Court of Tax Appeals · Second Division

Chevron Holdings, Inc. vs. Commissioner of Internal Revenue

CTA Case No. 8621 April 5, 2016 CASANOVA

Republic of the Philippines

COURT OF TAX APPEALS

Quezon City

SECOND DIVISION

CHEVRON HOLDINGS, INC.,

CTA Case No. 8621

Petitioner,

Members:

CASTANEDA, JR., Chairperson

-versus-

CASANOVA, and

COTANGCO-MANALASTAS, J.J.

COMMISSIONER OF INTERNAL

Promulgated:

REVENUE,

APR 0 5 2016

Respondent.

'I: ~ b ~-~

x----------------------------------------------------------------------------------x

DECISION

CASANOVA, J.:

This is a Petition for Review¹ filed by petitioner Chevron Holdings, Inc., praying for the refund or issuance of a tax credit certificate (TCC) in the amount of Seventy Million Six Hundred Thirty

One

Thousand

One

Hundred

Ninety

Two

and 67/100 (P70,631,192.67), representing its alleged excess and unutilized input value-added taxes (input VAT) on purchases of goods and services attributable to zero-rated sales for calendar year (CY) 2011. Petitioner is a Philippine branch of a multinational company duly organized and existing under and by virtue of the laws of the State of Delaware, United States of America. 2 It is licensed by the Securities and Exchange Commission (SEC) to transact business in the Philippines as a regional operating headquarters (ROHQ) under SEC Registration No. A1998024863 dated June 3, 1998, with officee-

address at 35th Floor, Yuchengco Tower, RCBC Plaza, 6819 Ayala Avenue, 1200 Makati City.4 Respondent, on the other hand, is the duly appointed Commissioner of Internal Revenue, vested under the appropriate laws with the authority to carry out the functions, duties and responsibilities of said office, including among others, the duty to act upon and approve claims for refund or tax credit pursuant to the provisions of the National Internal Revenue Code of 1997 (Tax Code) and other tax laws, rules and regulations. She may be served with summons, pleadings and other legal processes at her office at the 5th Floor, BIR National Office Building, BIR Road, Diliman, Quezon City.5 As a regional operating headquarters, petitioner is engaged in general administration and planning;

business planning and coordination;

sourcing/procurement of raw materials and components; corporate finance advisory services; marketing control and sales promotion; training and personnel management; logistic services;

research and development services and product development; technical support and maintenance; data processing and communication; and business development.6 Petitioner is registered with the BIR as a VAT taxpayer and was issued a Certificate of Registration with Tax identification Number (TIN) 201-056-391-000.7 On the following dates, petitioner filed with the BIR its Original Quarterly VAT Returns8 for the four quarters of 2011, respectively:

Taxable Quarter

Date of Filing of Original

Return

1st April 20, 2011 2nd July 18, 2011 3rd October 20, 2011 4th May 22, 2012 l/2 :p

CfA Case No. 8621

On October 23, 2012, petitioner filed its administrative claim for refund and/or the issuance of TCC9 of unutilized input VAT for the four quarters of CY 2011.

In view of respondent's inaction, petitioner filed the present Petition for Review10 on March 22, 2013. Respondent filed her Answer11 on June 13, 2013, interposing the following Special and Affirmative Defenses: "4. She reiterates and re-pleads the preceding paragraphs of this Answer as part of her Special and Affirmative Defenses.

5. To support its claim, it is imperative for petitioner to prove the following, viz. 9 Exhibit "P-6".

10 Supra note 1.

a. The registration requirements of a value- added taxpayer in compliance with section 6 (a) and (b) of Revenue Regulations No. 6-97 in relation to Section 4.107-1 (a) of Revenue Regulations No. 7-9~ and Section 236 of the Tax Code, as amended;

b. The invoicing and accounting requirements for VAT-registered persons, as well as the filing and payment of VAT in compliance with the provisions of Section 113 and 114 of the Tax Code, as amended;

c. Proof of compliance with the prescribed checklist of requirements to be submitted involving claims for VAT refund pursuant to Revenue Memorandum Order No. 53-98, otherwise there would be no sufficient compliance with the filing of an administrative claim for refund which is a condition sine qua non prior to the filing of a judicial claim in accordance with Section 112 of the Tax Code, as amended.

This requires th~

11 Docket (Vol. I), pp. 50-64.

submission of complete documents in support of the application filed with the Bureau of Internal Revenue before the 120-day audit period shall appl~ and before the taxpayer could avail of the judicial remedies as provided for in the law. Hence, petitioner's failure to submit proof of compliance with the above- stated requirements warrants immediate dismissal of petitioner's petition for review;

d. That the input taxes of Php 70,631,192.67 allegedly paid by petitioner from its purchases of goods and services for 2011 was attributable to its zero-rated sales and such have not been applied against any output tax and were not carried over to the succeeding taxable quarter or quarters;

e. That petitioner's administrative and judicial claims for tax credit or refund of the unutilized input tax (VAT) were filed within the periods provided in

Sections 112 (A} and (D) of the Tax

Code, as amended;

f. That petitioner's purchases of goods and services was made in the course of its trade or business, properly supported by VAT invoices and/or official receipts and other documents, such as subsidiary purchase Journal showing that it actually paid VAT in accordance with Sections 110 {A) (²) and 113 of the Tax code, as amended, and pursuant to Section 4.104-5

(a) and (b) of Revenue Regulations No. 7-

95 (Re: Substantiation of Claims for Input

Tax Credits);

g. The requirements as enumerated under Section 4.104-5 Revenue Regulations No. 7-95. (Re: Substantiation of Claims for Input Tax Credits).

6. Petitioner must prove that the aggregate amount of P70,631,192.67 allegedly representing excess andt!-

CfA Case No. 8621 unutilized input VAT for calendar year 2011, is properly documented.

7. As petitioner states in its petition before this Honorable Court, the subject of its claim for refund is the unutilized input VAT on its purchases of goods and services attributable to zero-rated sales of services covering the period 2011.

8. It is noteworthy to state that the instant petition involves a claim for refund in the amount Seventy Million

Six Hundred Thirty One Thousand One Hundred Ninety

Two and 67/100 Pesos (P70,631,192.67) allegedly paid and incurred for calendar year 2011, however such claim for refund should not be given due course for lack of jurisdiction since petitioner failed to exhaust all administrative remedies before elevating this case to the Honorable Court.

9. Unmistakably, Section 1 (j) of Rule 16 of the 1999 Rules of Civil Procedure provides that:

'MOTION TO DISMISS'

Section 1. Grounds. - Within the time for but before filing the answer to the complaint or pleading asserting a claim, a motion to dismiss may be made on any of the following grounds:

XXX

(j) That a condition precedent for filing the claim has not been complied with. '

10. Corollary thereto, Section 112 (D) [now Section 112 (c) of the Tax Code of 1997] provides as follows, to wit:

'SEC. 112. Refunds or Tax Credits of Input Tax.-

XXX

(D) Period Within Which Refund or Tax

Credit of Input Taxes Shall be Made. - In proper cases, the Commissioner shall grant ~ refund or issue the tax credit certificate for creditable input taxes within one hundred twenty (120) days from the date of submission of compete documents in support of the application filed in accordance with Subsections {A} and (B) hereof.

In case of full or partial denial of the claim for tax refund or tax credit, or the failure on the part of the Commissioner to act on the application within the period prescribed above, the taxpayer affected may, within thirty (30) days from the receipt of the decision denying the claim or after the expiration of the one hundred twenty day- period, appeal the decision or the unacted claim with the Court of Tax Appeals. '(Emphasis supplied)

11. Pursuant to the aforequoted provision of law, the Commissioner of Internal Revenue ('CIR', for brevit:'IJ has 120 days from the submission of the complete or supporting documents to decide the claim for refund. It logically follows that a taxpayer must first submit the complete supporting documents before the 120-day period should commence. The CIR cannot decide the claim for refund without the complete supporting documents.

12. The implementing rule for these complete documents required by law is RMO No. 53-98. Annex B-1 of said RMO lists all the required documents as follows:

VALUE-ADDED TAX

(For audit involving Claim for Refund/ TCC) A} Requirements from Taxpayer I. Requirements mention in Annex 8 II. Additional General Requirements~

1) 3 copies of 'Application for VAT Credit I

Refund'

2) Summary List of Local Purchases specifying the following:

XXX

3) Photocopies of VAT purchase invoices for purchase of goods and official receipts for purchase of services. (The invoices/ 'official receipts must be arranged according to the summary list) 4) Summary of importations made during the period with the following details:

XXX

Photocopies

of invoices, import entry documents, official receipts or confirmation receipts evidencing payment of VAT.

(Segregate documents paid by cash from those paid by tax debit memo) 6) VAT Returns filed for the quarter showing that the amount applied for refund/TCC has been reflected as a deduction from the total available input tax, as well as VAT Return for the succeeding quarter.

7) Certification of taxpayer showing the amount of Zero-rated Sales,

Taxable Sales and

Exempt Sales

8) A statement showing the amount and description of the sale of goods and services, name of persons or entities (except in case of exports) to whom the goods or services were sold and date of the transaction, where the applicant's zero-rated transactions are regulated by certain government agency. 9) Articles of Incorporation - for first time filers

10) Sales ContractjAgreemen~

11) 801 Certificate of Registration

12) BIR Certificate of Registration

13) Certification from 801, DOF, BOC, EPZA, etc., that subject taxpayer has not filed similar claim for refund covering the same period 14) Sworn statement that ending inventory as of the close of the period covered by the Claim has been used directly or indirectly in the products subsequently exported as supported by export documents, if the applicant is 100% exporter. 15) Documents of liquidation evidencing the actual utilization of the raw materials in the manufacture of goods at least 70% of which has been actually exported, if the applicant is an indirect exporter.

16) Copy of the ITR and Certified Financial

Statements, if applicable.

17) Beginning and ending inventory of raw materials, work-in-process, finished goods, supplies and materials.

Additional Specific Requirements

1) For Zero-Rated Sales of Services (contractors, mining, etc) a.

Authenticated copyjies of the contractjs showing the personjs for whom the services were rendered, amount of consideration, description of the services and documents evidencing actual payments.

b. Photocopies of official receipts and billings together with a summary of the date of billing, name of principal, official receipt number, date of receipt, amount in foreign currency and the corresponding value thereof, date of remittance, name of banke- bank credit memo number and amount remitted in pesos.

c. Bank credit memoranda and certificate from the BSP with information similar to 1-c (export sales) 13.

As stated above, the first documentary requirement is that provided in Annex B of the same RMO. Annex B provides for more requirements as follows:

VALUE-ADDED TAX

A) Requirements from Taxpayers 1) Proof of claimed tax credits

2) Proof of Tax Compliance Certificates

applied 3) Xerox copy of used Tax Credit Certificate {TCC) with annotation of issued TDM at the back, if applicable 4) Proof of payment of deficiency tax, if any a) current year /period b) previous year /period 5) Certification of the appropriate government agency as to taxpayer's entitlement to tax incentives. if applicable.

6) Xerox copies of the Official Receipts evidencing

VAT

payment on imported purchases, if applicable 7) Proof of exemption under special law, if applicable 8) Certification of the appropriate regulatory agency as to the exempt or zero-rated sales of the taxpayer under its regulatory supervision, if applicable a-

9) Certificate of Registration issued by the appropriate regulatory agency, together with the conditions attached to such registration, if applicable

10) Proof of 'Approval for Effective Zero

Rating of Sale~ 'if applicable 11) Sample invoicejs for 'Export/Exempt Sales; if applicable 12) Proof that the acceptable foreign currency exchange proceeds on export sales/ foreign currency denominated sales had been duly accounted for in accordance with the rules and regulations of the Bangko Sentral ng Pilipinas (BSP), if applicable.

14. Indubitably, the law requires the submission of complete documents in support of the application filed with the Bureau of Internal Revenue before the 120-day audit period shall apply, and before the taxpayer could avail of judicial remedies as provided for in the law.

15. Upon examination of the BIR records, it is evident that petitioner failed to prove that it has submitted the complete documents to substantiate its administrative claim for refund and to reckon the commencement of the 120-day period for the CIR. This is a requirement established by law and jurisprudence. Ergo, respondent humbly submits that failure on the part of petitioner to submit the required complete supporting documents would render the instant petition with this Honorable Court to have been prematurely filed.

16. This is not a claim for refund of erroneously or illegally collected taxes where petitioner may choose the evidence it wishes to submit to prove its case. This is merely a claim for excess input taxes where the prescribed documentation is needed by the

BIR

17. Petitioner's alleged claim for refund is subject to administrative routinary investigation/examination by the Bureau of Internal Revenue. A claim for refund is not ipso facto granted because respondent CIR still has to~

CfA Case No. 8621 investigate and ascertain the validity of the claim.

18. Respondent respectfully avers that before judicial inquiry into the issue of whether taxpayers, in general, are entitled to a refund/tax credit under substantive law may be considered, they have an initial burden to discharge. They must prove that they complied with all the administrative requirements continuing up to judicial review. In other words, before trial de novo proceeds and disposes of the issue of refund entitlement under substantive law, it must first be proved that there was procedural compliance in pursuing the administrative claim leading to the appellate proceedings. As stated by the Honorable Supreme Court: 'Petitioner's contention that non-compliance with Revenue Regulations 3-88 could not have adversely affected its case in the

CTA

indicates a failure on its part to appreciate the nature of the proceedings in that court First, a judicial claim for refund or tax credit in the CTA is by no means an original action but rather an appeal by way of petition for review of a previous, unsuccessful administrative claim.

Therefore, as in every apoeal or petition for review, a petitioner has to convince the apoellate court that the quasi- judicial agency a guo did not have any reason to deny its claims. In this case, it was necessary for petitioner to show the CTA not only it was entitled under substantive law to the grant of its claims but also that it satisfied all the documentary and evidentiary requirements for an administrative claim for refund or tax credit.

Second, cases filed in the CTA are litigated de novo. Thus, a respondent should prove every minute aspect of its case by presenting, formally offering and submitting its evidence to the CTA. Since it is crucial for a petitioner in a judicial claim for refund or tax credit to show that its administrative claim should have been ~ granted in the first place, part of the evidence to be submitted to the CTA must necessarily include whatever is required for the successful prosecution of an administrative claim. fEmphasis and underscoring supplied)

19. The doctrine of exhaustion of administrative remedies ensures an orderly procedure which favors a preliminary sifting process, particularly with respect to matters peculiarly within the competence of the administrative agency. After this sifting process comes the availability of judicial review of administrative decisions. Judicial review of administrative decisions entails the Court to examine the method in which the decision was arrived at, and finding no error, lets the administrative decision stand. This is precisely because, as previously stated, these are matters peculiarly within the competence of the administrative agency.

20. Well-settled is the rule that exhaustion of available administrative remedies is a condition sine qua non before taking a judicial action. The Honorable Supreme Court, in a long line of cases, has consistently held that if a remedy within the administrative machinery can still be resorted to by giving the administrative officer every opportunity to decide on a matter that comes within his jurisdiction, then such remedy must be exhausted first before the court's power of judicial review can be sought.

21. Moreso, the Honorable Supreme Court had the occasion to rule that where a remedy is available within the administrative machinery, this should be resorted to before resort can be made to courts, not only to give the administrative agency the opportunity to decide the matter by itself correctly, but also to prevent unnecessary and premature resort to courts. Thus, the party with an administrative remedy must not merely initiate the prescribed administrative procedure to obtain relief but also pursue it to its appropriate conclusion before seeking judicial intervention in order to give the administrative agency an opportunity to decide the matter itself correctly and prevent unnecessary and premature resort to the court~

22. The doctrine of exhaustion of administrative remedies has practical and legal reasons. Resort to administrative remedies entails lesser expenses and provides for speedier disposition of controversies. Thus, for reasons of comity and convenience, courts will shy away from a dispute until the system of administrative redress has been completed and complied with so as to give the administrative agency every opportunity to correct its error and to dispose of the case. The underlying principle of the rule rests on the presumption that the administrative agency, if afforded a complete chance to pass upon the matter, will decide the same correctly.

23. Respondent respectfully submits that the 120- day period provided for by law within which the CIR has to act on petitioner's claim for refund has not yet commenced considering petitioner's failure to comply with the duly mandated legal requirements in such claims for refund/tax credit (i.e submission of complete supporting documents). While it is true that petitioner filed an administrative claim for refund, the same is considered merely pro forma as it failed to submit a complete documentary evidence to prove its entitlement thereto. Petitioner here failed to substantiate its administrative claim for refund.

24. Had petitioner submitted all relevant documents to substantiate its claim for refund or tax credit, respondent would have the opportunity to determine the veracity of its claim and might refund or issue a tax credit certificate for the claimed amount. Such failure of petitioner to submit relevant documents deprived respondent of the opportunity and time to study petitioner's claim for refund and to fully exercise its function. It must be remembered, that in the case of Jariol vs. Commission on Elections, the Supreme Court reasoned that a party must not merely initiate the prescribed administrative procedure to obtain relief, the party concerned must pursue this relief until the appropriate conclusion takes place before seeking judicial intervention in order to give the administrative agency an opportunity to decide the matter by itself correctly and prevent unnecessary and premature resort to the court.6l

25. It is well settled rule in tax laws, that the taxpayer who feels aggrieved by the actions taken by tax authorities may not seek redress in the courts of justice without first exhausting available administrative remedies, except for certain well- recognized exceptions. It is the policy of the law and good practice to discourage court litigations and encourage resort to administrative action whenever the latter is feasible, adequate and speedy. Besides, the respect and consideration due to each branch of the government demand that the judicial department abstain, whenever possible from interfering in the acts of the other departments except when the latter transcend their respective shares of action and suitable remedies cannot be obtained by them.

26. Equally noteworthy is the fact that the Highest Tribunal in the case of Atlas Consolidated Mining and Development Corporation vs. Commissioner of Internal Revenue, held that:

'Petitioner's contention that non-compliance with Revenue Regulations 3-88 could not have adversely affected its case in the CTA indicates a failure on its part to appreciate the nature of the proceeding in that court. First a judicial claim for refund or tax credit in the CTA is by no means an original action but rather an appeal by way of petition for review of a previous, unsuccessful administrative claim. Therefore, as in every appeal or petition for review, a petitioner has to convince the appellate court that quasi- judicial agencv a quo did not have reason to denv its claim. In this case, it is necessary for petitioner to show the CTA not only that it was entitled under substantive law to grant of its claim but also that it satisfied all the documentary evidence and evidentiary requirements for administrative claim for refund or tax credits. xxx' (Emphasis and Underscoring

Supplied)

27.

Thus, as clearly stated by the above jurisprudence, the necessity for petitioner to submit al~

CfA Case No. 8621 relevant documents to substantiate its administrative claim for refund is imperative. The filing of the petition for review to this Honorable Court must be due to the denial of its claim or inaction which is tantamount to a denial of the said action. Absent these circumstances, the judicial claim merely becomes an attempt by the taxpayer to circumvent the role and duties of the Commissioner in evaluating taxpayer's claim for refund.

28. Failure of petitioner to exhaust all administrative remedies is fatal to its claim considering that such non- exhaustion is not merely for purposes of formality but is jurisdictional in nature.

29. Prescinding from and anent the foregoing considerations, petitioner's failure to exhaust all available administrative remedies which led to the premature filing of the instant petition divests the

Honorable

Court jurisdiction over the instant petition.

30. Exemptions from taxation are highly disfavored in law and he who claims exemption must be able to justify his claim by the clearest grant of organic or statutory law. An exemption from the common burden cannot be permitted to exist upon vague implications.

31. In an action for refund, the burden of proof is on the taxpayer to establish its right to refund, and failure to sustain the burden is fatal to the claim for refund. Hence, a taxpayer is charged with the heavy burden of proving that he has complied with and satisfied all the statutory and administrative requirements to be entitled to the tax refund. Failure to comply therewith warrants a dismissal of the taxpayer's claim for refund.

Respondent humbly submits that petitioner failed to establish its right to refund.

32. It can never be emphasized enough that in this jurisdiction tax refunds/ credits are in the nature of tax exemptions, hence, laws relating to them call for a strict application against the claimant. As held by the

Honorable Supreme Court:

'Tax refunds are in the nature of tax exemption~ and are to be construed strictissimi juris against the entity claiming th~ CfA Case No. 8621 same.

Thu~

the burden of proof rests upon the taxpayer to establish by sufficient and competent evidence, its entitlement to a claim for refund '

33. Taxes collected are presumed to be in accordance with laws and regulations.

34. Claims for refund are construed strictly against the claimant for the same partake of the nature of exemption from taxation and as such, they are looked upon with disfavor. Basic is the rule that tax refunds are regarded as tax exemptions that are in derogation of the sovereign authority and are to be construed in strictissimi juris against the person or entity claiming the exemption. The law does not look with favor on tax exemptions and that he who would seek to be thus privileged must justify it by words too plain to be mistaken and too categorical to be misinterpreted.

35. Based on the foregoing, petitioner's claim for refund has no basis in fact and in law. Thus, the instant petition should be dismissed for lack of jurisdiction and/or for lack of merit."

Petitioner's Pre-Trial Brief12 was filed on July 17, 2013, while respondent's Pre-Trial Brief13 was filed on September 6, 2013. Thereafter, the parties submitted their Joint Stipulation of Facts and Issues14 on August 30, 2013. Petitioner, however, filed its Amended Pre-Trial Brief15 on September 20, 2013. Thus, a Pre-Trial Order16 was issued on October 2, 2013, thereby terminating the Pre-Trial. During the trial, petitioner presented its witnesses, Mr. Robert D. Secular, Jr. 17, petitioner's Finance Coordinator; Mr. Chito R. Padie18, Optimization Manager of petitioner; Mr. Ruben R. Rubio19, Court-commissioned Independent Certified Public Accountant; and Ms. Jennifer A. Valdez20, Fixed Assets Team Leader of petitioner.s:-

12 Docket (Vol. I), pp. 71-80.

13 Docket (Vol. I), pp. 124-128.

14 Docket (Vol. I) pp. 119-122.

15 Docket (Vol. IV) pp. 1871-1881.

16 Docket (Vol. IV), pp. 1885-1888.

17 Docket (Vol. I) pp. 132-141.

18 Docket (Vol. IV), pp. 1894-1900.

19 Docket (Vol. I), pp. 171-226.

20 Docket (Vol. I), pp. 247-251.

On February 4, 2014, petitioner filed its Formal Offer of Evidence2\ while counsel for respondent manifested in the hearing held on March 24, 201422, that respondent has no witness in this case. Thus, the parties were ordered to file their respective memorandum within thirty (30) days from notice; afterwhich the case shall be deemed submitted for decision. Petitioner filed its Memorandum23 on April 23, 2014 while respondent filed a Manifestation24 dated May 23, 2014, stating that she is adopting the arguments raised in her Answer. Hence, this Court, in a Resolution25 dated May 27, 2014, submitted the instant petition for decision.

On November 6, 2014, petitioner filed an Urgent Omnibus Motion (1) For Leave of Court to Present Additional Evidence and (2) Defer Resolution of the Case26, which was granted by the Court in a Resolution27 dated February 24, 2015. However, petitioner filed a Manifestation and Motion28 on April 1, 2015, stating that it will not present any additional evidence. Thus, the case was submitted for decision on April 6, 201529 • As stipulated by the parties, the sole issue to be resolved in this case is whether or not petitioner is entitled to the claim for refund or issuance of TCC for excess or unutilized input VAT for the four (4) quarters

of Calendar

Year

(CY)

2011 in the amount of P70,631,192.67. 30 For the four quarters of taxable year 2011, petitioner duly filed with the Bureau of Internal Revenue (BIR) its Quarterly VAT Returns31 declaring the following:

Vatable Sales/Receipts

Zero-Rated Sales/Receipts

21 Docket (Vol. IV), pp. 1966-2019. 22 Minutes of the Hearing, Docket (Vol. V), p. 2058. 23 Docket (Vol. V), pp. 2059-2102. 24 Docket (Vol. V), pp. 2108-2110. 25 Docket (Vol. V), p. 2111. 26 Docket (Vol. V), pp. 2113-2119. 27 Docket (Vol. V), pp. 2147-2149. 28 Docket (Vol. V), pp. 2150-2152. 29 Minutes of the Hearing, Docket (Vol. V), p. 2154. 30 Stipulated Issues, JSFI, Docket (Vol. I), p. 120. 31 Exhibits "P-4.1" to "P-4.4". p 1st Quarter 2nd Quarter (Exhibit P-4.1) (Exhibit P-4.2) 33 221 546.96 p 32 362 352.24 645 984 584.15 662 353 661.91

Total Sales/Receipts

Output Tax Due

Less: Allowable Input Tax

|e 679,206,131.11 | P Input Tax Carried Over from Previous Period P Purchase of Capital Goods exceeding P1Million

D

Input Tax Deferred on Capital Goods Exceeding

P1Million from Previous Quarter P 3,986,585.64 | P 3,883,482.27 157,160,605.18

Current Transactions

Purchase of Capital Goods not exceeding P1Million P 168,295, 169.15 36,621,041.07 34,040,548.13 694,716,014.15 104,348.45 a 1,873,710.34 — | _2,036,605.79 [

Domestic Purchase of Services

omestic Purchases of Goods other than Capital Goods 356,278.83 524,082.55 Importation of Goods Other than Capital Goods 54,715.00 100,781.00 8,930, 139.03 9,702,448.35 — Services Rendered by Non-residents | 1,221,465.02

Total Available Input Tax

Less: Deductions from Input Tax 4,733, 187.72 | P _206,322,302.92 | P_ _219, 432,822.69 Input Tax on Purchases of Capital Goods exceeding PIMillion deferred for the succeeding period P VAT Refund/TCC claimed 34,040,548.13 | P 31,825,211.39 Te 34,040,548.13 | P 31,825,211.39

Total

|: — Total Allowable Input Tax P172,281,754.79 | P__187,607,611.30 | Net VAT Overpayment | P 168,295,169.15 P 183,724,129.03 3rd Quarter 4th Quarter Total Exhibit P-4,³, Exhibit P-4.⁴ Vatable Sales/Receipts P 22,002,922.66 | P 36,305,194.38 | P 123,892,016.24 Zero-Rated Sales/Receipts 612,162,244.83 552,084,574.11 2,472,585,065.00 Total Sales/Receipts P _634,165,167.49 | P 588,389,768.49 | P 2,596, 477,081.24 Output Tax Due P__2,640,350.72 | P 4,356,623.33 | P 14,867,041.96

Less: Allowable Input Tax

Input Tax Carried Over from Previous Period P_:183,724,129.04 | P 196,739,960.22 | P 157,160,605.18

Input Tax Deferred on Capital

Goods Exceeding P1Million from

Previous Quarter

22 34,129,991.80 36,621,041.07 31,825,211.39

Current Transactions

Purchase of Capital Goods |

c 104,348.45

Purchase of Capital Goods

exceeding P1Million — 12,772,590.89 23,225,862.12 not exceeding P1Million 6,542,955.10

1 221 465.02 4,733 187.72

Total Allowable Input Tax

p 15 121,149.61 p 19,312 442.15 3rd Quarter 4th Quarter

Total

Input Tax Deferred on Capital Goods

exceeding P1Million from Previous

Quarter

p 31 825,211.39 p 34 129 991.80 p 36 621,041.07

Add: Input Tax on Capital Goods

exceeding P1Million Purchased this Quarter 6 542,955.10 12 772 590.89 23 225,862.12

Total Unamortized Input Tax on Capital

Goods exceeding P1Million p 38 368 166.49 p 46 902 582.69 p 59 846,903.19

Less: Input Tax on Purchases of Capital

Goods

exceeding

P1Million

34 129,991.81 42 681 486.32 42 681,486.32 (~ deferred for the period succeeding

Amortization of Input Tax on Capital

Goods exceedinq P1Million

Add: Input Tax on-

Purchase of Capital Goods not exceeding P1Million

Domestic Purchases of Goods Other

than Capital Goods Importation of Goods other than

Capital Goods

Domestic Purchase of Services

Services Rendered by Non-

Residents

p 4 238 174.68 p 4,221 096.37 p 17 165 416.87 - - 104 348.45 709 870.37 733 739.46 2 323 971.21 69 015.00 35 569.00 260 080.00 7 596 073.11 16,127 544.51 42 356 205.00 3 043 048.74 3,100 254.57 12 097 956.05

Total Allowable Input Tax

p 15,656L181,90 p 24,218,203.91 p 74J307/iJ77 .58 Out of the P74,307,977.58 input VAT, petitioner is claiming refund of the amount of P70,631,192.67 allegedly representing input VAT attributable to its zero-rated sales for CY 2011, computed as follows32:

1st Quarter 2nd Quarter 3rd Quarter 4th Quarter

Total

Vatable Sales

p 33 221 546.96 p 32 362 352.24 p 22 002 922.66 p 36 305 194.38 p 123 892 016.24

Zero-Rated Sales

645 984 584.15 662 353 661.91 612 162 244.83 552 084 574.11 2 472 585 065.00

Total Sales

p 679 206 131.11 p 694 716 014.15 p 634 165 167.49 p 588 389 768.49 P2 596 477,081.24

%of Zero-Rated Sales

/Total Sales

95% 95% 97% 94% ln_Q_ut Tax p 15,121 149.60 p 19 312,442.16 p 15 656 181.90 p 24 218 203.92 p 74 307 977.58

Input Tax

Attributable to

Zero-Rated Sales

P14,381,539.11 P18 412,799.65 P15 112 976.79 P22,723,877.12 P7~631,192.67 Section 112(A) of the NIRC of 1997, as amended, provides the basis for the refund/tax credit of excess input VAT attributable to zero-rated or effectively zero-rated sales, to wit: "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: Provide~ howeve~ That in the case of zero-rated~

32 Exhibit "P-6".

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 Bangko 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: Provided, 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."

Pursuant to the above-mentioned provision and as enumerated by the Supreme Court in the case of San Roque Power Corporation vs. Commissioner of Internal Revenue'3/ in order to be entitled to a refund or issuance of a tax credit certificate of input VAT paid, petitioner must prove the following:

1. That there must be zero-rated or effectively zero-rated sales;

2. That input taxes were incurred or paid;

3. That such input taxes were attributable to zero-rated or effectively zero-rated sales;

4. That the input taxes were not applied against any output VAT liability; and

5. That the claim for refund was filed within the two-year prescriptive period.

The Court shall first determine the fifth requisite which is the timeliness of the filing of the administrative claim for refund. Following the above-mentioned provision, the administrative claim for refund/tax credit certificate must be filed within two (2) years after the close of the taxable quarter when the zero-rated or effectively zero-rated sales were made;#'

33 G.R. No. 180345, November 25, 2009.

CfA Case No. 8621

Based on the records of the case, petitioner filed its administrative claim for refund together with the supporting documents34 on October 23, 2012. Applying the foregoing rules, it is clear that petitioner's administrative claim for refund was filed within the 2-year period prescribed by law, as detailed below:

Date of Filing of

Administrative

Last Day to File

Claim and

Close of the

Administrative

Submission of

CY 2011

Taxable Quarter

Claim

Documents

1st Quarter March 31, 2011 March 31, 2013 2nd Quarter

June 30 2011

June 30, 2013 October 23, 3rd Quarter

September 30 2011

September 30 2013

201235 4th Quarter December 31, 2011 December 31, 2013 As to the timeliness of petitioner's judicial appeal, Section 112(C) of the NIRC of 1997, as amended, provides as follows: "SEC. 112. Refunds or Tax Credits of Input Tax.-

XXX

(C) Period within which Refund or Tax Credit of Input Taxes shall be Made. - In proper cases, the Commissioner shall grant a refund or issue the tax credit certificate for creditable input taxes within one hundred twenty (120) days from the date of submission of complete documents in support of the application filed in accordance with Subsection (A). In case of full or partial denial of the claim for tax refund or tax credit, or the failure on the part of the Commissioner to act on the application within the period prescribed above, the taxpayer affected may, within thirty

(30) days from the receipt of the decision denying the claim or after the expiration of the one hundred twenty day-period, appeal the decision or the unacted claim with the Court of Tax Appeals.'~

34 Exhibit "P-6".

35 Exhibit "P-6".

The afore-quoted provision provides that respondent has one hundred twenty (120) days from the date of submission of the complete documents within which to grant or deny petitioner's claim for refund. In case of respondent's inaction of the claim, petitioner is given a period of thirty (30) days from the expiration of the one hundred (120) days to appeal the claim before this Court. Thus, from the expiration of the 120 day period, petitioner may file its judicial claim before this Court.

Respondent contends that pursuant to Section 112 (C) of the NIRC of 1997, as amended, she has 120 days from the submission of the complete supporting documents to decide the claim for refund. Accordingly, it logically follows that a taxpayer must first submit the complete supporting documents, as required under RMO No. 53-98, before the 120-day period should commence to run. For respondent, the instant Petition for Review was prematurely filed on account of petitioner's failure to prove that it has submitted the complete documents to substantiate its administrative claim for refund. 36 The Court disagrees with the respondent. Petitioner, upon the filing of its administrative claim on October 23, 2012, simultaneously submitted the documents in support thereof as evidenced by petitioner's letter-claim37 for refund or issuance of tax credit certificate filed with the BIRon the said date. Since the records do not show that a written notice was sent by the BIR informing petitioner that the documents it submitted were incomplete nor requiring petitioner to submit additional documents, the 120-day period commenced and continued to run from October 23, 2012, the date when petitioner completely submitted the required documents. This is in accordance with Revenue Memorandum Circular (RMC) No. 29-09 which states that: "III. Period within which Refund or Tax Credit or Input Taxes shall be Made . .a-

36 Pars. 11 and 15, Answer, Docket (Vol. I), pp. 53 and 57.

37 Exhibit "P-6".

Section 112(C) of the Tax Code of 1997, as amended by Republic Act No. 9337, provides among others, that in proper cases, the Commissioner shall grant a refund or issue the tax credit certificate (TCC) for creditable input taxes within one hundred twenty (120) days from the date of submission of complete documents. For the purpose of defining "proper cases" in the said provision, the taxpayer/claimant must have complied with the following conditions/requirements upon audit/verification of his/its claim:

a. Submission of complete documents necessary to determine and/or ascertain the correctness of the return and the amount to be refunded/credited;

XXX

In cases where taxpayer failed to comply with the above conditions/ requirements, i.e., failure to present the accounting books and records for audit/verification, additional documents to explain discrepancies/findings are not submitted, taxpayer refuses or incurs delay in the submission of the Agreement Form, the running of the 120-day period shall stop from the date of notification to the taxpayer. Likewise, the running of the 120-day period shall be suspended in case a question of law arises during the conduct of audit/verification and/or review of the claim for tax refund/credit, and the issue is referred to the Legal Division or the Legal Service, as the case may be, for resolution and issuance of legal opinion, which should be rendered within thirty (30) working days from receipt of the request. (Emphasis supplied) Moreover, it is a well-settled rule that in claims for VAT refund, the non-submission of complete supporting documents in the administrative level is NOT fatal to petitioner's judicial claim. This Court is not barred from receiving, evaluating and appreciating evidence submitted before it. Once the claim for refund has been elevated to the Court, the admissibility, materiality, relevancy, probative value and weight of evidence presented therein become subject to the Rules of Court. The question of whether or not the evidence submitted by a party is sufficient to warrant the granting o~ a claim for refund lies within the sound discretion and judgment of the Court.38 In the present case, the respondent failed to act on petitioner's administrative claim within the period required by law which lapsed on February 20, 2013. Pursuant to Section 112 (C) of the NIRC, as amended, petitioner has thirty (30) days or until March 22, 2013 to file its judicial claim for refund. Thus, applying the said Section, petitioner's judicial claim for the four quarters of CY 2011 was timely filed within the "120-30" day period, as shown below:

Date of Filing of

End of 120 days

Administrative for the BIR

End of 30 days

Claim and

Commissioner to

from the

Date of Filing of

Submission of

decide on the expiration of the

Petition for

CY 2011

Documents

claim 120 days

Review

1st Quarter 2nd Quarter October 23, 2012 February 20, 2013 March 22, 2013 March 22, 2013 3rd Quarter 4th Quarter The Court shall now determine whether petitioner has satisfied the remaining requirements to be entitled to a refund. Petitioner claims that the services it renders to its affiliates located and doing business outside the Philippines are subject to zero percent (0°/o) VAT pursuant to Section 108(8)(2) of the NIRC of 1997, as amended, to wit:

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

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:~ 38 Commissioner of Internal Revenue vs. CE Luzon Geothermal Power Company, Inc., CTA EB Case No. 474, September 1, 2009; Commissioner of Internal Revenue vs. Toledo Power Company, CTA EB Case No. 589 (CTA Case No. 7471), September 15, 2010; Commissioner of Internal Revenue vs. San Roque Power Corporation CTA EB No. 657 (CTA Case Nos. 7424 and 7492), April 4, 2012.

(1) Processing, manufacturing or repacking goods for other persons doing business outside the Philippines which goods are subsequently exported, where the services are paid for in acceptable foreign currency and accounted for in accordance with the rules and regulations of the Bangko Sentral ng Pilipinas (BSP);

(2) Services other than those mentioned in the preceding paragraph rendered to a person engaged in business conducted outside the Philippines or to a non- resident person not engaged in business who is outside the Philippines when the services are performed, the consideration for which is paid for in acceptable foreign currency and accounted for in accordance with the rules and regulations of the Bangko Sentral ng Pilipinas (BSP);"

Based

therefrom, the following requirements must be met/complied with and, as laid down by the Supreme Court in the case of Commissioner of Internal Revenue vs. Burmeister and Wain Scandinavian Contractor Mindanao, Inc.}9 in order for the supply of services to be considered as VAT zero-rated:

1. the services must be other than processing, manufacturing or repacking of goods;

2. the recipient of such services is doing business outside the Philippines; and

3. payment for such services must be in acceptable foreign currency accounted for in accordance with the BSP rules and regulations.

It is undisputed that petitioner is duly registered with the BIR as a VAT taxpayer and was issued a Certificate of Registration with Tax Identification Number (TIN) 201-056-391-00040• Petitioner is licensed by the Securities and Exchange Commission (SEC) to transact business in the Philippines as a Regional Operating Headquarters (ROHQt1 to engage in general administration and planning; business planning and coordination; sourcing/procurement of raw materials and components; corporate finance advisory services; marketing control and sales promotion; training and~

39 G.R. No.153205, January 22, 2007.

40 Par. 3, Admitted Facts, JSFI, Docket (Vol. I), p. 120.

41 Par. 1, Admitted Facts, JSFI, Docket (Vol. I), p. 119.

personnel management; logistics services; research and development services and product development;

technical support and maintenance; data processing and communication; and business development.42 Such services are not of the same category as "processing, manufacturing or repacking of goods", thereby complying with the first requirement. In relation to the second requirement, Sections 113(A)(2), (8)(1), (2)(c) and (3) of the NIRC of 1997, as amended, as implemented by Sections 4.113-1(A)(2), 8(1) and (2)(c) of Revenue Regulations (RR) No. 16-05, provides that a VAT taxpayer shall, for every lease of goods or properties and for every sale, barter or exchange of services, issue a VAT official receipt which must contain the following information:

"SEC.

113.

Invoicing

and

Accounting

Requirements for VAT-Registered Persons. -

(A)

Invoicing Requirements. -

A VAT-registered

person shall issue:

XXX

(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 -

Corporation/

Partnership issued by the Republic of the Philippines Securities and Exchange Commission (SEC)48, Certificate/Memorandum/ Articles of_p...

43 Exhibit P-15.

44 Exhibit P-14, inclusive of sub-markings.

45 Exhibit P-22.1.

46 Exhibit P-14.7.13.

47 CTA Case No. 7808, December 16, 2014.

48 Exhibits P-7.1 to P-7.32 and P-7.33 to P-7.69.

Association/Incorporation49, Tax Residence Certificate50, Inline Report of the Corporate Profile5\ printed screenshots of Company Profile52,

Service

Agreements53

and printed screenshots of

Chevron

Corporation's records with the U.S. SEC website54• Each of the said documents, standing alone, is not sufficient to show that petitioner's client is a non-resident foreign corporation doing business outside the Philippines. While the SEC Certificates of Non-Registration show that the named entities therein are not registered companies in the Philippines, the same do not prove that such entities are non-resident foreign corporations doing business outside the Philippines. Likewise, the service agreements only show the names and addresses of petitioner's customers to whom it renders services but the same do not establish that such customers are non-resident foreign corporations doing business outside the Philippines.

Moreover, the

Certificate/Memorandum/Articles

of Association/Incorporation, Tax Residence Certificate, Inline Report of the Corporate Profile, printed screenshots of Company Profile and printed screenshots of the United States SEC website for company filings of Chevron Corporation only prove that the named entities therein were incorporated/organized abroad but do not establish that such entities are not doing business in the Philippines. Thus, only the following clients of petitioner, with transactions with the latter during 2011, shall be considered as non-resident foreign corporations doing business outside the Philippines:

1 Cabinda Gulf Oil Company Limited

2 Chevron Africa-Pakistan Services (Pty) Ltd. Chevron AI Khalij, A Branch of Chevron Asia Pacific

3 Holdings Limited

4 Chevron Bangladesh Blocks Thirteen & Fourteen, Ltd. 5 Chevron Brasil Lubrificantes Ltda.

Chevron Business and Real Estate Services (A Chevron

6 USA Inc. Division) 7 Chevron Business Support Center, S.A. 8

Chevron (Cambodia) Limited

9 Chevron (China) Investment Co. Ltd. 10 Chevron Corporation 13-.

49 Exhibits P-8.1 to P-8.23, P-33.1 to P-33.5 and P-47.1 to P-47.5.

50 Exhibits P-9.1 to P-9. 21.

51 Exhibits P-10.1 to P-10.7.

52 Exhibits P-11.1 to P-11.51.

53 Exhibits P-12.1 to P-12.40.

54 Exhibits P-13.

CfA Case No. 8621

11 Chevron Egypt S.A.E.

Chevron Energy Technology Co. (A Chevron USA Inc. 12

Division)

Chevron Environmental Management Company

14 Chevron Global Energy, Inc. 15

Chevron Hong Kong Limited

16 Chevron India Holdings, Pte Ltd.

Chevron International Exploration and Production

Technology Services, A Division of Chevron Global 17

Technology Services Company

Chevron International Limited

19 Chevron International Pte. Ltd. 20 Chevron Japan Ltd.

21 Chevron Kuo Pte. Ltd.

Chevron Limited

Chevron Lubricants India Private Limited

Chevron Lubricants Lanka PLC

Chevron Malaysia Limited

Chevron New Zealand

Chevron Nigeria Limited

Chevron North America Exploration and Production Co. 28 (A Chevron USA Inc. Division) 29

Chevron North Sea Limited

Chevron Oronite Company LLC

31 Chevron Oronite Pte. Ltd.

Chevron Petroleum India Private Limited

Chevron Shipping Company LLC

34 Chevron Singapore Pte. Ltd. 35

Chevron South Africa (Pty) Limited

Chevron (Thailand) Limited

37 Chevron (Tianjin) Lubricants Co., Ltd. 38 Chevron Trading Pte. Ltd.

Project Resources Company (A Chevron USA Inc. 39

Division)

PT Chevron Oil Products Indonesia

PT Chevron Pacific Indonesia

Star Holdings Company Limited

43 Talcor Pty. Ltd.

Accordingly, petitioner's foreign currency receipts derived from services rendered to the aforementioned entities for the CY 2011 in the amount of P578,576,738.40, duly covered by VAT zero-rated official receipts, qualify for VAT zero-rating under Section 108(8)(2) of the NIRC of 1997, as amended. Below is the breakdown of the amount of P578,576, 738.40: .?-'

OR

No.

Date

Client

25-Jan-11

Chevron North Sea Limited

3184

25-Jan-11

Chevron Singapore Pte. Ltd.

Chevron Africa-Pakistan Services (Pty)

3189

26-Jan-11

Ltd.

3190

26-Jan-11

Chevron Business Support Center S.A. 3191

26-Jan-11

Chevron Oronite Pte. Ltd.

3193

27-Jan-11

Chevron International Limited

3192

28-Jan-11

Chevron Lubricants Lanka PLC

3194

31-Jan-11

Chevron Business Support Center S.A.

3207

28-Feb-11

Chevron Lubricants Lanka PLC

3206

28-Feb-11

Chevron North Sea Limited

MARCH

3208

14-Mar-11

Chevron Nigeria Limited

3209

15-Mar-11

Chevron Japan Ltd.

Chevron Africa-Pakistan Services (Pty)

3211

18-Mar-11

Ltd.

3212

18-Mar-11

Chevron South Africa (P!Y) Limited 3216

25-Mar-11

Chevron Corporation

3222

25-Mar-11

Chevron Egypt S.A.E.

3217

25-Mar-11

Chevron Hong_ Kong Limited

Chevron International Exploration and

Production Technology Services, A

Division of Chevron Global Technology

Chevron Limited

3223

28-Mar-11

Chevron Malaysia Limited

3227

30-Mar-11

Chevron (Tianjin) Lubricants Co., Ltd. 3228

30-Mar-11

Chevron Lubricants Lanka PLC

sub-total

Second Quarter of 2011

55 Exhibit P-22.1 to P-22.12.

Amount Per Collection

Summary55

In US$

In PhP

Exhibit

2,383.25 104 005.03 P-14.1.5 1,199.42 53 260.21 P-14.1.15 136 681.89 6 069 355.68 P-14.1.14 327,732.86 14r_552 968.92 P-14.1.9 307 832.04 13,669 273.53 P-14.1.11 168,275.85 7 472 284.64 P-14.1.13 224,992.25 9 990 774.87 P-14.1.12 120,737.06 5 366 091.56 P-14.1.17 15,364.11 682 849.33 P-14.1.18 3,562.98 158 354.67 P-14.1.19 5_L903.60 262 615.66 P-14.1.21 2,850.66 126 135.40 P-14.1.20 4,911.81 217 048.61 P-14.1.22 1199.42 52 514.01 P-14.2.1 4,029.93 175 749.24 P-14.2.3 197 544.90 8 603 871.95 P-14.2.4 221_L124.24 9_L614 097.39 P-14.2.⁶ 105,063.45 4 567 976.09 P-14.2.10 164,188.23 7 138 618.70 P-14.2.⁷ 6 351.36 278 202.37 P-14.2.13 107,806.84 4 722 156.81 P-14.2.12 2 587.11 112 483.04 P-14.3.3 1,424.08 61 997.39 P-14.3.4 120 737.16 5 276 973.78 P-14.3.6 87 680.82 3,832 203.67 P-14.3.7 213,535.11 9 280 100.39 P-14.3.11 1 522.19 66 153.41 P-14.3.17 173 936.71 7L559,179.05 P-14.3.12 101,801.15 4 424 213.39 P-14.3.16 163 019.52 7_L084,724.90 P-14.3.13 232 661.72 10 111,330.73 P-14.3.10 23 001.06 998 309.90 P-14.3.19 9 424.24 409,038.19 P-14.3.20 3 245.49 140 863.28 P-14.3.21 122 872.93 5 333 026.48 P-14.3.18 14 847.69 645 271.19 P-14.3.22 3 015.57 131 054.76 P-14.3.23 3,405,048. 70 149,345,128.22 -i:k-

APRIL

3234 3232 3231 3235 3236 3238 3246 3253 3251 3245 3257 3260 3247 3252 3258 3256 3243 3255 3263 3250 3262 3265 3261 3270 3268 3266 3269 3275 3271 3276

MAY

3277 3279 3282 3285 3283

JUNE

3287 3290 3291 3296 3297

07-Apr-11

Chevron Lubricants India Private Limited

14-Apr-11

Chevron (China) Investment Co. Ltd.

15-Apr-11

Chevron Japan Ltd.

20-Apr-11

Chevron Limited

25-Apr-11

Cabinda Gulf Oil Company Limited

25-Apr-11

Chevron (Cambodia) Limited

26-Apr-11

Chevron (Thailand) Limited

Chevron AI Khalij, A Branch of Chevron

26-Apr-11

Asia Pacific Holdings Limited

Chevron Business and Real Estate

26-Apr-11

Services (A Chevron USA Inc. Division)

26-Apr-11

Services Company

Chevron International Exploration and

Production Technology Services, A

Division of Chevron Global Technology

26-Apr-11

Services Company

26-Apr-11

Chevron Kuo Pte. Ltd.

26-Apr-11

Chevron New Zealand

Chevron North America Exploration and

Production Co. (A Chevron USA Inc.

26-Apr-11

Division)

26-Apr-11

Chevron Shipping Company LLC

26-Apr-11

Chevron Trading Pte. Ltd.

Project Resources Company (A Chevron

26-Apr-11

USA Inc. Division)

26-Apr-11

PT Chevron Oil Products Indonesia

26-Apr-11

Chevron India Holdings Pte. Ltd.

27-Apr-11

Chevron Limited

27-Apr-11

Chevron Malaysia Limited

27-Apr-11

Chevron North Sea Limited

27-Apr-11

Chevron Oronite Company LLC

Chevron Thailand Exploration and

27-Apr-11

Production

27-Apr-11

Star Holdings Company Limited

28-Apr-11

Chevron International Limited

05-May-11

PT Chevron Pacific Indonesia

17-May-11

Chevron Lubricants Lanka PLC

25-May-11

Chevron Corporation

25-May-11

Chevron Limited

25-May-11

Chevron New Zealand

23-Jun-11

Chevron (Thailand) Limited

24-Jun-11

Chevron Corporation

24-Jun-11

Chevron Hong Kong Limited

24-Jun-11

Chevron International Limited

24-Jun-11

Chevron Limited

2,259.65 97 947.55 P-14.4.6 3 386.65 146J65.30 P-14.4.4 957.49 41 622.09 P-14.4.3 32.32 1 397.92 P-14.4.7 61 069.66 2 635 721.19 P-14.4.⁸ 13 294.00 573 759.17 P-14.4.10 226 541.75 9 777 373.76 P-14.4.18 35 196.65 1 519 061.29 P-14.4.25 46 151.41

1991 860.60

P-14.4.23 232 551.10 101036 732.84 P-14.4.17 6,499.72 280 523.09 P-14.4.29 5,502.80 237 496.76 P-14.4.32 149 352.96 6,445 962.88 P-14.4.19 42 289.97 1,825,203. 71 P-14.4.24 6 443.86 278 112.21 P-14.4.30 7 072.72 305 253.34 P-14.4.28 308 821.12 13 328,490.29 P-14.4.15 27 386.88

1181 997.41

P-14.4.27 1 834.40 79,171.34 P-14.4.36 83 671.41 3,611,195.94 P-14.4.22 2 645.78 114,189.90 P-14.4.34 410.64 17,722.92 P-14.4.37 4 615.21 199,189.04 P-14.4.33 35 196.65 1 520,373.65 P-14.4.42 84 695.77 3,658,564.58 P-14.4.40 194 840.39 8 416,431.53 P-14.4.38 72 591.43 3 135 698.92 P-14.4.41 8 120.86 350 793.09 P-14.4.47 31 615.99 1 365 701.51 P-14.4.43 19,580.47 847 272.61 P-14.4.48 1 622.74 69 585.76 P-14.5.7 8 886.93 382 892.29 P-14.5.9 283,625.11 12,315 462.87 P-14.5.12 11J32.22 509 432.05 P-14.5.15 235 509.27 10,226 194.96 P-14.5.13 182,660.59 7 934 864.90 P-14.6.5 238,138.98 10,331 409.11 P-14.6.8 179,297.34 7 778 626.46 P-14.6.9 12,544.40 544 225.60 P-14.6.14 11,732.22 508 990.02 P-14.6.15 -

3298

24-Jun-11

Chevron Limited

3295

3313

29-Jul-11

Chevron Lubricants Lanka PLC

AUGUST

25-Aug-11

Chevron North Sea Limited

3322

25-Aug-11

Chevron Singapore Pte. Ltd. 3329

31-Aug-11

Chevron South Africa (Pty) Limited

SEPTEMBER

3330

01-Sep-11

Chevron Lubricants Lanka PLC

3336

26-Sep-11

Chevron Corporation

3335

26-Sep-11

Chevron International Pte. Ltd. 3338

26-Sep-11

Chevron Oronite Company LLC

Chevron International Exploration and

Production Technology Services, A

Division of Chevron Global Technology

3340

27-Sep-11

Services Company

sub-total

Fourth Quarter of 2011

OCTOBER

3342 19-0ct-11

Chevron Petroleum India Private Limited

3343 21-0ct-11

Chevron International Limited

Chevron Bangladesh Blocks Thirteen &

3364 25-0ct-11 Fourteen, Ltd.

3349 25-0ct-11

Chevron Corporation

Chevron Environmental Management

3367 25-0ct-11

Company

3352 25-0ct-11

Chevron Hong Kong Limited

Chevron International Exploration and

Production Technology Services, A

Division of Chevron Global Technology

3362 25-0ct-11

Services Company

3357 25-0ct-11 Chevron International Pte. Ltd. 3356 25-0ct-11

Chevron Malaysia Limited

3348 25-0ct-11

Chevron New Zealand

Chevron North America Exploration and

3360 25-0ct-11 Production Co. (A Chevron USA Inc. 6,744.01 292 581.78 P-14.6.16 112,925.39 4 899 149.24 P-14.6.13 247 081.27 10,719 360.95 P-14.6.7 168,865.00 7 326 030.37 P-14.6.10 138,280.19 5 999 140.56 P-14.6.11 3,554,274.79 153 858 933.35 13 293.17 577 211.03 P-14.7.6 2,016.00 86 412.34 P-14.7.7 1,403.18 60 093.36 P-14.7.10 177 946.36 7 585 096.33 P-14.7.14 6,291.41 264 789.98 P-14.7.17 0.40 16.77 P-14.8.3 11 364.18 482 349.75 P-14.8.5 225.22 9 510.98 P-14.8.16 237,633.69 10,035 206.50 P-14.8.8 225,639.17 9 528 681.17 P-14.8.9 219 848.87 9 284,158.36 P-14.8.11 160 868.49 6,793,432.85 P-14.8.14 265 982.45 11 232 366.98 P-14.8.7 163 651.61 6,910 963.26 P-14.8.13 221 865.50 9,369,320.10 P-14.8.10 115 584.72 4,914,316.33 P-14.8.17 6 291.41 269,324.06 P-14.9.1 231 580.30 10 134 805.25 P-14.9.7 810 085.51 35 452,319.91 P-14.9.6 108 981.31 4 769 422.76 P-14.9.9 16 825.31 732 171.89 P-14.9.11 2,997,378.26 128,491,969.96 916.41 39 500.43 P-14.10.4 8 204.44 353 792.15 P-14.10.5 2,413.89 104 815.02 P-14.10.26 226,678.93 9 842 767.26 P-14.10.11 99.78 4 332.61 P-14.10.29 143 676.34 6 238 660.01 P-14.10.14 5,475.02 237 734.26 P-14.10.24 45 229.84 1 963 953.10 P-14.10.19 72 098.19 3 130 620.50 P-14.10.18 426 098.51 18 501 889.27 P-14.10.10 33 535.77

1456 177.59

P-14.10.22 ,._.

PT Chevron Oil Products Indonesia

26-0ct-11

Chevron (Thailand) Limited

Chevron AI Khalij, A Branch of Chevron 26-0ct-11

Asia Pacific Holdings Limited

Chevron Africa-Pakistan Services (Pty)

27-0ct-11 Ltd.

Chevron New Zealand

294 928.20 12 795 149.67 P-14.11.6 3386

22-Nov-11

Chevron Singapore Pte. Ltd. 149 360.83 6 479 862.47 P-14.11.8 3390

23-Nov-11

Chevron (Thailand) Limited

159 023.82 6 881169.19 P-14.11.12 3392

28-Nov-11

Chevron Oronite Pte. Ltd.

2 102.89 91 749.13 P-14.11.14 3393

29-Nov-11

Chevron Lubricants Lanka PLC

9 153.95 402 194.64 P-14.11.15

DECEMBER

3396

02-Dec-11

Chevron Corporation

175 842.76 7 668 676.84 P-14.12.5 3400

21-Dec-11

Chevron (Thailand) Limited

1091_710.32 4 826 674.88 P-14.12.13 3398

21-Dec-11

Chevron Corporation

206,069.44 9 065 967.44 P-14.12.11 3403

27-Dec-11

Chevron Lubricants Lanka PLC

6 291.41 273 420.69 P-14.12.16 3404

27-Dec-11

Chevron Oronite Pte. Ltd.

3,125.67 135 839.63 P-14.12.17 sub-total 3,381,912.20 146,880 706.87

TOTAL

13,338,613.95 578,576,738.40 In sum, out of petitioner's declared zero-rated receipts for CY 2011 in the amount of P2,472,585,065.00, only the amount of P578,576,738.40 represents its valid zero-rated receipts. The Court shall now determine the amount of input VAT attributable to the zero-rated receipts of P578,576,738.40. As stated earlier, petitioner reflected a total amount of P74,307,977.58 allowable input VAT in its Quarterly VAT Returns for CY 2011, to wit:

Particulars

Input VAT

Amortization of Input Tax on Capital Goods exceeding P1 Million p 17,165,416.87 Purchase of Capital Goods not exceeding P1M 104,348.45

CfA Case No. 8621

Domestic Purchase of Goods (other than Capital Goods) Importation of Goods other than Capital Goods

Domestic Purchase of Services

Service Rendered by Non-Residents

Total Available Input Tax

2,323,971.21 260,080.00 42,356,205.00 12,097,956.05 p 74,307,977.58 In support of the above input VAT, petitioner presented invoices, official receipts, Import Entry and Internal Revenue Declaration (IEIRD), BIR Form No. 1600 and other documents which were all examined by the Court-commissioned Independent Certified Public Accountant (ICPA) firm, SGV & Co., through its partner, Mr. Ruben R. Rubio.

However, upon careful examination of the ICPA Reports dated September 2, 201356 and September 17, 201357 together with petitioner's supporting documents, the Court finds that the input VAT in the amount of P14,073,181.47, detailed below, should be disallowed for not being properly substantiated by VAT invoices or receipts as prescribed under Sections 110(A) and 113(A) and (B) of the NIRC of 1997, as amended, in relation to Sections 4.110-1, 4.110-8 and 4.113-1 of RR No. 16-05, as amended: 1st 2nd 3rd 4th

FINDINGS

Quarter

Total

A. INPUT TAXES ON LOCAL PURCHASES OF SERVICES Supported by VAT ORs issued in the name other than Chevron Holdings, Inc.

(Exhibit P-18 Annex D-3)

Supported by VAT ORs dated outside

CY 2011 (Exhibit P-18 Annex D-5)

Supported by ORs with incorrect TIN of petitioner (Exhibit P-18 Annex D-9) Supported by ORs with different business style from that of petitioner

(Exhibit P-18 Annex D-12)

Supported by ORs with pre-printed "TIN" only (Exhibit P-18 Annex D-13) Supported by ORs where the amount in figures does not tally with the amount in words (Exhibit P-18 Annex D-14) Supported by ORs where VAT is not shown separately (Exhibit P-18, Annex

D-16)

Supported by Non-VAT ORs

(Exhibit P-18 Annex D-2)

Supported by OR without BIR Permit No. (Exhibit P-18 Annex D-4) Supported by OR without TIN of petitioner

(Exhibit P-18 Annex D-10)

(Exhibit P-51 Annex D-4)

56 Exhibit P-18.

57 Exhibit P-51.

24 440.93 568 572.13 467.72 4 320.00 - - - 470.92 6 607.24 16 108.71 - - - - 24/440.93 72.00 - 83 212.10 651 856.23 - - - 467.72 - - - 4 320.00 - 39 341.95 17 673.82 57 015.77 - 92 995.90 - 92 995.90 - 235 550.63 272,715.41 508 266.04 963.96 1 930.32 997 115.31 1 000 480.51 2 095.20 - - 8 702.44 8 597.14 - 2,466.25 27 172.10 - - 194 082.62 194 082.62

Supported by OR without business style of petitioner

(Exhibit P-18 Annex D-11)

(Exhibit P-51 Annex D-5)

Not supported by VAT ORs

(Exhibit P-18 Annex D-17)

Supported by Provisional Receipts

(Exhibit P-18 Annex D-18)

Without supporting documents

(Exhibit P-51 Annex D-61

Subtotal

95 312.81 100 084.18 3731_913.60 419 218.62 - 7 772.27 - - - 19 004.12 - - 20 475.90 - - 1,174,999.10 111812.48 751504.67 B. INPUT TAXES ON PURCHASES OF GOODS OTHER THAN CAPITAL GOODS Supported by VAT invoices issued in the name other than Chevron Holdings, Inc. (Exhibit P-18 Annex E-2) - 1,144.90 - Supported by VAT invoices dated outside CY 2011 (Exhibit P-1/3_ Annex

E-6)

45 805.68 - - Supported by photocopied VAT invoices

(Exhibit P-18 Annex E-8)

- 21752.58 - Supported by invoices where VAT is not shown separately (Exhibit P-113_ Annex

E-12)

- - 4 110.00 Supported by invoices with different business style from that of petitioner

(Exhibit P-18 Annex E-14)

26 051.77 - - Supported by VAT invoices without BIR

Permit (Exhibit P-18 Annex E-3)

1 398.21 6 885.86 - Supported by invoices without business style of petitioner

(Exhibit P-18 Annex E-9)

87 639.64 21,068.28 115 212.35 (Exhibit P-51,Annex 8-4) 1 221.43 - 1 956.43 Supported by VAT invoices without the TIN of petitioner (Exhibit P-1s_Annex E- 13) - - 2 541.10 Not supported by VAT invoices

(Exhibit P-18 Annex E-151

- 403.29 -

Subtotal

162,116.73 32 254.91 123 819.88 C. INPUT TAXES ON LOCAL PURCHASES OF CAPITAL GOODS EXCEEDING 1 MILLION Purchases of services supported by photocopied VAT ORs (Exhibit P-113_

AnnexC-5)

- 70 858.93 - Purchases of services supported by ORs where VAT is not shown separately

(Exhibit P-18 Annex C-8)

197 459.25 -

1179 918.31

(Exhibit P-51 Annex C-5)

- - - Purchases of goods supported by VAT invoices dated outside CY 2011 (Exhibit

P-18 Annex C-13)

1 616,331.54 - - Purchases of services supported by VAT ORs without the TIN of petitioner

(Exhibit P-18 Annex C-9)

14 307.86 - - Purchases of services supported by VAT ORs without the business style of petitioner

(Exhibit P-18 Annex C-10)

- - 78 301.08

(Exhibit P-51 Annex C-6)

- - - Purchases of goods supported by VAT invoices without the business style of petitioner (Exhibit P-18 Annex C-14) - - 103 765.68 Purchases of services without supporting VAT ORs (Exhibit P-51,

AnnexC-7)

- - - 623 115.94

1192 426.53

46,826.10 473 816.99 465.54 465.54 - 19 004.12 4 988.82 25 464.72 2,242L661,91 4 280 978.16 - 1144.90 - 45 805.68 - 2 752.58 - 4 110.00 - 26 051.77 - 8 284.07 128 230.58 352 150.85 5 994.18 9 172.04 651.86 3 192.96 - 403.29 134,876.62 453 068.14 - 70 858.93 3 579,167.21 4 956 544.77 1 832_1_436.62 1 832 436.62 - 1 616 331.54 - 14 307.86 - 78 301.08 356 775.07 356 775.07 13 392.86 117 158.54 181167.31 181167.31 (!,......

Subtotal

1828 098.65

70,858.93 1_L361_L985.07 5 962 939.07 D. INPUT TAXES ON LOCAL PURCHASES OF CAPITAL GOODS NOT EXCEEDING 1 MILLION Input VAT which was claimed twice

(Exhibit P-18 Annex C-16)

104,348.45 - - -

Subtotal

104 348.45 - - - E. INPUT TAXES ON IMPORTATIONS OF GOODS OTHER THAN CAPITAL GOODS Excess of the input VAT claim per Summary List of Importations over the input VAT per IEIRD (see breakdown under Note 1 below) 1 568.00 898.00 6 644.00 1J95.00

Subtotal

1568.00 898.00 6,644.00 1795.00 9 223,881.72 104,348.45 104 348.45 10 905.00 10,905.00

Total

3 271130.93 215,824.32 2,243,953.62 8 342 272.60 14 073,181.47 Note 1: Breakdown of input VAT disallowance on importations of goods other than capital goods under letter E above

Input VAT

(PHP) (per

Input VAT

Summary List

Less: Disallowances

1 828,098.65 70 858.93 1 361 985.07 5 962 939.07 9 223 881.72

Valid Input VAT

~ 45L611.69 Pl 965,746.86 ~5,180,970.03 P6,809,651.82 P14,001L980.40 While the above input taxes were found to be duly substantiated, the same are not entirely creditable for the subject period of claim.

Pursuant to Section 110(A)(2) of the NIRC of 1997, as amended, input VAT claim on capital goods purchases attributable to zero-rated sales may be claimed either in full during the month of acquisition, or spread over a period of time, depending on the aggregate acquisition cost of the capital goods in the calendar month. If the aggregate acquisition cost exceeds P1Million, the claim for input tax should be spread over 60 months or the estimated useful life of the capital goods, whichever is shorter. On the other hand, if aggregate acquisition cost does not exceed P1 million, the total input taxes shall be allowed as credit/refund in the month of acquisition.

Applying the prov1s1ons of Section 110(A)(2) to the present case, out of the P14,001,980.40 valid input VAT on capital goods purchases exceeding P1Million, only the amount of P995,518.30 is creditable for the four quarters of CY 2011, computed as follows:

Allowable

Input VAT

Input Tax

Monthly for the Four

Payee

Exhibit

Amortization 58

Quarters of

(In PhP)

Taxable

Year 2011

(In PhP)

First Quarter

Facilities Managers, Inc.

P-16.1.216 1 552.34 25.87 310.47 Mge Ups Systems Philippines, Inc. P-16.1.217 22 119.43 368.66 4 423.89

Adtech Construction And Industrial Services

P-16.3.350 Corp.

21 939.92 365.67 3 656.65

Subtotal

45 611.69 8 391.01 58 Based on a useful life of 60 months

Second Quarter

CB Richard Ellis Philippines, Inc. 4,648.82 CB Richard Ellis Philippines, Inc. 720.00 Facilities Managers, Inc. 382.11 Facilities Managers, Inc. 349.86 Facilities Managers, Inc. 393.30 Facilities Managers, Inc. 252.19 Facilities Managers, Inc. 232.85 Facilities Managers, Inc. P-16.4.286 1,681.28 28.02 252.19 Facilities Managers, Inc. P-16.4.287 1,681.28 28.02 252.19 Facilities Managers, Inc. P-16.4.289 2,124.48 35.41 318.67 MFT Internationa! Corporation P-16.4.290 56,796.73 946.61 8,519.51 Network Solutions and Interfaces Corp. P-16.4,291 61,128.84 1,018.81 9,169.33 RCW Construction and Dev’‘t Corporation P-16.4.294 355,747.07 5,929.12 RCW Construction and Dev’t Corporation P-16.4.295 95,821.64 1,597.03 53,362.06 RCW Construction and Dev’‘t Corporation P-16.4.293 91,361.48 1,522.69 13,704.22 14,373.25 Facilities Managers, Inc. P-16.4.288 1,552.35 25.87 232.85 Santa Fe Moving and Reloc. Svcs. Phils., Inc. | P-16.4.296 1,263.60 21.06 189.54 Santa Fe Moving and Reloc. Svcs. Phils., Inc. | P-16.4.297 4,224.96 633.74 G4S Security Systems, Inc. 7,712.19 RCW Construction and Dev’t Corporation 15,787.45 Santa Fe Moving and Reloc. Svcs. Phils., Inc. 544,32 Santa Fe Moving and Reloc. Svcs. Phils., Inc. 468.00 Santa Fe Moving and Reloc. Svcs. Phils., Inc. 194.40 Santa Fe Moving and Reloc. Svcs. Phils., Inc. 393.12 Santa Fe Moving and Reloc. Svcs. Phils., Inc. 129.60 Santa Fe Moving and Reloc. Svcs. Phils., Inc.

Santa Fe Moving and Reloc. Svcs. Phils., Inc. P-16.5.255 4276.80 71.28 570.24 RCW Construction and Dev't Corporation P-16.4.292 106,296.29 1,771.60 15,944.44 Santa Fe Moving and Reloc. Svcs. Phils., Inc. Santa Fe Moving and Reloc. Svcs. Phils., Inc. Santa Fe Moving and Reloc. Svcs. Phils., Inc. Santa Fe Moving and Reloc. Svcs. Phils., Inc.

Adtech Construction and Industrial Svcs. Pp Subtotal | 965,746.86] | (273,490.43 ee

Third Quarter

Dominic Construction, Inc. 147,000.00 G45 Security Systems, Inc. 874.45 G4S Security Systems, Inc. 2,127.95 Integrated Computer Systems,Inc. 50,882.14 Integrated Computer Systems,Inc. 50,882.14 | 1,366.07, Personal Computer Specialists, Inc. 14,059.20 Buendia Hardware and Construction Supply 1,366.07 113.84 Equicom Inc. 50,273.42 Equicom Inc. 49,703.98 Integrated Computer Systems,Inc. 42. 401.75 Equicom Inc. 53,295.34 Facilities Managers, Inc. 122.83 Facilities Managers, Inc. 186.82 Facilities Managers, Inc.

Facilities Managers, Inc. 112.09 Facilities Managers, Inc. 161.51 Facilities Managers, Inc. 120.04 | | 5,180,970.03| Alecto General Technology Corporation 4,188.57 1,846.34 Trends and Technologies, Inc. 93,374.44 Phil-Data Business Systems, Inc. 3,666.77 Datacraft Philippines, Inc. 32,400.00 Datacraft Philippines, Inc. 17,080.00 187.73 E. E. Black, Ltd. P-16.11.233 583,255.16 9,720.92 19,441.84 Equicom Inc. P-16.11.234 255,367.52 4,256.13 8,512.25 Hewlett-Packard Philippines Corp P-16.11.235 1,133.45 18.89 37.78 Integrated Computer Systems, Inc. 1,323.43 JLGT Marketing 4,869.18 Master Automated Systems, Inc. 2,721.46 Network Solutions and Interfaces Corp. 207.79 Cornersteel Systems Corp. 10,099.68

JLGT Marketing

MGE Ups Systems Philippines, Inc. 350.86 Network Solutions and Interfaces Corp. 307.89 Ronald Magbitang 5,436.05 Ronald Magbitang 1,473.20 Master Automated Systems, Inc. P-16.12.336 190,502.25 3,175.04 3,175.04 Alecto General Technology P-16.12.337 101,844.91 1,697.42 1,697.42 \j

TOTAL I

lt4,oot,98o.4o I 995,518.30 I In sum, petitioner's total substantiated input taxes for the CY 2011 amounted to P53,288,789.26, as computed below:

(In Philippine Pesos)

1st Quarter 2nd Quarter 3rd Quarter 4th Quarter

Total

Input VAT Claim

15 121 149.61 19 312 442.15 15,656,181.90 24,218,203.91 74 307 977.57

Less: Disallowances

Input VAT on local purchases of services 1174,999.10 111 812.48 751 504.67 2,242 661.91 4 280 978.16

Input VAT on

purchases of goods other than capital goods 162 116.73 32 254.91 123 819.88 134 876.62 453 068.14 Input VAT on local purchases of capital goods not exceeding

P1Million

104,348.45 - - - 104 348.45

Input VAT on

importations of goods other than capital goods 1 568.00 898.00 6 644.00 1,795.00 10,905.00 Input VAT on local purchases of capital goods exceeding

P1Million

4 454 203.28 4 251 942.53 4 238 174.68 4 221 096.37 17 165 416.86

Less: Allowable Input

VAT for the

period of claim (8 391.01) (273,490.43) (462 505.23) (251 131.63) (995 518.30)

Total Disallowances

5 888 844.55 4 123,417.49 4 657 638.00 6 349 298.27 21 019 198.31

Substantiated Input VAT

9,232 305.06 15,189,024.66 10,998,543.90 17,868,905.64 53,288,779.26 Since petitioner did not submit VAT invoices/receipts proving the existence of its reported input VAT carry-over from previous year in the amount of P157,160,605.1859, its output VAT liability for taxable year 2011 in the total amount of P14,867,041.96 shall be offset against the substantiated input VAT of P53,288,779.26. Hence, only the remaining input VAT of P38,421,737.30 can be attributed to the entire zero-rated receipts declared by petitioner in the amount of P2,472,585,065.00 and only the input VAT of P9,188,216.85 is attributable to the valid zero-rated receipts of P578,576,738.40, as computed below:

In Philippine Pesos

1st 2nd 3rd 4th

Total

Quarter

Substantiated Input VAT

9 232_L_305.06 15 189,024.66 10,998 543.90 17 868,905.64 53,288 779.26

Less: Output Tax

3 986,585.64 3 883 482.27 2 640 350.72 4 356 623.33 14 867 041.96

Excess Input VAT

5,245,719.42 11,305,542.39 8,358 193.18 13_L512/282.31 38,421,737.30

59 Exhibit P-4.1, Line 20A.

Valid Zero-Rated

Receipts

149 345 128.22 153 858 933.35 128 491,969.96 146 880 706.87 578 576 738.40

Divided by Total

Declared Zero-Rated

Receipts

645 984 584.15 662 353 661.91 612 162,244.83 552 084 574.11 2 472 585,065.00

Multiplied by Excess

Input VAT

5 245 719.42 11 305 542.39 8 358,193.18 13 512 282.31 38 421,737.30

Excess Input VAT

Attributable to Valid

Zero-Rated Receipts

1,212,757.48 2,626,178.12 1,754,372.66 3,594,908.59 9,188,216.85 Although the claimed input VAT was carried-over by petitioner in its succeeding Quarterly VAT Returns60, the same remained unutilized until it was deducted as "VAT Refund/TCC Claimed'161 in its Quarterly VAT Return for the fourth quarter of taxable year 2012. Thus, the excess input VAT of P141,688,758.5562 as of the end of the fourth quarter of taxable year 2012 which was to be carried-over to the succeeding first quarter of taxable 201363 no longer included the subject claim.

WHEREFORE, premises considered, the instant Petition for Review is PARTIALLY GRANTED and respondent is ordered to REFUND OR ISSUE A TAX CREDIT CERTIFICATE in favor of petitioner in the reduced amount of P9,188,216.85, representing its unutilized excess input VAT for the four quarters of taxable year 2011 which is attributable to its valid zero-rated receipts for the same period.

SO ORDERED.

60 Exhibits P-5.1 to P-5.4. 61 Exhibit P-5.4, Line 23D.

CAESAR~ANOVA

Associate Justice

62 Exhibit P-5.4, Line 29, Total Amount Payable (Overpayment).

63 Exhibit P-5.5.

WE CONCUR:

~~" c. a..:>r~ ~ 'i.. .

JUANITO C. CASTANEDA:~R.

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. ~~~% C!_. Q.Y--GW..J-~ -Q . ~UANITO c. CASTANEoN{'jR.

Associate Justice

Chairperson, Second Division

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 Decision were reached in consultation before the case was assigned to the writer of the opinion of the Court.

Presiding Justice

Footnotes

1
Docket (Vol. I), pp. 6-18.
2
Par. 1, The Parties, Petition for Review, Docket (Vol. I), p. 6.
3
Exhibit "P-1".
4
Par. 1, Admitted Facts, Joint Stipulation of Facts and Issues (JSFI), Docket (Vol. I), p. 119.
5
Par. 2, Admitted Facts, JSFI, Docket (Vol. I), p. 119.
6
Par. 3, Admitted Facts, JSFI, Docket (Vol. I), p. 220.
7
Exhibit "P-3".
8
Exhibits "P-4.1", "P-4.2", "P-4.3" and "P-4.4".