Philex Mining Corporation vs. Commissioner of Internal Revenue

AMENDED DECISION

coursed; and (2) bank passbooks showing the crediting of the net foreign exchange remittances to the bank accounts of petitioner. Likewise, petitioner avers that the remittances covered by the bank certifications 1 and by the corresponding entries in the passbooks2 actually pertained to the zero-rated sales of petitioner for the periods covered by the present claim. Petitioner points out that it can further be determined by analyzing the bank certifications in relation to the Provisional/Final Sales Invoices, as summarized in the Schedule of Sales and Remittances in the Independent CPA Report. In her Comment, respondent counter-argues that petitioner failed to comply with the third requisite of Revenue Regulations (RR) No. 16-2005. In other words, petitioner failed to submit the relevant documents necessary to substantiate its claim for refund of its unutilized excess input VAT attributable to its zero-rated sales for the second and third quarters of 2007. In support of its motion, petitioner illustrates an example to prove that the remittances it received actually pertain to the zero- rated sales for the period covered by the present claim, to wit: "First is Exhibit 'F-1 ', the Certification issued by BOO (formerly Equitable PCIB) that covered Pan Pacific's remittances during the 2"d quarter of 2007 that were coursed through said bank. One remittance was on 06/08/07 in the amount of US$13,975,805.87 (rounded to 13,975,806), and the other was on 05/10/07 in the amount of US$3,745,530.83 (rounded to 3,745,531 ). The remittance of US$13,975,806 on 06/08/07 is shown in the Schedule of Sales and Remittance, Exhibit 'F', second line under the column 'Remittances - Net'. If we look towards the left part of the Schedule, we note that it is covered by Provisional Invoice No. 2503, dated May 29, 2007 (Exhibit 'E-2-b') which shows the provisional Export Sales-Net of US$15,918,565. However, under the Long Term Sales Agreement (Exhibit 'C'), only 90% (US$14,326,708) is initially due and payable. Thus, from the export sales of US$15,918,565 as shown in Provisional Invoice No. 2503, dated May 29, 2007 (Exhibit 'E-2-b'), deducted is 10% thereof, or US$1,591,857 (which is reflected in the Schedule of Sales and Remittances, Exhibit "F", under the column 'Receivables J<- 1Exhibits "F-1" to "F-11" 2Exhibits "F-1-a" to "F-11-a"

- 2nd Q 2007'). Also deducted is the treatment charge in the amount of US$350,872, leaving a balance of US$13,975,837. The net remittance was US$13,975,806 after deducting the bank charge of US$31 (shown in the column 'Remittance - Deduct' in the Schedule of Sales and Remittances', Exhibit 'F'). The second remittance covered by Exhibit 'F-1' is the amount of US$3, 7 45,531 on 5/1 0/07. This is reflected in line 7 under the column 'Remittances - Net' of Exhibit 'F'. If we look towards the left part of Exhibit 'F', we note that it is covered by Final Invoice No. 2500, Exhibit 'E-8- c'. Examining this Final Invoice No. 2500, we find that it reflects the 'Final Balance Due Philex' in the amount of US$3, 745,562. However, after deducting the bank charge of US$31, the net remittance was US$3,745,531.xxx"3 After careful re-evaluationof the foregoing arguments, the Court finds petitioner's arguments meritorious. Based on petitioner's Schedule of Export Sales and the supporting Provisional and Final Invoices, the zero-rated sales in the amount of US$72,171,652.00 and US$72,666,701.00 for the second and third quarters of 2007 may be broken down as follows: Second Quarter of 2007 Provisional Invoice Final Invoice Amount 90% Recorded in Provisional the General lnv.

Amount Drawing lnv.

Amount Ledger Exhibit No.

(in US$) (in US$) Exhibit No.

(in US$) (in US$) Current Quarter's Shipments E-1-b 2501 16,740,281.56 15,066,253.40 E-1-c 2510 16,645,029.37 17,446,779.00 E-2-b 2503 15,918,565.41 14,326,708.87 E-2-c 2513 16,384,343.89 16,938,439.00 E-3-b 2505 15,266,237.96 13,739,614.16 E-3-c 2514 15,657,431.65 16,261,006.00 E-4-b 2506 15,470,215.27 13,923,193.74 E-4-c 2516 15,897,767.70 16,475,683.00 subtotal 63,395,300.20 64,584,572.61 67,121,907.00 Catch-uo Adjustments to Prior Quarter's Shipments E-5-b 2487 12,809,339.17 11,528,405.25 E-5-c 2498 12,132,342.27 (360,557.00) E-6-b 2490 13,571,696.17 12,214,526.55 E-6-c 2499 12,528,933.65 (466,740.00) E-7-b 2491 11,563,407.65 10,407,066.89 E-7-c 2502 12,433,383.79 798,959.00 E-8-b 2492 11,654,140.06 10,488,726.05 E-8-c 2500 14,234,287.88 2,433,690.00 E-9-b 2495 12,159,517.41 10,943,565.67 E-9-c 2504 14,512,805.59 2,644,393.00 E-1 0-b 2496 13,203,397.70 11,883,057.93 E-1 0-c 2507 15,022,988.88 - subtotal 74,961,498.16 80,864,742.06 5,049,745.00 3Motion for Reconsideration (Re: Decision Rendered on September 22, 2014), docket, p. 371 Total

138,356,798.36 145,449,314.67 72,171,652.00 Third Quarter of 2007 Provisional Invoice Final Invoice Amount 90% Recorded in Provisional the General lnv.

Amount Drawing lnv.

Amount Ledger Exhibit No.

(in US$) lin US$l Exhibit No.

lin US$) (in US$) Current Quarter's Shioments E-11-b 2508 15,583,711.76 14,025,340.58 E-11-c 2519 15,295,779.00 16,925,092.00 E-12-b 2509 14,579,004.85 13,121,104.37 E-12-c 2552 15,181,640.93 16,150,350.00 E-13-b 2511 15,315,307.64 13,783,776.88 E-13-c 2523 16,190,437.47 16,997,223.00 E-14-b 2512 16,074,535.85 14,467,082.27 E-14-c 2525 16,192,708.23 17,095,371.00 subtotal 61,552,560.10 62,860,565.63 67,168,035.00 Catch-u AdJustments to Prior Quarter's Shioments E-15-b 2496 13,203,397.70 11,883,057.93 E-15-c 2507 15,022,988.88 2,056,691.00 E-16-b 2497 13,451,691.12 12,106,522.01 E-16-c 2515 14,758,882.27 1,561,637.00 E-17-b 2501 16,740,281.56 15,066,253.40 E-17-c 2510 16,645,029.37 214,722.00 E-18-b 2503 15,918,565.41 14,326,708.87 E-18-c 2513 16,384,343.89 446,412.00 E-19-b 2505 15,266,237.96 13,739,614.16 E-19-c 2514 15,657,431.65 740,222.00 E-20-b 2506 15,470,215.27 13,923,193.74 E-20-c 2516 15,897,767.70 478,982.00 Total subtotal 90,050,389.02 94,366,443.76 5,498,666.00 151,602,949.12 157,227,009.39 72,666,701.00 Based on the Schedule of Sales and Remittances4 together with the foregoing explanation of petitioner, ninety percent (90%) of the export sales per Provisional Invoices for the second and third quarters of 2007 shipments, after deducting the alleged treatment charges, corresponds to the inward remittances received by petitioner. However, for Provisional Invoice Nos. 2511 and 2512 with Final Invoice Nos. 2523 and 2525, respectively, no inward remittance has been received. Thus, the same remained as collectible or receivable at the end of the third quarter of 2007. It is noteworthy that petitioner did not submit any documentary evidence to support its alleged treatment charges and that the remaining receivables were subsequently collected and accounted for in acceptable foreign currency. Hence these items shall be disregarded in computing the correct amount of petitioner's zero- rated sales.

Out of the 90% Provisional Drawing in the total amount of US$112,453,074.27 for the second and third quarter's shipments,~

only the amount of US$82,099,483.00 had the corresponding inward remittance, computed as follows: Current Quarter's Shi~ments (in US$) Actual Final Amount Remittance per Provisional Invoice Recorded in the 90% Provisional Bank Invoice No.

No.

General Ledger Drawin!l Certificates Difference Second Quarter of 2007 2501 2510 17,446,779.00 15,066,253.40 14,715,969.00 350,284.40 2503 2513 16,938,439.00 14,326,708.87 13,975,806.00 350,902.87 2505 2514 16,261,006.00 13,739,614.16 13,391,401.00 348,213.16 2506 2516 16,475,683.00 13,923,193.74 13,574,300.00 348,893.74 subtotal 67' 121 ,907.00 57,055,770.17 55,657,476.00 1,398,294.17 Third Quarter of 2007 2508 2519 16,925,092 00 14,025,340.58 13,675,738.00 349,602.58 2509 2552 16,150,350.00 13,121,104.37 12,766,269.00 354,835.37 2511 2523 16,997,223.00 13,783,776.88 - 13,783,776.88 2512 2525 17,095,371.00 14,467,082.27 - 14,467,082.27 subtotal 67' 168,036.00 55,397,304.1 0 26,442,007.00 28,955,297.10 Total 134,289,942.00 112,453,074.27 82,099,483.00 30,353,591.27 With regard to the Catch-up Adjustments to Prior Quarter's Shipments for the second and third quarters of 2007, only the payments for Provisional Invoice Nos. 2487, 2490, 2491, 2492, 2495, 2497, 2496 and 2501 with the respective Final Invoice Nos. 2498, 2499, 2502, 2500, 2504, 2515, 2507 and 2510, were inwardly remitted. For the Catch-up Adjustments pertaining to Provisional Invoice Nos. 2503, 2505 and 2506, with Final Invoice Nos. 2513, 2514 and 2516, respectively, no corresponding inward remittances were made.Thus:

Catch-up Adjustments to Prior Quarter's Shipments (in US$) Amount Balance· Prov.

Final Recorded in Amount per 90% Provisional should be lnv.

lnv.

the General Final Invoice Drawing remittance Actual No.

No.

Ledger (a) (b) (a·b) Remittance Second Quarter of 2007 2487 2498 (360,557.00) 12,132,342.27 11 ,528 405.25 603,937.02 603,900.00 2490 2499 (466,740.00) 12,528,933.65 12,214,526.55 314,407.10 314,407.00 2491 2502 798,959.00 12,433,383.79 10,407,066.89 2,026,316.90 2,026,317.00 2492 2500 2,433,690.00 14,234,287.88 10,488,726.05 3,745,561.83 3, 745,531.00 2495 2504 2,644,393.00 14,512,805.59 10,943,565.67 3,569,239.92 3,569,215.00 2497 2515 .

.

.

.

12,106,475.00 subtotal 5,049,745.00 65,841,753.18 55,582,290.41 1 0,259,462. 77 22,365,845.00 Third Quarter of 2007 2496 2507 2,056,691.00 15,022,988.88 11,883,057.93 3,139,930.95 3,139,909.00 2497 2515 1,561,637.00 14,758,882.27 12,106 522.01 2,652,360.26 .

Prov.

lnv.

No.

2501 2510 214,722.00 2503 2513 446,412.00 2505 2514 740,222.00 2506 2516 478,982.00 subtotal 5,498,666.00 Total 10,548,411.00 16,645,029.37 16,384,343.89 15,657,431.65 15,897,767.70 94,366,443.76 160,208,196.94 15,066,253.40 1 ,578, 775.97 1,578,776.00 14,326,708.87 2,057,635.02 - 13,739,614.16 1,917,817.49 - 13,923,193.74 1,974,573.96 - 81,045,350.11 13,321,092.65 4,718,685.00 136,627,640.52 23,580,556.42 27,084,530.00 Consequently, the amount of US$52,492,021.00, representing the difference between export sales as recorded in the General Ledger and the corresponding inward remittances for the second and third quarters' shipments, shall be disallowed as zero-rated sales, as determined below:

Amount Recorded in the General Ledger (in US$) Inward Remittance (in US$) Difference After the Current Final Quarter After the lnv.

Current (Catch-up Current Current No.

Quarter Adjustment) Total Quarter Quarter Total Difference Current Quarter's Shipments Second Quarter of 200 2501 2510 17,446,779.00 214,722.00 17,661,501.00 14,715,969.00 1 ,578, 776.00 16,294,745.00 1,366,756.00 2503 2513 16,938,439.00 446,412.00 17,384,851.00 13,975,806.00 - 13,975,806.00 3,409,045.00 2505 2514 16,261,006.00 740,222.00 17,001,228.00 13,391 ,401.00 - 13,391,401.00 3,609,827.00 2506 2516 16,475,683.00 478,982.00 16,954,665.00 - 13,574,300.00 13,574,300.00 3,380,365.00 I subtotal 67,121,907.00 1,880,338.00 69 002,245.00 42,083,176.00 15,153,076.00 57,236,252.00 11,765,993.00 I Third Quarter of 2007 2508 2519 16,925,092.00 - 16,925,092.00 13,675,738.00 - 13,675,738.00 3,249,354.00 2509 2552 16,150,350.00 - 16,150,350.00 12,766,269.00 - 12,766,269.00 3,384,081.00 ' 2511 2523 16,997,223.00 16,997,223.00 I - - - - 16,997,223.00 ;

2512 2525 17,095,371.00 - 17,095,371.00 - - - 17,095,371.00 subtotal 67,168,035.00 - 67,168,035.00 26,442,006.00 - 26,442,006.00 40,726,028.00 I Catch-up Adjustments to Prior Quarter's Shipments Second Quarter of 2007 2487 2498 (360,557.00) - (360,557.00) 603,900.00 - 603,900.00 - 2490 2499 (466,740.00) - (466,740.00) 314,407.00 - 314,407.00 - 2491 2502 798,959.00 - 798,959.00 2,026,317.00 - 2,026,317.00 - 2492 2500 2,433,690.00 - 2,433,690.00 3,745,531.00 - 3,745,531.00 - I 2495 2504 2,644,393.00 - 2,644,393.00 3,569,215.00 - 3,569,215.00 - subtotal 5,049,745.00 - 5,049,745.00 10,259,370.00 - 10,259,370.00 - Third Quarter of 2007 ' 2497 2515 1,561,637.00 - 1,561,637.00 12,106,475.00 - 12,106,475.00 2496 2507 2,056,691.00 - 2,056,691.00 3,139,909.00 - 3,139,909.00 - subtotal 3,618,328.00 - 3,618,328.00 15,246,384.00 - 15,246,384.00 - TOTAL 142,958,015.00 1,880,338.00 144,838,353.00 94,030,936.00 15,153,076.00 109,184,013.00 52,492,021.00 Accordingly, petitioner's export sales for the second and third quarters of 2007 with the net adjusted amount of US$60,405,659.00 Jt-- and US$31,940,673.00, respectively, qualify for VAT zero-rating. The said amounts are computed below: 2nd Quarter 3rd Quarter Total Zero-rated Sales US$ 72,171,652.00 US$ 72,666,701.00 US$144,838,353.00 Less: Sales without corresponding inward remittance 11,765,993.00 40,726,028.00 52,492,021.00 Adjusted Zero-rated Sales US$60,405,659.00 US$31 ,940,673.00 US$ 92,346,332.00 After resolving that petitioner had VAT zero-rated sales for the second and third quarters of 2007 in the total amount of US$92,346,332.00, the Court proceeds to determine whether petitioner incurred or paid input taxes in connection thereto and if said input taxes were not applied against any output VAT liability of petitioner.

Petitioner's Quarterly VAT Return for the second and third quarters of 2007 reflected an input VAT of P38,298,976.00 on importations of goods other than capital goods, P1 ,084,497. 72 on domestic purchase of goods other than capital goods and P875,526.89 on domestic purchases of services or in the total input VAT amount ofP40,259,000.61, as shown below: Input VAT on 2nd Quarter 3rd Quarter Total Importations of Goods (other than Capital Goods) p 17,986,209.00 p 20,312,767.00 p 38,298,976.00 Domestic Purchases Goods (other than Capital Goods) - 1,084,497.72 1 ,084,497. 72 Domestic Purchases Services 426,113.93 449,412.96 875,526.89 Total Input VAT p 18,412,322.93 p 21 ,846,677.68 p 40,259,000.61 To determine the accuracy of petitioner's declaration, the Independent CPA examined the voluminous documents of petitioner in support of its claim for refund.ln her Report, the Independent CPAfound the following: Findings Exhibit 2nd Quarter 3rd Quarter Total A. Input VAT on Importations of Goods (other than Capital Goods)

1. Supported by original BCORs/BDAs and IEIRDs a) Dated in the current _g_uarter "G~ 1" to "G-26-a" p 3,753,399.00 p 10,863,184.00 p 14,616,583.00 b) Not dated within the taxable quarter but within the taxable year Secondquarterof2007 "G-27" to ~~G-27 -a" - 300,976.00 300,976.00 Fourthquarterof2007 "G-28" to "G-28-a" - 1,030,052.00 1,030,052.00 2. Supported by original BCORs/BDAs and photocopies of IEIRDs "H-1" to "H-26"

3. No supporting BOAs, BCORs and IEIRDs "I" Subtotal 2,701,847.00 434,757.00 11,530,963.00 7,683,798.00 17,986,209.00 20,312,767.00 B. Input VAT on Domestic Purchases of Goods (other than Capital Goods)

1. Original VAT invoices that are in the name of petitioner a) Dated in the current quarter "L-1'' to "L-6" - 718,551.72 b) Not dated within the taxable quarter but within the taxable year First quarter of 2007 "L-7" - 93,278.57 Secondquarterof2007 "L-8" to "L-1 0 11 - 254,565.25

2. No supporting VAT invoices "M" - 18,102.18 Subtotal - 1 ,084,497.72 C. Input VAT on Domestic Purchases of Services

1. Original VAT official receipts that are in the name of petitioner a) Dated in the current "J-1" to "J-53";

quarter "J-96" to "J-151" 26,902.30 371,371.55 b) Not dated within the taxable quarter but within the taxable year Fourth quarter of 2006 "J-54" 120.36 - First quarter of 2007 "J-55" to "J-95" 279,507.68 - Secondquarterof2007 "J-152" to "J-178" - 34,167.48

2. No supporting VAT official Receipts "Kit 119,583.59 43,873.93 Subtotal 426,113.93 449,412.96 Total Input VAT P18,412,322.93 P21 ,846,677.68 3,136,604.00 19,214,761.00 38,298,976.00 718,551.72 93,278.57 254,565.25 18,102.18 1 ,084,497.72 398,273.85 120.36 279,507.68 34,167.48 163,457.52 875,526.89 P40,259,000.61 Based on the above findings, petitioner's claim in the amount of P23,891 ,001.31 shall be disallowed for the reasons stated below: Findings Exhibit 2nd Quarter 3rd Quarter Total A. Input VAT on Importations of Goods (other than Capital Goods)

1. Supported by original BCORs/BDAs and IEIRDs Not dated within the period of claim - Fourth quarter of 2007 "G-28" to "G-28-a" P1 ,030,052 00 p 1,030,052.00

2. Supported by original BOAs "H-1" to "H-26"5 only p 2,656,965.00 434,757.00 3,091 '722.00

3. No supportin~ BOAs, "I" 11,530,963.00 7,683,798.00 19,214,761.00

BCORs and IEIRDs Subtotal 14,187,928.00 9,148,607.00 B. Input VAT on Domestic Purchases of Goods (other than Capital Goods)

1. Original VAT invoices that are in the name of petitioner Not dated within the period of claim - First quarter of 2007 "L-7" 93,278.57

2. No supporting VAT invoices "M" 18,102.18 Subtotal 111,380.75 C. Input VAT on Domestic Purchases of Services

1. Original VAT invoices that are in the name of petitioner Not dated within the period of claim Fourth quarter of 2006 "J-54" 120.36 - First quarter of 2007 "J-55" to "J-95" 279,507.68 -

2. No supporting VAT official receipts "K" 119,583.59 43,873.93 Subtotal 399,211.63 43,873.93 Total Input VAT p 14,587,139.63 P9,303,861.68 23,336,535.00 93,278.57 18,102.18 111,380.75 120.36 279,507.68 163,457.52 443,085.56 P23,891 ,001.31 Upon further review of the Independent CPA's Report, together with petitioner's supporting documents, the Court finds that the input taxes in the amount of P475,407.10 should be disallowed from petitioner's claim due to its failure to substantiate the same by VAT invoices or receipts as prescribed under Sections 11 O(A), 113(A) and (B), 237 and 238 of the National Internal Revenue Code of 1997, as amended, in relation to Sections 4.110-1, 4.110-8 and 4.113-1 of Revenue Regulations No. 16-05, as amended. Below is the breakdown of the input taxes of P475,407.10: 3rd Findings Exhibit 2nd Quarter Quarter Total A. Input VAT on Domestic Purchases of Goods (other than Capital Goods)

1. Supported by VAT Invoices but no BIR Authority to print Mining and Petroleum Services Corp. "L-1" - 46,743.56 46,743.56 Mining and Petroleum Services Corp. "L-9" - 64,287.85 64,287.85 Subtotal .

111,031.41 111,031.41 B. Input VAT on Domestic Purchases of Services

1. Input VAT supported by documents with noted alternations or additions in the supporting official receipt without countersignature of authorized representative of the supplier. Ocean Link Container Terminal Center "J-1" 855.00 - 855.00 Asiaworld Transport Phils. Co. Inc. "J-2" 350.83 - 350.83 RCF lnteQrated Services Inc. "J-3" 478.38 - 478.38 ' CNT Air Express Inc.

"J-6" 120.00 - 120.00 i Sky Freight Forwarders Inc.

"J-1 0"

108.00 - 108.00 Intertraffic Transport Corp. "J-12" 120.00 - 120.00

DHL Express (Phils) Corp. Macnels Shipping (Phils) Inc. Hankyu lnt'l Transport Phils Inc. Nissin Transport Phils Corp. The Enterprise Warehousing Corp. Macnels Shipping (Phi Is) Inc. Sky Freight Forwarders Inc. Freight Connection Phils Inc. Wingspeed Shipping Corp. Orient Freight lnt'l Inc. Jaecub Cargo Surveying Services Safeway Warehousing Inc. Olympus lnt'l Forwarding Corp. UTI (Global Logistics) Inc. Negros Navigation Co. Inc. Crowne Plaza Galleria Manila Mercurv Freight lnt'llnc. Asiaworld Transport Phils. Co. Inc. Worldwide Seafreight Agency Inc. Fritz Logistics Philippines, Inc. Macnels Shipping (Phils) Inc. Asiaworld Transport Phils. Co. Inc. Negros Navigation Co. Inc. United Phils Drilling Co. Inc. Philippine World Travel Inc. United Phils Drilling Co. Inc. ATI Batangas Inc.

Asiaworld Transport Phils. Co. Inc. Famous Pacific Forwarding Phils Inc. Macnels Shipping (Phils) Inc. Con-Pac Warehousing Inc. Asiaworld Transport Phils. Co. Inc. Asiaworld Transport Phils. Co. Inc. Sea hawk Transport Inc. Jolly-B Box Express Line Inc. Freight Mngt. Worldwide Services Inc. 8R Flanders CFS Inc.

11J-16" 34.80 - "J-20" 908.54 - "J-23" 108.00 - "J-24" 107.14 - "J-26" 479.42 - "J-27" 240.00 - "J-28" 108.00 - "J-31" 288.66 - "J-34" 312.00 - "J-41" 1,670.69 - "J-44" 722.99 - IIJ-48" 120.00 - "J-96" - 996.28 "J-98" - 144.00 "J-111" - 2,828.48 "J-112" - 22,909.20 "J-115" - 799.50 "J-117" - 684.48 "J-119" - 812.78 "J-132" - 344.52 "J-133" - 1,393.06 "J-138" - 473.20 "J-142" - 3,474.50 "J-145" - 174,588.84 "J-149" - 1,302.52 "J-151" - 131,116.08 "J-152" - 527.54 "J-153" - 327.07 "J-154" - 390.00 "J-158" - 1,388.93 "J-159" - 848.91 "J-163" - 426.07 "J-164" - 797.03 "J-166" - 1,151.12 "J-170" - 709.20 "J-172" - 318.00 "J-176" - 537.28

2. Input VAT supported by VAT official receipt but VAT is not separately indicated Fritz Logistics Philippines, Inc. "J-102" - 108.00

3. Input VAT supported by document other than VAT official receipt Assoc. of lnt'l Shipping Lines Inc. "J-18" 16.07 - Assoc. of lnt'l Shipping Lines Inc. "J-29" 24.11 - Assoc. of lnt'l Shipping Lines Inc. "J-101" - 2.68 Asian Terminals, Incorporated "J-103" - 1,601.93 Asian Terminals, Incorporated "J-104" - 57.76 Asian Terminals, Incorporated "J-1 05 11 - 231.02 Asian Terminals, Incorporated

"J-1 08"

- 400.48 Asian Terminals, Incorporated "J-109" - 144.39 Assoc. of lnt'l Shipping Lines Inc.

"J-11 0"

- 2.68 34.80 908.54 108.00 107.14 479.42 240.00 108.00 288.66 312.00 1,670.69 722.99 I 120.00 !

996.28 ' 144.00 2,828.48 22,909.20 799.50 684.48 812.78 344.52 1,393.06 473.20 3,474.50 174,588.84 1,302.52 131 '116.08 527.54 327.07 390.00 !

1 ,388.93 ' 848.91 426.07 797.03 1,151.12 ' 709.20 • 318.00 I 537.28 108.00 16.07 24.11 2.68 1,601.93 57.76 :

231.02 I 400.48 144.39 2.68

Assoc. of lnt'l Shipping Lines Inc. "J-135" - 16.07 16.07 Assoc. of lnt'l Shipping Lines Inc. "J-143" - 18.75 18.75 Asian Terminals, Incorporated "J-157" - 2,243.30 2,243.30 Assoc. of lnt'l Shipping Lines Inc. "J-161" - 1,080.00 1,080.00 Miascor LoQistics Corporation UJ-173 11 - 80.04 80.04' Asian Terminals, Incorporated "J-174" - 1,927.37 1,927.37 Subtotal 7,172.63 357,203.06 364,375.69 Total Disallowance per this Court's Findings p 7,172.63 P468,234.47 P475,407.10 Out of petitioner's reported input VAT for the second and third quarters of 2007 in the amount of P40,259,000.61 only the amount of P19,540,776.16 represents petitioner's valid input tax for the second and third quarters of 2007, tabulated hereunder: 2nd Quarter 3rd Quarter Total Input VAT Claimed p 18,412,322.93 p 21,846,677.68 p 40,259,000.61 Less: Disallowances a) Based on the ICPA Report 14,587,139.63 9,303,861.68 23,891,001.31 bl Per this Court's findinQs 7,172.63 468,234.47 475,407.10 Valid Input VAT p 3,818,010.67 p 12,074,581.53 p 15,892,592.20 However, a portion of the P15,892,592.20 input VAT shall be applied against petitioner's reported output VAT liability for the second and third quarters of 2007 in the amount of P1 ,561,527.38 and P3,214.29, respectively. As a result, for the second and third quarters of 2007, only the remaining input VAT of P14,327,850.53 can be attributed to the entire zero-rated sales declared by petitioner in the amount of P6,659,685,264.73 (with US dollar equivalent of US$144,838,353.00) and only the input VAT of P7, 194,587.11 is attributable to the valid zero-rated sales of P4,253,414, 760.14 (with US dollar equivalent of US$92,346,332.00), as computed below: 2nd Quarter 3rd Quarter Total Valid Input VAT p 3,818,010.67 p 12,074,581.53 p 15,892,592.20 Less: Output VAT 1,561,527.38 3,214.29 1,564,741.67 Refundable Input VAT attributable to zero-rated sales p 2,256,483.29 p 12,071,367.24 p 14,327,850.53 Multiply by: Allocation Factor (Valid Zero- Rated Sales+ Total Zero-Rated Sales) Total Zero-Rated Sales in Php p 3,336,877,804.52 p 3,322,807,460.21 p 6,659,685,264. 73 x Valid Zero-Rated Sales in US$ 60,405,659.00 31,940,673.00 92,346,332.00 +Total Zero-Rated Sales in US$ 72,171,652.00 72,666,701.00 144,838,353.00 = Valid Zero-Rated Sales in Php 2,792,873,617.25 1 ,460,541 '142.89 4,253,414, 760.14 Allocation Factor 83.6972098% 43.9550338%

Excess Input VAT Attributable to Valid Zero-Rated Sales p 1 ,888,613.55 p 5,305,973.55 p 7' 194,587.11 While the claimed input VAT was carried over by petitioner in its succeeding Quarterly VAT Returns6 from the fourth quarter of 2007 to the first quarter of 2009, the same remained unutilized since it was deducted in its Quarterly VAT Return for the second quarter of 2009, as "VAT Refund/TCC claimed"7 from the total available input tax of P131,070,431.138.

In other words, the claimed input taxes for the second and third quarters of 2007 could not have been carried over or utilized in the succeeding third quarter of 2009. In sum, the Court finds petitioner entitled to a refund in the reduced amount of P7, 194,587.11, representing its unutilized excess input VAT attributable to its zero-rated sales for the second and third quarters of 2007.

WHEREFORE, premises considered, the instant Motion for Reconsideration is hereby PARTIALLY GRANTED. Accordingly, let a tax refund be issued in favor of Philex Mining Corporation in the amount of P7, 194,587.11, representing its unutilized excess input VAT attributable to its zero-rated sales for the second and third quarters of 2007.

WE CONCUR:

CAESAR~VA Associate Justice 6Exhibits "N-9" to "N-14" 7Exhibit "N-15(1/2)", line 23D 8Exhibit "N-7(1/2)", line 22 Q~~~i4 c. asto:. ~ ). tj'uA'NI-TO C. CASTANED~, JR. Associate Justice ~N.M~-6~ CIELITO N. MINDARO-GRULLA Associate Justice

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

c. Q.Jf-~~ ~ . .1UANITO C. CASTANEDA, JR. Associate Justice Chairperson CERTIFICATION Pursuant to Article VIII, Section 13 of the Constitution, and the Division Chairperson's Attestation, it is hereby certified that the conclusions in the above Amended Decision were reached in consultation before the case was assigned to the writer of the opinion of the Court.