Taganito Mining Corporation vs. Commissioner of Internal Revenue

DECISION

MANAHAN, J.:

This involves a Petition for Review filed on May 27, 2016 by Taganito Mining Corporation as petitioner, against the Commissioner of Internal Revenue, as respondent, before the Court in Division.

Petitioner seeks the refund of its alleged e)Ccessjunutilized input VAT for t~able year 2014. PARTIES Petitioner is a corporation duly organized and e)ClStlng under and by virtue of the laws of the Philippines with former principal office at 4 th Floor, NAC Center (formerly Solid Mills/ BMMC Building), Dela Rosa Street, Legaspi Village, Makati City and current business address at 29/F NAC Tower, 32nd Street, Bonifacio Global City, Taguig/Makati City. 1 1 Stipulated Facts, Joint Stipulation of Facts and Issues (JSFI), Paragraph (par.) 1, Court docket, p. 109. ~

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Respondent is the duly appointed Commissioner of the Bureau of Internal Revenue (BIR), vested with authority to exercise the functions of said office, including inter alia, the power to decide refunds of internal revenue taxes, fees or other charges, penalties imposed in relation thereto, or other matters arising under the 1997 National Internal Revenue Code (NIRC) or other laws administered by the BIR under Section 4 of the Tax Code, and holding office at the BIR National Office Building, Diliman, Quezon City, Metro Manila, where he may be served with summons and other legal processes of the Court. 2 Petitioner is duly registered with the Securities and Exchange Commission (SEC) with Certificate of Registration No. 138682 issued on March 4, 1987 with the following primary purpose: 3 "To carry on the business, for itself and for others, of mining lode and/ or placer mining, developing, exploiting, extracting, milling, concentrating, converting, smelting, treating, refining, preparing for market, manufacturing, buying, selling, exchanging, shipping, transporting, and otherwise producing and dealing in nickel, chromite, cobalt, gold, silver, copper, lead, zinc, brass, iron, steel, limestone, and all kinds of ores, metals and their by-products and which by-products thereof of every kind and description and by whatsoever process the same can be or may hereafter be produced, and generally and without limit as to amount, to buy, sell, locate, exchange, lease, acquire and deal in lands, mines, and mineral rights and claims and to conduct all business appertaining thereto, to purchase, locate, lease or otherwise acquire, mining claims and rights, timber rights, water rights, concessions and mines, buildings, dwellings, plants machinery, spare parts, tools and other properties whatsoever which this corporation may from time to time find to be to its advantage, to mine lands, and to explore, work, exercise, develop or turn to account the same, and to acquire, develop and utilize water rights in such manner as may be authorized or permitted by law; to purchase, hire, make, construct or otherwise, acquire, provide, maintain, equip, alter, erect, improve, repair, manage, work and operate private roads, barges, vessels, aircraft and vehicles, private telegraph and telephone lines, and other communication media, as may be needed by the corporation for its own purpose, and to purchase, import, construct,

CT A Case No. 9369 machine, fabricate, or otherwise acquire, and maintain and operate bridges, piers, wharves, wells, reservoirs, plumes, watercourses, waterworks, aqueducts, shafts, tunnels, furnaces, coke ovens, crushing works, gasworks, electric lights and power plants and compressed air plants, chemical works of all kinds, concentrators, smelters, smelting plants, and refineries, matting plants, warehouses, workshops, factories, dwelling houses, stores, hotels or other buildings, engines, machinery, spare parts, tools, implements and other works, conveniences, and properties of any description in connection with or which may be directly or indirectly conducive to any of the objects of the corporation, and to contribute to, subsidize or otherwise aid or take part in any operations."

Petitioner is also a VAT-registered entity with updated Certificate of Registration (BIR Form No. 2303) No. OCN 8RC0000685884E duly issued by respondent. 4 In addition, it is registered with the Board of Investments (BOI) with BOI Certificate of Registration No. EP 88-306 dated April 14, 1988. 5 On December 29, 2015, petitioner filed with respondent, through respondent's Excise Taxpayers' Assistance Division under the Large Taxpayers Division, a claim for refund of excess input taxes paid on its domestic purchases and importation of taxable goods and services and importation of goods including capital goods.6 On June 7, 2013, respondent informed the Commissioner of the Bureau of Customs (BOC) that the former has approved in favor of petitioner VAT credit in the amount of P20,817,854.93 representing input tax amortized in the calendar year 2014 on importations for the period from January 1, 2010 to December 31, 2014, attributable to zero- rated export sales of nickel ore sources.7 On the other hand, the BOC stated that it has not issued any refund on VAT in favor of petitioner for the calendar years 2009 to 2014.8 4 JSFI, paragraph 4, Court docket, p. 111. SJSFI, paragraph 5, Court docket, p. 111. 6JSFI, docket, paragraph 6, p. 111; Exhibits "P-1", "P-1-A", "P-1-B", "P-1-C", and "P-2" Court docket, pp. 198-205.

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Hence, this petition. Respondent filed a Motion to Admit Attached Answer9, with attached Answer10, on July 26, 2016, which the Court granted on September 2, 201611. A Notice of Pre-Trial Conference 12 was issued by this Court on October 12, 2016, setting the case for pre-trial conference on November 10, 2016. Accordingly, petitioner's Pre-Trial Brief13 was filed on October 28, 2016, while the Pre- Trial Brief for the Respondent 14 was filed on November 3, 2016.

Pre-trial conference ensued. The parties submitted their Joint Stipulation of Facts and Issues15 (JSFI) on November 21, 2016. On November 28, 2016, the Court issued a Pre-Trial Order 16 adopting the parties' JSFI, and the pre-trial was deemed terminated.

Upon petitioner's motion17, the Court commissioned Mr. George V. Villaruz, a partner in the auditing firm of Villaruz Villaruz & Co., CPAs, as Independent Certified Public Accountant (ICPA).18 During trial, petitioner presented as its witnesses (1) Mr. George V. Villaruz19, the ICPA; and (2) Ms. Lennie A. Terre2o, petitioner's Vice-President for Finance. Petitioner filed its Formal Offer of Evidence21 on July 26, 2017. In the Resolution dated September 4, 201722, the Court admitted all of petitioner's evidence. 9 Court Docket, pp. 51-55. wId., pp. 57-68.

11 Resolution dated September 2, 2016, Court docket, p. 75. 12 Court Docket, pp. 77-78. 13 Id., pp. 79-87.

14 Id., pp. 88-91.

1s Id., pp. 109-114.

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On the other hand, respondent manifested that there is no report of investigation in this case, and hence, he is submitting the case for the decision of the Court.23 The case was submitted for decision on December 12, 2017 24 , considering petitioner's Memorandum 2s filed on November 8, 2017, and respondent's Memorandum26 filed on November 29, 2017.

ISSUE The parties jointly stipulated that the sole issue to be resolved in this case is as follows:27 Whether or not petitioner is entitled to the refund of its alleged excess input VAT in the amount of Twenty Eight Million Nine Hundred Twenty Six Thousand Eight Hundred Thirty Seven Pesos (P28, 926,837. 00).

Petitioner's Arguments Petitioner began its arguments by submitting the timeliness of its claim for refund both in the administrative and judicial levels. It maintains that pursuant to Sections 112 and 229 of the 1997 NIRC and existing jurisprudence, the claim for refund lodged with the Bureau of Internal Revenue (BIR) and its subsequent appeal to the Court of Tax Appeals (CTA) are both within the prescriptive period. As to the substantive aspect of the claim for refund, its entitlement to the grant of the entire amount is anchored on Section 106 (A) (2) (a) of the 1997 NIRC, which specifically states that export sales by a VAT-registered entity are subject to value-added tax (VAT) at zero percent. Being registered with 22 Id., pp. 388-389.

23 Minutes of the Hearing dated October 9, 2017, Court docket, p. 393. 24 Resolution dated December 12, 2017, Court docket, p. 426. 25 Court docket, pp. 400-416. 26 Id., pp. 418-424.

~

CT A Case No. 9369 the Board of Investments (BOI) as one primarily engaged in the business of exploring and eventually exporting nickel silicate ores and chromite ores, petitioner claims that it is covered by the said Section 106 (A) (2) (a) of the 1997 NIRC. Petitioner also maintains that all of its generated and recorded zero-rated sales from January 1, 2014 to December 31, 2014 were all paid for in acceptable foreign currency, specifically in US Dollars which were inwardly remitted to the Philippines and accounted for in accordance with the rules and regulations of the Bangko Sentral ng Pilipinas (BSP) pursuant to Section 106 (a) (2) (a) (1) of the 1997 NIRC, as amended.

Overall, petitioner anchored its rationale for entitlement to the full amount of its claim for refund on the following propositions, thus :

1. The VAT input taxes, subject of the claim, were paid for in the course of its trade or business and are directly attributable to its zero-rated export sales.

2. The excess input taxes being claimed for refund/tax credit have not been applied against or are undiminished by any VAT output taxes for the same or subsequent periods.

3. The evidence shows that the input taxes being claimed for refund have not been carried forward to the succeeding quarter or quarters as these were already deducted from its accumulated input taxes upon the filing of its application with the BIR.

4. All the VAT sales and purchases were duly recorded in its books of accounts and duly indicated its VAT sales and purchases in its monthly VAT declarations and quarterly VAT returns.

5. The VAT input taxes are duly supported by VAT- registered invoices and/ or official receipts issued by its suppliers of goods and services as well as by official receipts issued by the Bureau of Customs (BOC). Respondent's Counter-Arguments In his Answer filed on July 26, 2016, respondent interposed the following Special and Affirmative Defenses, to wit:

"SPECIAL AND AFFIRMATIVE DEFENSES~ CT A Case No. 9369 On the basis of the foregoing allegations and in further support of the Specific Denials herein set forth, respondent respectfully alleges as her defense that: It is incumbent upon petitioner to prove that it is entitled to the refund sought because a claim for refund is not ipso facto granted upon filing of the claim. 4.

As a matter of course, a claim for refund is subject to investigation as it involves removal of accrued revenue from the coffers of the Government. It has been held by the Supreme Court that a claim for refund is not ipso facto granted because the Commissioner of Internal Revenue still has to investigate and ascertain the veracity of the claim.

5.

Respondent submits that petitioner failed to demonstrate that the amount of P28,926,837.00 which is the subject of the case at bar was erroneously or illegally collected. Taxes remitted to the BIR are presumed to have been made in the regular course of business and in accordance with provisions of law. 6.

Before the instant Petition for Review should be given due course, petitioner should prove that it submitted the relevant pieces of documents to substantiate its claim and had observed the procedure laid down in Section 112(C) of the National Internal Revenue Code (NIRC) of 1997, as amended, which reads: XXX XXX XXX 7.

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.

8.

Clearly, 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, petitioner's failure to comply with the duly mandated legal requirements in such claims for refund/tax credit warranted the denial by inaction of the administrative claim. ~

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9.

Furthermore, said Section 112 (C) clearly states that there should be a prior administrative claim filed with respondent before judicial resort can be had in the Court of Tax Appeals, where relevant documents must be submitted by the taxpayer to support its claim for refund. Failure on the part of the taxpayer to file the administrative claim and submit relevant documents on administrative level, makes the administrative claim for tax refund or credit pro-forma and shall be construed as if no administrative claim was filed at all.

10.

In cases such as this, 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 appeal or petition for review, a petitioner has to convince the appellate court that the quasi-Judicial agency a quo did not have any reason to deny its claims. In this case, it was necessary for petitioner to show the CTA not only that 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 petitioner 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.' (Emphasis and underscoring supplied)~

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11.

As can be seen, proper substantiation begins in the administrative level. So if the denial (by inaction) of the administrative claim is because of non-compliance with legal procedural requirements, then true to its appellate nature, the Honorable Court must sustain the decision of the BIR since it suffers no infirmity. 12.

The purpose of requiring the filing of the administrative claim for refund/tax credit and submission of supporting documents relevant to a claim for tax refund/ credit is to give the administrative agency concerned the opportunity to ascertain the veracity and validity of the claim. This is the very essence, the very substance of the doctrine of exhaustion of administrative remedies. The doctrine rests upon the presumption that the administrative body, board, or officer, if given the chance to correct its mistake or error, may amend its decision on a given matter and decide it properly. Thus, non compliance with a condition precedent renders the Petition for Review dismissible.

13.

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 there are matters peculiarly within the competence of the administrative agency. 14.

The above-mentioned periods are clearly given for strict compliance as a prerequisite before seeking redress in a competent court. Such statutory periods are set to prevent delays as well as enhance the orderly and speedy discharge of judicial functions (Agpalo, Statutory Construction, Third Edition 1995, p. 266). For this reason, the courts construe these provisions of statutes as mandatory (Ibid., citing Alvero vs. De la Rosa, 76 Phil. 428, 434). 15.

Settled is the rule that the non-exhaustion of administrative remedies is jurisdictional. In this case the right of petitioner to apply or request for refund has prescribed and it has no cause of action to ventilate in court. The case is susceptible of dismissal for failure to state a cause of action. Petitioner has only until March 31, 2011 within which to request or demand for refund/tax credit. Considering that as of even date, petitioner has not yet made a written request for refund before the office of the respondent, it has no more right to assert to, more so with this Honorable Court, because there is nothing to appeal.~

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There was no decision, neither, inaction because in the first place there was no written claim for refund ever made, which categorically demanded for reimbursement. 16.

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: XXX XXX XXX 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: XXX XXX XXX 17.

In the case entitled Commissioner of Internal Revenue vs. Rosemarie Acosta, the Supreme Court had occasion to say:

XXX XXX XXX 18.

In the present case, petitioner failed to submit all the necessary documents needed for the application of its VAT refund.

19.

The purpose of requiring the filing of the administrative claim for refund/tax credit and submission of supporting documents relevant to a claim for tax refund/ credit is to give the administrative agency concerned the opportunity to ascertain the veracity and validity of the claim. This is the very essence, the very substance of the doctrine of exhaustion of administrative remedies. The doctrine rests upon the presumption that the administrative body, board, or officer, if given the chance to correct its mistake or error, may amend its decision on a given matter and decide it properly. Thus, non-compliance with a condition precedent renders the Petition for Review dismissi ble.

20.

The failure of petitioner to substantiate its claim for refund before the office of the respondent and the filing of the instant petition before this Honorable Court deprived respondent of the opportunity to fully exercise her function to decide claims for refund, correct, modify or affirm the findings of her subordinates. 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~ DECISION CT A Case No. 9369 Page II of60 appropriate conclusion takes place before seeking judicial intervention in order to give the administrative body an opportunity to decide the matter by itself correctly and prevent unnecessary and premature resort to the court. 21.

The power to tax is the most effective instrument to raise needed revenues to finance and support the myriad activities of the government for the delivery of basic services essential to the promotion of the general welfare and enhancement of peace, progress and prosperity of the people. Consequently, any delay in implementing tax measures would be to the detriment of the public. It is for this reason that claims for refund are required to be done within certain time frames.

22.

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 (Asiatic Petroleum Co. vs Llanes, 49 Phil. 466 cited in Collector of Internal Revenue v Manila Jockey Club, Inc., 98 Phil. 670). 23.

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. 24.

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 exemptions, and are to be construed strictissimi juris against the entity claiming the same. Thus, the burden of proof rests upon the taxpayer to establish by sufficient and competent evidence, its entitlement to a claim for refund.' 25.

Taxes collected are presumed to be m accordance with laws and regulations. 26.

Claims for refund are construed strictly against the claimant for the same partake of the nature of exemption~

CT A Case No. 9369 from taxation (Commissioner of Internal Revenue vs. Ledesma, 31 SCRA 95) and as such, they are looked upon with disfavor (Western Minolco Corp. vs. Commissioner of Internal Revenue, 124 SCRA 1211). 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 (Philippine Phosphate Fertilizer Corporation

v. Commissioner of Internal Revenue, G.R. No. 141973, June 28, 2005). 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 (Sea-Land Service. Vs. Court of Appeals, 357 SCRA 444). 27.

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."

In his Memorandum, respondent additionally expressed his objections to the claim for refund by asserting that petitioner failed to substantiate its claim for refund during trial, specifically its compliance with the requirements provided under Revenue Memorandum Order (RMO) No. 53-98 and other existing rules and regulations relative to applications of this nature. Further respondent theorizes that for a judicial claim for refund of input VAT to prosper, the 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 the input taxes are attributable to zero-rated or effectively zero-rated sales;

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

5. That the claim for refund/tax credit must be filed within the two- year prescriptive period. Respondent maintains that petitioner did not fully comply with all of the above requirements, thus the claim for refund of input VAT for the taxable year 2014 must be denied.

RULING OF THE COURT~

CT A Case No. 9369

Foremost among the issues to be resolved in claims for refund of excessjunutilized VAT input taxes is the timeliness of the filing of the claim or claims as this is determinative of the jurisdiction of this Court. The claim before the administrative level and the subsequent Petition for Review before the Court were seasonably filed Pursuant to Section 112(A) of NIRC of 1997, as amended, the application for tax credit certificate/refund of unutilized excess input VAT must be filed within two years after the close of the taxable quarter when the zero-rated or effectively zero- rated sales were made, and we quote: "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: Provided, however, That in the case of zero-rated sales under Section 106(A)(2)(a)(1), (2) and

(b) and Section 1 08(B)( 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 (BSP): 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(B)(6), the input taxes shall be allocated ratably between his zero-rated and non-zero-rated sales. XXX XXX XXX The present claim covers the four quarters of CY 2014, which closed on March 31, 2014, June, 30, 2014, Septemberae -

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30, 2014 and December 31, 2014. Counting two years from the said dates, petitioner had until March 31, 2016, June, 30, 2016, September 30, 2016 and December 31, 2016, respectively, within which to file its administrative claim for tax credit certificate/ refund. Thus, petitioner's administrative claims for the said quarters were seasonably filed on December 29, 2015, to wit: Last Day to Date of Filing Close of the File of Taxable Administrative Administrative

CY 2014

Quarter Claim Claim 1st Quarter 31-Mar-14 31-Mar-16 2nd Quarter 30-Jun-14 30-Jun-16 29-Dec-1528 3rd Quarter 30-Sep-14 30-Sep-16 4th Quarter 31-Dec-14 31-Dec-16 Anent the timeliness of petitioner's judicial appeal, Section 112(C) of the NIRC of 1997, as amended, states the time requirements for filing a judicial claim for the refund or tax credit of input VAT. The legal provision speaks of two periods: the period of 120 days, which serves as a waiting period to give time for the CIR to act on the administrative claim for a refund or credit; and the period of 30 days, which refers to the period for filing a judicial claim with the CTA. 29 We quote Section 112 ( C ) of the 1997 NIRC, thus: "Section 112. - xxx xxx (C) Period within which Refund or Tax Credit of Input Taxes shall be Made. - In proper cases, the Commissioner shall grantln 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."

It is to be noted that the 120-day period begins to run from the date of submission of complete documents supporting the administrative claim. If there is no evidence 28 JSFI, paragraph 6, Court docket, pp. 111; Exhibits "P-1" to "P-1-C" and "P-2", Court docket, pp. 198 to 205. 29 Rohm Apollo Semiconductor Philippines us. Commissioner of Internal Revenue, G.R. No. 168950, January 14, 2015.~

CT A Case No. 9369 showing that the taxpayer was required to submit or actually submitted - additional documents after the filing of the administrative claim, it is presumed that the complete documents accompanied the claim when it was filed. 30 In this case, petitioner simultaneously submitted its complete supporting documents upon filing of its administrative claim on December 29, 2015. Accordingly, respondent had 120 days from December 29, 2015, or until April 27, 20 16 to decide on petitioner's claim. However, respondent failed to act on the claim within the allowable period of 120 days. Thus, petitioner had 30 days or until May 27, 2016 to appeal such inaction to the Court. Evidently, petitioner's judicial claim for refund on May 27, 2016 was timely filed as well, as shown below: End of 120 Date of filing of days for the administrative BIR End of30 claim/submission Commissioner days to Date of Filing of complete to decide on appeal before of Petition documents the claim the CTA for Review 29-Dec-15 27-Apr-16 27-May-16 27-May-16 We now proceed to the substantive aspects of the claim for refund of alleged excessjunutilized input VAT for the four quarters of 2014 and whether or not petitioner complied with the well-established requisites to substantiate the same. Pertinent to the resolution of this issue is Section 110(B) of the 1997 NIRC, and we quote: "SECTION. 110. Tax Credits.- XXX XXX XXX (B) Excess Output or Input Tax. - If at the end of any taxable quarter the output tax exceeds the input tax, the excess shall be paid by the VAT-registered person. If the input tax exceeds the output tax, the excess shall be 3D Silicon Philippines, Inc. (Fonnerly jp.Jel Philippines Manufacturing, Inc.) vs. CIR, G.R. No. 182737, March 2, 2016.~ CT A Case No. 9369 carried over to the succeeding quarter or quarters: Provided} however, That any input tax attributable to zero-rated sales by a VAT-registered person may at his option be refunded or credited against other internal revenue taxes, subject to the provisions of Section 112." Pursuant to the above provisions in relation to the aforequoted Section 112 (A) and (C) of the 1997 NIRC, the requisites for a refund or tax credit of unutilized excess input VAT attributable to zero-rated or effectively zero-rated sales are as follows:

1) the taxpayer-claimant is VAT-registered; 2) there must be zero-rated or effectively zero-rated sales; 3) input taxes were incurred or paid; 4) such input taxes are attributable to zero-rated or effectively zero-rated sales; 5) said input taxes were not applied against any output VAT liability; and 6) the claim was filed within the prescribed periods both in the administrative and judicial levels. Petitioner is a VAT- registered entity and had zero-rated sales/receipts during the subject period of the claim It is undisputed that petitioner is a VAT-registered entity with updated Certificate of Registration (BIR Form No. 2303) No. OCN 8RC0000685884E duly issued by the respondent31, hence, satisfying the first requisite. On the second requisite, i.e., the existence of zero-rated sales, petitioner, in its Quarterly VAT Returns for the four quarters of CY 2014, reflected a total amount of P8,800,661,932.71 zero-rated sales/receipts, broken down as follows:

Zero-Rated Exhibit

CY 2014

Sales I Receipts "P-11-A-42" 1st Quarter p 579,928,809.92 P-11-A-43" 2nd Quarter 2,960,901 ,412. 91 31JSFI, paragraph 4, Court docket, p. 111. ~ CT A Case No. 9369 "P-11-A-44" "P-11-A-45" 3rd Quarter 4,590,263,340.57 4th Quarter 669,568,369.31 Total p 8,800,661 '932. 71 The Court-commissioned ICPA 32 examined and verified the supporting documents of petitioner and accordingly classified petitioner's reported zero-rated sales/receipts into the following categories:33 Reference to Exhibit Amount in Amount in "P-11-B" US Dollars Philippine Pesos A. Export zero-rated sales of goods to non-resident foreign corporations (NRFCs) supported by Export Declaration forms, Sales Invoices (Sis), Security Bank's Client's Advise forms and Bills of Lading JBLsl Annex F1 160,560,943.83 7,044,757,401.94 B. Local zero-rated sales of goods to PEZA-registered companies supported by Sis, es, and Client's Advise forms issued by Security Bank Annex F2 32,382,545.45 1 ,434,219,965. 79 C. Zero-rated sales of services to non- resident foreign corporations representing dispatch supported by VAT registered Official Receipts and Billing Statements and Client's Advise forms issued by Security Bank Annex F3 527,010.92 23,478,725.99 D. Zero-rated sales of services to PEZA-registered companies representing materials handling, drilling services and equipment rental supported by VAT registered Official Receipts and Billing Statements Annex F4 298,205,838.98 Total 8,800,661,932. 7034 Export sales to non-resident foreign corporations (NRFCs) With regard to its reported zero-rated export sales of goods to non-resident foreign corporations in the amount of 32 Villaruz, Villaruz & Co., CPAs through its Partner, Mr. George V. Villaruz. 33 Exhibit "P-11-B", Court docket, p. 10. 34 Total amount is P0.01lower due to rounding-off.~ CT A Case No. 9369 P7,044,757,401.94, records show that petitioner is primarily engaged in the mining and exporting of nickel saprolite and limonite ore, and exploration activities. 35 Petitioner claims that during the CY 20 14, it generated export sales of nickel ores from its mining operations that were all paid for in US Dollars inwardly remitted to its bank account in the Philippines and duly accounted for in accordance with the rules and regulations of the BSP. Petitioner posits that such export sales are subject to zero percent (0%) VAT pursuant to Section 1 06(A)(2)(a)( 1) of the NIRC of 1997, as amended, which states:

"SEC. 106. Value-added Tax on Sale of Goods or Properties. - (A) Rate and Base of Tax. - xxx XXX XXX XXX (2) Zero-rated Sales - The following sales by VAT- registered persons shall be subject to zero percent (0%) rate:

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

(1) The sale and actual shipment of goods from the Philippines to a foreign country, irrespective of any shipping arrangement that may be agreed upon which may influence or determine the transfer of ownership of the goods so exported and paid for in acceptable foreign currency or its equivalent in goods or services, and accounted for in accordance with the rules and regulations of the Bangko Sentral ng Pilipinas (BSP);" Based on the aforequoted provisions of Section 1 06(A)(2)(a)( 1) of the NIRC of 1997, as amended, in order for an export sale to qualify as zero-rated, the following conditions must be present:

1.) there was sale and actual shipment of goods from the Philippines to a foreign country; 2.) the sale was made by a VAT registered person;

CTA Case No. 9369

3.) the sale was paid for in acceptable foreign currency or its equivalent in goods or services; and 4.) the payment was accounted for in accordance with the rules and regulations of the BSP. Corollary to the first requisite, Section 113(A)(1), (B)(1), (2)(c) and (3) of the NIRC of 1997, as amended, and as implemented by Section 4.113-1(A)(1), B(1) and (2)(c) of Revenue Regulations (RR) No. 16-05, as amended, provides that a VAT taxpayer, like herein petitioner, shall for every sale, barter or exchange of goods or properties, issue a VAT invoice 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:

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

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

CT A Case No. 9369

(3) The date of transaction, quantity, unit cost and description of the goods or properties or nature of the service; and xxx" "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 XXX XXX XXX 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: XXX XXX XXX

(c) If the sale is subject to zero percent (0%) VAT, the term "zero-rated sale" shall be written or printed prominently on the invoice or receipt;" (Underscoring supplied) In addition to the above requirements, the invoices must be duly registered with the BIR as prescribed under Section 237 in relation to Section 238 of the 1997 NIRC, as amended, towit:~ CT A Case No. 9369 "SEC. 237.

Issuance of Receipts or Sales or Commercial Invoices. - All persons subject to an internal revenue tax shall, for each sale or transfer of merchandise or for services rendered valued at Twenty-five pesos (P25.00) or more, issue duly registered receipts or sales or commercial invoices, prepared at least in duplicate, showing the date of transaction, quantity, unit cost and description of merchandise or nature of service: xxx" (Underscoring supplied) "SEC. 238.

Printing of Receipts or Sales or Commercial Invoices. - All persons who are engaged in business shall secure from the Bureau of Internal Revenue an authority to print receipts or sales or commercial invoices before a printer can print the same.

No authority to print receipts or sales or commercial invoices shall be granted unless the receipts or invoices to be printed are serially numbered and shall show, among other things, the name, business style, Taxpayer Identification Number (TIN) and business address of the person or entity to use the same, and such other information that may be required by rules and regulations to be promulgated by the Secretary of Finance, upon recommendation of the Commissioner. XXX XXX xxx'' Pursuant to the foregoing provisions of Section 106(A)(2)(a)(1) of the 1997 NIRC, as amended, in relation to Section 113(A)(1), (B)(1), (2)(c), and (3) of the same Code and Sections 4.113-1(A)(1), B(1), and (2)(c) of RR No. 16-05, any VAT registered person claiming VAT zero-rated direct export sales must present at least three (3) types of documents, to wit: (a) the sales invoice as proof of sale of goods; (b) bill of lading or airway bill as proof of actual shipment of goods from the Philippines to a foreign country; and (c) bank credit advice, certificate of bank remittance or any other document proving payment for the goods in acceptable foreign currency or its equivalent in goods and services. Further, the sales invoices supporting the export sales must be registered with the BIR and contain all the required information under the law and regulations, such as the imprinted word "zero-rated" and the taxpayer's TIN-VAT number.~ Custome rName Regent Sound Ltd.

Boas tee!

Resource s Internati onal Co., Ltd.

Total L__ -

CTA Case No. 9369

After careful examination of the evidence on record, the Court finds that petitioner submitted the aforesaid documents except for the following sales amounting to P101,378,116.27 which have no corresponding bank credit advice or proof of foreign currency inward remittances, thus, must be denied VAT zero-rating:

Inward Remittance per lnvoic Zero-rated Sales Security Bank's Philippine Peso e No.

per Invoice Exhibit Client Advice Exhibit Difference Equivalent 0859 0930 ~- US$ P-11-B- 2,312,811.00 17 - - US$2,312,811.00 I' 101,289,557.75 P-11-B- 660,340.00 34.1 US$ 658,319.50 {!S$2,973,151.00 US$658,319.50 Sales of goods and services to entities registered with the Philippine Economic Zone Authority (PEZA) P-11- B-34.4 2,020.50 88,558.5236 US$2,314,831.50 P101,378,116.27 As to petitioner's claimed zero-rated sales of goods and services in the respective amounts of P1,434,219,965.79 and P298,205,838.98, to PEZA-registered entities, pertinent provisions of Sections 1 06(A)(2)(a)(5) and 1 08(B)(3) of the 1997 NIRC of 1997, as amended, state: "SEC. 106. Value-added Tax on Sale of Goods or Properties. - (A) Rate and Base of Tax. xxx XXX XXX XXX 2) Zero-rated Sales - 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 36 Computed based on the peso equivalent of U$660,340.00 (P28,942,702.20). ~

CT A Case No. 9369

(5) Those considered export sales under Executive Order No.

226, otherwise known as the 'Omnibus Investments Code of 1987,' and other special laws; and XXX XXX xxx" (Underscoring supplied) "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 (3) Services rendered to persons or entities whose exemption under special laws or international agreements to which the Philippines is a signatory effectively subjects the supply of such services to zero percent (0%) rate;"

(Underscoring supplied) Indeed, sales by a VAT taxpayer from the customs territory to entities located in export processing zones are considered export sales under Executive Order (E.O.) No. 226, otherwise known as the "Omnibus Investments Code of 1987", the relevant portions of which read as follows:

"ARTICLE 23. "Export sales" shall mean the Philippine port F.O.B. value, determined from invoices, bills of lading, inward letters of credit, landing certificates, and other commercial documents, of exports products exported directly by a registered export producer or the net selling price of export product sold by a registered export producer to another export producer, or to an export trader that subsequently exports the same: Provided, That sales of export products to another producer or to an export trader shall only be deemed export sales when actually exported by the latter, as evidenced by landing certificates or similar commercial documents: Provided, further, That without actual exportation the following shall be considered constructively exported for purposes of this provision: (1) sales to bonded manufacturing warehouses of export- oriented manufacturers; (2) sales to export processing zones; xxx" (Emphasis supplied) "ARTICLE 77. Tax Treatment of Merchandise in the Zone. - ( 1) Except as otherwise provided in this Code, foreign and domestic merchandise, raw materials, supplies, articles,a.~,.,.....-- CT A Case No. 9369 equipment, machineries, spare parts and wares of every description, except those prohibited by law, brought into the zone to be sold, stored, broken up, repacked, assembled, installed, sorted, cleaned, graded, or otherwise processed, manipulated, manufactured, mixed with foreign or domestic merchandise whether directly or indirectly related in such activity, shall not be subject to customs and internal revenue laws and regulations nor to local tax ordinances, the provisions of law to the contrary notwithstanding. "(2) Merchandise purchased by a registered zone enterprise from the customs territory and subsequently brought into the zone, shall be considered as export sales and the exporter thereof shall be entitled to the benefits allowed by law for such transaction. xxx" (Emphasis supplied) Further, Section 8 of Republic Act (RA) No. 791637 , as amended, mandates that the PEZA shall manage and operate the ecozones as a separate customs territory, thus: "SEC. 8. ECOZONE to be Operated and Managed as Separate Customs Territory. -The ECOZONE shall be managed and operated by the PEZA as separate customs territory.

The PEZA is hereby vested with the authority to issue certificate of origin for products manufactured or processed in each ECOZONE in accordance with the prevailing rules or origin, and the pertinent regulations of the Department of Trade and Industry and/or the Department of Finance." Since the ecozone is viewed as a foreign territory by legal fiction, sales of goods and services made by a VAT-registered person in the Philippine customs territory to an entity registered and operating within the ecozone are considered exports to a foreign country subject to zero percent (0°/o) VAT. This was elucidated by the Supreme Court in the case of Commissioner of Internal Revenue us. Toshiba Information Equipment (Phils.), Inc. 38, to wit: 37 An Act Providing for the Legal Framework and Mechanisms for the Creation, Operation, Administration, and Coordination of Special Economic Zones in the Philippines, Creating for this Purpose, the Philippine Economic Zone Authority (PEZA), and for Other Purposes.

CT A Case No. 9369

"This Court agrees, however, that PEZA-registered enterprises, which would necessarily be located within ECOZONES, are VAT-exempt entities, not because of Section 24 of Rep. Act No. 7916, as amended, which imposes the five percent (5%) preferential tax rate on gross income of PEZA-registered enterprises, in lieu of all taxes; but, rather, because of Section 8 of the same statute which establishes the fiction that ECOZONES are foreign territory.

xxx An ECOZONE or a Special Economic Zone has been described as ... [S]elected areas with highly developed or which have the potential to be developed into agro-industrial, industrial, tourist, recreational, commercial, banking, investment and financial centers whose metes and bounds are fixed or delimited by Presidential Proclamations. An ECOZONE may contain any or all of the following:

industrial estates (IEs), export processing zones (EPZs), free trade zones and tourist/ recreational centers. The national territory of the Philippines outside of the proclaimed borders of the ECOZO NE shall be referred to as the Customs Territory. Section 8 of Rep. Act No. 7916, as amended, mandates that the PEZA shall manage and operate the ECOZONES as a separate customs territory; thus, creating the fiction that the ECOZONE is a foreign territory. As a result, sales made by a supplier in the Customs Territory to a purchaser in the ECOZONE shall be treated as an exportation from the Customs Territory. Conversely, sales made by a supplier from the ECOZONE to a purchaser in the Customs Territory shall be considered as an importation into the Customs Territory.

Given the preceding discussion, what would be the VAT implication of sales made by a supplier from the Customs Territory to an ECOZONE enterprise? The Philippine VAT system adheres to the Cross Border Doctrine, according to which, no VAT shall be imposed to form part of the cost of goods destined for consumption outside of the territorial border of the taxing authority. Hence, actual export of goods and services from the Philippines to a foreign country must be free of VAT; while, those destined for use or consumption~

CT A Case No. 9369 within the Philippines shall be imposed with ten percent (10%) VAT39." (Emphasis supplied) To substantiate its zero-rated sales/receipts to PEZA- registered entities, petitioner presented Sales Invoices 40 , Security Bank's Credit Advices41, Billing Statements42, Official Receipts43 and Certifications44 from PEZA. These documents proved that for the year 2014, petitioner sold its products, i.e., nickel ores, to Taganito HPAL Nickel Corporation (THPAL) and rendered services (materials handling services and equipment rental) to Visayas Slaked Lime Corporation (VSLC) and THPAL. Since it was established that both THPAL and VSLC are registered with the PEZA, petitioner's sales to I receipts from these entities in the amounts of P1,434,219,965.79 and P298,205,838.98 which are duly covered by VAT zero-rated sales invoices and official receipts qualify for VAT zero-rating under Sections 106(A)(2)(a)(5) and 108(B)(3) of the 1997 NIRC, as amended.

Sales of services to non- resident foreign corporations With reference to petitioner's declared zero-rated sales of services to non-resident foreign corporations, Section 108(B)(2) and (3) of the 1997 NIRC, as amended, provides as follows: "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 (2) Services other than those mentioned in the preceding paragraph rendered to a person engaged in 39 Now at 12% VAT rate.

CT A Case No. 9369 business conducted outside the Philippines or to a nonresident 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); xxx" In the case of Commissioner of Internal Revenue vs. Burmeister and Wain Scandinavian Contractor Mindanao, Jnc.45 , the Supreme Court held that in order for the supply of services to be VAT zero-rated under Section 108(B)(2) of the NIRC of 1997, as amended, the following requisites must be met:

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

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

3. the recipient of such services is doing business outside the Philippines.

Based on petitioner's submitted billing statements, official receipts and bank credit advices 46, the claimed zero rated sales/receipts of P23,478,725.99 arose from "Laytime Saved" by petitioner at loading point for the nickle ore shipments.

In her Judicial Affidavit 47 , petitioner's Vice- President for Finance, Ms. Lennie A. Terre, explained that this represents "Dispatch income which is a form of premium payment or reward for early completion of ore loading or when ore loading is made earlier than the allowed loading days based on the contract terms. This is an additional payment to the contract price of the ores and is billed by and paid to petitioner in US Dollars thru the Philippine banking system." Clearly, petitioner complied with the first and second requisites considering that the amount of P23,478,725.99 pertains to services which fall within the scope of "services other than processing, manufacturing or repacking of goods" and that the same was paid for in acceptable foreign currency

CT A Case No. 9369 duly accounted for in accordance with the rules and regulations of the BSP. However, petitioner failed to comply with the equally important third requisite, i.e., that its non-resident foreign clients were doing business outside the Philippines. This Court has consistently held that for an entity to be considered a non-resident foreign corporation doing business outside the Philippines, the said entity must be supported at the very least, by the Certification of Non-Registration of Corporation/Partnership duly issued by the Securities and Exchange Commission (SEC) and proof of incorporation or registration in a foreign country (e.g., Certificate of Incorporation, Memorandum and Articles of Association, or Certificate of Registration) or any other equivalent document. For failure to present the aforesaid documents, petitioner's reported zero-rated sales/ receipts in the amount P23,478,725.99 shall be disallowed. In sum, out of the reported sales in CY 20 14 of P8,800,661,932.71, only the amount of P8,675,805,090.45 represents petitioner's valid zero-rated sales/receipts, computed as follows:

Zero-Rated Sales/Receipts per VAT Returns Less: Disallowances

a. Sales of goods to non-resident foreign corporations without foreign currency inward remittances

b. Sales of services to non-resident foreign corporations without proof that such were doing business outside the Philippines Total Disallowances Valid Zero-Rated Sales/Receipts Petitioner incurred/paid input taxes attributable to zero-rated sales/receipts and said input taxes were not applied against any output VAT liability.~ p 8,800,661,932.71 p 101,378,116.27 23,4 78,725.99 p 124,856,842.26 P8,675,805,090.45

CT A Case No. 9369

Having resolved that petitioner had valid VAT zero-rated sales/receipts for the four quarters of CY 2014 in the amount of P8,675,805,090.46, we proceed to the determination of whether petitioner incurred input taxes in connection therewith and if said input taxes were not applied against any output VAT liability of petitioner. In its Quarterly VAT Returns for the four quarters of CY 2014, petitioner reflected a total amount of P30,160,760.33 allowable input VAT arising from its amortization of input VAT on purchases of capital goods exceeding P 1 million, domestic purchases and importation of goods other than capital goods, and domestic purchases of services, detailed as follows: 1st Quarter4s 2nd Quarter49 3rd Quarterso 4th Quartersl Total Input Tax Deferred on Capital Goods exceeding P 1 Million from p p p p Previous Quarter 65,384,924.63 60,066,168.09 56,834,972.27 50,250,798.32 p 65,384,924.63 Add: Input Tax on Capital Goods exceeding

P 1

Million Purchased this Quarter 1,255,570.43 3,566,657.57 245,892.87 401,110.00 5,469,230.87 Total Unamortized Input Tax on I I Capital Goods exceeding P1 70.854.155.50 1 Million 66,640,495.06 63,632,825.66 57,080,865.14 50,651,908.32 Less: Input Tax on Purchases of Capital Goods exceeding Pl Million deferred for the succeeding period 60,066,168.09 56,834,972.27 50,250,798.32 43,803,818.55 43,803,818.55 Amortization of Input Tax on Capital Goods exceeding f'1 f' f' f' f' Million 6 574,326.97 6, 797 853.39 6 830 066.82 6 848 089.77 f' 27,050,336.95 Add: Input Tax on:

Domestic Purchases of Goods Other

I I

than Capital Goods 15,859.23 6,925.68 3,150.17 6,276.66 32,211.74 Importation of Goods other than Capital Goods - 205 237.00 2 403 204.00 - 2,608,441.00 Domestic Purchase of Services 54,688.10 59,663.36 106,620.99 248,798.19 469,770.64 Total 70,547.33 271,826.04 2,512,975.16 255,074.85 3,110,423.38 Total Allowable Input T~ -- _P6,644,874.30 _P7,069,679.4~ P9,343,041.9~ ~7,103,164.6~-~30, 160, 760.3=!_j Of the P30, 160,760.33 declared input VAT, petitioner's application for refund/tax credit filed with the BIR was only P29,581,266.94 52 representing P26,972,825.94 53 input VAT amortization on capital goods exceeding P 1 million and P2,608,441.00 input VAT on importation of goods other than 48 Exhibits "P-11-A-42" to "P-11-A-42.5". 49 Exhibits "P-11-A-43" to "P-11-A-43.5". 5o Exhibits "P-11-A-44" to "P-11-A-44.5". 51 Exhibits "P-11-A-45" to "P-11-A-45.5". s2 Exhibit "P-1-C".

53 Lower by P77,511.01 when compared to the reported amount ofP27,050,336.95.u.__..--

CT A Case No. 9369 capital goods.

However, the administrative claim of !>29,581,266.94 was reduced to P28,926,837.00 when petitioner filed its Petition for Review before this Court. The reduction in petitioner's claim was explained by petitioner's Vice-President for Finance, Ms. Lennie A. Terre, in her Judicial Affidavit54, as follows: "Q31: Can you tell us what has happened to the claim filed with the Respondent?

A31: On May 12, 2016, Petitioner received from the Respondent an undated letter stating that out of Petitioner's claim in the amount of P29,581 ,267.00, it is approving for refund the amount of P21,330,738.32, as follows:

PARTICULARS BIR BOC TOTAL Total applied for TCC 654,430.00 28,926,837.00 29,581,267.00 Less:

Disallowance 141,546.61 8,108,982.07 8,250,528.68 NET REFUNDABLE AMOUNT 512,883.39 20,817,854.93 21,330,738.32 Simultaneous with the issuance of the aforesaid letter, Respondent issued to the Petitioner, a tax credit certificate in the amount of P512,883.39. Subsequently, we were furnished a copy of an endorsement letter addressed to the Commissioner of the Bureau of Customs (BOC) stating the Respondent's approval of Petitioner's VAT credit claim from importation of goods in the amount ofP20,817,854.93. Q33: Why are you still pursuing this claim despite the said endorsement?

A32: Petitioner disagrees with the disallowance of Eight Million One Hundred Eight Thousand Nine Hundred Eighty Two and 07/ Pesos (P8,108,982.07) on the BOC portion of the total claim amounting to Twenty Eight Million Nine Hundred Twenty Six Thousand Eight Hundred Thirty Seven Pesos (P28,926,837.00). Also, the BOC endorsement has not translated into the issuance of any TCC by or cash refund from the BOC, so that at this point, it is still

CT A Case No. 9369 worth nothing but a piece of paper which would not ensure the enforcement of the company's right to refund. We are, however, following up the approval of the release of any TCC or cash refund from the BOC and in the event that this actually happens, we undertake to advice to this Court." The Court-commissioned ICPA confirmed that petitioner's input VAT claim of P28,926,837.00 pertains only to importation of capital goods and non-capital goods as supported by the following documents:ss Particulars Input VAT Claim

1. Input VAT on Importation of capital goods supported by Import Entry and Internal Revenue Declarations tiEIRDs) and Security Bank's Debit Advice forms p 25,498,784.85

2. Input VAT on Importation of capital goods supported by Certified True Copy IEIRDs and Security Bank's De bit Advice forms 819,612.00

3. Input VAT on Importation of non-capital goods supported by IEIRDs, Sales Invoices and Security Bank's Debit Advice forms 2,608,441.00 Total Input VAT P28,926,837.85 The input VAT claims of P25,498,784.85 and P819,612.00 totalling P26,318,396.85 represent the amortized portion on petitioner's importation of capital goods exceeding P 1 million, detailed as follows: Reference to Exhibit Date "P-11-B" Exhibit Description 56 Purchased 57 Annex D P-11-A-30 to P- 5 Volvo Dump 11-A-30.3 Truck 03-Jun-10 P-11-A-1 to P-11- 12 Volvo Dump A-1.2 Truck 19-Apr-11 Annex C1 P-11-A-2 to P-11- A-2.3 1 Volvo Motor 10-May-11 P-11-A-3 to P-11- 4 Volvo Dump A-3.3 Truck 28-Jun-11 P-11-A-5 to P-11- A-5.2 Volvo FMX37064R 10-Feb-12 Annex C2 P-11-A-4 to P-11- 6 Caterpillar A-4.3 Wheel 10-Feb-12 P-11-A-6 to P-11- 9 Volvo Dump 21-Mar-12 55 Exhibit "P-11-B", Findings and Observations, p. 8. 56 Per Schedule 3 of the Quarterly VAT Returns . .--.----- 57 Id.

Input VAT Amortization for

CY 2014

p 819,612.00 3,005,490.52 229,672.25 771,129.00 163,839.00 1,939,248.00 - -- 1,520,336.00

CT A Case No. 9369

A-6.2 P-11-A-7 to P-11- A-7.1 P-11-A-8 to P-11- A-8.2 P-11-A-9 to P-11- A-9.1 P-11-A-10 toP- 11-A-10.1 P-11-A-11 toP- 11-A-11.1 P-11-A-12 toP- 11-A-12.2 P-11-A-13 toP- 11-A-13.1 P-11-A-14 toP- 11-A-14.2 P-11-A-16 toP- 11-A-16.2 P-11-A-15 toP- 11-A-15.2 P-11-A-17 toP- 11-A-17.2 P-11-A-18 toP- 11-A-18.1 Annex C3 P-11-A-19 toP- 11-A-19.2 P-11-A-20 toP- 11-A-20.1 P-11-A-21 toP- 11-A-21.1 P-11-A-22 toP- 11-A-22.2 P-11-A-23 toP- 11-A-23.1 P-11-A-24 toP- 11-A-24.1 P-11-A-25 toP- 11-A-25.1 P-11-A-27 toP- 11-A-27.1 Annex C4 P-11-A-26 toP- 11-A-26.1 P-11-A-28 toP- 11-A-28.1 P-11-A-29 toP- 11-A-29.1 Truck 2 Caterpillar Motor 9 Volvo Dump Truck 10 Volvo Dump Truck Volvo Motor Grade 2 Volvo Wheel Loader Forklift Sandvik 7 Volvo Hyd Excavator 5 Wheel Loader 2 Hydraulic Excavator Wheel Loader 5 Dump Truck 2 Volvo Motor Grade 2 Volvo Dump Truck 7 Volvo Dump Truck 12 Volvo Dump Truck 1 Unit FMX 6 Volvo FMX 1 Terrain Crane Lowbed Trailer 2 Wheel Loader 1 Truck Tractor 1 Manlift Truck Total ss Lower by P0.97 due to rounding-off.~ 10-AQ_r-12 577,718.00 16-Apr-12 1,980,087.00 24-May-12 2, 195,266.75 03-Jul-12 228,766.99 14-Aug-12 567,932.50 12-Nov-12 60,364.99 27-Dec-12 466,294.00 21-Jan-13 1 ,239,405. 75 06-Mar-13 1,270,289.00 06-Mar-13 489,021.25 12-Mar-13 291,355.00 12-Mar-13 1,108,712.75 01-Apr-13 226,505.25 03-Apr-13 436,490.25 18-Apr-13 1,560,936.00 10-May-13 2,644,348.25 20-May-13 225,178.00 25-Jun-13 1,438,683.25 06-Feb-14 216,161.23 01-AQr-14 81,921.56 01-Apr-14 468,846.19 02-Jun-14 69,715.77 29-0ct-14 25,069.37 P26,318,395.8858 Reference to ICPA Report

CT A Case No. 9369

A scrutiny of petitioner's supporting documents shows that the input VAT claim of P26,318,395.88 requires a downward adjustment in the amount of P2,007,306.40 for not being properly substantiated in accordance with Section 4.110-8(a)(l) of RR No. 16-05: Disallowed Input VAT Date Amortization Exhibit Description Purchased for CY 2014 Supported by Certified Trne Copy of IEIRD and Security Bank's Debit Advice but the payment reflected in the Debit Advice is insufficient Advance P1,093,531.0 Duties paid 0 Less:CUD/IPF 992,748.00 Amount attributed to VAT 100,783.00 Input VAT claimed 4 '098 '060. 00 P-11-A- Input VAT Annex D 30 to 5 Volvo 03-Jun-10 payment P-11-A- Dump Truck deficiency 3,997,277.00 30.3 Divide by amortization period (in months) 60 Multiply by period amortized for 1st to 4th qtrs.- 2014 12 p 799,455.40 Supported by IEIRD and Sales Invoice but without proof of VAT payment P-11-A- 5 toP- 11-A- Volvo Annex C2 5.2 FMX37064R 10-Feb-12 163,839.00 Supported by unreadable IEIRD and Security Bank's Debit Advice which does not show VAT payment P-11-A- 7 toP- 11-A- 2 Caterpillar Annex C2 7.1 Motor 10-Apr-12 577,718.00 P-11-A- 13 to P-11-A- 13.1 Sandvik 27-Dec-12 466,294.00 Total P2,007 ,306.40 With regard to the P2,608,441.00 input VAT claim on importation of non-capital goods, the same is broken down as follows:~

CT A Case No. 9369

Reference to ICPA Report Exhibit P-11-A-31 to P-11-A-31.3 Annex E P-11-A-32 to P-11-A-32.2 P-11-A-33 to P-11-A-33.6 Supplier Ellton Conveyers YBM Co Ltd Ellton Conveyers Pty Ltd Total Allowable Date Input for CY Purchased 2014 28-A_Qr-1459 p 205,237.00 13-Jun-14 91,181.00 06-Jun-14 2,312,023.00 P2,608,441.00 The Court observed that the importation made by petitioner from YBM Co. Ltd is supported by IEIRD showing a VAT amount of only P25,4 76.64. Hence, the difference of P65,704.36 (P91,181.00 less P25,476.64) shall be disallowed from petitioner's claim. In sum, petitioner was able to properly substantiate its input VAT claim to the extent of P26,853,826.24, computed as follows:

Input VAT Claim p 28,926,837.00 Less: Disallowances

1. Supported by Certified True Copy of IEIRD and Security Bank's Debit Advice but the payment reflected in the Debit Advice is insufficient p 799,455.40

2. Supported by IEIRD and Sales Invoice but without QroofofVATpayment 163,839.00

3. Supported by unreadable IEIRD and Security Bank's Debit Advice which does not show VAT payment 1,044,012.00

4. Supported by IEIRD showing a lower amount of input VAT 65,704.36 Total Disallowances p 2,073,010.76 Properly Substantiated Input VAT P26,853,826.24 However, considering that petitioner had also reported Vatable and exempt sales/receipts, and its input VAT cannot be directly identified with specific sales, we shall allocate the valid input VAT proportionately on the basis of the volume of petitioner's sales pursuant to Section 112(A) of the NIRC of 1997, as amended, computed as follows: 59 Per IEIRD. ~

CT A Case No. 9369

Vatable Sales/Receipts Zero-Rates p Allocation Factor (Percentage to Total Amount60 Sales/Receipts) 1,593,836.60 0.01782949% Sales I Receipts 8,800,661,932.71 98.4487820% Exempt Sales/Receipts 137,074,667.05 1.5333885% p Total Sales I Receipts 8,939,330,436.36 100.0000000% Net Substantiated Input VAT p 26,853,826.24 Allocated as follows: Vatable Sales I Receipts 4,787.90 Zero-Rates Sales/Receipts 26,437,264.85 Exempt Sales/Receipts 411,773.49 Total p 26,853,826.24 After deducting the input VAT attributable to VATable sales/receipts in the amount of P4,787.90 from petitioner's output VAT liability of P191 ,260.39, petitioner still has a net output VAT payable ofP186,472.49, computed as follows: Output VAT Payable 1st Quarter (Exhibit "P-11-A-42") p 32,022.86 2nd Quarter (Exhibit ((P-11-A-43") 39,557.89 3rd Quarter (Exhibit "P-11-A -44 ") 76,933.93 4th Quarter (Exhibit "P-11-A-45") 42,745.71 p 191,260.39 Less: Input VAT attributable to Vatable Sales 4,787.90 Net Output VAT Payable p 186,472.49 Petitioner also submitted in evidence the documents supporting its reported input VAT on domestic purchases of services and goods (other than capital goods) for CY 2014 in the respective amounts of P469,770.64 and P32,211.74 which were summarized in Annex I of the ICPA report6 1• However, the summary shows a higher input VAT amount of P979,540.45.

60 Exhibits "P-11-A-42" to "P-11-A-45". 61 Exhibit "P-11-B". ~ Exhibit 1st Quarter P-11-A-81 P-11-A- 132 2nd Quarter P-11-A- 221 3rd Quarter P-11-A- 341, P- 11-A- 341.1 and P-11-A- 341.2

CT A Case No. 9369

Further, the Court noted that the amount of P979,540.45 included an input VAT of P709,392.86 related to petitioner's domestic purchases of capital goods, the amortized portion of which in the amount of P106,962.50 formed part of the P512,883.39 claim for which a TCC was already issued in favor of petitioner. Below is the breakdown of the amount of P106,962.5062:

Amortized Sales Est. Life Portion Date Invoice (in allowable for Purchased No.

Description Input VAT months) the CY 2014 29-Jan-14 V112916 Toyota Hi-Lux p 146,250.00 60 p 29,250.00 1 Toyota 26-Feb-14 A123355 Grandia 166,071.43 60 30,446.43 30-A_Qr-14 838858 Toyota Hi-Lux 151,178.57 60 22,676.79 6472, 6473 and 02-Jul-14 6474 3 Suzuki Jimny 245,892.86 60 24,589.29 Total P709,392.86 P106,962.50 - -- - ~- -- · - ~- -~·- -- As to the remaining input VAT of P270,147.59 (P979,540.45 less P709,392.86), the amount of P200, 184.83 should be disallowed for not being properly substantiated by VAT invoices or receipts as prescribed under Sections 110(A), 113(A) and (B), 237, and 238 of the NIRC of 1997, as amended, and as implemented by Sections 4.110-1, 4.110-2, 4.110-8, and 4.113-1 of RR No. 16-05, as amended: Exhibit Supplier Name Document No.

Date Input VAT

INPUT VAT SUPPORTED BY UNDATED SALES INVOICE

New Family Drug & General Merchandise (Lim, Lance P-11-A-240 Lemuel Ling) 163989 - p 16.93

INPUT VAT SUPPORTED BY ACKNOWLEDGEMENT RECEIPTS

P-11-A-54 I LBC Express, Inc.

I SUG01143990 I 07-Jan-14 J - - 11·_1__±_.

CT A Case No. 9369

LBC Express, Inc.

08-Jan- 14.46 P-11-A-55 SUG01144077 14 P-11-A-56 LBC Express, Inc.

SUGO 1143988

07-Jan-14 18.21 P-11-A-57 LBC Express, Inc.

SUG01144348 10-Jan-14 14.46 P-11-A-58 LBC Express, Inc.

SUG01144345 10-Jan-14 18.21 P-11-A-59 LBC Express, Inc.

SUGO 1144351

10-Jan-14 26.79 P-11-A-60 LBC Express, Inc.

SUG01144576 12-Jan-17 580.18 P-11-A-61 LBC Express, Inc.

SUG01144876 15-Jan-14 26.79 P-11-A-62 LBC Express, Inc.

SUG01144349 10-Jan-14 18.21 P-11-A-63 LBC Express, Inc.

SUG01145034 16-Jan-14 18.21 P-11-A-64 LBC Express, Inc.

SUG01145607 22-Jan-14 26.79 P-11-A-65 LBC Express, Inc.

SUG01145114 17-Jan-14 18.21 P-11-A-66 LBC Express, Inc.

SUGO 1145807

24-Jan-14 234.64 P-11-A-67 LBC Express, Inc.

SUGO 1145789

24-Jan-14 18.21 P-11-A-68 LBC Express, Inc.

SUGO 1145860

25-Jan-14 18.21 P-11-A-69 LBC Express, Inc.

SUG01146315 29-Jan-14 26.79 P-11-A-70 LBC Express, Inc.

SUG01146316 29-Jan-14 26.79 P-11-A-71 LBC Express, Inc.

SUG01146104 28-Jan-14 18.21 P-11-A-72 LBC Express, Inc.

SUG01146550 31-Jan-14 18.21 P-11-A-103 LBC Express, Inc.

SUGO 1146820

02-Feb-14 33.75 P-11-A-104 LBC Express, Inc.

SUG01147285 06-Feb-14 10.71 P-11-A-105 LBC Express, Inc.

SUG01147425 07-Feb-14 26.79 P-11-A-106 LBC Express, Inc.

SUG01147423 07-Feb-14 18.21 P-11-A-107 LBC Express, Inc.

SUG01147422 07-Feb-14 18.21 P-11-A-108 LBC Express, Inc.

SUGO 114 7826

11-Feb-14 26.79 P-11-A-109 LBC Express, Inc.

SUGO 114 7828

11-Feb-14 26.79 P-11-A-110 LBC Express, Inc.

SUG01147829 11-Feb-14 26.79 P-11-A-111 LBC Express, Inc.

SUGO 1148040

12-Feb-14 26.79 P-11-A-112 LBC Express, Inc.

SUGO 1148268

14-Feb-14 26.79 P-11-A-113 LBC Express, Inc.

SUG01148269 14-Feb-14 18.21 P-11-A-114 LBC Express, Inc.

SUGO 1148431

15-Feb-16 18.21 P-11-A-115 LBC Express, Inc.

SUGO 1148598

16-Feb-14 84.11 P-11-A-116 LBC Express, Inc.

SUG01148833 18-Feb-14 14.46 P-11-A-117 LBC Express, Inc.

SUGO 1149178

21-Feb-14 14.46 P-11-A-118 LBC Express, Inc.

SUGO 1149433

23-Feb-14 10.71 P-11-A-119 LBC Express, Inc.

SUGO 1149540

24-Feb-14 15.00 P-11-A-143 LBC Express, Inc.

SUGOOO 1150464

04-Mar-14 26.79 LBC Express, Inc.

08-Mar- 26.79 P-11-A-144 SUG01151148 14 LBC Express, Inc.

09-Mar- 26.791 P-11-A-145 SUG01151183 14 LBC Express, Inc.

09-Mar- 26.79 P-11-A-146 SUG01151185 14 LBC Express, Inc.

09-Mar- 95.89 P-11-A-147 SUG01151281 14 LBC Express, Inc.

11-Mar- 26.79 P-11-A-148 SUG01151478 14 LBC Express, Inc.

14-Mar- 26.79 P-11-A-149 SUG01151826 14 LBC Express, Inc.

14-Mar- 26.79 P-11-A-150 SUG01151827 14 LBC Express, Inc.

14-Mar- 14.46 P-11-A-151 SUG01151878 14 ~

CT A Case No. 9369

P-11-A-152 LBC Express, Inc.

P-11-A-153 LBC Express, Inc.

P-11-A-154 LBC Express, Inc.

P-11-A-155 LBC Express, Inc.

P-11-A-156 LBC Express, Inc.

P-11-A-157 LBC Express, Inc.

P-11-A-158 LBC Express, Inc.

P-11-A-159 LBC Express, Inc.

P-11-A-160 LBC Express, Inc.

P-11-A-186 LBC Express, Inc.

P-11-A-187 LBC Express, Inc.

P-11-A-188 LBC Express, Inc.

P-11-A-189 LBC Express, Inc.

P-11-A-190 LBC Express, Inc.

P-11-A-191 LBC Express, Inc.

P-11-A-192 LBC Express, Inc.

P-11-A-193 LBC Express, Inc.

P-11-A-194 LBC Exg_ress, Inc.

P-11-A-195 LBC Express, Inc.

P-11-A-196 LBC Express, Inc.

P-11-A-228 LBC Express, Inc.

P-11-A-229 LBC Express, Inc.

P-11-A-230 LBC Express, Inc.

P-11-A-231 LBC Express, Inc.

P-11-A-232 LBC Express, Inc.

P-11-A-233 LBC Express, Inc.

P-11-A-234 LBC Express, Inc.

P-11-A-235 LBC Express, Inc.

P-11-A-236 LBC Express, Inc.

P-11-A-237 LBC Express, Inc.

P-11-A-238 LBC Express, Inc.

P-11-A-263 LBC Express, Inc.

SUGO 1152090

SUG01152091 SUG01152968 SUG01153180 SUG01153185 SUG01153184 SUG01153183 SUG01153609 SUG01153610 SUG01156524

SUGO 1154956

SUG01154902 SUG01154233 SUG01155762 SUG01155951 SUG01155182 SUG01156684 SUG01155284 SUG01155282 SUG01155283 SUG01157614 SUG01157822 SUG01158945 SUG01158348

SUGO 1157821

SUG01157819

SUGO 1159327

SUG01159612 SUG01159607

SUGO 1156941

SUG01157621 SUG01161293 16-Mar- 26.79 14 16-Mar- 26.79 14 23-Mar- 26.79 14 25-Mar- 271.61 14 25-Mar- 255.54 14 25-Mar- 279.64 14 25-Mar- 287.68 14 28-Mar- 26.79 14 28-Mar- 26.79 14 27-Apr-14 18.21 09-Apr-14 26.79 09-Apr-14 18.21 02-Apr-14 17.14 17-Apr-14 26.79 22-Apr-14 18.21 -- 12-Apr-14 26.79 29-Apr-14 18.21 13-Apr-14 10.71 13-Apr-14 10.71 13-Apr-14 10.71 08-May- 26.79 14 10-May- 26.79 14 22-May- 14 10.71 15-May- 14 26.79 I 10-May- I 14 26.79 10-May- 14 26.79 25-May- 17 17.14 28-May- 14 41.79 28-May- 14 10.71 01-May- 14 14.46 08-May- 14 18.21 14-Jun- 14 57.86 tlo.-

CTA Case No. 9369

P-11-A-264 | LBC Express, Inc. SUG01161059 are 7 41.79 P-11-A-265_| LBC Express, Inc. SUGO1160349 are ~ 18.21 P-11-A-266 | LBC Express, Inc. suco1161128 | 14 18.21 |_P-11-a-267_| LBC Express, Inc. SUGO1160506 18.21 P-11-A-268 | LBC Express, Inc. SUG01162307 26.79 p-11-A-269 | bBC Express, Inc. SUGO1160505 | ara 18.21 p-11-a-270 | LBC Express, Inc. 501162575 | 14 a 18.21 |_P-11-A-271 LBC Express, Inc. SUGO1160994 aren 18.21 P-11-A-272 | LBC Express, Inc. ae ~ 18.21 P-11-A-273 | /BC Express, Inc. 5ugo11610228| 14 10.71 P-11-A-312 | LBC Express, Inc. SUGO1163826 | 10-Jul-14 18.21 p-11-A-313 | PBC Express, Inc. SUG01165036 | 23-Jul-14 18.21 | p-11-A-314 | LBC Express, Inc. SUGO1164492 | 17-Jul-14 18.21 | p-11-a-315 | LBC Express, Inc. 03-Jul-14 18.21 p-11-a-316 | bBC Express, Inc. SUGO1163687 | 09-Jul-14 18.21 P-11-A-317 _| PBC Express, Inc. SUGO1164902 | 22-Jul-14 10.71 p-11-A-318 | LBC Express, Inc. SUGO1163110 | 03-Jul-14 18.75 p-11-a-319 | LBC Express, Inc. SUGO1164126 4 13-Jul-14 |___ 18.21 | |_P-11-A-320 LBC Express, Inc. $UG0O1164047 | 12-Jul-14 26.79 | p-11-A-321_| PBC Express, Inc. SUG01165763 | 31-Jul-14 14.46 p-11-a-354_| LBC Express, Inc. 01165860 red 18.21 | | p-11-a-355__| BC Express, Inc. 01166957 la 26.79 | p-11-A-356 | /BC Express, Inc. 01166956 atrad 18.21 : P-11-A-357_| LBC Express, Inc. 01167082 arad 18.21 - p-11-a-353_| bBC Express, Inc. 031000062876 | 19-Jul-14 18.75 p-11-a-359_| PBC Express, Inc. o1e7018_| da 81.96 | P-11-a-403 | LBC Express, Inc. SUGO1168884 | 02-Sep-14 14.46 aa

CT A Case No. 9369

P-11-A-404 LBC Express, Inc.

P-11-A-405 LBC Express, Inc.

P-11-A-406 LBC Express, Inc.

P-11-A-407 LBC Express, Inc.

P-11-A-437 LBC Express, Inc.

P 11-A-438

LBC Express, Inc.

P-11-A-439 LBC Express, Inc.

P-11 A-440

LBC Express, Inc.

P-11-A-441 LBC Express, Inc.

P-11-A-442 LBC Express, Inc.

P-11-A 443

LBC Express, Inc.

P 11-A-444

LBC Express, Inc.

P 11 A-445

LBC Express, Inc.

P-11 A-446

LBC Express, Inc.

P 11-A-447

LBC Express, Inc.

P-11-A-448 LBC Express, Inc.

P-11-A-449 LBC Express, Inc.

P-11-A-450 LBC Express, Inc.

P11-A451 LBC Express, Inc.

P-11-A452 LBC Express, Inc.

P-11-A-453 LBC Express, Inc.

P-11-A-489 LBC Express, Inc.

P-11-A-490 LBC Express, Inc.

P-11-A-491 LBC Express, Inc.

P-11-A-492 LBC Express, Inc.

P 11-A 493

LBC Express, Inc.

P 11 A-494

LBC Express, Inc.

SUG01169367 SUG01169763 SUG01169914

SUGO 11707 42

SUG01171819

SUGO 1173323

SUGO 1173076

SUG01174416 SUG01173170 SUG01173609 SUG01172122 SUG01173607

SUGO 117287 4

SUG01173696 SUG01174002

SUGO 1172558

SUG01172147

SUGO 1172758

SUGO 1172876

SUG01174214

SUGO 117 4537

SUG01174860 SUG01175407 SUG01175488 SUG01175742 SUG01175741 SUG01175939 05-Sep-14 26.79 10-Sep-14 26.79 19-Sep-14 18.21 11-Sep-14 11.25 01-0ct-14 18.21 16-0ct-14 18.21 14-0ct-14 18.21 28-0ct-14 10.71 15-0ct-14 18.21 19-0ct-14 41.79 03-0ct-14 18.21 19-0ct-14 18.21 11-0ct-14 10.71 20-0ct-14 44.46 23-0ct-14 11.25 08-0ct-14 10.71 03-0ct-14 10.71 10-0ct-14 18.21 11-0ct-14 26.79 26-0ct-14 26.79 29-0ct-14 26.79 03-Nov- 14 18.21 07-Nov- 14 18.21 10-Nov- 14 18.21 11-Nov- 14 26.79 11-Nov- 14 18.21 13-Nov- 14 42.32 l'l ... ..

CT A Case No. 9369

LBC Express, Inc.

15-Nov- P-11-A-495

SUGO 1176068

14 26.79 LBC Express, Inc.

22-Nov- P-11-A-496 SUG01176861 14 18.21 LBC Express, Inc.

29-Nov- P-11-A-497 SUG01177533 14 10.71 LBC Express, Inc.

23-Nov- P-11-A-498

SUGO 1176939

14 10.71 LBC Express, Inc.

28-Dec- P-11-A-557 SUG01180395 14 26.79 LBC Express, Inc.

05-Dec- P-11-A-558 SUG01178103 14 26.79 LBC Express, Inc.

13-Dec- P-11-A-559

SUGO 117877 4

14 18.21 LBC Express, Inc.

14-Dec- P-11-A-560

SUGO 1178903

14 18.21 LBC Express, Inc.

13-Dec- P-11-A-561 SUG01178773 14 26.79 LBC Express, Inc.

16-Dec- P-11-A-562

SUGO 1179067

14 26.79 LBC Express, Inc.

19-Dec- P-11-A-563 SUG01179422 14 26.79 LBC Express, Inc.

19-Dec- P-11-A-564 SUG01179423 14 26.79 LBC Express, Inc.

19-Dec- P-11-A-565 SUG01179381 14 18.21 LBC Express, Inc.

19-Dec- P-11-A-566

SUGO 1179383

14 26.79

INPUT VAT SUPPORTED BY BILLING STATEMENTS

J .A.R.C. Construction 24-Jan- P-11-A-53 Company 0205 14 2,014.29 Infor International Software, 17-Dec- 136,741.38 P-11-A-552 Inc.

0169 14

INPUT VAT SUPPORTED BY STATEMENT OF ACCOUNTS

P-11-A-133 Wayfair Tours, Inc.

1755 11-Feb-14 858.00 P-11-A-134 Wayfair Tours, Inc.

1950 22-Feb-14 1,388.00 P-11-A-135 Wayfair Tours, Inc.

1957 22-Feb-14 727.00 P-11-A-136 Wayfair Tours, Inc.

2060 28-Feb-14 528.00 P-11-A-137 Wayfair Tours, Inc.

2059 28-Feb-14 432.00 P-11-A-76 andP-11-A- 01-Jan- 76.1

PLDT PHILCOM

0215201204 14 75.76 P-11-A-77 andP-11-A- 01-Jan- 77.1

PLDT PHILCOM

0215201342 14 180.29 P-11-A-79 andP-11-A- 0 1-Jan- 79.1 Smart Broadband, Inc. 0215267508 14 49.20 01-Jan- P-11-A-80 Smart Broadband, Inc. 0215267695 14 131.03 P-11-A-126 andP-11-A- 126.1

PLDT PHILCOM

0218340178 01-Feb-14 189.23 P-11-A-127

PLDT PHILCOM

0218339433 01-Feb-14 73.31&~ ....

CTA Case No. 9369 and P-11-A- 127.1 P-11-A-128 and P-11-A- 128.1 Smart Broadband, Inc. 0218407135 01-Feb-14 116.36 P-11-A-129 and P-11-A- 129.1 Smart Broadband, Inc. | 0218405506 01-Feb-14 49.20 P-11-A-165 and P-11-A- 01-Mar- 165.1 PLDT PHILCOM 221504844 14 195.45 P-11-A-166 and P-11-A- 01-Mar- 166.1 PLDT PHILCOM 221503707 14 74.29 P-11-A-170 and P-11-A- 01-Mar- 170.1 Smart Broadband, Inc. 221569828 14 49.20 P-11-A-171 and P-11-A- 01-Mar- 171.1 Smart Broadband, Inc. 221570600 14 163.75 14-Mar- P-11-A-176 | Wayfair Tours, Inc. 2209 14 1,248.00 P-11-A-216 and P-11-A- 216.1 PLDT PHILCOM 224693030 01-Apr-14 93.93 P-11-A-217 and P-11-A- 217.1 PLDT PHILCOM 224693601 01-Apr-14 202.21 P-11-A-220 and P-11-A- 220.1 Smart Broadband, Inc. 224759390 01-Apr-14 134.45 P-11-A-222 | Wayfair Tours, Inc. 2809 OS-Apr-14 1,006.00 P-11-A-223 | Wayfair Tours, Inc. 2852 08-Apr-14 1,006.00 P-11-A-243 and P-11-A- 01-May- 243.1 PLDT PHILCOM 227908673 180.07 P-11-A-244 and P-11-A- O01-May- 244.1 PLDT PHILCOM 227908863 P-11-A-245 and P-11-A- 01-Jun- 245.1 PLDT PHILCOM 231137368 14 P-11-A-246 and P-11-A- 246.1 Smart Broadband, Inc. 224759133 O1-Apr-14

P-11-A-247 |

and P-11-A- 01-Jun- 247.1 Smart Broadband, Inc. 231203985 14 P-11-A-248 and P-11-A- O1-May- 248.1 | Smart Broadband, Inc. 227976384 14 P-11-A-250 | Wayfair Tours, Inc. 3300 10-May- |

CTA Case No. 9369

14 1,356.00 P-11-A-251 Wayfair Tours, Inc. 1,200.00 P-11-A-282 and P-11-A- 01-Jun- 282.1 PLDT PHILCOM 231137024 P-11-A-283 and P-11-A- 01-Jun- 283.1 PLDT PHILCOM 231137368 P-11-A-291 and P-11-A- 291.1 Smart Broadband, Inc. 227975806 P-11-A-292 and P-11-A- 01-Jun- 292.1 Smart Broadband, Inc. 231203485 14 49.20 P-11-A-293 and P-11-A- 293.1 Smart Broadband, Inc. 234451216 01-Jul-14 156.67 P-11-A-294 and P-11-A- 01-Jun- 294.1 Smart Broadband, Inc. 231203985 14 49.20 04-Jun- P-11-A-296 | Wayfair Tours, Inc. 3669 14 883.00 29-May- P-11-A-297 | Wayfair Tours, Inc. 3623 14 1,211.00 26-Jun- P-11-A-298 _| Wayfair Tours, Inc. 3966 14 | 432.00 | P-11-A-325 and P-11-A- 01-Aug- 325.1 PLDT PHILCOM 0237705407 14 47.62 P-11-A-326 and P-11-A- 326.1 PLDT PHILCOM 0234384694 01-Jul-14 107.67 P-11-A-327 and P-11-A- 327.1 PLDT PHILCOM | 0234383651 | 01-Jul-14 191.96 P-11-A-328 |_| PLDT PHILCOM 234451216 01-Jul-14 (156.67

P-11-A-329 |

and P-11-A- 01-Aug- 329.1 PLDT Smart Broadband Inc. 0237773871 14 142.78 P-11-A-338 and P-11-A- 01-May- 338.1 Smart Broadband, Inc. 0227975806 14 88.21 P-11-A-339 and P-11-A- 339.1 Smart Broadband, Inc. 0234451216 | O1l-Jul-14 | 156.67 P-11-A-340 and P-11-A- 340.1 Smart Broadband, Inc. 0235551353 01-Jul-14 98.40 30-Jun- P-11-A-342 | Wayfair Tours, Inc. 4015 14 432.00 | P-11-A-343 _| Wayfair Tours, Inc. 4352 30-Jul-14 | 278.00) P-11-A-353 | JLD Travel & Tours Corp. 1348 O08-Aug- | __ ;

CT A Case No. 9369

P-11-A-366 and P-11-A- 366.1

PLDT PHILCOM

P-11-A-367 and P-11-A- 367.1

PLDT PHILCOM

P-11-A-368 andP-11-A- 368.1

PLDT PHILCOM

P-11-A-369 andP-11-A- 369.1

PLDT PHILCOM

P-11-A-370 andP-11-A- 370.1

PLDT PHILCOM

P-11-A-371 andP-11-A- 371.1 PLDT Smart Broadband Inc. P-11-A-375 Wayfair Tours, Inc.

P-11-A-376 Wayfair Tours, Inc.

P-11-A-377 Wayfair Tours, Inc.

P-11-A-378 Wayfair Tours, Inc.

P-11-A-379 Wayfair Tours, Inc.

P-11-A-380 Wayfair Tours, Inc.

P-11-A-381 Wayfair Tours, Inc.

P-11-A-382 Wayfair Tours, Inc.

P-11-A-383 Wayfair Tours, Inc.

P-11-A-384 Wayfair Tours, Inc.

P-11-A-385 Wayfair Tours, Inc.

P-11-A-386 Wayfair Tours, Inc.

P-11-A-387 Wayfair Tours, Inc.

P-11-A-388 Wayfair Tours, Inc.

P-11-A-389 Wayfair Tours, Inc.

P-11-A-390 Wayfair Tours, Inc.

P-11-A-391 Wayfair Tours, Inc.

P-11-A-392 Wayfair Tours, Inc.

0234383651 0237705591 0241009081 0241008041 0241008041 0237773871 4435 4537 4436 4437 4541 4542 4543 4613 4610 4612 4609 4660 4665 4662 4703 4703 4693 4694 14 280.94 01-Jul-14 172.49 01-Aug- 14 97.36 01-Sep-14 20.98 01-Sep-14 65.46 01-Sep-14 18.05 01-Aug- 14 49.20 04-Aug- 14 864.00 08-Aug- 14 883.00 04-Aug- 14 864.00 04-Aug- 14 864.00 08-Aug- 14 42.00 08-Aug- 14 84.00 08-Aug- 14 84.00 14-Aug- 14 451.00 14-Aug- 14 95.00 14-Aug- 14 42.00 14-Aug- 14 883.00 15-Aug- 14 299.00 15-Aug- 14 479.00 15-Aug- 14 479.00 19-Aug- 14 299.00 19-Aug- 14 299.00 19-Aug- 14 624.00 19-Aug- t"l.. - CTA Case No. 9369 P-11-A-393 P-11-A-395 P-11-A-396 P-11-A-409 and P-11-A- 409.1 P-11-A-410 P-11-A-412 and P-11-A- 412.1 P-11-A-413 and P-11-A- 413.1 P-11-A-419 P-11-A-420 P-11-A-423 P-11-A-459.1, P-11-A-459.2 and P-11-A- 459.3 P-11-A-460.1 and P-11-A- 461 P-11-A-465 P-11-A-469 P-11-A-470 P-11-A-394 P-11-A-421 P-11-A-422 P-11-A-459, P-11-A-460, Wayfair Tours, Inc.

Wayfair Tours, Inc.

Wayfair Tours, Inc.

Wayfair Tours, Inc.

PLDT PHILCOM

and P-11-A- 410.1 | PLDT PHILCOM Smart Broadband Inc.

Smart Broadband Inc.

4753 14 271.00 22-Aug- 998.00 23-Aug- 14 479.00 Wayfair Tours, Inc.

Wayfair Tours, Inc.

Wayfair Tours, Inc.

Wayfair Tours, Inc.

Wayfair Tours, Inc.

PLDT PHILCOM

PLDT PHILCOM

Smart Broadband Inc.

P-11-A-467 | Wayfair Tours, Inc.

P-11-A-468 | Wayfair Tours, Inc.

Wayfair Tours, Inc.

0241009081 172.49 0244342640 | 01-Oct-14 206.17 0241075473 | 01-Sep-14 134.44 0241075003 | 01-Sep-14 49.20 4907 03-Sep-14 299.00 4902 03-Sep-14 5,980.00 4975 06-Sep-14 998.00 4977 06-Sep-14 098.00 9073 12-Sep-14 451.00 0244342640 | 01-Oct-14 172.49 0244343397 0244410770 01-Oct-14 01-Oct-14 Wayfair Tours, Inc.

P-11-A-471 P-11-A-472 Wayfair Tours, Inc.

Wayfair Tours, Inc.

0311 27-Sep-14 659.00 0447 04-Oct-14 864.00 9432 03-Oct-14 1,310.00 0473 07-Oct-14 328.00 9807 | 23-Oct-14

CT A Case No. 9369

P-11-A-473 Wayfair Tours, Inc.

P-11-A-474 Wayfair Tours, Inc.

P-11-A-475 Wayfair Tours, Inc.

P-11-A-506 and P-11-A- 506.1

PLDT PHILCOM

P-11-A-507 and P-11-A- 508

PLDT PHILCOM

P-11-A-525 Wayfair Tours, Inc.

P-11-A-526 Wayfair Tours, Inc.

P-11-A-527 Wayfair Tours, Inc.

P-11-A-528 Wayfair Tours, Inc.

P-11-A-529 Wayfair Tours, Inc.

P-11-A-530 Wayfair Tours, Inc.

P-11-A-531 Wayfair Tours, Inc.

P-11-A-532 Wayfair Tours, Inc.

P-11-A-533 Wayfair Tours, Inc.

P-11-A-534 Wayfair Tours, Inc.

P-11-A-535 Wayfair Tours, Inc.

P-11-A-536 Wayfair Tours, Inc.

P-11-A-537 Wayfair Tours, Inc.

P-11-A-538 Wayfair Tours, Inc.

P-11-A-573 and P-11-A- 573.1 PLDT PHILCOM, INC.

P-11-A-574 and P-11-A- 574.1 PLDT PHILCOM, INC.

P-11-A-579 Wayfair Tours, Inc.

P-11-A-580 Wayfair Tours, Inc.

P-11-A-581 Wayfair Tours, Inc.

--------- 5796 5792 5864 0229859331 0229860097 5912 5927 5928 6016 6064 6200 6205 6210 6267 6324 6325 6342 6349 6409 0251083469 0251083849 6512 6570 6633 - ------·----- 23-0ct-14 642.00 24-0ct-14 299.00 27-0ct-14 902.00 01-Nov- 14 82.15 01-Nov- 14 65.45 30-0ct-14 1,804.00 31-0ct-14 69.00 31-0ct-14 42.00 05-Nov- 14 902.00 08-Nov- 14 1,284.00 14-Nov- 14 432.00 14-Nov- 14 1,798.00 14-Nov- 14 328.00 19-Nov- 14 655.00 22-Nov- 14 432.00 22-Nov- 14 328.00 26-Nov- 14 451.00 26-Nov- 14 354.00 28-Nov- 14 887.00 01-Dec- 14 93.49 01-Dec- 14 129.05 06-Dec- 14 1,804.00 11-Dec- 14 864.00 15-Dec- 14 432.00 Total p 200,184.83..!1

CT A Case No. 9369

Only the amount of P69,962.75 (P979,540.45 less the sum of P709,392.87 and P200, 184.83) represents petitioner's valid input VAT on domestic purchases of services and goods other than capital goods, detailed as follows: Exhibit Supplier Name Document No.

Date Input VAT ~ P-11-A- Absolute Essentials 47 Traders Incorporated 000500 21-Jan-14 p 578.57 P-11-A- Bad- As Petron Station 48 (Lourberto S. Lerio) 102550 05-Jan-14 32.14 P-11-A- Bad- As Petron Station 49 (Lourberto S. Lerio) 102778 11-Jan-14 10.71 P-11-A- Bad- As Petron Station 50 (Lourberto S. LerioJ 102816 13-Jan-14 53.57 Claver General P-11-A- Merchandise (Jerry S. 51 Mainit) 001000 16-Jan-14 166.07 Claver General P-11-A- Merchandise (Jerry S. 52 Mainit) 001053 16-Jan-14 128.57 Ocean Bounties Seafood Market & Restaurant P-11-A- (Ocean Bounties Fresh 73 & Frozen Foods Inc) 006022 13-Jan-14 85.71 Ocean Bounties Seafood Market & Restaurant P-11-A- (Ocean Bounties Fresh 74 & Frozen Foods Inc) 005965 21-Jan-14 82.50 P-11-A- Palma Superstore 75 (Palma, Joselito Ramos) 15044 14-Jan-14 24.70 P-11-A- Rose Pharmacy, Inc.

78 6120 03-Jan-14 158.28 Almont Hotel & Inland P-11-A- Resort (Almont Hotel 82 Inc) A2275 12-Feb-14 69.64 P-11-A- Brilliant Star Food 83 Corporation 018128 07-Feb-14 512.04 P-11-A- Brilliant Star Food 84 Corporation 018135 08-Feb-14 163.82 P-11-A- Brilliant Star Food 85 Corporation 018138 09-Feb-14 104.25 P-11-A- Brilliant Star Food 86 Corporation 018167 13-Feb-14 78.00 Butuan Grand Palace P-11-A- Restaurant (Karaga 4 87 Aces Development Corp) 0454 05-Feb-14 48.75 Butuan Grand Palace P-11-A- Restaurant (Karaga 4 88 Aces Development Corp) 0455 05-Feb-14 1,211.79 P-11-A- Doctor's Choice 000687 26-Feb-14 6.21. la.t.

CT A Case No. 9369

89 Pharmacy Co.

Figaro Coffee Shop P-11-A- (Cebu Knotsberry Food 90 Corp) P-11-A- Freemon t Foods 91 Corporation P-11-A- Gaisano Superstore 92 (lnterpace Corporation) Gerry's Grill (MM P-11-A- Cuisine Connoisseurs 93 Inc) Gevans General P-11-A- Merchandise (Shaine 94 Oliver V.Tamayo) Goat 2geder Hotel & P-11-A- Restaurant (Kim Lian T. 95 Tan) Greenwich Golden Lion P-11-A- Pizza (Surigao) 96 Corporation Greenwich Golden Lion P-11-A- Pizza (Surigao) 97 Corporation Jollibee Golden Lion P-11-A- Foods (Surigao) 98 Corporation Jollibee Golden Lion P-11-A- Foods (Surigao) 99 Corporation Jollibee Golden Lion P-11-A- Foods (Surigao) 100 Corporation Jollibee Golden Lion P-11-A- Foods (Surigao) 101 Corporation Jollibee Golden Lion P-11-A- Foods (Surigao II) 102 Corporation P-11-A- Mang !nasal Restaurant 120 (L. Cubillan) P-11-A- Mang !nasal Restaurant 121 (L. Cubillan) P-11-A- Nickel Sales Center 122 (Jerick Chua Cubillan) P-11-A- Peng-U Ventures, Inc. 123 P-11-A- Philippine Ports 124 Authority P-11-A- PIGAR Trading (Pigar, 125 Cesar So) P-11-A- Southwinds Hotel (Jose 130 C. Agudo Ill) P-11-A- Surigaonon Visayan 131 Marketing Corporation 0167 09-Feb-14 43.18 6250 10-Feb-14 85.71 436430 10-Feb-14 79.59 0272 10-Feb-14 53.57 000076 08-Feb-14 10.71 26980 09-Feb-14 157.93 31598 06-Feb-14 106.93 31639 15-Feb-14 68.14 49268 09-Feb-14 57.86 49261 08-Feb-14 72.43 49279 11-Feb-14 103.50 49326 15-Feb-14 37.93 15386 05-Feb-14 35.36 1572 15-Feb-14 22.18 1567 14-Feb-14 44.36 005843 27-Feb-14 86.79 35846 11-Feb-14 128.57 CG-L0594149-5 07-Mar-14 334.26 29101 19-Feb-14 26.79 97073 28-Feb-14 278.57 58532 08-Feb-14 8.04.: If...

CT A Case No. 9369

P-11-A- Webforge Philippines, 138 Inc.

PH16848 12-Feb-14 5,100.51 P-11-A-

ASM FOODS (AURELIO

139 S. MARASIGAN, JR.)

1327 04-Mar-14 92.14 P-11-A-

ASM FOODS (AURELIO

140 S. MARASIGAN, JR.)

917 24-Mar-14 41.57 P-11-A- CafeFrance Corp.

141 3173 27-Mar-14 36.32 P-11-A- Copylandia Office 142 Systems Corporation 12964 25-Mar-14 334.82 P-11-A- Mercury Drug 161 Corporation 58077 26-Feb-14 246.16 P-11-A- Moraco Food Corp.

162 4012 28-Feb-14 77.14 P-11-A- Philippine Ports 163 Authority CG-L0594149-5 07-Mar-14 501.39 P-11-A- PHO NAM, INC.

164 1533 27-Mar-14 150.21 Rosario's Seafood P-11-A- Restaurant & Grillhouse 167 Chinese Cuisine 1165 28-Mar-14 59.89 P-11-A- Rose Pharmacy, Inc.

168 48 09-Mar-14 117.32 P-11-A- Rose Pharmacy, Inc.

169 30 04-Mar-14 38.62 P-11-A- Smart Broadband, Inc. 172 PGQOR000058916 12-Mar-14 19.44 P-11-A- Traknology Incorporated 173 1039 01-Feb-14 5,760.00 Tri-Mix Enterprises (B.

KIM LEASING &

P-11-A- DEVELOPMENT 174 CORPORATION) 55150 05-Mar-14 2.68 P-11-A- Uni-City General 175 Merchandise Inc.

2088 05-Mar-14 6.38 A. Zarate General P-11-A- Hospital (Albert L.

177 Zarate) 103440 14-Jan-14 214.29 A. Zarate General P-11-A- Hospital (Albert L.

178 Zarate} 106053 22-Agr-14 163.93 P-11-A- Absolute Essentials 179 Traders Incorporated 756 27-Mar-14 1,025.91 D & L Medical P-11-A- Equipments Supplies 180 (Sheridan L. Castro) 88978 25-Jan-14 548.57 P-11-A- Doctor's Choice 181 Pharmacy Co.

838 03-Apr-14 38.79 P-11-A- E. Simtoco Enterprises 182 (Elisa T. Simtoco) 169640 29-Mar-14 19.29 P-11-A- Gaisano City-Mall 183 (Unipace Corp.)

25034 04-Apr-14 166.07 P-11-A- Gaisano Superstore 184 Butuan City Branch 439070 22-Apr-14 27.21"'~ CT A Case No. 9369 P-11-A- Jerome Anthony S.

185 Asuncion, MD, FPOA P-11-A- Mang !nasal Restaurant 197 Megavalue Drugstore P-11-A-

(MEGAVALUE TRADE

198 SALES CORP.)

P-11-A- Mercury Drug 199 Corporation P-11-A- Mercury Drug 200 Corporation P-11-A- Mercury Drug 201 Corporation P-11-A- Mercury Drug 202 Corporation P-11-A- Mercury Drug 203 Corporation P-11-A- Mercury Drug 204 Corporation P-11-A- Mercury Drug 205 Corporation P-11-A- Mercury Drug 206 Corporation P-11-A- Mercury Drug 207 Corporation P-11-A- Mercury Drug 208 Corporation P-11-A- Mercury Drug 209 Corporation P-11-A- Mercury Drug 210 Corporation P-11-A- Mercury Drug 211 Corporation P-11-A- Oro Celestial Petron 212 Service Station P-11-A- Pigar Trading (Pigar 213 Cesar So) P-11-A- Pigar Trading (Pigar 214 Cesar So) P-11-A- Pigar Trading (Pigar 215 Cesar So) P-11-A- Rose Pharmacy, Inc.

218 P-11-A- Rose Pharmacy, Inc.

219 P-11-A- C & C Pharmacy - 224 branch (Anecita C. Uy) P-11-A- C & C Pharmacy - 225 bracnh (Anecita C. Uy) Cagayan River View Inn P-11-A- & Restaurant 226 (Tansitiam & Sons, Inc.) P-11-A- Greenwich Golden Lion 227 Pizza (Surigao) 321 09-Apr-14 48.00 1754 19-Apr-14 51.00 5472 11-Apr-14 590.61 637-10122 30-Jan-14 63.75 637-10090 14-Jan-14 13.50 637-10104 20-Jan-14 27.00 637-10100 19-Jan-14 158.14 637-10108 22-Jan-14 67.50 637-10110 25-Jan-14 24.43 637-10264 12-Apr-14 351.05 637-10283 22-Apr-14 517.18 114-32531 16-Jan-14 60.11 114-32534 17-Jan-14 66.86 114-32526 19-Jan-14 19.26 114-32536 21-Jan-14 53.04 531-10299 21-Jan-14 66.54 454 11-Apr-14 107.14 31856 07-Apr-14 66.96 29794 03-Apr-13 72.86 31852 06-Apr-14 33.43 18102 30-Mar-14 52.04 1380 09-Apr-14 94.18 4277 20-Mar-14 112.53 4743 16-Apr-17 15.75 31353 29-May-14 75.00 31887 23-Apr-14 90.86, ..

I

CT A Case No. 9369

Corporation Metro sphere P-11-A- Corporation - Ellis 239 Ecotel P-11-A- Philippine Ports 241 Authority P-11-A- Philippine Ports 242 Authority P-11-A- Starlane Caltex Station 249 P-11-A- Asialink Central Mall, 252 Incorporated P-11-A- Asialink Central Mall, 253 Incorporated P-11-A- Bad-as Petron Station 254 P-11-A- Dales Food Haus 255 P-11-A- Gardenstate 256 Enterprises, Inc.

P-11-A- Greenwich (Fresh N' 257 Famous Foods, IncJ Greenwich Golden Lion P-11-A- Pizza (Surigao) 258 Corporation GV Hotel - Cagayan P-11-A- Branch (Vismin GV 259 Hotel Inc.)

Jollibee Golden Lion P-11-A- Foods (Surigao) 260 Cor_poration Jollibee Golden Lion P-11-A- Foods (Surigao II) 261 Corporation Jollibee Golden Lion P-11-A- Foods (Surigao II) 262 Corporation Lutong Bahay ni Aling P-11-A- Cora Restaurant 274 (Corazon Uy Yu) P-11-A- Margarita Mobile Shop 275 (Lim, Cindy Enrile) P-11-A- Margarita Mobile Shop 276 (Cindy E. Lim) Marlowe S. Indo P-11-A- Internal Medicine & 277 Neurology Clinic Marlowe S Indo Internal P-11-A- Medicine & Neurology 278 Clinic P-11-A- Mercury Drug 279 Corporation P-11-A- Moon Cafe (Cebu 280 Knotsberry Foods 26688 29-May_-14 192.86 HOOO- 000000002081 19-May-14 1,071.43 HOOO- 000000002082 19-May-14 128.57 756210 11-May-14 160.71 5644 02-May-14 97.29 5642 02-May-14 84.10 109117 06-Jun-14 10.71 18434 19-Jun-14 280.71 123690 04-Jun-14 53.57 508 02-Jul-14 97.61 32061 06-Jun-14 40.61 9780 12-Jun-14 53.57 49991 01-Jun-14 20.46 15827 20-Jun-14 47.36 15828 20-Jun-14 51.43 18187 19-Jun-14 131.57 35101 09-Jun-14 30.86 1653 07-Jun-14 75.00 64 18-Jun-14 60.00 347 19-Jun-14 60.00 30253 29-May-17 53.04 599 17-Jun-14 80.79

CT A Case No. 9369

Corporation) P-11-A- New Family Drug & 281 General Merchandise 209469 16-Jun-14 17.52 P-11-A- Ra PHOENIX GAS 284 STATION 60538 25-Jun-14 125.25 Red Ribbon - Robinsons P-11-A- Butuan (Red Ribbon 285 Bakeshop Inc.)

333 21-May-14 69.64 P-11-A- Rosecake Specialties 286 2904 19-Jun-14 81.96 P-11-A- Rose Pharmacy, Inc.

287 25098 20-May-14 16.15 P-11-A- Rose Pharmacy, Inc.

288 24393 21-May-14 71.33 P-11-A- Rose Pharmacy, Inc.

289 17302 03-Jun-14 186.97 P-11-A- Rose Pharmacy, Inc.

290 347 02-Jun-14 93.86 P-11-A- Watsons Personal Care 295 Stores (Phils.), Inc. 35298 21-May-14 31.07 P-11-A- YC Rainbow Food, Inc. 299 2142 25-Jun-14 51.00 P-11-A- American Technologies, 300 Inc.

025038 03-Jul-14 21,565.42 A. Zarate General P-11-A- Hospital (Albert L.

301 Zarate) 106786 21-May-14 32.14 A. Zarate General P-11-A- Hospital (Albert L.

302 Zarate) 107600 18-Jun-14 32.14 Almirante Shell Super P-11-A- Station II (April Twinkle 303 Almirante Corral) 70575 21-Jul-14 160.71 P-11-A- Bad-as Petron Station 304 (Lourberto S. Lerio) 110777 15-Jul-14 16.07 P-11-A- Bad -as Petron Station 305 (Lourberto S. Lerio) 108736 08-Jul-14 10.71 P-11-A- C & C Pharmacy- 306 Branch (Anecita C. Uy) 13397 14-Jul-14 178.18 CD-R King Gen.

Merchandise (Haleiwa P-11-A- International 307 Corporation) 204152 18-Jul-14 72.8t?_ Gaisano Superstore P-11-A- Butuan City Branch 308 (Interpace Corporation) 471645 26-Jul-14 34.91 Greenwich Golden Lion P-11-A- Pizza (Surigao) 309 Corporation 32171 04-Jul-14 48.96 Hemado Phoenix Fuel P-11-A- Business Trading (Ma. 310 Theresa L. Docallos) 016357 14-Jul-14 107.14 P-11-A- Hotel Karaga Inc.

311 2415 10-Jul-14 428.57...-: ~ ~

CT A Case No. 9369

Ocean Bounties Seafood Market & Restaurant (Ocean Bounties P-11-A- Seafood Market and 322 Restaurant) P-11-A- Philippine Ports 323 Authority P-11-A- Pigar Trading (Cesar So 324 Pi gar) P-11-A- Rose Pharmacy, Inc.

330 P-11-A- Rose Pharmacy, Inc.

331 P-11-A- Rose Pharmacy, Inc.

332 P-11-A- Rose Pharmacy, Inc.

333 P-11-A- Rose Pharmacy, Inc.

334 P-11-A- Rose Pharmacy, Inc.

335 P-11-A- Rose Pharmacy, Inc.

336 P-11-A- Rose Pharmacy, Inc.

337 P-11-A- Almirante Shell Super 344 Station II P-11-A- Asia Link Shopping 345 Center P-11-A- Bad-as Petron Station 346 P-11-A- Bad-as Petron Station 347 P-11-A- Bad-as Petron Station 348 P-11-A- Dales Food Haus 349 P-11-A- E.C. Nickel Drug 350 Branch P-11-A- Goat 2geder Hotel & 351 Restaurant P-11-A- Kingsway Inn 352 P-11-A- Limbros Shell Service 360 Station P-11-A- New Family Drug & 361 General Merchandise P-11-A- Oro Celestial Petron 362 Service Station P-11-A- Pearlmont Inn 363 P-11-A- People's Choice 364 Pharmacy P-11-A- People's Choice 007526 11-Jul-14 182.14 CG-L0594149-5 07-Mar-14 (334.26) 34328 12-Jul-14 111.86 16320 11-Jul-14 90.54 0054 21-Jun-14 193.90 18130 16-Jul-14 186.94 25207 01-Jul-14 28.65 25178 20-Jun-14 148.19 25177 20-Jun-14 123.94 I 25199 27-Jun-14 162.80 i 0411 21-Jun-14 188.12 I 71033 05-Aug-14 160.71 8209 19-Jul-14 26.89 111561 04-Aug-14 12.08 110441 08-Aug-14 20.36 110567 10-Aug-14 25.22 019026 27-Aug-14 94.29 032368 30-Jun-14 13.04 29275 07-Aug-14 45.54 28336 19-Aug-14 160.71 20161 15-Aug-14 202.~ 255233 13-Aug-14 17.81 0770 14-Aug-14 107.14 180402 15-Aug-14 522.32 283574 19-Au_g-14 122.16 283842 23-Aug-14 30.05

CT A Case No. 9369

365 Pharmacy Rosario's Seafood P-11-A- Restaurant & Grillhouse 372 Chinese Cuisine P-11-A- Southwinds Hotel 373 P-11-A- Thaore De Oro Food 374 Corporation P-11-A- 1 Windsoar Hotel 397 P-11-A- Almont Hotel & Inland 398 Resort P-11-A- Almont Hotel & Inland 399 Resort P-11-A- Co Ban Kiat Hardware, 400 Inc.

P-11-A- Gaisano Superstore 401 Butuan City Branch Greenwich Golden Lion P-11-A- Pizza (Surigao) 402 Corporation P-11-A- New Family Drug & 408 General Merchandise P-11-A- Rose Pharmacy, Inc.

411 P-11-A- Southwinds Hotel 414 P-11-A- Starlane Caltex Station 415 P-11-A- Surigaonon Visayan 416 Marketing Corporation P-11-A- Surigaonon Visayan 417 Marketing Corporation P-11-A- The Golden Peak Hotel 418 & Suites P-11-A- Alba Copy Center 424 P-11-A- Almont Hotel & Inland 425 Resort P-11-A- Almont Hotel & Inland 426 Resort P-11-A- A. Zarate General 427 Hospital P-11-A- A. Zarate General 428 Hospital P-11-A- A. Zarate General 429 Hospital P-11-A- A. Zarate General 430 Hospital P-11-A- Cafe Breton 431 P-11-A- Gaisano Superstore 432 Butuan City Branch P-11-A- Gaisano Superstore 001090 14-Aug-14 144.64 100487 21-Aug-14 390.00 000120 14-Aug-14 142.02 1886 29-Sep-14 96.00 7598 30-Sep-14 720.25 10993 29-Sep-14 17.68 544553 09-Sep-14 458.57 465940 22-Sep-14 43.23 32514 25-Sep-14 353.79 279403 12-Sep-14 16.39 29962 05-Sep-14 74.79 100812 11-Sep-14 1,032.86 775342 10-Sep-14 214.29 79019 15-Sep-14 34.82 77458 26-Aug-14 72.32 49157 05-Sep-14 321.43 11662 08-Sep-14 143.36 7391 05-0ct-14 104.47 8142 19-0ct-14 139.29 105729 11-Apr-14 32.14 106034 22-Apr-14 227.68 109408 16-Aug-14 199.28 109422 06-Aug-14 32.14 2308 24-0ct-14 103.71 460739 27-0ct-14 26.23 470805 01-0ct-14 100.61 --

CTA Case No. 9369

433 Butuan City Branch P-11-A- Gerry's Grill 434 P-11-A- Greenwich 435 P-11-A- Janet C. De Grano, 436 M.D.

P-11-A- Mercury Drug 454 P-11-A- New Family Drug & 455 General Merchandise P-11-A- New Family Drug & 456 General Merchandise P-11-A- Pats Electronics Shoppe 457 P-11-A- Philippine Ports 458 Authority P-11-A- Princity Inc.

462 P-11-A- Rophacs Venture 463 Corporation P-11-A- Rose Pharmacy, Inc.

464 P-11-A- United Bookstore- 466 Butuan P-11-A- YHL Commercial 476 Asia Link Shopping P-11-A- Center (Melona Cuajao 477 Regis) P-11-A- El Cielito Inn (Los 478 Angeles Corporation) Gaisano Superstore P-11-A- Butuan City Branch 479 (Interpace Corporation) Gerry's Grill (MM P-11-A- Cuisine Connoisseurs 480 Inc.)

Jollibee Golden Lion P-11-A- Foods (Surigao II) 481 Corporation P-11-A- L. Mailig Store (Lourdes 482 G. Mailig) P-11-A- L. Mailig Store (Lourdes 483 G. Mailig) P-11-A- L. Mailig Store (Lourdes 484 G. Mailig) P-11-A- L. Mailig Store (Lourdes 485 G. Mailig) Lasertech Copier P-11-A- Services (Elizalde L. 486 Nepomuceno) P-11-A- Lasertech Copier 487 Services (Elizalde L. 1597 15-0ct-14 403.93 0800 15-0ct-14 82.50 2873 28-0ct-14 85.18 11289 17-0ct-14 4.90 295237 02-0ct-14 32.92 295331 02-0ct-14 12.19 645035 09-0ct-14 225.00 BP21- 000000075767 31-0ct-14 3,600.00 000126 15-0ct-14 33.97 07790 16-Sep-14 16.07 2994 14-0ct-14 233.46 6968 01-0ct-14 53.57 2711 13-Sep-14 21.32 I 8445 29-0ct-14 48.321 107981 15-Nov-14 138.79 460112 22-Nov-14 33.69 1775 16-Nov-14 136.07 16355 30-0ct-14 109.93 174643 17-Jul-14 39.64 174644 17-Jul-14 39.64 174698 18-Jul-14 37.50 175054 23-Jul-14 27.86 10831 16-0ct-14 115.71 10822 16-0ct-14 144.86~~.--- DECI SION CTA Case No. 9369 Page 56 of 60 Nepomuceno P-11-A- 488 Lasertech Copier Services (Elizalde L. Nepomuceno P-11-A- 499 New Family Drug & General Merchandise (Lance Lemuel Ling Lim P-11-A- 500 P-11-A- 501 New Family Drug & General Merchandise Lance Lemuel Ling Lim Palma Commercial James R. Palma Palma Commercial (James R. Palma P-11-A- 904 P-11-A- 905 Palma Commercial James R. Palma Pearlmont Inn (Perla G. Gotil Philippine Spring Water Resources, Inc.

Prince Plaza Hotel & Restaurant (Operated Rose Pharmacy, Inc.

P-11-A- 918 Ultra Shell Motorist Center, Inc.

P-11-A- 919 P-11-A- Uni-City General Merchandise, Inc.

Uni-City General 11365 11-Nov-14 338122 25-Nov-14 342530 01-Dec-14 004585 004584 005493 183308 002424 29-Oct-14 15.00 36.75 31.97 17-Jul-14 45.43 17-Jul-14 49.60 16-Sep-14 139.26 12-Nov-14 450.00 70.57 P-11-A- | by: Baguio AY & F Co., 909 Inc.} 123317 11-Nov-14 320.89 Robinsons Department Store - Butuan (Owned P-11-A- | and Operated by: 910 Robinsons Incorporated 003515 18-Nov-14 822.68 Robinsons Department Store - Butuan (Owned P-11-A- | and Operated by: O11 Robinsons Incorporated) 003526 23-Nov-14 208.47 Rosario's Seafood Restaurant & Grillhouse Chinese Cuisine (Operated by: New P-11-A- | Rosario Food Corporation 26-Nov-14 156.96 P-11-A- | Rose Pharmacy, Inc 913 ’ 13-Nov-14 24.20 2848 30404 21-Nov-14 P-11-A- 515 Rose Pharmacy, Inc. 0407 24-Dec-14 81.95 Gaisano Superstore P-11-A- | Butuan City Branch 916 (Interpace Corporation) 144031 05-Jun-14 24.56 | P-11-A- | Southwinds Hotel (Jose 917 C. Agudo III) 101656 27-Oct-14 | 125.36 19-Nov-14 19-Nov-14 27-Oct-14

CT A Case No. 9369

520 Merchandise, Inc.

P-11-A- Uni-City General 521 Merchandise, Inc.

P-11-A- Uni-City General 522 Merchandise, Inc.

P-11-A- Uni-City General 523 Merchandise, Inc.

Unite General P-11-A- Merchandise (Rosario Q. 524 Co) Almont Hotel & Inland P-11-A- Resort (Almont Hotel 539 Inc.)

Asia Link Shopping P-11-A- Center (Melona Cuajao 540 Regis) Bo's Coffee (Samping P-11-A- Realty and Development 541 Corporation) Bo's Coffee (Samping P-11-A- Realty and Development 542 Corporation) P-11-A- Claver Petron Station 543 (Roland Entenia Mira) CD-R King Gen.

P-11-A- Merchandise (Princess 544 Sapphire Corporation) P-11-A- E. Simtoco Enterprises 545 (Elisa T. Simtoco) Gerry's Grill (MM P-11-A- Cuisine Connoisseurs 546 Inc.)

P-11-A- GMI Greatfit Makers 547 Inc.

P-11-A- Hotel Karaga Inc.

548 P-11-A- Hotel Karaga Inc.

549 P-11-A- Hukad Butuan (VDCU 550 Prince Hotel Inc.)

P-11-A- Hukad Butuan (VDCU 551 Prince Hotel Inc.)

P-11-A- Karjel Photoshoppe 553 (Lourdes Navales Go) Kenny Rogers Roasters P-11-A- (Epicurean Partners 554 Echange Inc) Lasertech Copier P-11-A- Services (Elizalde L. 555 Nepomuceno) P-11-A- Laughing Buddha Food 556 Corp.

P-11-A- Mang !nasal Restaurant 567 (L. Cubillan) 2868 19-Nov-14 72.86 3155 30-Nov-14 171.42 3153 30-Nov-14 183.00 1457 29-0ct-14 55.71 8619 19-Dec-14 69.64 8526 07-Dec-14 51.43 1839 14-Nov-14 43.93 1928 28-Nov-14 101.25 19723 22-Dec-14 32.14 215283 09-Nov-14 8.57 180961 17-Dec-14 6.75 1918 12-Dec-14 39.64 17814 04-Dec-14 150.00 3269 05-Dec-14 85.71 3334 16-Dec-14 85.71 1699 28-Nov-14 31.50 1763 12-Dec-14 31.50 27339 17-Dec-14 52.07 6311 12-Dec-14 43.93 1 9318 19-Aug-14 144.43 17832 28-Nov-14 47.46 2454 16-Dec-14 12.321.

CT A Case No. 9369

P-11-A- Mercury Drug 568 Corporation 611-10252 10-Dec-14 184.66 P-11-A- Mercury Drug 569 Corporation 340-30679 22-Dec-14 215.14 P-11-A- Palma Commercial 570 (James R. Palma) 4503 12-Jul-14 38.04 P-11-A- Palma Commercial 571 (James R. Palma) 4704 26-Jul-14 28.71 P-11-A- Palma Commercial 572 (James R. Palma) 9802 19-Dec-14 45.86 P-11-A- Southwinds Hotel (Jose 575 C. Agudo Ill) 102614 21-Dec-14 139.29 P-11-A- Uni-City General 576 Merchandise, Inc.

2590 0 1-Dec-14 91.05 P-11-A- Uni-City General 577 Merchandise, Inc.

3261 03-Dec-14 280.13 Unite General P-11-A- Merchandise (Rosario Q. 578 Co) 1419 10-Dec-14 1,227.32 P-11-A- Yahotsia Corp.

582 0716 28-Nov-14 47.14 P-11-A- Yahotsia Corp.

583 0785 12-Dec-14 37.61 Total p 69,962.75 The valid input VAT of P69,962.75 should be reduced by Pl ,072.80 63, a portion attributable to petitioner's declared Exempt Sales/Receipts, hence, leaving a balance of P68,889.95.

Since petitioner did not submit VAT invoices/receipts proving the existence of its reported input VAT carry-over from previous quarter in the amount of P21,001,409.5864 and the valid input VAT on domestic purchases of services and goods other than capital goods after deducting the amount attributable to exempt sales/receipts is only P68,889. 95, the net output VAT liability still has a balance ofP117,582.546s. The remaining output VAT due of P117,582.54 shall be offset against the input VAT on importation of capital goods exceeding Pl million and non-capital goods attributable to the declared zero-rated sales/receipts, thus, leaving an excess input VAT of P26,319,682.31 (P26,437,264.85 minus P117,582.54).

63 P69,962.75 x 1.5333885% (Allocation factor for exempt sales/receipts). 64 Exhibit "P-11-A-42", Line 20A. 65 Net Output VAT Payable (P186,472.49) minus P68,889.95.""""

CT A Case No. 9369

However, as stated earlier, petitioner was able to properly substantiate only the amount of P8,675,805,090.45 out of its total declared zero-rated sales/receipts of P8,800,661,932.71. Thus, the excess input VAT attributable to petitioner's valid zero-rated sales/receipts of P8,675,805,090.45 amounts only to P25,946,279.40, as computed below: Excess Input VAT attributable to declared zero- rated sales I receiQ_ts p 26,319,682.31 Divided by declared zero-rated sales I receipts 8,800,661,932.71 Multiplied by valid zero-rated sales/receipts X 8,675,805,090.45 Refundable excess input VAT attributable to valid zero-rated sales/receipts p 25,946,279.40 In fine, petitioner has sufficiently proven its entitlement to a refund in the amount of P25,946,279.40 representing its unutilized excess input VAT for the four quarters of CY 2014 which is attributable to its zero-rated sales/receipts for the same period.

WHEREFORE, in view of the foregoing, the instant Petition for Review is PARTIALLY GRANTED. Accordingly, respondent is ORDERED to refund or issue a tax credit certificate in favor of petitioner in the reduced amount of P25,946,279.40 representing its unutilized excess input VAT for the four quarters of CY 20 14.

I CONCUR:

~ .. 7·~--·~ CATHERINE T. MANAHAN Associate Justice ~ ffl C- -~e:/.. :J J6ANITO c. CASTANED~, JR. Associate Justice

CT A Case No. 9369

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:l-~cls.t' ~ $JANITO C. CASTANEDA, JR. Associate Justice 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's Division. Presiding Justice ~