New York Bay Philippines, Inc. vs. Commissioner of Internal Revenue

D E CISION

Fa bon-Victorino, J. :

This Petition for Review 1 filed by New York Bay Philippines, Inc. on August 26, 2016, seeks to refund the amount of Thirty-Nine Million Two Hundred Ninety-Eight

Thousand Two Hundred Fifty-Five Pesos and Ninety-Five

Centavos (P39,298,255.95), allegedly representing excess and unutilized input value-added tax (VAT) on domestic purchases of goods and services attributable to its zero-rated sales of services for the four quarters of calendar year (CY) 2014.

First, the facts.

Petitioner New York Bay Philippines, Inc. is a domestic corporation with principal place of business at Unit 2102, 21st Floor Antel Global Corporate Center, Julia Vargas Avenue, / Pasig City. 2 It is registered with the Bureau of Internal

Revenue (BIR), Revenue District Office (RDO) No. 43A, as a VAT taxpayer with Taxpayer Identification No. 000-217-994- 000.3 Respondent, on the other hand, is the Commissioner of the BIR with the power to decide on disputed assessments, refunds of internal revenue taxes, fees or other charges, penalties imposed in relation thereto or other matters arising under the National Internal Revenue Code (NIRC) or other laws or portions thereof administered by the BIR. He holds office at the BIR National Office Building, Agham Road, Diliman, Quezon City.

On March 31, 2016, petitioner filed with the BIR RDO No. 43A an administrative claim for refund, with attached Application for Tax Credits/Refunds (BIR Form No. 1914), of its alleged excess and unutilized input VAl for the four quarters of CY 2014 in the amount of P39,298,255.95. 4 Allegedly the said amount is attributable to its zero-rated sales of services in the Philippines for the four quarters of CY 2014 to non-resident foreign corporations not engaged in business in the country.

On August 26, 2016, petitioner, citing respondent's inability to act on its administrative claim for refund/tax credit, filed the instant Petition for Review. In his AnswerS, respondent assails the jurisdiction of the Court to try the case on ground of premature filing. Citing Item II, Paragraph 1 of Revenue Memorandum Circular (RMC) No. 54-2014, in relation to Section 112(C) of the NIRC of 1997, as amended, respondent submits that since petitioner failed to submit the complete supporting documents upon submission of the administrative claim for VAT refund and the lapse of eighty (80) calendar days from the date of filing of the application/submission of documents, the application for tax credit/refund should be denied. 3 Exhibit "P-2", docket, p. 444. 4 Exhibits "P-18", "P-18-a", and "P-18-b", docket, pp. 489-493. 5 Docket, pp. 65-70.

/

CfA Case No. 9450

Respondent further submits that in order to validly claim for tax credit/refund, petitioner must first prove its compliance with the invoicing and accounting requirements mandated under Sections 113 and 114 of the 1997 NIRC, as amended.

He

also invokes the principle that tax refunds/credits are in the nature of tax exemptions thus, petitioner has the burden of proving the factual and legal bases of its claim.

After the pre-trial conference, the parties filed their Joint Stipulation of Facts and Issues6 (JSFI) on the basis of which a Pre-Trial Order7 was issued on March 30, 2017. To substantiate its claim for refund/tax credit, petitioner presented its Accounting Manager, Ma. Victoria Cruz and the Court-commissioned Independent Certified Public Accountant (!CPA), Madonna Mia S. Dayego. Witness Ma. Victoria Cruz testified8 that as petitioner's

Accounting

Manager, she is responsible for its entire accounting operations, which includes the review of tax returns for filing with the BIR. She also communicates and coordinates with petitioner's: (a) external auditors and government agency representatives for the audit of petitioner's books of accounts; and (b) legal counsel and tax consultants for statutory and tax issues. She is also the custodian of communications and notices to and from the BIR pertaining to any transactions that petitioner had with the BIR.

The instant case, according to the witness involves petitioner's claim for refund of the amount of P39,298,255. 95, representing its excess and unutilized input VAT on purchases of goods and services attributable to zero-rated sales for the four quarters of CY 2014.

As shown in petitioner's

Amended

Articles

of Incorporation issued on January 29, 2002, it is engaged in • Docket, pp. 231-239.

7 Docket, pp. 248-256.

8 Exhibit "P-23", docket, pp. 113-128. /

DEOSION

financial holding activities particularly as a remittance service provider. It utilizes and offers as services to its non-resident clients alternative delivery channels, including door-to-door, deposit to commercial bank account, pick-up from pawnshops and commercial and rural banks, credit cash cards, credit mobile phone remittance, bills payment, and telegraphic transfer.

In 2014, petitioner rendered services to two (2) non- resident clients, namely: (¹) Trans-Fast Remittance LLC, a limited liability company created under the laws of Delaware, United States of America (USA) and conducts business in the USA; and (²) Trans-Fast International FZ-LLC, a company existing under the laws of Dubai, United Arab Emirates (UAE) and conducts business in UAE. The two companies are not engaged in business in the Philippines as evidenced by their Articles of Incorporation issued by their respective countries, as well as, the Certifications issued by the Securities and Exchange Commission (SEC) certifying that they are not registered or licensed to do business in the Philippines. Per petitioner's Amended Quarterly Returns filed with the BIR, petitioner declared VATable and zero-rated sales during the four quarters of CY 2014 of P405,403,385.55, for which it incurred input VAT credits on its domestic purchases of goods and services in the amount of P39,327,313.92. A portion of the said input tax credits was applied as payment for its output tax of P29,057.99, thus, an excess and unutilized input VAT amounting to P39,298,255.95, which is the subject of the present claim. The witness further declared that on March 31, 2016, petitioner filed with the BIR Revenue District Office (RDO) No. 43A an administrative claim for refund of the said excess and unutilized input VAT for the four quarters of CY 2014 amounting to P39,298,255.95, with attached supporting documents. Also attached was a Sworn Certification stating that it submitted complete documents for purposes of processing its claim for refund. Respondent allegedly failed to act on the said administrative claim for refund, prompting petitioner to file the instant case on August 26, 2016. y--

ICPA Madonna Mia S. Dayego testified9 that per her examination and verification of voluminous supporting documents, petitioner is entitled to refund/TCC in the amount of P37,488,753.67 only.

In the Resolutions dated March 7, 2018 10 and July 5, 201811, the Court admitted all the documents formally offered by petitioner.

During the presentation of evidence for respondent, his counsel manifested that the latter would not present any evidence. Hence, the parties were granted thirty (30) days to submit their respective memoranda. However, only petitioner complied12, respondent did not13• Hence, the case was deemed submitted for decision on August 6, 2018.

THE ISSUE

The lone issue submitted for the resolution of the Court is as follows:

WHETHER PETITIONER IS ENTITLED

TO

ITS

CLAIM

FOR

REFUND

OF

OR

ISSUANCE OF TCC FOR THE AMOUNT OF

P39,298,255.95,

REPRESENTING

ITS

EXCESS AND UNUTILIZED INPUT VAT FOR

THE FOUR QUARTERS OF CY 2014. 14

THE COURT'S RULING

Section 112(A) and (C) of the NIRC of 1997, as amended, which pertinently provides, thus: SEC. 112. Refunds or Tax Credits of Input Tax. - 9 Exhibit "P-52", docket, pp. 369-384. 10 Docket, pp. 544-545.

11 Docket, pp. 568-569.

12 Docket, pp. 570-602.

13 Docket, p. 603.

14 JSFI, docket, pp. 231-239. /

(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

108 (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 of 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

(C) Period within which Refund or Tax Credit of Input Taxes shall be Made. - In proper cases, the Commissioner shall grant a refund or issue the tax credit certificate for creditable input taxes within one hundred twenty (120) days from the date of submission of complete documents in support of the application filed in accordance with Subsection (A) hereof. /

DEGSION

erA case No. 9450

Page 7 of 22

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." Per the above provision, to be entitled to a refund or tax credit of unutilized input VAT attributable to zero-rated or effectively zero-rated sales, the following requisites must be satisfied:

1. the taxpayer is VAT-registered;

2. the claim for refund was filed within the prescriptive period;

3.

the taxpayer is engaged in zero-rated or effectively zero-rated sales;

4. the input taxes were incurred or paid; 5.

the input taxes claimed are attributable to zero- rated or effectively zero-rated sales; and

6. the input taxes were not applied against any output VAT liability.

1st requisite:

Petitioner is VAT-registered entity It is undisputed that petitioner is a registered VAT taxpayer with Taxpayer Identification No. (TIN) 000-217-994- 000 as shown in its Certificate of Registration No. OCN 3RC0000682520,15 issued by the BIR on January 13, 2015. 15 Exhibit "P-2", docket, p. 444 /

DEOSION

2nd requisite:

Petitioner's

administrative and judicial claims were filed within the prescriptive period The subject claim covers the four quarters of CY 2014, each ending as follows:

Quarter

Close of Taxable Quarter

1st

March 31 2014

2nd June 30, 2014 3rd September 30, 2014 4th

December 31 2014

Based on the express provision of Section 112(A) and as expounded in the case of Commissioner of Internal Revenue vs. Aichi Forging Company of Asia, Inc. (Aichi), 16 a VAT- registered person, such as petitioner, may within two (2) years from the close of the taxable quarter when the relevant sales were made, apply with respondent a claim for refund/TCC of creditable input tax attributable to such sales. Counting two (2) years from the close of the taxable quarters, petitioner had until the following dates to file its administrative claim for refund/TCC of unutilized input VAT attributable to its zero-rated sales, to wit:

Quarter

Close of Taxable

Last Day of the Two-

Quarter

Year Prescriptive Period

1st March 31, 2014

March 31 2016

2nd

June 30 2014

June 30, 2016 3rd September 30, 2014 September 30, 2016 4th December 31, 2014 December 31, 2016 Evidently, the administrative claim covering the four quarters of CY 2014 was seasonably filed on March 31,

2016Y

16 G.R. No. 184823, October 06, 2010. 17 Exhibits "P-18", "P-18-a", and "P-18-b", docket, pp. 489-493. ,/

As to the timeliness of petitioner's judicial appeal, Section 112(C) of the NIRC of 1997, as amended, provides that respondent has 120 days from the date of submission of the complete documents in support of the application for refund or tax credit within which to grant or deny the claim. In case of full or partial denial by respondent, the taxpayer's recourse is to file an appeal before this Court within 30 days from receipt of the adverse decision of respondent. However, if after the 120-day period, respondent fails to act on the application for refund/TCC, the taxpayer may appeal respondent's inaction to this Court within 30 days. Thus, from the filing of petitioner's administrative claim on March 31, 2016, respondent had 120 days or until July 29, 2016 to decide on the said claim. Since respondent failed to act on petitioner's claim after the lapse of the 120-day period, petitioner had 30 days from July 29, 2016 or until August 28, 2016 within which to file its judicial claim. Indubitably, petitioner's filing of its judicial appeal on August 26, 2016 was likewise on time.

3rd requisite:

Petitioner

had zero-rated sales Petitioner claims that its sales of services in the

Philippines to

non-resident foreign corporations doing business outside the Philippines, particularly, Trans-Fast Remittance LLC and Trans-Fast International FZ-LLC, the consideration for which were paid for in acceptable foreign currency and duly accounted for in accordance with the rules and regulations of Bangko Sentral ng Pilipinas qualify as zero- rated sales under Section 108(B)(2) of the NIRC of 1997, as amended, which reads, thus: SEC. 108. Value-added Tax on Sale of Services and Use or Lease of Properties. -

XXX

XXX

XXX

/ erA Case No. 9450

(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:

(1) Processing, manufacturing or repacking goods for other persons doing business outside the Philippines which goods are subsequently exported, where the services are paid for in acceptable foreign currency and accounted for in accordance with the rules and regulations of the Bangko Sentral ng Pilipinas (BSP); (2)

Services

other than those mentioned in the preceding paragraph rendered to a person engaged in business conducted outside the Philippines or to a 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). In the case of Commissioner of Internal Revenue vs. Burmeister and Wain Scandinavian Contractor Mindanao, Inc. 18, the Supreme Court held that in order for the supply of services to be VAT zero-rated under Section 108(8)(2) of the NIRC of 1997, as amended, the following requisites must concur:

1. the services must be other than processing, manufacturing or repacking of goods; 2.

the payment for such services must be in acceptable foreign currency accounted for in accordance with the BSP rules and regulations; and •• G.R. No. 153205, January 22, 2007. /

DEOSION

3.

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

The record reveals that petitioner is duly registered with the SEC and is principally engaged in providing money remittance services either by electronic bank transfers, door- to-door, and other kinds of fund transfer19 • The said services are certainly not under the same category as "processing, manufacturing or repacking of goods". Hence, petitioner satisfied the first requisite. Anent the third requisite, the Court has previously held that to be considered as a non-resident foreign corporation doing business outside the Philippines, each entity must be supported, at the very least, by both SEC certificate of non- registration of corporation/partnership and certificate/articles of foreign incorporation/association/registration. 20 In the instant case, petitioner was able to establish that its clients, Trans-Fast Remittance LLC

and Trans-Fast

International FZ-LLC, are non-resident foreign corporations doing business outside the Philippines as evidenced by the following documents:

1. SEC Certificate of Non-registration of Company, certifying that Trans-Fast Remittance LLC is not registered as a corporation or partnership in the Philippines; 21

2. SEC Certificate of Non-registration of Company, certifying that Trans-Fast International FZ-LLC is not registered as a corporation or partnership in the Philippines; 22

3. Authenticated copy of Trans-Fast Remittance LLC's Articles of Incorporation, License to 19 Exhibit "P-29-2 (7/57)", Note 1 of the Notes to Financial Statements; Exhibit "P-1", docket, pp. 430-443.

20 Deutsche Knowledge Services Pte. Ltd. vs. Commissioner of Internal Revenue, CTA EB Nos. 1244 and 1345 {CTA Case No. 8443), March 30, 2017. 21 Exhibit "P-19", docket, p. 494. 22 Exhibit "P-20", docket, p. 495. ~

CfA Case No. 9450

Transact Business issued by the State of New York, Certificate of Formation from Delaware, and

State

of

Delaware

Certificate

of Amendment; 23 and

4. Authenticated copy of Trans-Fast International

FZ-LLC's Amended Memorandum of Association

and Articles of Association. 24 As regards the second requisite, Sections 113(A)(2), (B)(1), (2)(c) and (3) of the NIRC of 1997, as amended, as implemented by Sections 4.113-1(A)(2), (B)(1) and (2)(c) of Revenue Regulations (RR) No. 16-05, provide that a VAT taxpayer, like petitioner, shall for every lease of goods or properties and for every sale, barter or exchange of services, issue a VAT official receipt which must contain the following information:

SEC. 113.

Invoicing and Accounting

Requirements for VAT-Registered Persons. - (A) Invoicing Requirements. - A VAT- registered person shall issue:

XXX

XXX

XXX

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

(B) Information Contained in the VAT

Invoice or VAT Official Receipt. - 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 23 Exhibit "P-21", docket, pp. 496-525. 24 Exhibit "P-22", docket, pp. 526-541. ./

CfA Case No. 9450 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

(3) The date of transaction, quantity, unit cost and description of the goods or properties or nature of the service; and (Emphasis supplied) SEC.

4.113-1.

Invoicing

Requirements.-

(A)

A VAT-registered person shall issue: -

XXX

XXX

XXX

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

Only

VAT-registered

persons are required to print their TIN followed by the word 'VAT' in their invoice or official receipts.

Said

documents shall be considered as a 'VAT Invoice' or VAT official receipt.

All

purchases covered by invoices/receipts other than

VAT

Invoice/VAT Official Receipt shall not give rise to any input tax.

VAT invoice/official receipt shall be prepared at least in duplicate, the original to be given to the buyer and the duplicate to be retained by the seller as part of his accounting records.

/

CTA Case No. 94SO

(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; (Emphasis supplied) Pursuant to the foregoing provisions, the foreign currency remittances referred to under Section 108(B)(2) of the NIRC of 1997, as amended, must also be supported by VAT zero-rated official receipts. In its Original and Amended Quarterly VAT Returns for the four quarters of CY 2014, petitioner reported zero-rated sales of P405,161,235.60, as shown below:

Exhibit

Period Covered

Zero-Rated

Sales/Receipts

"P-4", docket, vol. 2, p. 447 1st Quarter 2014 p 111,771,474.15 "P-5", docket, vol. 2, p. 449 2nd Quarter 2014 119,636,433.17 "P-7", docket, vol. 2, p. 453 3rd Quarter 2014 128,828,717.42 "P-9", docket vol. 2 p, 457 4th Quarter 2014 44 924 610.86

Total

P405,161,235.60 To prove that it rendered services to Trans-Fast Remittance LLC and Trans-Fast International FZ-LLC for the four quarters of CY 2014; and that they were paid for in acceptable foreign currency duly accounted for in accordance with the rules and regulations of the BSP, petitioner presented / its VAT zero-rated official receipts (0Rs)25, bank advices26, and passbooks27 •

Upon

verification, the Court finds the foregoing supporting documents in order. Accordingly, petitioner's total reported zero-rated sales of P405,161,235.60 qualify for VAT zero-rating under Section 108(8)(2) of the Tax Code. 4th and sth requisites:

Petitioner incurred and paid input taxes which are attributable to its zero-rated sales In its Original and Amended Quarterly VAT Returns for the four quarters of CY 2014, petitioner reported input VAT in the total amount of P39,327,313.92, broken down as follows: 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter

(Exhibit P-4)

(Exhibit P-5)

(Exhibit P-7)

(Exhibit P-9)

Total

Purchase of Capital

Goods not exceeding

1M (Line 218)

p 98 306.11 p 252 843.39 p 22 578.77 p 18 702.00 p 392 430.27

Domestic Purchases

of Goods Other than

Capital Goods (Line

21F)

23 752.61 25 355.77 31 067.55 17 709.32 97 885.25

Domestic Purchase of

Services (Line 21JJ

8 975 316.48 9 571 240.30 9 938 570.14 10 351 871.48 38 836 998.40

Total Input Taxes

for the period 1'9,097,375.20 1'9 ,849 439.46 1'9 992 216.46 1'10 388 282.80 1'39 327 313.92 To establish that petitioner incurred/paid the afore- mentioned input VAT, it submitted various suppliers' invoices28 and official receipts29 • After examination of these documents, the Court-commissioned ICPA, Madonna Mia S. Dayego, noted exceptions in the amount of P1,809,502.28, to wit: 30 2s Exhibits "P-30-21" to "P-30-40". 26 Exhibits "P-32-1" to "P-32-20". 21 Exhibits "P-32-21" to "P-32-38". 26 Exhibits "P-39-1" to "P-39-30", "P-40-1", to "P-40-2", "P-41-1" to "P-41-3", and "P-43-1" to "P-43-59".

29 Exhibits "P-46-1" to "P-46-289", "P-47-1" to "P-47-17", "P-48-1" to "P-48-20", "P-49-1" to "P-49-18", and "P-50-1" to "P-50-4". 30 Exhibit "P-53", ICPA Report, docket, pp. 305-306.

J

Exhibit

Particulars

Input VAT on Capital Goods Not

Exceeding I'J Hi/lion Supported by original

P-40

VAT invoices not in the

Petitioner's Name

Supported by original

P-41

VAT invoices without

the TIN of the

Petitioner

P-42

Not supported

Input VAT on Domestic

Purchases of Goods Other Than

Capital Goods

P-45

I Not supported

Input VAT on Domestic

Purchases of Services

Supported by original VAT ORs in the name

P-47

of the Petitioner not dated or issued within the taxable year Supported by original

P-48

VATORs

without/invalid TIN of

the Petitioner

Supported by non-VAT

P-49

ORs in the name of

the Petitioner

Supported by original

P-50

VAT ORs without TIN and/or address of the

Petitioner

P-51

Not supported

Total Downward Adjustments

periCPA 1st Qtr

I'

- 9 739.28 8 488.39 1 913.70 - 14 256.96 1 064.14 - 2 560.76 1'38 023.23 2nd Qtr 3rd Qtr 4th Qtr

Total

I'

~910.00 p - p - f' 5 910.00 - - 748.93 10 488.21 9 278.04 - - 17 766.43 4 849.33 2 020.89 3 836.36 12 620.28 - - 1 566 025.87 1 566 025.87 1 013.56 3,039.09 18 119.81 36 429.42 31 959.62 73 605.54 21 742.50 128 371.80 - - 16 233.74 16 233.74 4 714.08 8 141.69 240.00 15 656.53 1'57 724.63 1'86 807-21 1'1 626 947.21 1'1 809 502.28 The Court finds the above findings of the ICPA in order. The said input taxes of P1,809,502.28 shall be disallowed from petitioner's claim as they were not properly substantiated by VAT invoices or ORs as prescribed under Sections llO(A) and 113(A) and (B) of the Tax Code, and as implemented by Sections 4.110-1, 4.110-2, 4.110-8, and 4.113-1(A) and (B) of RR No. 16-05. Further review of the !CPA's report and petitioner's supporting documents indicates that the input VAT on domestic purchases of services in the amount of P144,410.50, broken down below, shall likewise be disallowed for failure to meet the substantiation requirements under the aforecited VAT law and regulations:

'

I

I

-

J

erA case No. 9450

511J!plier Name

First_Quarter

CIS Bayad Center Inc.

CIS B"Y_ad Center Inc.

CIS Bayad Center Inc.

Federal Express Pacific Inc. Federal Exoress Pacific Inc.

Feria Tantoco Robeniol Law

Offices

Global Piney Remittance &

Services Inc.

Pronto Express Distribution, Inc.

subtotal Second J}uarter

Cebuana Lhuillier Pera

Padala

CIS Bayad Center Inc.

CIS Bavad Center. Inc.

Exhibit No.

P-46-13

P-46-14

P-46-15

P-46-24

P-46-26

P-46-29

P-46-33

P-46-54

P-46-79

P-46-80

P-46-81

OR No.

Input VAT

21088 !' 7 347.86 1113 6 756.43 1114 7 566.43

C00037341

0.02

C00039193

107.68 8282 420.00 527 1477.50 104205 216.96 ,. 2.1892.88 250534 p 9.64 1176 6 248.57 2507 10.922.14 Reason for disallowance Supported by VAT OR without the phrase 'THIS

INVOICE/RECEIPT SHALL BE

VAUD FOR RVE (5) YEARS

FROM THEDA TE OF THE ATP"

printed thereon as prescribed under RMO 12-2013.

Supported by VAT OR without the phrase 'THIS,

INVOICE/RECEIPT SHALL BE '

VAUD FOR FIVE (5) YEARS

FROM THEDA TE OF THE ATP"

printed thereon as prescribed under RMO 12-2013.

Supported by VAT OR without the phrase 'THIS

INVOICE/RECEIPT SHALL BE

VAUD FOR FIVE (5) YEARS

FROM THE DATE OF THE ATP"

printed thereon as prescribed under RMO 12-2013.

Amount per schedule (1'175.52) is lower than the amount per VAT OR (1'175.50)

Supported by VAT OR with

alteration on amount of VAT with countersignature but different from the signatory of said OR

Supported by VAT OR with

alteration on petitioner's name but without countersignature

Supported by VAT OR but the

amount

of VAT

was not separately shown Supported by document with notation 'THIS DOCUMENT IS

NOT VAUD FOR CLAIMING

INPUT TAX"

Amount

per schedule (!'1,428,406.07) is lower than the amount per

VAT

OR

(P1 428 396.43) Supported by VAT OR without the phrase 'THIS

INVOICE/RECEIPT SHALL BE

VAUD FOR FIVE (5) YEARS

FROM THE DATE OF THE ATP"

printed thereon as prescribed under RMO 12-2013.

Supported by VAT OR without the phrase 'THIS

INVOICE/RECEIPT SHALL BE

VAUD FOR FIVE f5) YEARS

FROM THEDA TE OF THE ATP"

printed thereon as prescribed under RMO 12-2013 and the amount of VAT is unreadable

J

OS Bayad Center Inc.

Deeconcrete Incorporated

Marickson Printinq Services

Pronto Express Distribution, Inc.

Pronto Express Distribution, Inc.

Pronto Express Distribution, Inc.

Ronald Mark S. Daos Pronto Express Distribution, Inc.

subtotal

Third Quarter

CIS Bayad Center Inc.

CIS Bayad Center Inc.

OS Bayad Center Inc.

Integrated Safeguard

Securitv Agency, Inc.

Pronto Express Distribution, Inc.

P-46-82

P-46-88

P-46-116

P-46-126

P-46-127

P-46-128

P-46-129

P-46-286

P-46-148

P-46-149

P-46-150

P-46-180

P-46-195

3338 13 191.43 21628 747.07 3653 246.43 104506 216.96 104665 180.00 104734 249.36 0043 1 080.00 104308 216.96 , 33308.56 3336 p 14 605.71 3337 16 945.71 4109 18 437.14 13559 383.44 104907 249.36 Supported by VAT OR without the phrase 'THIS

INVOICE/RECEIPT SHALL BE

VALID FOR FIVE (S) YEARS

FROM THEDA TE OF THE A TP"

printed thereon as prescribed under RMO 12-2013.

Amount

per schedule (P8,217.79) is lower than the amount per

VAT

OR

(P7 470.72) Supported by document with notation 'THIS DOCUMENT IS

NOT VALID FOR CLAIMING

INPUT TAX"

Supported by document with notation 'THIS DOCUMENT IS

NOT VALID FOR CLAIMING

INPUT TAX"

Supported by document with notation 'THIS DOCUMENT IS

NOT VALID FOR CLAIMING

INPUT TAX"

Supported by document with notation 'THIS DOCUMENT IS

NOT VALID FOR CLAIMING

INPUT TAX"

Amount

per schedule (P2,280.00) is lower than the amount per

VAT

OR

(P1 200.00).

Supported by document with notation 'THIS DOCUMENT IS

NOT VALID FOR CLAIMING

INPUT TAX"

Supported by VAT OR without the phrase 'THIS

INVOICE/RECEIPT SHALL BE

VALID FOR FIVE (5) YEARS

FROM THE DATE OF THE ATP"

printed thereon as prescribed under RMO 12-2013.

Supported by VAT OR without the phrase 'THIS

INVOICE/RECEIPT SHALL BE

VALID FOR FIVE (5) YEARS

FROM THE DATE OF THE A TP"

printed thereon as prescribed under RMO 12-2013.

Supported by VAT OR without the phrase 'THIS

INVOICE/RECEIPT SHALL BE

VALID FOR FIVE (5) YEARS

FROM THEDA TE OF THE A TP"

printed thereon as prescribed under RMO 12-2013.

Supported by VAT OR but the

amount

of VAT

was not separately shown Supported by document with notation 'THIS DOCUMENT IS

NOT VALID FOR CLAIMING

INPUT TAX"

/

Pronto Express Distribution, Inc.

Pronto Express Distribution, Inc.

Stelsen Corporation

Via Express Travel & Tours

Inc

subtotal

Fourth Quarter

Airfreight 2100 Inc.

Airfreioht 2100, Inc.

Airfreioht 2100 Inc.

CIS Bayad Center Inc.

as Bayad Center Inc.

Marickson Printino Services

Pronto Express Distribution, Inc.

Pronto Express Distribution, Inc.

subtotal

Total

P-46-196

P-46-197

P-46-207

P-46-208

P-46-214

P-46-215

P-46-216

P-46-221

P-46-222

P-46-258

P-46-267

P-46-268

105054 249.36 105198 249.36 91758 432.00 0591 20.89 ,. 51572.97

2050451A

p 41.13

2050453A

20.79

2050452A

33.30 4420 21 375.00 4906 13 474.29 3540 192.86 105377 249.36 105550 249.36 ,. 35. 636.09 P144 410.50 Supported by document with notation 'THIS DOCUMENT IS

NOT VALID FOR CLAIMING

INPUT TAX"

Supported by document with notation 'THIS DOCUMENT IS

NOT VALID FOR ClAIMING

INPUT TAX"

Supported by VAT OR but

without the TIN of petitioner Amount per schedule (!'48. 75) is lower than the amount per VAT OR (P27.86)

Supported by VAT OR but the

amount

of VAT

was not separately shown

Supported by VAT OR but the

amount

of VAT

was not seoaratelv shown

Supported by VAT OR but the

amount

of VAT

was not separately shown Supported by VAT OR without the phrase 'THIS

INVOICE/RECEIPT SHALL BE

VALID FOR FIVE (5) YEARS

FROM THE DATE OF THE ATP"

printed thereon as prescribed under RMO 12-2013.

Supported by VAT OR without the phrase 'THIS

INVOICE/RECEIPT SHALL BE

VALID FOR FIVE (5) YEARS

FROM THE DATE OF THE ATP"

printed thereon as prescribed under RMO 12-2013.

Supported by VAT OR but the

amount

of VAT

was not seoaratelv shown Supported by document with notation 'THIS DOCUMENT IS

NOT VALID FOR ClAIMING

INPUT TAX"

Supported by document with notation 'THIS DOCUMENT IS

NOT VALID FOR CLAIMING

INPUT TAX"

Therefore, out of the reported input

VAT

of P39,327,313.92, only the amount of P37,373,401.14 represents petitioner's valid input VAT, computed as follows: 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter"

(Exhibit P-4}_

(Exhibit P-5}

(Exhibit P-7)

(ExhibitP-9L

Total

Input VAT per VAT

Returns

p 9 097 375.20 p 9 849 439.46 p 9 992 216.46 p 10 388 282.80 p 39 327 313.92

Less: Disallowances:

./

Per !CPA Report 38 023.23 57 724.63 86 807.21 1 626 947.21 1 809 502.28 Per Court's further verification 23 892.88 33 308.56 51 572.97 35 636.09 144 410.50

Total Disallowances

p 61 916.11 p 91 033.19 p 138 380.18 p 1 662 583.30 p 1 953 912.78 Valid input VAT P9,035,459.09 P9 758,406.27 1 P9,853,836.28 . P8,725,699.50 P37,373,401.14_ However, a portion of the valid input VAT of P37,373,401.14 shall be applied against petitioner's total reported output VAT liability of P29,057.99. Consequently, only the remaining input VAT of P37,344,343.15 can be attributed to the entire zero-rated sales of P405,161,235.60 declared and substantiated by petitioner, as computed below: 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter

Total

Valid input VAT p 9,035,459.09 p 9,758,406.27 p 9,853,836.28 p 8,725,699.50 p 37,373,401.14

Less: Outout VAT

- 20 764.50 7 275.00 1 018.49 29,057.99

Excess Input VAT

attributable to zero-rated sales P9 035 459.09 P9 737 641.77 P9 846 561.28 P8 724 681.01 P37 344 343.15 6th requisite:

Petitioner's

taxes were against any liability excess input not applied output

VAT

Petitioner was able to prove that the claimed excess input VAT of P39,298,255.95 for the four quarters of CY 2014 remained unutilized as the said amount was deducted as "VAT Refund/TCC claimed"31 in its Amended Quarterly VAT Return for the fourth quarter of CY 2014. It was not also reflected as carry over in petitioner's Monthly and Quarterly VAT Returns32 of the succeeding CY 2015. As such, it eliminates the possibility that the present claim will be applied to future output VAT liability.

In fine, petitioner was able to meet all the requisites for its claim for refund/TCC of unutilized input VAT attributable to its zero-rated sales, hence, it is entitled to the refund of the amount substantiated and not applied against output tax. 31 Line 230 of Exhibit "P-9", docket, p. 458. 32 Exhibits "P-38-1" to "P-38-12". / erA Case No. 9450

WHEREFORE, 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 P37,344,343.15, representing its excess and unutilized input VAT on purchases of goods and services attributable to zero-rated sales for the four quarters of calendar year 2014.

Associate Justice

ATTESTATION

.,. ABON-viCTORINO 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.

CERTIFICATION

Pursuant to Section 13 of Article VIII of the Constitution, and the Division Acting 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