Court of Tax Appeals · Second Division
0Emerson Electric Limited-Rohq vs. Commissioner of Internal Revenue
REPUBLIC OF THE PHILIPPINES
COURT OF TAX APPEALS
QUEZON CITY
SECOND DIVISION
EMERSON ELECTRIC (ASIA}
CTA CASE NO. 8384
LIMITED-ROHQ,
Petitioner,
Members:
CASTANEDA, JR., Chairperson,
- versus -
CASANOVA, and
COTANGCO-MANALASTAS, 11.
COMMISSIONER OF INTERNAL
Promulgated:
REVENUE,
AUG 1 3 2015
Respondent.
/
,/7 'f• ,rv f·4f .
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x
AMENDED DECISION
CASTANEDA, JR., J.:
Before this Court are (1) petitioner's Motion for Reconsideration (And to Reopen Trial for Reception of Additional Evidence}, filed on April 15, 2015, without respondent's comment despite due notice ~ as per Records Verification dated May 20, 2015; and (2) respondent's Motion for Reconsideration, filed on April 16, 2015, with petitioner's Comment (To Respondent's Motion for Reconsideration dated 16 April 2015}, filed on May 19, 2015.
Both petitioner and respondent seek reconsideration of the Court's Decision dated March 31, 2015, the dispositive portion of which reads as follows: "WHEREFORE, premises considered, the instant Petition for Review is hereby PARTIALLY GRANTED. Accordingly, respondent is hereby ORDERED TO REFUND or TO ISSUE A TAX CREDIT CERTIFICATE ft-- in favor of petitioner in the amount of P852,298.76 representing its excess unutilized input taxes for the period covering October 1, 2009 to December 31, 2009 or the 1st quarter of fiscal year ending September 30, 2010."
SO ORDERED."1
On petitioner's Motion for Reconsideration A. There is no cogent reason to re-open trial for reception of additional evidence.
Petitioner prays that this case be re-opened for the purpose of submitting the properly issued certified true copies of official receipts and invoices, hence, it asks for the relaxation of the rules of procedure, citing the principle enunciated in the Philippine National Bank v. Commissioner of Internal Revenue (Philippine National Bank case).
We now re-examine the Philippine National Bank case, where the Supreme Court cited the ruling in Suarez v. Judge Villarama, Jr.3, to wit:
"It is an accepted tenet that rules of procedure must be faithfully followed except only when, for persuasive and weighting reasons, they may be relaxed to relieve a litigant of an injustice commensurate with his failure to comply with the prescribed procedure.
Concomitant to a liberal interpretation of the rules of procedure, however, should be an effort on the part of the party invoking liberality to adequately explain his failure to abide by the rules." 4 Based on the foregoing, the Court may only relax the rigid application of the rules of procedure upon showing of compelling and persuasive reasons. In the instant case, petitioner neither advanced ~
any justifiable reason nor adequately explained the circumstances for its failure to submit the certified true copies of the official receipts and invoices. It simply invoked the liberal application of rules without providing any cogent reason for the application of the exception. While a party may believe that it has a meritorious legal defense, this must be weighed against the need to halt an abuse of the flexibility of procedural rules. It is well established that faithful compliance with the Rules of Court is essential for the prevention and avoidance of unnecessary delays and for the organized and efficient dispatch of judicial business.5 In the case of Luzon Hydro Corporation v. Commissioner of Internal Revenue,6 the Supreme Court denied the party's prayer to remand the case before the CTA to enable it to present evidence consisting of VAT official receipts. It held: xxx Verily, the Court has emphasized in Atlas Consolidated Mining and Development Corporation v. Commissioner of Internal Revenue that a judicial claim for tax refund or tax credit brought to the CTA is by no means an original action but an appeal by way of a petition for review of the taxpayer's unsuccessful administrative claim;
hence, the taxpayer has to convince the CTA that the quasi-judicial agency a quo should not have denied the claim, and to do so the taxpayer should prove every minute aspect of its case by presenting, formally offering and submitting its evidence to the CTA, including whatever was required for the successful prosecution of the administrative claim as the means of demonstrating to the CTA that its administrative claim should have been granted in the first place. Nonetheless, on the proposition that we may relax the stringent rules of procedure for the sake of rendering justice, we still hold that the concept of newly discovered evidence may not apply herein. In order that newly discovered evidence may be a ground for allowing a new)*-
CfA CASE NO. 8384 trial, it must be fairly shown that: (a) the evidence is discovered after the trial; (b) such evidence could not have been discovered and produced at the trial even with the exercise of reasonable diligence; (c) such evidence is material, not merely cumulative, corroborative, or impeaching; and (d) such evidence is of such weight that it would probably change the judgment if admitted. The first two requisites are not attendant. To start with, the proposed evidence was plainly not newly discovered considering the petitioner's admission that its former Finance and Accounting Manager had misplaced the VAT official receipts. If that was true, the misplaced receipts were forgotten evidence. And, secondly, the receipts, had they truly existed, could have been sooner discovered and easily produced at the trial with the exercise of reasonable diligence. But the petitioner made no convincing demonstration that it had exercised reasonable diligence. The Court cannot accept its tender of such receipts and return now, for, indeed, the non-production of documents as vital and material as such receipts and return were to the success of its claim for refund or tax credit was improbable, as it goes against the sound business practice of safekeeping relevant documents precisely to ensure their future use to support an eventual substantial claim for refund or tax credit. (Emphases supplied) Applying the foregoing, the Court cannot relax the rules of procedure for reasons discussed above. B. Petitioner was able to establish the twenty nine
(29) foreign clients were indeed doing business outside the Philippines, hence, the refundable input VAT was accordingly adjusted. r
Petitioner posits that it rendered services to additional twenty- nine (29) clients considered as zero-rated transactions. Petitioner likewise avers that it submitted various documents that would establish that it rendered services to clients doing business outside the Philippines. Petitioner insists that its zero-rated sales amounted to P337,337,536.29, thus, the refundable input VAT should be recomputed into a total amount of P1,963,018.36. Petitioner enumerates the various exhibits, which the Court allegedly omitted in the assailed Decision, denominated as Certificates of Foreign Registration/Incorporation, Articles of Association/Incorporation, and Tax Residency/Payment Certificates that would establish that its twenty-nine (29) foreign clients are doing business outside the Philippines. Thus, petitioner prays that the sales made to these entities covered by eighty six (86) invoices be reconsidered as zero-rated sales. Upon careful re-examination of the records of the case, the Court reconsiders its earlier findings. We reiterate the requisites in order for the supply of services to be VAT zero-rated under Section 108 (B)(2) of the National Internal Revenue Code (NIRC) of 1997, as amended, to wit: (1) the services must be other than processing, manufacturing, or repacking of goods; (2) the payment for such services must be in acceptable foreign currency accounted for in accordance with the BSP rules and regulations; and (3) the recipient of such services must be doing business outside the Philippines.7 The Court found petitioner to have fully met the first and second requisites. However, with reference to the third requisite, it was ruled that only those clients of petitioner with Securities and Exchange Commission (SEC) Certificates of Non-registration and Certificates of Registration or Incorporation in a foreign country are considered to have complied with the said requisite. Based on the assailed Decision, out of the declared zero-rated sales/receipts for the first quarter of fiscal year (FY) ending September 30, 2010, i.e., from October 1, 2009 to December 31, 2009, in the amount of~ 7 Page 12 of the Decision dated March 31, 2015, docket, p. 2310, citing Commissioner of Internal Revenue vs. Burmeister and Wain Scandinavian Contractor Mindanao, Inc., G.R. No. 153205, January 2, 2007, 512 SCRA 124.
A.
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26
P487,383,178.988, only the amount of P215,816,767.89 may be considered as zero-rated. After considering petitioner's arguments and upon scrutiny of the records, petitioner was able to sufficiently establish that the additional twenty nine (29) foreign clients are indeed foreign entities doing business outside the Philippines. The supporting documents are as follows:
Certificate of Foreign SEC Registration/Incorporation; Certificate of Articles of Non- Association/Incorporation; Service Registration Tax Residency Certificate/Tax Contract Client Name (Exhibit) Payment Certificate (Exhibit) (Exhibit) With SEC Certificate of Non-registration, Certificate of Registration or Incorporation in Foreign Country and Service Contract with petitioner Emerson Climate Technologies (Hong Kong) us yB yB-1 KK Emerson Network Power Connectivity Solutions M6
G9 G9-1
n Emerson Japan Ltd.
H6 H9 H9-1 to H9-3 uu Emerson Network Power S.R.L. N6
I9 I9-1
w Emerson Network Power Ltd. (UK) 06 J9 J9-1 to J9-6 ww Emerson Power Transmission R6 L9 L9-1 to L9-2 XX Emerson Process Management (Australia) rG N9 N9-1 to N9-2 yy Emerson Process Management Flow B.V. w6 0 9 0 9-1 AAA Emerson Process Management Shared Services Ltd.
z6 Q9 Q9-1 to Q9-4 CCC Emerson Tool Company cl FlO F10_1 DDD Fisher Rosemount Systems Inc. F7 59 59-1 EEE Fusite Gl Tg FFF InSinkErator e ug GGG Instrument & Valve Services Company i
~ V9-1
HHH Intermetro K7
W9 W9-1
III Kato Enqineerinq, Inc. L7
X9 X9-1
JJJ KNAACK L.L.C.
M7 Y9 Y9-1 to Y9-2 KKK Liebert Corporation N7
Z9 Z9-1
LLL Liebert Services 07
A10 A10-1
MMM LLLP Corporate Headquarters p7 610 610-1 NNN Micro Motion Inc.
ccccc c10 c10-1 000 Regulator Technologies Inc. GGGGG HlO H10_1 ppp Ridge Tool Company FFFFF
D10 0 10-1
QQQ Therm-o-Disc BBBBB Elo Elo_1 to Elo_2 RRR Emerson Network Power - Energy Systems, N.A. Inc.
p6
K9 K9-1
sss Emerson Process Management Valve Automation Inc.
A7 GlO TTI B. With SEC Certificate of Non-registration and Certificate of Registration or Incorporation or Certification by Taxing Authority in Foreign Country 8 Exhibit "J".
1 2 3 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23
Emerson Process Management-Power & Water Solution Emerson Process Management GMBH & Co. OHG Argelsri EPM Process Systems & Solutions 56
M9 M9-1
x6 p9 p9-1 D7 Rg As such, petitioner's receipts derived from services rendered to the aforementioned entities in the amount of P121,107,993.70 may qualify for VAT zero-rating pursuant to Section 108(8)(2) of the NIRC of 1997, as amended.
Below is the breakdown of the amount of P121,107,993.70:
Invoice Invoice Amount in Exchange Client No.
Date USD Rate Amount in Php Emerson Climate Technologies (HK) 1284 10/28/2009 6 177.15 47.61905 294 150.01 Emerson Power Transmission 1289 10/28/2009 3 308.96 47.61905 157 569.53 Emerson Tool Company 1290 10/28/2009 8 488.50 47.61905 404,214.31 Emerson Network Power Connectivity Solutions 1292 10/28/2009 9 443.93 47.61905 449,710.97 Emerson Network Power Energy Systems N.A. Inc.
1293 10/28/2009 41 070.95 47.61905 1 955,759.62 Emerson Japan Ltd.
1296 10/28/2009 7 617.40 47.61905 362,733.35 Emerson Network Power SRL 1298 10/28/2009 4,058.09 47.61905 193 242.39 Emerson Network Power Ltd. (UK) 1301 10/28/2009 19 416.75 47.61905 924,607.19 Emerson Process Management (Australia) 1303 10/28/2009 21,489.11 47.61905 1 023 291.00 Emerson Process Management Flow B.V.
1305 10/28/2009 10,744.87 47.61905 511,660.50 Emerson Process Management GMBH & Co.OHG 1306 10/28/2009 1,877.90 47.61905 89 423.81 EPM Process Systems & Solutions 1308 10/28/2009 1,328.24 47.61905 63 249.53 Emerson Process Management Shared Services Ltd.
1309 10/28/2009 136 907.07 47.61905 6 519 384.61 Fisher Rosemount Systems Inc.
1311 10/28/2009 2 340.82 47.61905 111467.62 Fusite 1312 10/28/2009 4 555.57 47.61905 216 931.92 InSinkErator 1314 10/28/2009 4,955.26 47.61905 235,964.77 Instrument and Valve Services Company 1315 10/28/2009 27 420.57 47.61905 1 305 741.49 Intermetro 1316 10/28/2009 32 936.01 47.61905 1 568 381.51 Kato Engineering Inc. 1317 10/28/2009 6,493.90 47.61905 309 233.35 Knaack LLC 1318 10/28/2009 14,799.51 47.61905 704 738.61 Liebert Corporation 1319 10/28/2009 145,531.46 47.61905 6 930 069.87 Liebert Services 1320 10/28/2009 82,432.16 47.61905 3 925 341.15 LLLP Corporate 1321 10/28/2009 12 827.29 47.61905 610 823.36 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54
Headquarters Micro Motion Inc.
Regulator Technologies Inc.
Ridge Tool Company Therm-o-disc Emerson Climate Technologies (HK) Emerson Network Power Pty. Ltd.
(Australia) Emerson Network Power Connectivity Solutions Emerson Japan Ltd.
Emerson Network Power SRL Emerson Network Power Ltd. (UK) Emerson Network Power Energy Systems N.A. Inc.
Emerson Power Transmission Emerson Process Management- Power & Water Solution Emerson Process Management (Australia) Emerson Process Management Flow B.V.
Emerson Process Management GMBH & Co. OHG Emerson Process Management Shared Services Ltd.
Emerson Process Management Valve Automation Inc.
Emerson Tool Company EPM Process Systems & Solutions Fisher Rosemount Systems Inc.
Fusite InSinkErator Instrument and Valve Services Company Intermetro Kato Engineering Inc. Knaack LLC Liebert Corporation Liebert Services LLLP Corporate Headquarters Micro Motion Inc.
1324 10/28}2009 38,852.23 47.61905
1850 106.28
1325 10/28/2009 48,821.18 47.61905 2 324 818.21 1326 10/28/2009 16,749.99 47.61905 797,618.61 1332 10/28/2009 36,045.62 47.61905 1 716 458.18 1350 11/24/2009 8 348.12 46.59832 389,008.37 1358 11/24/2009 207 615.35 46.59832 9 674 526.52 1365 11/24/2009 9 559.83 46.59832 445 472.02 1366 11/24/2009 6 390.84 46.59832 297,802.41 1368 11/24/2009 4 902.33 46.59832 228,440.34 1369 11/24/2009 26 812.47 46.59832 1 249,416.06 1370 11/24/2009 49 498.16 46.59832 2 306 531.10 1371 11/24/2009 5 422.89 46.59832 252,697.56 1372 11/24/2009 (445.96) 46.59832 (20 780.99) 1373 11/24/2009 23 317.03 46.59832 1 086 534.43 1376 11/24/2009 11,261.75 46.59832 524 778.63 1377 11/24/2009 1 886.64 46.59832 87 914.25 1379 11/24/2009 135/191.44 46.59832 6 299 693.98 1380 11/24/2009 12 078.08 46.59832 562 818.24 1382 11/24/2009 6,502.17 46.59832 302 990.20 1383 11/24/2009 1,822.89 46.59832 84 943.61 1384 11/24/2009 2,352.79 46.59832 109 636.06 1385 11/24/2009 4,505.22 46.59832 209 935.68 1388 11/24/2009 5,760.91 46.59832 268 448.73 1389 11/24/2009 30 814.70 46.59832
1435 913.25
1390 11/24/2009 35 590.82 46.59832 1 658 472.42 1391 11/24/2009 7 137.22 46.59832 332 582.46 1392 11/24/2009 19 822.01 46.59832 923 672.37 1393 11/24/2009 159,689.15 46.59832 7 441 246.11 1394 11/24/2009 93 683.17 46.59832 4 365 478.33 1395 11/24/2009 14 380.19 46.59832 670 092.70 1398 11/24/2009 38,459.58 46.59832 1 792 151.82 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85
CfA CASE NO. 8384
Regulator Technologies Inc.
Ridge Tool Company Therm-o-disc Emerson Climate Technologies (HK) Emerson Network Power Connectivity Solutions Emerson Japan Ltd.
Emerson Network Power SRL Emerson Network Power Ltd. (UK) Emerson Network Power Energy Systems N.A. Inc.
Emerson Power Transmission Emerson Process Management (Australia) Emerson Process Management Flow B.V.
Emerson Process Management GMBH & Co.OHG Emerson Process Management Shared Services Ltd.
Emerson Process Management Valve Automation Inc.
Emerson Tool Company EPM Process Systems & Solutions Fisher Rosemount Systems, Inc.
Fusite InSinkErator Instrument and Valve Services Company Intermetro Kato Engineering Inc. Knaack LLC Liebert Corporation Liebert Services LLLP Corporate Headquarters Micro Motion Inc.
Regulator Technologies Inc.
Ridge Tool Company Therm-o-disc TOTAL 1400 11/24/2009 54,701.30 46.59832 2 548 988.68 1401 11/24/2009 28 670.54 46.59832 1 335 999.00 1406 11/24/2009 40,379.88 46.59832 1 881 634.57 1421 12/22/2009 8,606.50 46.94836 404 061.06 1435 12/22/2009 10,890.13 46.94836 511 273.74 1436 12/22/2009 5,278.82 46.94836 247 831.94 1438 12/22/2009 4,776.83 46.94836 224 264.33 1439 12/22/2009 19,452.77 46.94836 913 275.65 1440 12/22/2009 47,711.74 46.94836 2 239 987.95 1441 12/22/2009 7,789.63 46.94836 365 710.35 1442 12/22/2009 23 340.80 46.94836 1 095 812.28 1445 12/22/2009 10 861.57 46.94836 509 932.90 1446 12/22/2009 1,566.43 46.94836 73 541.32 1448 12/22/2009 140,749.59 46.94836 6 607 962.42 1449 12/22/2009 12 636.18 46.94836 593 247.93 1451 12/22/2009 6 267.48 46.94836 294 247.91 1452 12/22/2009 1 281.09 46.94836 60 145.07 1456 12/22/2009 5,348.27 46.94836 251 092.51 1457 12/22/2009 6 361.28 46.94836 298 651.66 1459 12/22/2009 5 565.80 46.94836 261 305.18 1460 12/22/2009 31 870.28 46.94836 1,496,257.38 1461 12/22/2009 9 925.24 46.94836 465 973.74 1462 12/22/2009 7 836.92 46.94836 367 930.54 1463 12/22/2009 17 063.23 46.94836 801 090.66 1464 12/22/2009 149 041.95 46.94836 6 997 275.12 1465 12/22/2009 91153.82 46.94836 4,279,522.36 1466 12/22/2009 12 261.18 46.94836 575 642.29 1467 12/22/2009 38 368.26 46.94836 1 801,326.88 1469 12/22/2009 50 194.54 46.94836 2,356,551.33 1470 12/22/2009 21 340.88 46.94836 1,001,919.32 1475 12/22/2009 36 389.54 46.94836 1,708,429.22 2,576,732.75 121,107,993.70
The Court, in the assailed Decision, initially considered the amount of P215,816,767.899 as petitioner's zero-rated receipts for the first quarter of fiscal year (FY) ending September 30, 2010. However, after considering the foregoing, petitioner's aggregate receipts that may qualify for VAT zero-rating amount to P336,924,761.59 (P215,816,767.89 plus P121,107,993.70). However, petitioner must substantiate its zero-rated receipts by proper VAT zero-rated official receipts (ORs) in accordance with Sections 113(A)(2) and (B) of the NIRC of 1997, as amended, which provide as follows:
SEC. 113. Invoicing and Accounting Requirements for VAT-Registered Persons.- (A) Invoicing Requirements.-A VAT-registered person shall issue:
(1) A VAT invoice for every sale, barter or exchange of goods or properties; and (2) A VAT official receipt for every lease of goods or properties, and for every sale, barter or exchange of services. (B) Information Contained in the VAT Invoice or VAT Official Receipt-=The following information shall be indicated in the VAT invoice or VAT official receipt: (1) A statement that the seller is a VAT-registered person, followed by his Taxpayer's Identification Number (TIN); (2) The total amount which the purchaser pays or is obligated to pay to the seller with the indication that such amount includes the value-added tax: xxx XXX XXX XXX )k-
9 Page 19 of the Decision dated March 31, 2015, docket, p. 2317.
(3) The date of transaction, quantity, unit cost and description of the goods or properties or nature of the service; and ( 4) In the case of sales in the amount of One thousand pesos (Pl,OOO) or more where the sale or transfer is made to a VAT-registered person, the name, business style, if any, address and Taxpayer Identification Number (TIN) of the purchaser, customer or client. (Emphases supplied) The Court-commissioned Independent Certified Public Accountant (ICPA) reported the following findings with regard to petitioner's zero-rated receipts for the first quarter of FY ending September 30, 2010:
Findings Amount a) Gross receipts from zero-rated sales supported by ORs and invoices10 p 394,950,723.28 b) Gross receipts from zero-rated sales supported by invoices11 89,973,369.59 c) Gross VATable sales subject to 12% included in gross receipts from zero-rated sales12 2,459,087.10 TOTAL p 487,383,179.97 An examination of the ICPA report13 and the related supporting documents reveals that the following zero-rated receipts were not properly substantiated and should be disallowed: Invoice Invoice Amount in Client No.
Date USD
1. Found to be supported by invoices on/J per /CPA Report Annex 8-2 Emerson Electric Asia-Pacific Air Comfort Products Emerson Electric Asia-Pacific Emerson Hermetic Motors Emerson Network Power (Malaysia) SDN BHD Emerson Network Power (Singapore) Pte. Ltd. Instrument and Valve 10 Exhibit Z7, Annex B-1. 11 Exhibit Z7, Annex B-2. 12 Exhibit Z7, Annex B-3. 13 Exhibit Z7• 1336 10/28/2009 429 310.32 1337 11/24/2009 2 534.90 1352 11/24/2009 500 943.22 1357 11/24/2009 4 983.88 1361 11/24/2009 39 260.63 1363 11/24/2009 27 873.44 1315 10/28/2009 Exchange Rate Amount in PhP 47.61905 20,443,349.59 46.59832 118 122.08 46.59832 23,343 112.47 46.59832 232 240.44 46.59832 1,829,479.40 46.59832 1,298 855.48
CfA CASE NO. 8384
Services Company Intermetro Knaack LLC LLLP Corporate Headquarters Micro Motion Inc.
Regulator Technologies Inc. Emerson Japan Ltd.
Emerson Power Transmission Emerson Process Management Power & Water Solution Emerson Process Management (Australia) Emerson Process Management Flow B.V.
Emerson Process Management GMBH & Co. OHG Emerson Process Management Valve Automation Inc.
Fusite Instrument and Valve Services Company Kato Engineering Inc. Knaack LLC Micro Motion Inc.
Knaack LLC Sub-total 27,420.57 47.61905 1,305, 741.49 1316 10/28/2009 32 936.01 47.61905 1 568 381.51 1318 10/28/2009 14 799.51 47.61905 704,738.61 1321 10/28/2009 12 827.29 47.61905 610,823.36 1324 10/28/2009 38 852.23 47.61905 1 850 106.28 1325 10/28/2009 48 821.18 47.61905 2 324 818.21 1366 11/24/2009 6 390.84 46.59832 297,802.41 1371 11/24/2009 5 422.89 46.59832 252,697.56 1372 11/24/2009 (445.96) 46.59832 (20 780.99) 1373 11/24/2009 23 317.03 46.59832 1 086,534.43 1376 11/24/2009 11 261.75 46.59832 524,778.63 1377 11/24/2009 1 886.64 46.59832 87,914.25 1380 11/24/2009 12 078.08 46.59832 562,818.24 1385 11/24/2009 4 505.22 46.59832 209,935.68 1389 11/24/2009 30 814.70 46.59832 1 435,913.25 1391 11/24/2009 7 137.22 46.59832 332,582.46 1392 11/24/2009 19 822.01 46.59832 923,672.37 1398 11/24/2009 38 459.58 46.59832 1 792,151.82 1463 12/22/2009 17 063.23 46.94836 801 090.66 1,358,276.41 63,916,879.69
2. As found by the Court ORs were not issued in the name of the client in the corresponding invoice Alber Corporation 1271 10/28/2009 1 654.73 47.61905 78,796.67 ASCO Numatics 1272 10/28/2009 17 123.41 47.61905 815 400.52 Closetmaid 1276 10/28/2009 11 085.69 47.61905 527 890.03 EGS Electrical Group 1279 10/2812009 2 676.33 47.61905 127 444.29 Electric Reliability Services 1280 10/28/2009 4 815.86 47.61905 229,326.68 Emerson Electric Co.
1335 10/28/2009 635 415.03 47.61905 30 257,860.08 Alber Corporation 1338 11/24/2009 2 777.27 46.59832 129,416.12 ASCO Numatics 1339 11/24/2009 19 914.86 46.59832 927,999.02 Closetmaid 1343 11/24/2009 13 821.27 46.59832 644,047.96 EGS Electrical Group 1346 11/24/2009 6 534.30 46.59832 304,487.40 Electric Reliability Services 1347 11/24/2009 5 897.30 46.59832 274,804.27 Emerson Electric Co.
1353 11/24/2009 731 760.23 46.59832 34 098,797.36 Alber Corporation 1409 12/22/2009 2 714.50 46.94836 127,441.32 ASCO Numatics 1410 12/22/2009 25 464.17 46.94836 1 195,501.02 EGS Electrical Group 1417 12/22/2009 4 901.51 46.94836 230,117.86 Electric Reliability Services 1418 12/22/2009 5 492.51 46.94836 257,864.34 Emerson Climate Technologies (HK) 1284 10/28/2009 6 177.15 47.61905 294,150.01 Emerson Power Transmission 1289 10/28/2009 3 308.96 47.61905 157,569.53 Emerson Tool Company 1290 10/28/2009 8 488.50 47.61905 404,214.31 erA CASE NO. 8384
Emerson Process Management Flow B.V.
Emerson Process Management GMBH & Co. OHG EPM Process Systems & Solutions Emerson Process Management Shared Services Ltd.
Fusite Liebert Corporation Liebert Services Emerson Climate Technologies (HK) EPM Process Systems & Solutions Liebert Corporation LLLP Corporate Headquarters Regulator Technologies Inc. Emerson Climate Technologies (HK) Emerson Power Transmission Emerson Process Management Flow B.V.
Emerson Process Management GMBH & Co. OHG Emerson Process Management Valve Automation Inc.
Emerson Tool Company EPM Process Systems & Solutions Fusite Instrument and Valve Services Company Liebert Corporation Liebert Services LLLP Corporate Headquarters Regulator Technologies Inc. Sub-total TOTAL 1305 10/28/2009 10,744.87 47.61905 511 660.50 1306 10/28/2009 1,877.90 47.61905 89 423.81 1308 10/28/2009 1,328.24 47.61905 63 249.53 1309 10/28/2009 136,907.07 47.61905 6 519 384.61 1312 10/28/2009 4,555.57 47.61905 216 931.92 1319 10/28/2009 145 531.46 47.61905 6 930 069.87 1320 10/28/2009 82 432.16 47.61905 3 925 341.15 1350 11/24/2009 8,348.12 46.59832 389 008.37 1383 11/24/2009 1,822.89 46.59832 84 943.61 1393 11/24/2009 159,689.15 46.59832 7 441 246.11 1395 11/24/2009 14,380.19 46.59832 670 092.70 1400 11/24/2009 54 701.30 46.59832 2 548 988.68 1421 12/22/2009 8 606.50 46.94836 404 061.06 1441 12/22/2009 7,789.63 46.94836 365 710.35 1445 12/22/2009 10 861.57 46.94836 509 932.90 1446 12/22/2009 1,566.43 46.94836 73 541.32 1449 12/22/2009 12 636.18 46.94836 593 247.93 1451 12/22/2009 6 267.48 46.94836 294 247.91 1452 12/22/2009 1,281.09 46.94836 60 145.07 1457 12/22/2009 6,361.28 46.94836 298 651.66 1460 12/22/2009 31 870.28 46.94836
1496 257.38
1464 12/22/2009 149 041.95 46.94836 6,997 275.12 1465 12/22/2009 91153.82 46.94836 4,279 522.36 1466 12/22/2009 12 261.18 46.94836 575 642.29 1469 12/22/2009 50 194.54 46.94836 2,356 551.33 2,522,234.43 118,778,256.33 3,880,510.84 182,695,136.02 Moreover, the Court finds that the following zero-rated receipts in the amount of $114,544.14 were not supported by official receipts: Invoice Invoice Amount in OR OR Amount Exhibit No.
USD Number inUSD Difference
DDDDDDDD-26 &
DDDDDDDD-26a 1297 31 852.01 1250 21438.70 10 413.31
DDDDDDDD-56 &
DDDDDDDD-56a
DDDDDDDD-68 &
DDDDDDDD-68a
DDDDDDDD-102 &
DDDDDDDD-102a to -102b
DDDDDDDD-30 &
DDDDDDDD-30a
DDDDDDDD-43 &
DDDDDDDD-43a
DDDDDDDD-67 &
DDDDDDDD-67a
DDDDDDDD-77 &
DDDDDDDD-77a
DDDDDDDD-84 &
DDDDDDDD-84a
DDDDDDDD-87 &
DDDDDDDD-87a
DDDDDDDD-91 &
DDDDDDDD-91a
DDDDDDDD-135 &
DDDDDDDD-135b TOTAL 1343 13 821.27 1359 163 495.31 1414 12 173.23 1301 19 416.75 1314 4 955.26 1358 207 615.35 1379 135,191.44 1388 5 760.91 1394 93 683.17 1401 28 670.54 1448 140 749.59 857,384.83 1724 11 896.00 1 925.27 1599 163 345.96 149.35 1605, 1574 10 170.82 2 002.41 1522 13 663.56 5 753.19 1319 1 930.44 3 024.82 1589 207 595.73 19.62 1565 125 160.20 10 031.24 1782 88.82 5 672.09 1547 50 273.00 43 410.17 1608 12 117.26 16 553.28 1565 125 160.20 15 589.39 742,840.69 114,544.14 Using the foreign currency exchange rate on the invoice date per petitioner's Schedule of Zero-Rated Sales, 14 the foregoing zero- rated receipts which are not supported by VAT zero-rated ORs amounted to P5,363,311.47, thus: Amount in Exchange Amount in Client Invoice No.
USD Rate PhP Emerson Network Power (Malaysia) SDN BHD 1297 10 413.31 47.61905 495 871.93 Closetmaid 1343 1 925.27 46.59832 89,714.35 Emerson Network Power (Hong Kong) Co. Ltd.
1359 149.35 46.59832 6 959.46 Closetmaid 1414 2 002.41 46.94836 94,009.87 Emerson Network Power Ltd. (UK) 1301 5 753.19 47.61905 273 961.44 InSinkErator 1314 3 024.82 47.61905 144 039.05 Emerson Network Power Pty. Ltd. (Australia) 1358 19.62 46.59832 914.26 Emerson Process Management Shared Services Ltd.
1379 10 031.24 46.59832 467 438.93 InSinkErator 1388 5 672.09 46.59832 264 309.86 Liebert Services 1394 43 410.17 46.59832 2 022,840.99 Ridge Tool Company 1401 16 553.28 46.59832 771 355.04 Emerson Process Management Shared Services Ltd.
1448 15 589.39 46.94836 731 896.29 TOTAL 114,544.14 5 363,311.47
14 Exhibit CCCCCCCC-1.
CfA CASE NO. 8384
Thus, petitioner's adjusted substantiated zero-rated receipts for the first quarter of FY ending September 30, 2010 is P148,866,314.10, computed as follows: Gross recei!)ts considered to be zero-rated p 336,924,761.59 Less: Disallowances Supported by Invoices only p 63,916,879.69 Official receipts not Issued In the name of the client In the corresponding Invoice 118,778 256.33 Not supported by official receipts 5,363,311.47 188,058,447.49 Substantiated zero-rated receipts P148,866,314.10 Inasmuch as only a portion of petitioner's zero-rated receipts is substantiated, only the portion of the input tax claimed attributable thereto will be refunded. The rate to be applied is 30.5440°/o, computed as follows:
Substantiated zero-rated receipts p 148,866,314.10 Divided by total zero-rated receipts, per VAT returns p 487,383,178.98 Rate of substantiated zero-rated receipts 30.5440°/o In fine, petitioner has proven that it is entitled to a refund or an issuance of tax credit certificate for its excess unutilized input taxes for the first quarter of FY ending September 30, 2010 in the adjusted amount of P866,276.08, computed as follows: Substantiated input taxes Portion of substantiated zero-rated sales Refundable input taxes On respondent's Motion for Reconsideration p 2,836,157.9515 X 30.5440% p 866,276.08 Respondent, on the other hand, alleges that petitioner failed to prove the latter's submission of complete documents in support of the administrative claim for refund. As such, the period of 120 days will not commence to run. Respondent further asserts that petitioner failed to comply with the invoicing and accounting requirements. Respondent points out that the VAT invoices or official receipts should include not only the name of the taxpayer but also the TIN number, registered address, and business style.~
15 Page 26 of the Decision dated March 31, 2015, docket, p. 2324.
It is noteworthy that the issues regarding the timeliness of the filing of the Petition for Review and the invoicing requirements have already been passed upon extensively by the Court in the assailed Decision.
WHEREFORE, petitioner's Motion to Reopen Trial for Reception of Additional Evidence is DENIED.
Further, petitioner's Motion for Reconsideration of the Decision is PARTIALLY GRANTED and the assailed Decision promulgated on March 31, 2015 is MODIFIED. Accordingly, respondent is ORDERED TO REFUND OR ISSUE A TAX CREDIT CERTIFICATE in favor of petitioner in the amount of P866,276.08 representing its excess unutilized input taxes for the period covering October 1, 2009 to December 31, 2009 or the 1st quarter of fiscal year ending September 30, 2010.
Meanwhile, respondent's Motion for Reconsideration is DENIED.
SO ORDERED.
WE CONCUR:
CAES~SANOVA Associate Justice ~J!t, c .a.,r--~~ ~ fuANI'TO C. CASTANEDA:Jtr.. Associate Justice AMELIA R. COTANGCO-MANALASTAS Associate Justice
ATTESTATION I 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. <;k~ C. QJf-~~L ~ iOANITQ C. CAST AN ED~,~ 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.
Presiding Justice