Maersk Global Service Centres Ltd. vs. Commissioner of Internal Revenue

AMENDED DECISION

CASTANEDA, JR., J.:

For this

Court's

resolution is petitioner's Motion for Reconsideration (of the Decision dated 14 November 2014) filed on December 1, 2014, without respondent's comment thereto, despite due notice as per Records Verification dated January 9, 2015. Petitioner moves for the reconsideration of the Decision promulgated on November 14, 2014, the dispositive portion of which reads:

WHEREFORE, premises considered, the instant Petition for Review is hereby DENIED for lack of merit.

XXX

XXX

XXX

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

XXX

XXX

XXX

(4) Services rendered to persons engaged in international shipping or international air transport operations, including leases of property for use thereof;

XXX

XXX

XXX

This is because the local exporter is required to export only 70°/o of its total annual production so that its purchases will be zero- rated under Section 106(A)(a)(3)3 and Section 108(8)(5)4 of the NIRC of 1997, as amended; whereas, a non-resident foreign purchaser engaged in international shipping is required that 100°/o of the service purchased from the Philippines be used for a business that is totally unrelated to the Philippines; otherwise, its entire purchase of services from the Philippines will be subjected to VAT. Petitioner contends that this could not have been intended by the government because it will discourage foreign investments and dampen down export of services and local employment. We resolve to PARTIALLY GRANT petitioner's motion. After a careful evaluation of the arguments presented by petitioner and re-examination of the records of the case, petitioner is qualified to claim refund under Section 108(8)( 4) of the NIRC of 1997, but NOT under Section 108(8)(2) of the said law. Petitioner's client, A.P. Moller-Maersk A/S, is actually doing business in the Philippines based on the evidence that 1.5°/o of the total services rendered to it is allocable to the Philippine portion of the latter's international shipping operations. 5 The Court has extensively discussed this in the assailed Decision, the pertinent portion of which reads: )v' 3 SEC. 106. Value-Added Tax on Sale of Goods or Properties. - (A) Rate and Base of Tax. -

XXX

XXX

XXX

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

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

XXX

XXX

XXX

(3) Sale of raw materials or packaging materials to export-oriented enterprise whose export sales exceed seventy percent (70%) of total annual production;

XXX

XXX

XXX

4 SEC. 108. Value-added Tax on Sale of Services and Use or Lease of Properties. -

XXX

XXX

XXX

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

XXX

XXX

XXX

(5) Services performed by subcontractors and/or contractors in processing, converting, or manufacturing goods for an enterprise whose export sales exceed seventy percent (70%) of total annual production.

As to the third requisite, petitioner submitted the following documents to prove that its client A.P. Moller- Maersk A/Sis doing business outside the Philippines:

1. Certificate of Non-Registration of A.P. Moller-Maersk A/S issued by the Security and Exchange Commission (SEC);

2. Certificate of Residency of A. P. Moller- Maersk A/S issued by the Central Customs and Tax Administration of Denmark;

3. Articles of Association for A. P. Moller- Maersk A/S; and

4. Compiled Summary for A.P. Moller-Maersk A/S.

From the foregoing, it appears that A.P. Moller- Maersk A/S is doing business outside the Philippines. However, the fact that it is actually doing business in the Philippines is disclosed by Mr. Arthur Arana in the following statements:

Q35. You mentioned that A.P. Moller-Maersk A/S is engaged in international shipping that transports container cargoes to and from the Philippines. Would you know if petitioner rendered services to A. P.

Moller-Maersk

A/S

pertaining to shipments of cargoes to or from the Philippines?

A35. Yes, the petitioner rendered services to A.P. Moller-Maersk A/S pertaining to shipments of cargoes to or from the Philippines.

Q36. Do you know how much of the total sales of services rendered by petitioner in 2009 relate to the shipments of A.P. Moller-Maersk A/S to or from the Philippines?

A36. Yes. The petitioner's sales relating to the shipments of A.P. Moller-Maersk A/5 to or from the

Philippines

would be approximately 1.5°/o of the total sales. 9a- erA CASE NO. 8549

Q37. How were you able to determine that petitioner's sales relating to the shipments of A.P. Moller-Maersk A/5 to or from the Philippines would be approximately 1.5°/o of the total sales? A37. The computation (0/o) is based on 2009 average headcount of employees supporting the shipments to/from the Philippines over the average headcount of all employees in 2009.

Q38. How were you able to determine the 2009 average headcount of employees supporting the shipments to/from the Philippines over the average headcount of all employees in 2009?

A38. We monitor on a monthly basis the number of employees providing services to each and every country.

Petitioner

submitted an

Average

Headcount

Distribution Per Country for the year 2009 to support the approximate portion of A.P. Moller-Maersk A/5' business in the Philippines.

Further, the Court-commissioned Independent CPA, Ms. Mary Ann C. Capuchino, noted the following in her report dated April17, 2013:

The Company disclosed to us that A.P. Moller-Maersk A/S is engaged in international shipping business and other businesses. A portion of the international shipping business relates to the

Philippine

business.

XXX

XXX

XXX

Based on the above, considering that the export sale of services relating to A.P. Moller-Maersk A/S Philippine portion of its international shipping business is not conducted outside the Philippines, these may Jt- no longer be entitled to input VAT refund to the extent of the Philippine portion of such export sale.

Therefore, 98.50°/o or P396,459,587.59 (98.50°/o x P402,497,043.24) of the total zero- rated sales of the Company for the month of June, 3rd and 4th quarters of CY 2009 relates to services rendered to non-residents are entitled to an input VAT refund, while 1.50°/o or P6,037,455.65 (1.50°/o X P402,497,043.24) of the total zero-rated sales pertains to the Philippine shipping business of A.P. Moller- Maersk A/S may no longer be entitled to input VAT refund. (Emphasis supplied) Clearly, petitioner was unable to comply with the third requisite because its non-resident foreign client, A.P. Moller-Maersk A/S, is actually doing business in the Philippines.

Consequently, petitioner's sales of services to A.P. Moller-Maersk A/S cannot qualify for VAT zero-rating and the claimed input taxes attributable thereto in the amount of P7,862,002.84 cannot be refunded. Accordingly, it is unnecessary to discuss petitioner's compliance with the remaining requisites previously mentioned.6 In the case of Commissioner of Internal Revenue vs. Burmeister and Wain Scandinavian Contractor Mindanao, Inc.7, the Supreme Court explained why Section 108(8)(2) cannot apply to a VAT taxpayer claiming refund when the recipient of its services does business in the Philippines, to wit: xxx In short, services other than processing, manufacturing, or repacking of goods must likewise be performed for persons doing business outside the Philippines.

This can only be the logical interpretation of Section 102(b )(2). If the provider and recipient of the "other services" are both doing business in the Philippines, the ~

payment of foreign currency is irrelevant. Otherwise, those subject to the regular VAT under Section 102(a) can avoid paying the VAT by simply stipulating payment in foreign currency inwardly remitted by the recipient of services. To interpret Section 102(b )(2) to apply to a payer-recipient of services doing business in the Philippines is to make the payment of the regular VAT under Section 102(a) dependent on the generosity of the taxpayer. The provider of services can choose to pay the regular VAT or avoid it by stipulating payment in foreign currency inwardly remitted by the payer-recipient. Such interpretation removes Section 102(a) as a tax measure in the Tax Code, an interpretation this Court cannot sanction. A tax is a mandatory exaction, not a voluntary contribution.8 (Emphasis supplied) However, the Court finds that petitioner may claim refund under Section 108(8)(4) of the NIRC of 1997, as amended, which provides:

SEC. 108. Value-added Tax on Sale of Services and Use or Lease of Properties. -

XXX

XXX

XXX

(B) Transactions Subject to Zero Percent (0%)

Rate.

- The following services performed in the Philippines by VAT-registered persons shall be subject to zero percent (0°/o) rate:

XXX

XXX

XXX

( 4) Services rendered to persons engaged in international shipping or international air transport operations, including leases of property for use thereof;" (Emphasis supplied) This provision must be read in connection with Section 4.108-5 (b)(4) of Revenue Regulations (RR) No. 16-2005, as amended by RR No. 4-2007, to wit: jv 8 Section 102 is now Section 108 of the NIRC of 1997. The renumbering took effect on 1 January 1998 pursuant to Republic Act No. 8424, otherwise known as the Tax Reform Act of 1997.

CfA CASE NO. 8549

Sec. 4.108-5. Zero-Rated Sale of Services.

XXX

XXX

XXX

(b) Transactions Subject to Zero Percent (0°/o) VAT

Rate -

The following services performed in the Philippines by a VAT-registered persons shall be subject to zero percent (0°/o) VAT rate:

XXX

XXX

XXX

(4) Services rendered to persons engaged in international shipping or air transport operations, including leases of property for use thereof; Provided, however, that the services referred to herein shall not pertain to those made to common carriers by air and sea relative to their transport of passengers, goods or cargoes from one place in the Philippines to another place in the Philippines, the same being subject to twelve percent (12°/o) VAT under Sec. 108 of the Tax Code starting Feb. 1, 2006;" It was established in the assailed Decision that petitioner's client, A.P. Moller-Maersk A/S, is a non-resident foreign corporation9 engaged in international shipping that transports container cargoes, including shipments of cargoes to and from the Philippines.10 Its "main objects are to carry on shipping, chartering and related business, but it shall be a further object to engage in other transport business, commercial and industrial activities at home and abroad within the scope deemed appropriate by the Board of Directors''11• Consequently, petitioner's sale of services to A.P. Moller- Maersk A/S qualify for zero-rating under Section 108(B)( 4) of the NIRC of 1997, as amended, and the claimed input taxes attributable thereto may be refunded.

Pertinent to petitioner's judicial claim is Section 112 (A) of the NIRC of 1997, as amended, which provides: 1-

SEC. 112. Refunds or Tax Credits of Input Tax. - (A) Zero-rated or Effectively Zero-rated Sales. - Any VAT- registered person, whose sales are zero-rated or effectively zero-rated may, within two (2) years after the close of the taxable quarter when the sales were made, apply for the issuance of a tax credit certificate or refund of creditable input tax due or paid attributable to such sales, except transitional input tax, to the extent that such input tax has not been applied against output tax: Provideft however, That in the case of zero-rated sales under Section 106(A)(2)(a)(1), (2) and (b) and Section 108(8)(1) and (2), the acceptable foreign currency exchange proceeds thereof had been duly accounted for in accordance with the rules and regulations of the 8angko Sentral ng Pilipinas (8SP): Provided further, That where the taxpayer is engaged in zero-rated or effectively zero-rated sale and also in taxable or exempt sale of goods or properties or services, and the amount of creditable input tax due or paid cannot be directly and entirely attributed to any one of the transactions, it shall be allocated proportionately on the basis of the volume of sales: Provideft finally, That for a person making sales that are zero-rated under Section 108 (8)(6), the input taxes shall be allocated ratably between his zero-rated and non-zero-rated sales.

Thus, in order to be entitled to a refund or tax credit of input VAT payments attributable to zero-rated or effectively zero-rated sales, the following requisites must be satisfied:

1. the taxpayer must be VAT-registered;

2. there must be zero-rated or effectively zero-rated sales;

3. input taxes were incurred or paid;

4. such input VAT payments were directly attributable to zero-rated sales or effectively zero-rated sales;

5. the input VAT payments were not applied against any output VAT liability; and

6. the claim for refund was filed within the two-year prescriptive period. ?v

As previously found by the Court, petitioner filed its administrative and judicial claims well within the prescriptive period. We quote the Court's findings: 12 Petitioner filed its administrative claim for the four quarters of taxable year 2009 amounting to P13,120,701.70 with the DOF-OSS on September 1, 2010, which is well within the two-year prescriptive period.

XXX

XXX

XXX

The foregoing provision provides that petitioner has 30 days from the receipt of the BIR Commissioner's decision denying the claim to appeal before this Court. On August 30, 2012, petitioner received a letter from the DOF-OSS to that effect. Reckoned from that date, petitioner had until September 29, 2012 within which to file its judicial claim. The instant Petition for Review was filed on September 28, 2012, hence, within the period prescribed by law.

As to the first requisite, the Court found that petitioner satisfied the first requisite as it is a VAT-registered taxpayer as evidenced by its Certificate of Registration No. OCN3RC0000466671.13 The Court likewise found that petitioner's client A.P. Moller- Maersk A/S is a non-resident foreign corporation engaged in international shipping that transports container cargoes, including shipments of cargoes to and from the Philippines. 14 Thus, petitioner's sales of services to A.P. Moller-Maersk A/S qualify for VAT zero- rating pursuant to Section 108(B)( 4) of the NIRC of 1997, as amended.

For the month of June 2009, and the third (3rd) and fourth (4th) quarters of 2009, petitioner derived zero-rated receipts from services rendered to A.P. Moller- Maersk A/S in the amount of P402,497,043.24. The sales were declared in petitioner's VAT Returns for the same period and evidenced by Statements of Accounts (SAs) and VAT zero-rated Official Receipts (ORs), detailed as follows: )k-

Period Covered

2nd Quarter 2009

Less:

April 2009

May 2009

Sub-total

June 2009

3rd Quarter 2009 4th Quarter 2009

TOTAL

Exh.

SA No.

SA Date

EEE-1

006 6/30/2009

EEE-2

007 7/31/2009

EEE-3

008 8/31/2009

EEE-4

009 9/30/2009

EEE-5

010 10/30/2009

EEE-6

011 11/30/2009

EEE-7

012 12/31/2009

VAT Returns

(Exhibit No.)

BBB-05 to -06

BBB-01 to -02

BBB-03 to -04

BBB-11 to -12

BBB-17 to -18

Amount

(in US$)

1 026 333.00

1153 833.00

1 058 858.00

1135 652.00

1 249 167.00 1 358 764.00

1451 700.00

Zero-Rated Sales/Receipts

p 198,368,128.99 p 49,003,376.60 99 162,470.39 p 148,165,846.99 p 50 202 282.00 161 222 031.00 191 072,730.24 p 402,497,043.24

Amount

Amount

(in PhP)

Ex h.

OR No.

(in US$)

50 202 282.00

DDD-1

0010 1 070 570.05 55 557 059.00

DDD-2

0011 1 088 988.95 50 995 347.00

DDD-3

0012 1 079 465.00 54 669 625.00

DDD-4

0013

1135 652.00

60 134 134.00

ODD-S

0014

1249 167.00

63 905 920.00

DDD-6

0015 1,358 764.00 67 032 676.00

DDD-7

0016

1451 700.00

TOTAL

8 434 307.00 402,497,043.00 8,434,307.00 Having resolved that petitioner had VAT zero-rated receipts for the month of June 2009, and the 3rd and 4th quarters of 2009 in the amount of P402,497,043.24, We now determine the amount of unutilized excess input VAT attributable thereto. For the same taxable period, petitioner reported input taxes in the total amount of P7,865,681.37, detailed as follows:

Exhibit

Period Covered

Input Taxes

BBB-05 to -06

2nd Quarter 2009 p 2, 745,873.94

BBB-01 to -02

Less: April 2009

p 860,739.22

BBB-03 to -04

May 2009

1, 115,127.35

June 2009

p 770,007.37

BBB-11 to -12

3rd Quarter 2009 2,647,619.89

BBB-17 to -18

4th Quarter 2009 4,448,054.11

Total

p 7,865,681.37 However, petitioner's claim only amounts to P7,862,002.84. The difference of P3,678.53 was accounted for by the

Court-~

commissioned Independent Certified Public Accountant (ICPA)15 as follows: 16 Input VAT credited to Output VAT for the period p 2,839.28 Input VAT per VAT Returns not claimed for the period 839.27 Total Input VAT not Claimed per Petition for Review p 3,678.55* *(P0.02 insignificant difference due to rounding-off) Upon examination of the documents submitted by petitioner to support its declared input taxes, the ICPA noted the following findings: 17

Findings

A. Input taxes on purchases of goods and services properly supported for VAT purposes:

1. Domestic purchases of goods properly supported with original VAT invoices

2. Domestic purchases of services properly supported with original

VATORs

3. Purchases of capital goods exceeding P1M properly supported with original VAT invoices (Amortization of Input VAT)

Subtotal

B. Input taxes on purchases of goods and services properly supported by VAT invoices and VAT ORs but with exceptions noted:

1. Domestic purchases of goods properly supported with original VAT invoices but does not bear the Company's TIN

2. Domestic purchases of services properly supported with original VAT ORs but does not bear the Company's TIN

3. Purchases of capital goods exceeding P1M properly supported with original VAT invoices but does not bear the Company's TIN

(Amortization of Input VAT)

4. Domestic purchases of goods properly supported with original VAT invoices but the amount of input VAT was not separately indicated

5. Domestic purchases of services properly supported with original VAT ORs but the amount of input VAT was not separately indicated

6. Purchases of capital goods exceeding P1M properly supported with original VAT invoices but does not bear the Company's TIN and the amount of input VAT was not separately indicated (Amortization of input VAT)

7. Domestic purchases of services properly supported with original VAT ORs but the amount of input VAT claimed is less than the input VAT per supporting VAT documents (Amount presented pertains to Input VAT claimed)

Subtotal

Subtotal of items A and B C. Input taxes on purchases of goods and services not properly supported with the required VAT documents: 15 Ms. Mary Ann C. capuchino of SGV & Co. 16 Exhibit "CC-2", Docket (vol. I), p. 642. 17 Ibid, pp. 26-28.

Exhibit

Input Tax

HHHH

p 1,622 042.34

Annex I

4/089/816.75

Annex J

324 167.10

Annex K

p 6 036,026.19 p 781477.87

Annex L

447/067.15

Annex M

131011.50

Annex N

15 528.10

Annex 0

4 821.43

Annex P

140 728.99

Annex Q

31 051.26

Annex R

p 848 686.30 P6,884,712.49

1. Domestic purchases of services supported with original VAT ORs but the amount of input VAT claimed was overstated (Amount of overstatement)

2. Domestic purchases of goods and services supported with original VAT invoices and ORs not dated within the covered period

3. Domestic purchases of goods supported with Non-VAT invoices

4. Domestic purchases of services supported with Non-VAT ORs

5. Domestic purchases of goods and services supported only with photocopies of VAT invoices and ORs

6. Domestic purchases of goods not supported with original VAT invoices but supported with oriqinal VAT ORs

7. Purchases of capital goods exceeding P1M not supported with VAT invoices but supported with original VAT ORs (Amortization of Input

VAT)

8. Domestic purchases of goods supported with collection receipts

Subtotal

D. Input taxes on purchases of goods and services without supporting documents:

1. Purchases of capital goods exceeding P1M without supporting documents (Amortization of input VAT)

2. Domestic purchases of services without supporting documents

Subtotal

Total unutilized input taxes for the month of June, 3rd and 4th quarters of CY 2009 per ICPA verification p 642.07

Annex S

331127.96

Annex T

733.93

Annex U

13,349.01

Annex V

75 034.20

Annex W

43,914.76

Annex X

14,023.33

Annex Y

87,615.00 Annex z p 566,440.26 p 304,237.76

Annex AA

110,290.92

Annex BB

p 414,528.68 P7,865,681.43 Items under B.1 to B.6, C and D should be disallowed for failure to comply with the invoicing requirements pursuant to Section 113(A) and (B) of the NIRC of 1997, as amended, which provides: SEC. 113. Invoicing and Accounting Requirements for VAT-Registered Persons.- (A) Invoicing Requirements.-

A VAT-registered

person shall issue:

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

(2) A VAT official receipt for every lease of goods or properties, and for every sale, barter or exchange of services.

(B) Information Contained in the VAT Invoice or

VAT Official Receipt-The following information shall be indicated in the VAT invoice or VAT official receipt: ~

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

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

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

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

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

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

(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's Identification Number (TIN) of the 1-

purchaser, customer or client.

(Underscoring

supplied.)

The foregoing is implemented by Section 4.113-1(A) and (B) of RR No. 16-2005, as amended, thus: SEC. 4.113-1. Invoicing Requirements.- (A) A VAT-registered person shall issue: --

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

(2) A VAT official receipt for every lease of goods or properties, and for every sale, barter or exchange of services.

Only

VAT-registered

persons are required to print their TIN followed by the word "VAT" in their invoice or official receipts. Said documents shall be considered as a "VAT Invoice" or VAT official receipt. All purchases covered by invoices/receipts other than VAT Invoice/VAT Official Receipt shall not give rise to any input tax.

VAT invoice/official receipt shall be prepared at least in duplicate, the original to be given to the buyer and the duplicate to be retained by the seller as part of his accounting records. (B) Information contained in VAT invoice or VAT official receipt.-The following information shall be indicated in VAT invoice or VAT official receipt: ( 1) A statement that the seller is a VAT- registered person, followed by his TIN;

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

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

CfA CASE NO. 8549

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

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

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

(3) In the case of sales in the amount of one thousand pesos {Pl,OOO) or more where the sale or transfer is made to a VAT-registered person, the name, business style, if any, address and

TIN

of the purchaser, customer or client, shall be indicated in addition to the information required in (1) and

(2) of this Section. (Emphasis supplied.) Out of the P31,051.26 input VAT pertaining to petitioner's domestic purchases of services under item B. 7 of the ICPA findings, the amount of P658.93 supported by OR No. 018718 issued by ECK Printing Press on March 26, 2010 shall be disallowed for being outside the period of claim. The remaining input VAT in the amount of P30,392.33 which is duly supported by VAT ORs represents petitioner's valid claim.

Thus, the disallowances per the ICPA's findings are adjusted to P1,799,262.91, as computed below: r

Findings

1) Input taxes on purchases of goods and services properly supported by VAT invoices and VAT ORs but with exceptions noted (Item B) Less: Properly supported but VAT claimed is less (Item 8.7) Add: OR dated outside the period of claim (Exh. YYY-18) 2) Input taxes on purchases of goods and services not properly supported with the required VAT documents (Item C) 3) Input taxes on purchases of goods and services without supporting documents (Item D)

Total

Disallowed

Input Tax

p 848,686.30 (31 051.26) 658.93 p 818,293.97 566,440.26 414 528.68 P1,799,262.91 Likewise, the following input VAT in the aggregate amount of ~233,341.01 shall be disallowed from petitioner's claim for failure to meet the substantiation requirements under the VAT law and regulations:

OR/Invoice

OR/Invoice

Exhibit

Number

Date

Supplier

Input Tax

1. Input tax on purchase of goods which was claimed twice.

Continental Associated Food

PPP-094

0671 10/7/2009 Products Export Inc.

p 816.53

Subtotal

p 816.53

2. Input taxes on purchases of services supported by official receipts dated outside the period of claim.

PPP-104

0169 1/8/2010

ECK Printing Press

p 1,933.89

PPP-107

0168 1/8/2010

ECK Printing Press

1,518.38

QQQ-1497

67448 10/16/2002 Philscan Travel & Tours Inc.

428.57

Subtotal

p 3,880.84

3. Input taxes on purchases of services supported by official receipts without the word "VAT" and BIR Authority to Print (ATP} and collection receipts that are "not a valid source of input tax".

QQQ-0704 to -0705

PKEOR000416908

8/12/2009

PLDT

p 390.49

QQQ-708 & -710

PKEOR000416909

8/12/2009

PLDT

213.75

QQQ-712 to -713

PKEOR000416905

8/12/2009

PLDT

22 339.42

QQQ-716 to -717

PKEOR000416906

8/12/2009

PLDT

12 517.10

QQQ-722

PKEOR000416998

8/12/2009

PLDT

160.71

QQQ-724 to -725

PKEOR000416999

8/12/2009

PLDT

160.71

QQQ-728 to -729

PKEOR000416996

8/12/2009

PLDT

2 400.00

QQQ-732 to -733

PKEOR000416997

8/12/2009

PLDT

190.09

QQQ-736 to -737

PKEOR000417340

8/13/2009

PLDT

160.71

QQQ-740 to -741

PKEOR000417341

8/13/2009

PLDT

160.71

QQQ-744 to 745

PKEOR0004 22669

8/25/2009

PLDT

300.00

QQQ-748 to -749

PKEOR000254327

9/17/2009

PLDT

1740.00

QQQ-752 to -753

PKEOR000254 334

9/17/2009

PLDT

2 400.00

QQQ-756 to -757

PKEOR000254333

9/17/2009

PLDT

13 305.98

QQQ-760 to -761

PKEOR000254331

9/17/2009

PLDT

15,107.20

QQQ-764 to -765

PKEOR000254 339

QQQ-768 to -769

PKEOR000254 348

QQQ-772 to -773

PKEOR000254 346

QQQ-776 to 777

PKEOR000254 345

QQQ-780 to -781

PKEOR000254344

QQQ-784 to -785

PKEOR000254350

QQQ-788 to -789

PKEOR000430867

QQQ-792 to -793

PKEOR000430868

QQQ-1554 to -1555

PKDOR000258152

QQQ-1558 to -1559

PKDOR000258163

QQQ-1562 to -1563

PKDOR000258154

QQQ-1566 to -1567

PKDOR000158155

QQQ-1570 to -1571

PKDOR000158162

QQQ-1574 to -1575

PKDOR000258161

QQQ-1578 to -1579

PKDOR000258164

QQQ-1582 to -1583

PKDOR000258151

QQQ-1586 to -1587

PKDOR000437429

QQQ-1590 to -1591

PKDOR000437432

QQQ-1594 to -1595

PKDOR000262809

QQQ-1598 to -1599

PKDOR000449630

QQQ-1602 to -1603

PKDOR000454232

QQQ-1606 to -1607

PKDOR000156375

QQQ-1610 to -1611

PKDOR000156372

QQQ_-1614 to -1615

PKDOR000156376

QQQ-1618 to -1619

PKDOR000156377

QQQ-1622 to -1623

PKDOR000262803

QQQ-1626 to -1627

PKDOR000262802

QQQ-1630 to -1631

PKDOR000262813

QQQ-1634 to -1635

PKDOR000262810

QQQ-1638 to -1639

PKDOR000262829

QQQ-1642 to -1643

PKDOR000262825

QQQ-1646 to -1647

PKDOR000262831

QQQ-1650 to -1651

PKDOR000267247

QQQ-1654 to -1655

PKDOR00026 7245

QQQ-1659 to -1660

PKDOR000267249

QQQ-1663 to -1664

PKDOR000267246

QQQ-1667 to -1668

PKDOR00026 7248

QQQ-1671 to -1672

PKDOR00026 7251

QQQ-1675 to -1676

PKDOR000267250

QQQ-1679 to -1680

PKDOR000459231

QQQ-1683 to -1684

PKDOR000459230

QQQ-1687 to -1688

PKDOR000465828

QQQ-1691 to -1692

PKDOR000465827

QQQ-1695 to -1696

PKEOR000465916

QQQ-1699 to -1700

PKEOR000465920

Subtotal

9/17/2009

PLOT

9/17/2009

PLOT

9/17/ 2009

PLOT

9/17/2009

PLOT

9/17/ 2009

PLOT

9/17/ 2009

PLOT

9/25/2009

PLOT

9/25/2009

PLOT

10/13/2009

PLOT

10/13/2009

PLOT

10/13/2009

PLOT

10/ 13/2009

PLOT

10/13/ 2009

PLOT

10/13/2009

PLOT

10/13/2009

PLOT

10/13/2009

PLOT

10/16/2009

PLOT

10/16/2009

PLOT

10/17/2009

PLOT

10/ 17/2009

PLOT

10/17/ 2009

PLOT

10/26/2009

PLOT

10/26/ 2009

PLOT

10/26/2009

PLOT

10/26/2009

PLOT

11/13/ 2009

PLOT

11/ 13/2009

PLOT

11/13/2009

PLOT

11/ 13/2009

PLOT

11/13/ 2009

PLOT

11/ 13/ 2009

PLOT

11/13/2009

PLOT

12/11/2009

PLOT

12/11/2009

PLOT

12/11/2009

PLOT

12/11/ 2009

PLOT

12/ 11/ 2009

PLOT

12/ 11/ 2009

PLOT

12/11/2009

PLOT

12/ 12/2009

PLOT

12/ 12/2009

PLOT

12/28/2009

PLOT

12/28/2009

PLOT

12/29/2009

PLOT

12/29/2009

PLOT

4. Input taxes on purchases of services supported by official receipts with no or incomplete date.

QQQ-974

1459186 12/04

DHL Express

160.71 390.49 373.52 230.59 375.02 213.75 300.00 12/723.37 370.52 18,250.48 390.49 160.71 1740.00 2 400.00 213.75 160.71 160.71 160.71 334.52 13 332.46 16 588.35 179.59 16J30.72 300.00 160.71 2 400.00 1 740.00 160.71 213.75 160.71 390.49 160.71 319.52 1 740.00 213.75 390.49 22 697.44 215.59 2,400.00 12,656.18 160.71 160.71 160.71 14/944.72 300.00 P219,534.94 p 68.37

QQQ-977

QQQ-980

Subtotal

1459187 1459188 -

DHL Express

94.23 12/4

DHL Express

97.37 p 259.97 S. Input taxes on purchases of services supported by official receipts but the amount of VAT was not separately indicated.

QQQ-1130

2105661 11/27/2009 Globe Telecom Inc.

p 1824.23

QQQ-1142

2105662 11/27/2009 Globe Telecom Inc.

380.56

QQQ-1145

2105663 11/27/2009 Globe Telecom Inc.

333.02

QQQ-1156

2105664 11/27/2009 Globe Telecom Inc.

4 931.55

QQQ-1194

2105665 11/27/2009 Globe Telecom Inc.

1 293.66

_QQQ-1202

2088060 11/27/2009 Globe Telecom Inc.

85.71

Subtotal

p 8,848.73

TOTAL

P233,341.01 Thus, petitioner's substantiated input VAT claim amounted to P5,832,238.18, computed as follows:

Input VAT per Returns

p 7,865,681.37

Less: Disallowances

1) Per !CPA's findings p 1,799,262.91 2) Per this Court's further verification 233,341.01 3) Input VAT not claimed per Petition

for Review

839.27

Total Disallowances

p 2,033,443.19

Substantiated Input VAT Claim

p 5,832,238.18 A portion, however, of the P5,832,238.18 input VAT shall be applied against petitioner's reported output VAT liability for the subject period of claim in the amount of P2,839.28, broken down as follows:

Exhibit

.Quarter

VATable Sales

Output Taxes

BBB-05 to -06 2nd Quarter 2009 p 2,678.50 p 321.42

BBB-01 to -02 Less: April 2009

p - p -

BBB-03 to -04

May 2009

1,339.29 160.71

Sub-total

p 1,339.29 p 160.71

June 2009

p 1,339.29 p 160.71 BBB-11 to -12 3rd Quarter 2009 22,321.43 2,678.57 BBB-17 to -18 4th Quarter 2009 - -

Total

p 23,660.72 p 2,839.28

Consequently, only the remaining input VAT of P5,829,398.90 can be attributed to petitioner's zero-rated sales for the subject period of claim.

Although the substantiated input VAT of P5,829,398.90 was included in petitioner's reported excess input VAT amounting to P13,120,701.7019 for the fourth quarter of 2009, which was carried over to the succeeding quarter20, the same amount remained unutilized since it was deducted as "VAT Refund/TCC claimed" in the first quarter of taxable year 2010.21 Thus, petitioner has sufficiently proven its entitlement to a refund or issuance of tax credit certificate in the amount of P5,829,398.90 representing unutilized excess input taxes attributable to its zero-rated sales for June 2009 and the 3rd and 4th quarters of 2009.

WHEREFORE, in view of the foregoing, petitioner's Motion for Reconsideration (of the Decision dated 14 November 2014), is PARTIALLY GRANTED. Accordingly, respondent is ORDERED TO REFUND or TO ISSUE A TAX CREDIT CERTIFICATE in favor of petitioner in the amount of P5,829,398.90, representing petitioner's unutilized excess input VAT attributable to its zero-rated sales for June 2009 and the 3rd and 4th quarters of 2009.

WE CONCUR:

~ CAESAR A. CASANOVA

Associate Justice

19 Exhibit " BBB-18", Line 27. 20 Exhibit "BBB.1-1", Line 20A. 21 Ibid, Line 23D.

~~ c . Qy-~ . Q .JOANITO C. CASTANEDi(, jR.

Associate Justice

(On Leave)

AMELIA R. COTANGCO-MANALASTAS

Associate Justice

ATTESTATION

I attest that the conclusions in the above Decision were reached in consultation before the case was assigned to the writer of the opinion of the Court's Division. Q/2/fAA~-k> C . a:r~~

I

Q_

ClUANITO C. CASTANEDAf]R.

CERTIFICATION

Associate Justice

Chairperson

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 Decision were reached in consultation before the case was assigned to the w · of the opi ·o of t Court.

ROMAN G. DEL OSARIO

Presiding Justice