA, is thus, summarized as follows:

(a) Sales amounting to P213,967.63 were not supported by sales invoices. Hence, the corresponding output tax ofP21 ,396.76 was Jeducted from Petitioner's claim for refund.

(b) Input taxes amounting to P 1,141,046.41 were disallowed for non-compliance with the VAT invoicing requirements.

(c) No exception was noted for Petitioner's inward remittances. Based on the findings of the independent CPA, Petitioner's claim was reduced to P15,023,282.78 (mentioned as Exhibit A in Exhibit E page 140, CTA Records). The Court finds the independent CPA's report to be in order. Upon further verification by the Court, the pre-marked documents presented in evidence resulted to an additional input VAT disallowance of P1 ,491 ,612.56 due to the following reasons:

(a) Not supported by official receipts/invoices but by statement of account, account summary, statement of freight charges or debit note. QTR.

ACCOUNT REFERENCE INVOICE INPUT SUPPLIER INVOLVED NO.

AC 0450

5/29/97 16595 10,196.00 926.91 ARROW FREIGHT CORP.

3RD QTR

AC 0450

5/29/97 16596 42,215.00 3,837.73

ARROW FREIGHT CORP.

AYALA BAIN INSURANCE

3RD QTR

AC 0450

AC 0261

AC 0633

AC 0533

AC 0633

AC 1701

5/29/97 5/31/97 5/31/97 5/31/97 5/31/97 5/31/97 6/16/97 6/20/97 6/28/97 6/28/97 6/30/97 6/30/97 TIN4/97 TI17/97 7/19/97 7/23/97 7/23/97 7/23/97 7/30/97 7/31/97 7/31/97 5/29/97 5/31/97 6/16/97 6/16/97 6/28/97 6/30/97 6/30/97 7/14/97 TI15/97 717/197 7/19/97 7/23/97 7/23/97 7/29/97 7/30/97 7131197 7/31/97 74/18/97 5/29/97 5/29/97 5/19/97 6/16/97 6/20/97 6/20/97 7/31/97 7/31/97 TIV7/97 TI17/97 TI17/97 TIV7/97 TIV7I9T 7/18/97 7/18/97 16597 16615 16619 16633 16636 16640 16643 16660 16667 16669 16684 16695 16702 16720 16729 16734 16735 16742 16753 16765 16771 16594 16627 16644 16650 16670 16683 10591 16704 16707 16721 16728 16739 16743 16748 16754 16759 16766 16500 16593 16599 16629 16645 16658 16659 16770 16773 103790 103792 103798 103812 103818 103852 103858 288.71 3,376.00 10,196.00 5,113.00 1,127.60 5,103.00 62,607.00 31,544.00 1,935.00 26,902.00 63,501.89 29,225.00 15,299.00 16,235.00 2,743.50 14,762.10 8,469.00 18,103.00 20,392.00 5,467.00 10,196.00 8,252.56 19,134.50 8,090.38 26,400.00 8,182.00 16,334.00 16,400.87 9,569.00 3,000.00 19,128.00 16,334.00 16,334.00 16,344.00 4,200.00 32,678.00 26,400.00 19,128.00 30.00 144.72 17,390.00 17,390.00 91,62 40,000.00 30,000.00 66.87 17,390.00 266.09 88.00 568.48 122.87 184.91 88.00 162.58 26.25 306.91 926.91 464.82 102.51 463.91 5,691.55 2,867.64 175.90 2,445.64 5,772.90 2,656.82 1,390.82 1,475.91 249.41 1,342.01 769.91 1,645.73 1,853.82 497.00 926.91 750.23 1,739.50 735.49 2,400.00 743.82 1,484.91 1,490.99 869.91 272.73 1,738.91 1,484.91 1,484.91 1,485.82 381.82 2,970.73 2,400.00 1,738.91 2.73 13.16 1,580.91 1,580.91 8.33 3,636.36 2,727.27 6.08 1,580.91 24.19 8.00 51.68 11.17 16.81 8.00 14.78

PAGE I1

AYALA BAIN INSURANCE

INT'L COMMUNICATION

PHILIPPINE AIRLINES

PILIPINO TELEPHONE

SKYLAND BROKERAGE

SYCIP, SALAZAR SYCIP, SALAZAR Subtotal for 3rd quarter

ADC GENERAL

ARTHUR RODRIGUEZ

AYALA BAIN INSURANCE

3RD QTR

4TH QTR

AC 1701

AC 0261

AC 0633

AC 0261

AC 0633

AC 0261

AC 1701

AC 0451

AC 1701

7/18/97 7/21/97 7/21/97 7/21/97 7/21/97 7/22/97 8/25/97 6/25/97 7/10/97 7/28/97 9/8/97 9/8/97 9/8/97 9/8/97 9/8/97 9/8/97 9/8/97 9/8/97 9/8/97 9/8/97 9/8/97 9/24/97 TIV7/97 7/31/97 8/31/97 7/31/97 8/31/97 8/12/97 9/19/97 9/22/97 6/18/97 7/18/97 8/14/97 9/1/97 4/30/97 4/30/97 11/7/97 10/1/97 9/18/97 9/18/97 9/18/97 9/19/97 9/22/97 9/22/97 9/22/97 9/22/97 9/22/97 9/22/97 9/22/97 9/22/97 9/22/97 103877 103912 103914 103916 103920 103938 104834 435138 435409 435723 1053127 1053167 1037930 0137933 0138606 0138766 0138770 0139290 0139292 0139293 0139294 1060087 1038206 561 824 £61 824 3552638 1864017 21348 131078 131269 0046 0059 1057513 1057515 1057516

1057 527

1057588 1058567 1058568 1058627 1058647 1058687 1058727 1058747 1058767 388.41 88.00 88.00 106.15 88.00 581.57 1,947.33 24,448.58 34,606.24 23,542.05 10,297.08 20,847.42 88.00 88.00 163.75 88.00 88.00 88.00 88.00 501.85 501.49 31,862.73 88.00 61,600.00 61,600.00 107,599.80 107,599.80 7,349.00 7,593.00 8,288.00 1,414.60 1,391.50 1,348.60 4,601.19 11,250.00 156.25 P 1,457,677.96 P 400.00 2,411.45 228.47 189.64 98.45 361.57 457.16 120.89 413.05 88.00 374.55 88.00 88.00 356.73 461.01 35.31 8.00 8.00 9.65 8.00 52.87 177.03 2,222.60 3,146.02 2,140.19 936.10 1,895.22 8.00 8.00 14.89 8.00 8.00 8.00 8.00 45.62 45.59 2,896.61 8.00 5,600.00 5,600.00 9,781.80 9,781.80 668.09 690.27 753.45 128.60 126.50 122.60 418.29 1,022.73 14.20 132,516.23 363.64 219.22 20.77 17.24 8.95 32.87 41.56 10.99 37.55 8.00 34.05 8.00 8.00 32.43 41.91

PAGEI2

AYALA BAIN INSURANCE

4TH QTR

CAPITOL PUBLISHING

4TH QTR

INTL COMMUNICATION

4TH QTR

INTL COMMUNICATION

4TH QTR

INTL COMMUNICATION

4TH QTR

INTL COMMUNICATION

4TH QTR

INTL COMMUNICATION

4TH QTR

RUBIE INTEL

4TH QTR

RUBIE INTEL

4TH QTR

RUBIE INTEL

4TH QTR

Subtotal for the 4th quarter

AC 1701

AC 0632

AC 0633

AC 0~61

AC 0261

AC 0644

AC 0451

AC 0644

9/24/97 1 060107 7/22/97 1 0855 9/30/97 1 090 11/30/97 1633 9/30/97 1090 11/31/97 1358 11/30/97 1033 12/17/97 039 12/4/97 190 11/22/97 189 11/3/97 0429 10/17/97 745000 12/31/97 341 12/15/97 336 1/25/97 332 1/14/97 328 p 63.80 32,300.00 107,599.80 107,599.80 57,127.99 61 ,600.00 61 ,600.00 76,156.44 75,277.82 74,812.88 59,519.52 41 ,483.64 18,600.00 18,600.00 18,600.00 18,600.00 835,678.66 p

(b) Invoices/official receipts not in the name of Benguet Corporation SUPPLIER ASCENDING RAY CORP.

AQUINO ENTERPRISES

BAGUIO JBL SCHOOL

BAGUIO METROPOLITAN

BENSO WINNER

BOTICAZOR COLORITE QTR.

INVOLVED

3RD QTR

COMML FREIGHT SERVICE

3RD QTR

CONSOLIDATED INDUS.

3RD QTR

CONSOLIDATED INDUS.

DAIRES TRADING

DOUBLE HAPPINESS

REST.

DOUBLE HAPPINESS

REST.

DOUBLE HAPPINESS

REST.

DOUBLE HAPPINESS

REST.

EUROPA PARTS & ACCES. EUROPA PARTS & ACCES. EUROPA PARTS & ACCES. F & B INTL INC.

FARMACIA CASTILLO

FARMACIA VENTURA

FARMACIA WILMA INC

FXR ENTERPRISES

GABBY & ELLEN REST.

GEMINI AUTO SUPPLY

GOLDEN CIRCLE, INC.

HOLIDAYLAND

JANET'S PHARMACY

JV'S AUTO SUPPLY

KONG'S RESTAURANT

LA BOTICA

LASER MKTG

LRK GEN. MDSE LRK GEN. MDSE LRK GEN. MDSE LRK GEN. MDSE

MAX RESTAURANT

MERCURY DRUG

MOSA ANGALA ENT.

NEW MASINLOC HENRY'S

NEW SOUTH STAR DRUG

PYRAMID HARDWARE

3RD QTR

AC 1705

AC 1701

AC 1705

IRISAN IRISAN IRISAN IRISAN IRISAN IRISAN IRISAN IRISAN IRISAN IRISAN IRISAN IRISAN

AC 1705

IRISAN

AC 1705

IRISAN IRISAN IRISAN IRISAN 8/8/97 9/5/97 5/31/97 5/31/97 TIV7I9T 8/11/97 8/6/97 9/11/97 8/14/97 8/14/97 8/14/97 712197 7I7I9T 6/28/97 8/7/97 6/30/97 6/8/97 7/3/97 7/6/97 6/28/97 6/25/97 8/7/97 8/24/97 8/19/97 6/20/97 7/15/97 6/30/97 TISI97 7/4197 7/8/97 TI7I97 8/15/97 7129197 9/10/97 7128/97 7TI12/97 8/11/97 8/16/97 7/3/97 7126/97 TIAI97 7I5I97 9/2197 8/4/97 8/4/97 8/5/97 8/13/97 TI14197 8/13/07 7/15/97 6/30/97 TI17/97 7129/97 8/16/97 78780 81674 96343 96341 96847 97189 97120 97184 97232 97266 347621 291 8443 8712 42497 15028 11570 30126 30098 30077 30069 30418 30559 12275 15.!206 236589 25269 25375 25362 25413 25556 25949 25718 26343 301 220 0314 0368 143112 679645 82145 82368 204088 31914 1217492 16242 20131 93151 93292 47543 17468 17637 17687 17904 100.00 155.00 259.45 40.00 235.00 66.60 149.50 61.20 60.25 182.20 397.80 309,078.96 275.00 140.00 45.00 144.88 262.00 99.75 210.00 100.00 350.00 25.00 615.00 400.00 227.00 135.80 1,045.00 99.25 126.75 874.50 208.00 105.00 70.00 420.00 2,070.00 1,650.00 630.00 1,200.00 432.30 805.50 835.75 235.50 104.85 131.50 60.25 9,836.00 2,170.00 276.00 1,000.00 65.05 4,989.80 540.00 8,764.00 1,270.00 9.09 14.09 23.59 3.64 21.38 6.24 13.59 5.56 5.48 16.56 36.16 28,098.09 25.00 12.73 4.09 13.17 23.82 9.07 19.09 9.09 31.82 2.27 55.91 36.36 20.64 12.35 95.00 9.02 11.52 79.50 18.91 9.55 6.36 38.18 188.18 150.00 57.27 109.09 39.30 73.23 75.98 21.41 9.53 1.23 5.48 894.18 197.27 25.09 90.91 5.91 453.62 49.09 796.73 115.45

PYRAMID HARDWARE

REDISOL INC.

ROSJ MKTG

SAN ANDRES CONCRETE

SAN FERNANDO MOTOWN

SHAKEY'S EDSA

SILAHIS MKTG

SM SUPERMARKET

T & J CUSTOMBUILT

TCY MACHINERY

TIONGSON DRUGSTORE

TOP ACE MOTORWORK

VG COMML II

WAN-WAN RESTAURANT

Subtotal for the 3rd quarter

ARRIAGA ALUMINUM

ATA AUTO SUPPLY

BAGUIO JBL

BENGUET-DIZON CON.

BENSO WINNER CORP.

BLOSSOM'S PHARMACY

CITIMOTORS, INC.

CONSOLIDATED INDUS.

DAGUPAN HONEYBEE

DOUBLE HAPPINESS

DY AUTO SUPPLY

EUROPA PARTS

F& BINT'L

FARMACIA ESPERANZA

FARMACIA MANIAGO

FARMACIA VENTURINA

GARBES-DIZON SERVITEK

3RD QTR

AC 0452

AC 1705

IRISAN IRISAN IRISAN IRISAN

AC 1705

AC 0452

AC 1705

9/2/97 8/22/97 9/5/97 TII97 7110/97 8/11/97 8/19/97 8/20/97 1/15/97 8/15/97 TITI9T 5/5/97 7/18/97 TIVTI97 8/5/97 8/21/97 9/13/97 9/18/97 6/6/97 7I1I97 8/4/97 8/27/97 9/4/97 7/12/97 10/28/97 10/7/97 10/6/97 5/23/97 11/27/97 11/2/97 11/21/97 10/27/97 9/6/97 10/7/97 10/18/97 11/29/97 12/12/97 11/30/97 1/10/98 10/17/97 10/13/97 11/5/97 10/2/97 10/4/97 12/2/97 12/2/97 11/2/97 9/29/87 10/20/97 10/3/97 9/24/97 17942 17884 17986 4392 2529 1&400 26772 26950 80544 53579 477903 35529 1154 1183 1238 1285 1344 1366 24338 40125 40205 40217 19585 "9 8996 212238 1328 76004 38380 1588 2957 1209 283806 2657 2779 3072 3225 22196 32912 892311 38049 42492 100 8808 8833 8837 20365 97787 97786 97697 29400 P P 1,080.00 180.00 1,960.00 5,100.00 600.00 1,510.00 127.00 87.00 125.84 6,500.00 169.75 7,150.00 4,750.00 6,000.00 2,400.00 9,460.00 720.00 640.00 288.35 2,383.35 3,800.00 1,140.00 50.00 325.00 550,699.23 7,500.00 1,350.00 600.00 976.90 281.00 290.00 160.00 735.00 250.00 600.00 2,000.00 1,800.00 1,800.00 947.75 130.00 212.00 850.00 92.50 7,651.00 57,333.10 10,625.60 7,208.85 600.00 175.40 170.00 298.65 2,750.00 P Pp 98.18 16.36 178.18 463.64 54.55 137.27 11.55 7.91 11.44 590.91 15.43 650.00 431.82 545.45 218.18 860.00 65.45 58.18 26.21 216.67 345.45 103.64 4.55 29.55 50,053.00 681.82 122.73 54.55 88.81 25.55 26.36 14.55 66.82 22.73 54.55 181.82 163.64 163.64 86.16 11.82 19.27 77.27 8.41 695.55 5,212.10 965.96 655.35 54.55 15.95 15.45 27.15 250.00

GARBES-DIZON SERVITEK

JANET'S PHARMACY

JVS AUTO SUPPLY

KAYANG COMML

KOLORMATE PAINT

MAC-BER AUTO SUPPLY

MERCURY DRUG

MUY BIEN FOODS CORP.

SM SUPERMARKET

ST. JOSEPH DRUGSTORE

SUNSHINE LUNCH

SYNERCON ENTRP.

TAMBAL ATBPA

TEXAS MANOK

Subtotal for the 4th quarter

SUPPLIER

ACR JANITORIAL

BAGUIO COUNTRY CLUB

BUNTAK MINES

CRIBEN PRINTING

DOLOR HOTEL

FXR ENTERPRISES

MENDOZA BROS. RAD.

PENSIONNE VIRGINIA

SUBIC PROTECTORS

4TH QTR

QTR.

INVOLVED

3RD QTR

AC 1705

ACCOUNT NO.

AC 1701

AC 0615

AC 1705

AG 0645

AC 1705

AC 1701

AC 0645

AC 0633

AC 1705

9/23/97 10/30/97 9/26/97 11/4/97 11/5/97 11/27/97 10/22/97 11/28/97 9/12/97 10/29/97 11/13/97 10/10/97 9/27/97 12/15/97 10/31/97 9/22/97 11/20/97 11/3/97 9/30/97 9/7197 10/27/97 12/10/97 11/8/97 DATE 8/14/97 9/2/97 9/2/97 9/2/97 6/30/97 7/31/97 7/31/97 6/24/97 713197 7/3197 7/3/97 713197 712197 7/2197 8/19/97 9/11/97 9/20/97 9/20/97 6/10/97 6/30/97 7/15/97 8/16/97 7/31/97 29373 31130 30854 31059 3° 964 31322 12789 110491 55596 35689 35927 33251 32582 44676 24434 7485 497660 330876 176504 87206 28057 30720 89844 450.00 754.00 370.00 81.00 90.00 225.00 430.00 38.00 680.00 224.00 110.00 66.25 66.75 204.00 108.80 73.25 113.65 121.25 223.00 260.00 165.00 200.00 105.00 P 112,546.70

REFERENCE INVOICE

NO.

1864 1867 1871 1872 063097 073197 80 3440 4549 4548 4550 4522 290 292 296 298 300 301 2631 5457 1652 1657 1654 AMOUNT P 16,206.93 5,402.31 76,952.50 74,916.93 6,233.31 3,928.22 297,369.40 630.00 220.00 220.00 220.00 270.00 40,908 52 34,342.11 25,970.60 13,440.31 105,120.33 24,353.80 850.00 2,250.00 138,974.14 138,997.80 148,264.32 40.91 68.55 33.64 7.36 8.18 20.45 39.09 3.45 61.82 20.36 10.00 6.02 6.07 18.55 9.89 6.66 10.33 11.02 20.27 23.64 15.00 18.18 9.54 10,231.54 INPUT VAT 1,473.36 491.12 6,995.68 6,810.63 566.66 357.114 27,033.58 57.27 20.00 20.00 20.00 24.55 3,718.96 3,122.01 2,360.96 1,221.85 9,556.39 2,213.98 77.27 204.55 12,634.01 12,636.16 13,478.57

SUBIC PROTECTORS 3RD QTR

Subtotal for the 3rd quarter

BUNTAK MINES 4TH QTR

CRITERION MKTG 4TH QTR

DAGUPAN AIR PROD. 4TH QTR

FXR ENTRP 4TH QTR

NEW BAGUIO JOHNNY 4TH QTR

SUBIC PROTECTORS 4TH QTR

Subtotal for the 4th quarter

AC 1705

AC 0632

AC 1705

AC 0451

AC 0645

AC 1705

(d) Invoices/official receipts without BIR permit QTR.

SUPPLIER INVOLVED

CITIMOTORS INC 3RD QTR

BENGUET BUILDERS 4TH QTR

Subtotal for the 4th quarter

(e) Without supporting document QTR.

SUPPLIER INVOLVED

ANITA'S DRUG 3RD QTR

BENGUET BUILDER'S 3RD QTR

BENGUET MGT. 3RD QTR BENGUET MGT. 3RD QTR BENGUET MGT. 3RD QTR

DIVINE MERCY 3RD QTR

EDIFER'S TRADING 3RD QTR

FERNANDEZ ENTRP. 3RD QTR FERNANDEZ ENTRP. 3RD QTR FERNANDEZ ENTRP. 3RD QTR FERNANDEZ ENTRP. 3RD QTR FERNANDEZ ENTRP. 3RD QTR ACCOUNT NO,

AC 1705

ACCOUNT NO.

AC 1705

AC 0252

AC 0452

AC 1701

AC 0252

9/1/97 1658 9/16/97 1661 Pp Nov-97 081 =P 7/21/97 2843 10/23/97 3844 10/1/97 303 10/15/97 305 10/24/97 306 10/16/97 12193 10/31/97 12026 10/13/97 12178 10/23/97 12235 12/1/97 1671 11/15/97 1669 12/16/97 1673 12/29/97 1675 10/1/97 1663 10/16/97 — 1€65 10/31/97 1€67 Pp REFERENCE DATE NO.

435362 P

10/18/97 159 =P

11/13/97 199 Pp REFERENCE DATE ro.

P 148,264.32 138,997.80 1,443,303.65 416,751.72 207,412.60 6,210.00 40,619.22 20,509.10 2,278.78 1,755.00 395.00 110.00 53.00 124,802.28 124,013.64 124,605.12 134,463.12 138,997.80 138,997.80 148,067.16 1,630,041.34 INVOICE ANMGUNT 39,600.00 200,000.00 276,000.00 476,000.00 INVOICE AMOUNT 81.95 148.50 270,000.00 270,000.00 479,797.50 1,370.00 4,850.00 280.00 23,835.00 24,254.68 19,032.00 2,148.00 Pp P 13,478.57 12,636.16 131,209.40 37,886.52 18,855.78 564.55 3,692.66 1,864.46 207.16 169.55 35.91 10.00 4.82 11,345.66 11,273.97 11,327.74 12,223.92 12,636.16 12,636.16 13,460.65 148,185.67 INPUT VAT 3,600.00 18,181.82 25,090.91 43,272.73 INPUT VAT 6.81 13.50 24,545.45 24,545.45 43,617.95 124.55 440.91 25.45 2,166.82 2,204.97 1,730.18 195.27

PAGEl ?

FERNANDEZ ENTRP.

3RD QTR

AC 0252

2,255.00 205.00 Subtotal for the 3rd quarter p 5,210,073.90 p 472,787.88

ARCHILLES MFG

4TH QTR

AC 1702

p 5,800.00 p 527.27 FAIRCARGO

4TH QTR

AC 0261

37.13 3.38 FAIRCARGO

4TH QTR

AC 0261

4TH QTR

AC 1705

62.95 5.72

PILIPINAS SHELL

4TH QTR

AC 1702

3,260.40 296.40

PILIPINO TELEPHONE

4TH QTR

AC 0644

5,085.03 462.02

PILIPINO TELEPHONE

4TH QTR

AC 0644

17,474.94 1,588.63 PILTEL

4TH QTR

AC 0451

2,325.43 138.18

TAMBAL ATBPA

4TH QTR

AC 1705

360.00 32.73

PAGE!& Subtotal for the 4th quarter p 352,377.25 p 31,960.82

(f) Invoices/official receipts without an indicated date QTR.

ACCOUNT REFERENCE INVOICE INPUT SUPPLIER INVOLVED NO.

AC 0452

945 35,638.25 3,239.84 Subtotal for the 4th quarter p 158,074.00 p 14,370.37

(g) Non-VAT invoices/official receipts QTR.

ACCOUNT REFERENCE INVOICE INPUT SUPPLIER INVOLVED NO.

DATE NO.

AMOUNT VAT MADRIGAL-WAN HAl

3RD QTR

AC 0261

4TH QTR

AC 0452

10/2/97 4153 26,543.00 2,413.00 BENGUET CORP.

4TH QTR

AC 0452

10/2/97 4167 8,861 .60 805.60 Subtotal for the 4th quarter p 35,404.60 p 3,218.60

(h) Not within the period of claim QTR.

ACCOUNT REFERENCE INVOICE INPUT SUPPLIER INVOLVED NO.

AC 1705

6/20/97 77234 832.00 75.64

FARMACIA CASTILLO

GEOMETRIC CONS.

GRAM COMPUTER

GRAYBAR MKTG

MACRO HARDWARE

NEW MASINLOC

NEW MAS!NLOC

NORDBERG PHILS

PAULIRENZ RUBBER

PHILGERMA MFG

SYDEHAM PHARMA.

VF INDUSTRIAL SALES

ZUELLIG INSURANCE

Subtotal for the 3rd quarter BENGUETRADE, INC.

BENGUETRADE, INC.

BONAVENTURE GRAPHIC

CAPITOL PUBLISHING

DIZ-MAC INSURANCE

MEDAL PRINTERS

PACIFIC OFFICE

MACHINES R. CERVANTES ENG'G

ZUELLIG INSURANCE

3RD QTR

4TH QTR

AC 1705

AC 1701

AC 1702

AC 1705

AC 0252

AC 1702

AC 1705

AC 0615

AC 1702

AC 0615

AC 1705

AC 0632

AC 0633

AC 0632

AC 0615

AC 0452

AC 0633

5/22/97 5/22/97 5/22/97 6/18/97 3/8/97 2/19/97 2/4/97 2/13/97 2/3/97 5/20/97 6/20/97 6/20/97 2/26/96 5/14/97 5/14/97 6/2/97 6/20/97 5/20/97 5/20/97 6/20/97 6/3/97 5/20/97 5/28/97 6/5/97 6/30/97 4/15/97 6/11/97 8/1/96 9/11/96 6/16/97 6/23/97 6/23/97 4/28/97 4/28/97 6/24/97 6/24/97 6/24/97 4/28/97 5/2/97 8/27/96 9/13/96 1/7197 5/14/97 6/25/97 3/13/98 3/14/97 6/17/97 2/21/96 3/18/96 6/18/96 A 77106 77105 77104 77224 1036 2583 2578 2592 119 255 312 313 157 23828 23829 24126 24429 92270 92271 92850 92317 92272 92269 598 0009 1185 36827 2947 3105 3351 3352 3353 630013 630014 014 013 015 00301 7680 7126 7183 7502 8043 8166 2266 47339 20503 608279 609782 614494 1,445.00 2,153.00 288.00 1,335.00 90,588.30 91,606.80 99,785.80 91,748.60 11,109.37 11,109.37 11,109.37 11,109.37 38,280.00 17,310.00 948.00 2,300.00 10,800.00 520.00 6,830.00 3,200.00 1,340.00 2,208.00 600.00 12,100.00 36,875.00 5,937.20 1,666.46 38,840.00 18,037.50 25,727.35 35,793.75 35,268.75 495.00 22,938.41 765,559.25 189,145.00 189,145.00 189,145.00 21,360.00 32,300.00 550.00 33,788.70 1,017.50 118,053.40 22,000.00 6,866.75 1,430.00 15,500.00 172,975.00 3,160.19 664.29 Pp P 131.36 195.77 26.18 121.36 8,235.30 8,327.89 9,071.44 8,340.78 1,009.94 1,009.94 1,009.94 1,009.94 3,480.00 1,573.64 86.18 209.09 981.82 47.27 620.91 290.91 121.82 200.73 54.55 1,100.00 3,352.27 539.75 151.50 3,167.27 1,639.77 2,338.85 3,253.98 3,206.25 45.00 2,085.31 68,959.98 17,195.00 17,195.00 17,195.00 1,941.82 2,936.36 50.00 3,071.70 92.50 10,732.13 2,000.00 624.25 130.00 1,409.09 15,725.00 287.29 60.39

ZUELLIG INSURANCE

Subtotal for the 4th quarter

4TH QTR

AC 0633

4TH QTR

AC 0633

4TH QTR

AC 0633

4TH QTR

AC 0633

4TH QTR

AC 0633

4TH QTR

AC 0633

4TH QTR

AC 0633

4TH QTR

AC 0533

4TH QTR

AC 0633

4TH QTR

AC 0633

4TH QTR

AC 0633

4TH QTR

AC 0633

4TH QTR

AC 0633

4TH QTR

AC 1701

4TH QTR

AC 1701

4TH QTR

AC 1701

4TH QTR

AC 1701

4TH QTR

AC 1701

4TH QTR

AC 1701

4TH QTR

AC 1701

4TH QTR

AC 1701

4TH QTR

AC 1701

4TH QTR

AC 1701

4TH QTR

AC 1701

4TH QTR

AC 1701

4TH QTR

AC 1701

4TH QTR

AC 1701

4TH QTR

AC 1701

4TH QTR

AC 1701

4TH QTR

AC 1701

(i) Pre-printed "TIN"f'V"/"VAT" after July 31, 1991 SUPPLIER BEGONSA CONS.

BEGONSA CONS.

FERNANDEZ ENTRP.

QTR.

ACCOUNT INVOLVED NO.

3RD QTR

AC 0251

3RD QTR

AC 0251

3RD QTR

AC 0645

3RD QTR

AC 0645

3RD QTR

AC 0645

3RD QTR

AC 0645

3RD QTR

AC 0645

3RD QTR

AC 0645

3RD QTR

AC 0645

3RD QTR

AC 0645

(j) Invoice/official receipt twice recorded QTR.

ACCOUNT REFERENCE INVOICE INPUT SUPPLIER INVOLVED NO.

DATE NO.

AMOUNT VAT FRONTIER'S SEC & D.A.

3RD QTR

AC 0615

9/10/97 91097 p 39,968.74 p 3,633.52

(k) Overstatement of input tax claimed per invoices/official receipts QTR.

ACCOUNT REFERENCE INVOICE INPUT SUPPLIER INVOLVED NO.

AC 1705

7/19/97 201567 861 7.26 8017.26 600.00 54.55 Subtotal for 3rd quarter p 200,763.17 p 18,251.20

Total for the 3rd quarter Total for the 4th quarter Grand Total p 11,224,961.00 p 1,018,948.75 p 5,193,291.39 p 472,663.81 p 16,418,252.39 p 1,491,612.56 In fine, Petitioner is entitled to the refund of unutilized input VAT in a reduced amount of P 13,531 ,670.26, computed as follows; 3rd 4th Quarter Quarter Total Total Amount Claimed p 12,592,011.34 p 3,593,714.65 p 16,185,725.99 Less: Disallowances

(a) Per independent's CPA's verification p 797,122.78 p 343,923.63 p 1,141 ,046.41

(b) Unreported sales 21 ,396.76 21 ,396.76

(c) Per Court's verification 1,018,948.75 472,663.81 1 ,491 ,612.56 Total Disallowances p 1 ,837,468.29 p 816,587.44 p 2,654,055.73 Net Amount Refundable p 10,754,543.05 p 2, 777,127.21 p 13,531,670.26

WHEREFORE, in v1ew of the foregoing, the instant Petition for Review is hereby PARTIALLY GRANTED. Respondent is OR."'lERED to REFUND or ISSUE A TAX CREDIT CERTIFICATE in favor of Petitioner in the amount of P13,531 ,670.26.

SO ORDERED.

~~ - O~...t- ERNESTo D. ACOSTA Presiding Judge

WE CONCUR:

~~ ym;~~~~~e'k:GA a-ut:;-C?. ~~A UANITO C. CASTANEDA, J Associate Judge CERTIFICATION I hereby certify that the above decision was reached after due consultation with the members ofthe Court of Tax Appeals in accordance with Section 13, Article VIII of the Constitution.

L~. o~ ERNESTO D. ACOSTA Presiding Judge ·