Intel Technology Philippines, Inc. v. Commissioner of Internal Revenue

SECOND DIVISION [C.T.A. CASE NO. 6128. May 25, 2012.] INTEL TECHNOLOGY PHILIPPINES, INC. , petitioner , vs . COMMISSIONER OF INTERNAL REVENUE , respondent . DECISION CASTAEDA, JR. , J p : This is a remanded case involving a claim for refund in the amount of P11,770,181.70 allegedly representing petitioner's unutilized VAT input taxes on its domestic purchases of goods and services for the period April 1, 1998 to June 30, 1998 attributable to its zero-rated sales for the said period. Initially, this case was decided by the Court of Tax Appeals (CTA original composition) prior to the effectivity of Republic Act (RA) No. 9282. 1 The facts of the case are as follows: Petitioner is a domestic corporation duly registered with the Securities and Exchange Commission (SEC) and is engaged primarily in the business of designing, developing, manufacturing and exporting advanced and large-scale integrated circuits components or IC's. 2 It is registered with the Philippine Economic Zone Authority (PEZA) as pioneer enterprise enjoying six (6) years Income Tax Holiday with Certificate of Registration No. 95-133 3 and with the Bureau of Internal Revenue (BIR) as a value-added tax (VAT) entity with Certificate of Registration No. 96-540-000713 and Tax Identification No. 004-833-143. 4 As a VAT-registered entity, petitioner reported input taxes it incurred from April 1, 1998 to June 30, 1998 in its Quarterly VAT Returns 5 and Monthly VAT Declarations 6 for the second quarter of 1998 filed and stamped received by the BIR or its agent. 7 On May 18, 1999, petitioner filed with respondent, through the One Stop Shop Inter-Agency Tax Credit and Duty Drawback Center of the Department of Finance, an application for tax credit/refund of VAT input taxes paid on its domestic purchases of goods and/or services directly used by the petitioner in its commercial operations, amounting to P11,770,181.70, covering the period April 1, 1998 to June 30, 1998. 8 Without action on the part of the respondent, 9 petitioner filed this Petition for Review. 10 In the Answer, respondent raised the following Special and Affirmative Defenses: 11 "4. Petitioner being allegedly registered with the Philippine Economic Zone Authority, is exempt from all taxes, including value-added tax, pursuant to Section 24 of Republic Act No.7916 in relation to Section 103 of the TaxCode, as amended by R.A.7716. Since its sales are not zero-rated but are exempt from VAT, petitioner is not entitled to refund of input tax pursuant to Section 4.106-1 and 4.103-1 of Revenue Regulations No.7-95; TCaADS 5. Petitioner alleged claim for refund is subject to administrative routinary investigation/examination by the Bureau; 6. The amount of P47,582,813.72 being claimed by petitioner as alleged VAT input taxes for the period of 01 July 1997 to 31 December 1997 was not properly documented (sic) ; 7. 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/credit; 8. Petitioner must show that it has complied with the provisions of Sections 204(c) and 229 of the TaxCode on the prescriptive period for claiming tax refund/credit; 9. Claims for refund are construed strictly against the claimant for the same partake the nature of exemption from taxation." After the parties filed their respective Pre-trial Briefs, the court ordered the submission of Joint Stipulation of Facts and Issues. On September 18, 2000, the parties filed their Joint Stipulation of Facts and Simplification of Issues, 12 approved in a Resolution 13 dated September 21, 2000. In the same Resolution, the pre-trial was considered terminated. During trial, petitioner presented and formally offered its documentary and testimonial evidence. In a Resolution dated November 5, 2002, Exhibits "A", "B", "C", "C-1", "D", "D-1", "E", "E-1", "F", "F-1" to "F-6", "G" to "L", "H-2", "K-2", "G-1" to "L-1", "H-3", "I-2", "K-3", "L-2", "M", "N", "M-1", "N-1", "O", "O-1", "O-2", "P", "P-1", "P-2", "Q", "Q-1", "Q-2", "S", "T", "T-1", "U-1" to "U-375", "V-1" to "V-665", "W-1" to ''W-424", "X" to "X-669", and "Y" were admitted as part of petitioner's evidence. 14 On the other hand, respondent's counsel manifested that the case has no report of investigation; thus, she moved for the submission of the case for decision. 15 On February 1, 2002 16 and February 26, 2002 17 petitioner and respondent, respectively, filed their Memoranda. On February 28, 2002, petitioner filed a "Motion to Admit" 18 the summary of VAT claimed deductions as part of the exhibits of the petitioner. In a Resolution 19 dated March 21, 2002, the Court granted the motion and submitted the case for decision. On June 21, 2002, the Court granted petitioner's "Motion to Re-Open" the case for presentation of additional document. 20 On August 29, 2002, the "Amended Formal Offer of Petitioner's Evidence" 21 was filed. On November 5, 2002, the Court resolved to admit exhibits mentioned in the Amended Formal Offer of Petitioner's Evidence and submitted the case for decision. 22 The parties raised the following issues to be resolved by this court: 1. Whether or not Petitioner's sales were actually export sales subject to zero-rated (sic) for VAT purposes; 2. Whether or not the export proceeds of Petitioner were inwardly remitted in accordance with the rules and regulations of the Bangko Sentral ng Pilipinas; 3. Whether or not the VAT input taxes have not been applied to the output tax for the period covered in its claim or any succeeding quarter or quarters; 4. Whether or not the VAT input taxes on domestic purchases of goods and services are attributable to Petitioner's zero-rated sales; and 5. Whether or not Petitioner is entitled to a refund of the VAT input taxes arising from domestic purchases of taxable goods and services from April 1, 1998 to June 30, 1998 in the amount of P11,770,181.70. 23 On April 21, 2003, the Court of Tax Appeals (CTA original composition) prior to the effectivity of RA No. 9282, promulgated a Decision 24 denying the petition for failure to substantiate its export sales with valid VAT export sales invoices which should contain BIR authority to print and Taxpayer's Identification Number VAT (TIN-V). The ruling reads: On the basis of all the foregoing, the documents submitted by petitioner in support of its claim cannot be considered as valid evidence to prove its zero-rated sales of goods for VAT purposes. Apparently, petitioner failed to substantiate its demand for refund/issuance of tax credit certificate. TcDHSI WHEREFORE, in view of the foregoing, petitioner's claim for issuance of a tax credit certificate in the amount of P11,770,181.70 allegedly representing its VAT input taxes on domestic purchases of goods and services for the period April 1, 1998 to June 30, 1998 is hereby DENIED. SO ORDERED. 25 On May 14, 2003, petitioner filed a Motion for Reconsideration 26 and a Supplemental Motion for Reconsideration on June 23, 2003 27 which the CTA denied in the Resolution 28 dated September 1, 2003. Aggrieved by the Decision and Resolution of the CTA, petitioner filed a Petition for Review with the Court of Appeals (CA). In the Decision dated August 12, 2004, the CA affirmed the decision of the CTA which denied petitioner's claim for refund. Thus, by way of Petition for Review docketed as G.R. No. 166732 petitioner appealed the denial of its claim to the Supreme Court. In its Decision 29 dated April 27, 2007, the Supreme Court reversed the ruling of the CA and partially granted the petition. The case was remanded to the CTA for determination and computation of petitioner's tax credit/refund. The Supreme Court held: In a claim for refund or issuance of a tax credit certificate attributable to zero-rated sales, what is to be closely scrutinized is the documentary substantiation of the input VAT paid, as may be proven by other export documents, rather than the supporting documents for the zero-rated export sales. And since petitioner has established by sufficient evidence that it is entitled to a refund or issuance of a tax credit certificate, in accordance with the requirements of Sections 106 (A)(2)(a)(1) and 112(A) of the TaxCode, then its claim should not be denied, notwithstanding its failure to state on the invoices the BIR authority to print and the TIN-V. Worthy of mentioning again is the fact that even the CTA and the CA have found petitioner to be legally entitled to a claim for refund or issuance of a tax credit certificate of its unutilized VAT input taxes on domestic purchases of goods and services attributable to its zero-rated sales. xxx xxx xxx Even as the Court now holds that petitioner is legally entitled to a refund or issuance of a tax credit certificate of its unutilized VAT input taxes on domestic purchases of goods and services attributable to its zero-rated sales, the case shall nevertheless be remanded to the CTA for proper determination and computation of petitioner's tax credit/refund, considering that in the Report of the independent auditor, Eliseo Aurellado, only the amount of P9,688,809.00 was deemed as petitioner's valid claim for tax credit. According to Aurellado, the difference of P2,081,372.32 from petitioner's input VAT claim of P11,770,181.70 was not supported by sufficient documentary proof. The Court, not being a trier of facts, cannot certainly decide this factual circumstance. WHEREFORE , premises considered, the petition is PARTIALLY GRANTED . The Decision dated August 12, 2004 of the CA in CA-G.R. SP No. 79327 is REVERSED and SET ASIDE . The instant case is REMANDED to the Court of Tax Appeals for the determination and computation of petitioner's tax credit/refund. SO ORDERED . When the case was remanded to the CTA, petitioner's counsel moved that petitioner be granted cash refund instead of tax credit certificate on the ground that it already stopped its operation and is actually in the process of dissolution. Acting on said motion, the Court ordered petitioner to submit "Compliance," showing that indeed petitioner has stopped operation, hence the grant of cash refund instead of tax credit certificate. 30 Respondent did not file her comment or opposition to the petitioner's "Compliance and Manifestation" filed on April 23, 2012. Attached to the "Compliance and Manifestation" 31 were the following documents: a. Secretary's Certificate dated February 3, 2012 of Board Resolution dated 29 June 2010 shortening the Corporate Term to June 30, 2010; 32 b. Duly received application with the BIR for the issuance of a Tax Clearance dated 30 December 2010; 33 and cTECHI c. E-Letter of Authority issued by the BIR dated May 12, 2011. 34 In compliance with the Supreme Court's decision dated April 27, 2007 where it has been settled that petitioner is legally entitled to a refund, this court now proceeds to determine and compute petitioner's tax credit/refund representing the VAT input paid on domestic purchases of goods and services for the period April 1, 1998 to June 30, 1998 attributable to its zero-rated sales. As regards the substantiation issue on the claimed input VAT payment of P11,770,181.70, the commissioned independent CPA, Mr. Eliseo A. Aurellado, in his report dated May 18, 2001, 35 noted the following exceptions and observations 36 as far as the total claimed amount of unutilized input taxes are concerned: Exceptions Findings Amount Exception A No supporting documents P2,029,491.77 Exception B Sold/billed to Intel Philippines Manufacturing, Inc. 51,880.54 Total P2,081,372.31 =========== Of the total disallowances of petitioner's input VAT arrived at by the commissioned independent CPA in the amount of P2,081,372.31, only the amount of P2,068,280.85 37 represents petitioner's disallowed input VAT on purchased of goods and services and the remaining amount of P13,091.46 38 previously disallowed by the independent CPA should then be allowed for its available documents properly support the claimed input VAT. However, further verification and examination of the records discloses that additional amount of P2,153,422.07 of the input taxes claimed should be disallowed for failure to properly document the same, to wit: Findings Total Input VAT Input tax on purchase of goods/services supported by invoice/OR but dated outside the period of claim. P1,209,653.71 Input tax on purchase of goods/services supported by invoice/OR but not in the name of petitioner. 275,428.34 Input tax on purchase of goods/services supported by "TIN-V" invoice/OR. 288,503.93 Input tax on purchase of goods/services not supported by the required documents. 102,245.42 Input tax on purchase of goods supported by zero-rated sales invoice. 176,271.76 Input tax on purchase of goods supported by invoice not registered with the BIR 101,318.91 Total Disallowances P2,153,422.07 =========== The details of these disallowances are as follows: Exhibit Supplier Invoice Date Input Tax Purchase of goods/services supported by invoice/OR but dated outside the period of claim. Batch #1 U-15 ADD SERVICES & SUPPLY 03/22/98 14,400.00 U-16 ADD SERVICES & SUPPLY 03/22/98 15,454.55 U-17 ADD SERVICES & SUPPLY 03/22/98 30,909.09 U-48 ASIAN AUTOMATION & ROBOTICS 03/10/98 209.09 CORP. U-77 ATS RESOURCE CENTER, INC. 03/25/98 2,424.00 U-78 AUTOMATED TOOL FAB. 10/16/97 396.15 RESOURCES U-80 BASE CORP. 12/16/97 3,273.60 U-88 BENEDICT SAFETY SHOES & IND'L 03/31/98 285.00 SUPPLY U-89 BENEDICT SAFETY SHOES & IND'L 03/31/98 1,282.50 SUPPLY U-96 BLUE SKY TRADING COMPANY INC. 03/21/98 5,909.09 U-97 BOOKHAVEN, INC. 03/31/98 8,513.64 U-98 BROWN DIRECT SALES CORP. 03/23/98 2,196.00 U-99, 100 BROWN DIRECT SALES CORP. 03/03/98 1,477.27 U-103 CHASE PACIFIC TECH. 03/23/98 271.82 U-106 CHASE PACIFIC TECH. 03/30/98 86.36 U-109, 110 CITIMEX, INC. 11/24/97 41,809.09 U-109, 111 CITIMEX, INC. 07/23/97 27,872.73 U-112,113 COMPUMEDICS CORP. 02/11/98 1,561.82 U-114 CONSOLIDATED IND'L GASES, INC. 03/26/98 7,333.26 U-114 CONSOLIDATED IND'L GASES, INC. 03/26/98 6,807.00 U-114 CONSOLIDATED IND'L GASES, INC. 03/26/98 4,673.10 U-115 CONSOLIDATED IND'L GASES, INC. 03/26/98 7,769.80 U-115 CONSOLIDATED IND'L GASES, INC. 03/26/98 7,378.92 U-115 CONSOLIDATED IND'L GASES, INC. 03/26/98 6,700.50 U-115 CONSOLIDATED IND'L GASES, INC. 03/26/98 6,552.94 U-115 CONSOLIDATED IND'L GASES, INC. 03/26/98 4,338.45 U-115 CONSOLIDATED IND'L GASES, INC. 03/26/98 6,426.07 U-116 CONSOLIDATED IND'L GASES, INC. 03/22/98 3,829.40 U-117 CONSOLIDATED IND'L GASES, INC. 03/19/98 5,907.55 U-118 CONSOLIDATED IND'L GASES, INC. 03/19/98 7,862.59 U-119 CONSOLIDATED IND'L GASES, INC. 03/18/98 4,749.14 U-120 CONSOLIDATED IND'L GASES, INC. 03/23/98 7,259.21 U-121 CONSOLIDATED IND'L GASES, INC. 03/22/98 7,258.76 U-122 CONSOLIDATED IND'L GASES, INC. 03/23/98 6,234.63 U-123 CONSOLIDATED IND'L GASES, INC. 01/20/98 7,024.07 U-126 CONSOLIDATED IND'L GASES, INC. 03/31/98 7,228.71 U-126 CONSOLIDATED IND'L GASES, INC. 03/31/98 6,703.60 U-126 CONSOLIDATED IND'L GASES, INC. 03/31/98 6,491.15 U-126 CONSOLIDATED IND'L GASES, INC. 03/31/98 6,671.28 U-126 CONSOLIDATED IND'L GASES, INC. 03/31/98 3,844.42 U-127 CONSOLIDATED IND'L GASES, INC. 03/31/98 6,470.09 U-127 CONSOLIDATED IND'L GASES, INC. 03/31/98 7,309.35 U-127 CONSOLIDATED IND'L GASES, INC. 03/31/98 7,016.72 U-127 CONSOLIDATED IND'L GASES, INC. 03/31/98 7,389.81 U-127 CONSOLIDATED IND'L GASES, INC. 03/31/98 6,386.45 U-127 CONSOLIDATED IND'L GASES, INC. 03/31/98 3,027.19 U-128 CONSOLIDATED IND'L GASES, INC. 03/31/98 4,855.67 U-128 CONSOLIDATED IND'L GASES, INC. 03/31/98 6,470.31 U-128 CONSOLIDATED IND'L GASES, INC. 03/31/98 6,840.17 U-128 CONSOLIDATED IND'L GASES, INC. 03/31/98 7,113.16 U-128 CONSOLIDATED IND'L GASES, INC. 03/31/98 6,378.87 U-129 CONSOLIDATED IND'L GASES, INC. 03/31/98 7,962.46 U-131 CONSOLIDATED IND'L GASES, INC. 01/23/98 845.82 U-133 CONSOLIDATED IND'L GASES, INC. 03/10/98 1,106.18 U-134 CONSOLIDATED IND'L GASES, INC. 03/03/98 5,454.55 U-135 CONSOLIDATED IND'L GASES, INC. 03/09/98 7,669.09 U-146 CORNERSTEEL SYSTEM CORP. 03/26/98 2,080.70 U-147 CORNERSTEEL SYSTEM CORP. 03/31/98 32,498.00 U-155, 156 DATA CENTER DESIGN CORP. 10/15/98 6,818.18 U-157, 158 DELTA STAR POWER MFG. CORP. 09/08/98 4,363.64 U-164 DIVERSO 02/13/98 5,184.00 U-165 DIVERSO 01/28/98 12,527.46 U-166 DIVERSO 01/20/98 9,931.09 U-167 DIVERSO 03/30/98 14,545.46 U-168 DIVERSO 02/02/98 4,092.00 U-179 DIVERSO 03/29/98 7,863.64 U-202 DMS ENG'G & SERVICES 03/26/98 1,909.09 U-314 DMS ENG'G & SERVICES 07/06/98 417.27 U-314 DMS ENG'G & SERVICES 07/06/98 8,116.36 U-314 DMS ENG'G & SERVICES 07/06/98 1,500.00 U-314 DMS ENG'G & SERVICES 07/06/98 1,636.36 U-314 DMS ENG'G & SERVICES 07/06/98 1,622.83 U-314 DMS ENG'G & SERVICES 07/06/98 4,545.45 U-314 DMS ENG'G & SERVICES 07/06/98 7,868.09 U-314 DMS ENG'G & SERVICES 07/06/98 4,818.18 U-314 DMS ENG'G & SERVICES 07/06/98 5,636.36 U-314 DMS ENG'G & SERVICES 07/06/98 5,236.36 Subtotal 532,882.76 Batch #2 V-41 ECO-TRIANGLE TECH. 3/24/1998 409.09 V-43 ECO-TRIANGLE TECH. 3/26/1998 259.09 V-44 ECO-TRIANGLE TECH. 2/20/1998 195.45 V-45 EQUIPMENT TECH., INC. 3/30/1998 2,644.40 V-46 EQUIPMENT TECH., INC. 1/26/1998 2,571.48 V-81 FLORO BLUE PRINTING LAS PIAS, 3/24/1998 1,781.82 INC. V-82 GEM STATIONERY, INC. 3/25/1998 52.18 V-83 GEM STATIONERY, INC. 3/26/1998 67.56 V-84 GEM STATIONERY, INC. 3/26/1998 58.18 V-85 GEM STATIONERY, INC. 3/26/1998 137.51 V-86 GEM STATIONERY, INC. 3/25/1998 268.25 V-87 GEM STATIONERY, INC. 3/25/1998 51.10 V-88 GEM STATIONERY, INC. 3/25/1998 280.38 V-89 GEM STATIONERY, INC. 3/25/1998 245.25 V-90 GEM STATIONERY, INC. 3/25/1998 302.38 V-91 GEM STATIONERY, INC. 3/25/1998 434.90 V-92 GEM STATIONERY, INC. 3/26/1998 263.95 V-93 GEM STATIONERY, INC. 3/25/1998 1,068.03 V-94 GEM STATIONERY, INC. 3/25/1998 56.94 V-95 GEM STATIONERY, INC. 3/25/1998 24.55 V-96 GEM STATIONERY, INC. 3/25/1998 973.93 V-97 GEM STATIONERY, INC. 3/26/1998 44.50 V-98 GEM STATIONERY, INC. 3/26/1998 104.43 V-99 GEM STATIONERY, INC. 3/25/1998 150.50 V-100 GEM STATIONERY, INC. 3/25/1998 46.10 V-101 GEM STATIONERY, INC. 3/25/1998 29.55 V-102 GEM STATIONERY, INC. 3/26/1998 61.36 V-278 GOLDEN PYRAMID TRADING 3/18/1998 1,310.68 V-280 GOLDEN PYRAMID TRADING 3/18/1998 2,282.13 V-606 HEWLETT-PACKARD PHILS. CORP 2/4/1998 1,835.00 V-608 HEWLETT-PACKARD PHILS. CORP 2/23/1998 1,896.00 V-610 HOLLAND PACIFIC PAPER, INC. 3/23/1998 1,797.82 V-609 HOLLAND PACIFIC PAPER, INC. 1/4/1998 4,494.55 V-612 I & CS, INC. 2/9/1998 2,036.36 V-620 INCA PLASTIC PHILS., INC. 3/28/1998 513.00 V-623 INPHASE INDUSTRIAL 7/8/1998 14,261.06 CONSTRUCTION V-625 INTEGRATED WASTE MANAGEMENT 8/5/1998 890.91 V-625 INTEGRATED WASTE MANAGEMENT 8/5/1998 890.91 V-625 INTEGRATED WASTE MANAGEMENT 8/5/1998 890.91 V-625 INTEGRATED WASTE MANAGEMENT 8/5/1998 890.91 V-625 INTEGRATED WASTE MANAGEMENT 8/5/1998 2,672.73 V-625 INTEGRATED WASTE MANAGEMENT 8/5/1998 2,672.73 Subtotal 51,918.53 Batch #3 W-411 FILEMIX SYSTEMS & SERVICES, INC. 01/08/98 2,508.86 W-412 J.E. AUTOMATED PARTS 02/10/98 1,653.00 W-413 JUNNA INDUSTRIAL SALES 01/22/98 4,441.73 W-14 KEMARS ENGG & SUPPLY CORP. 03/18/98 1,250.00 W-27 LEAD MARKETING & IND'L, INC. 03/11/98 2,181.82 W-28 LINKAGE FIRST VENTURES, INC. 03/20/98 20,490.91 W-29 LINKAGE FIRST VENTURES, INC. 03/11/98 13,502.73 W-32 LIONAPEX 01/14/98 809.09 W-33 MABELLE PRINTING & TRADING 03/13/98 1,590.91 W-34 MABELLE PRINTING & TRADING 03/13/98 2,386.36 W-35 MABELLE PRINTING & TRADING 03/11/98 436.36 W-36 MABELLE PRINTING & TRADING 03/13/98 12,863.64 W-37 MABELLE PRINTING & TRADING 03/23/98 1,454.55 W-38 MABELLE PRINTING & TRADING 03/18/98 250.00 W-40 MABELLE PRINTING & TRADING 03/16/98 2,168.18 W-41 MABELLE PRINTING & TRADING 03/20/98 21,818.18 W-42 MABELLE PRINTING & TRADING 03/03/98 4,363.64 W-44 MACRO LABEL CENTER 02/17/98 68,181.82 W-47 MAGNETO ENTERPRISES 03/24/98 4,963.64 W-48 MAGNETO ENTERPRISES 03/25/98 1,218.18 W-49 MAGNETO ENTERPRISES 03/24/98 3,954.55 W-50 MAGNETO ENTERPRISES 03/17/98 8,700.00 W-51 MAGNETO ENTERPRISES 03/12/98 11,163.64 W-54 MAGNETO ENTERPRISES 03/02/98 7,118.18 W-59 MAXTRONIX, INC. 11/27/97 755.89 W-77 MEDINA SALES CO., INC. 03/31/98 4,309.01 W-79 MERCURY DRUG CORP. 01/03/98 1,651.00 W-80 MERCURY DRUG CORP. 01/03/98 705.68 W-81 MERCURY DRUG CORP. 01/03/98 6,168.18 W-82 MERCURY DRUG CORP. 01/03/98 783.64 W-83 MERCURY DRUG CORP. 01/03/98 168.76 W-84 MERCURY DRUG CORP. 01/03/98 1,897.27 W-85 MERCURY DRUG CORP. 01/03/98 8,569.09 W-86 MERCURY DRUG CORP. 01/03/98 935.08 W-87 MESCO, INC. 03/10/98 1,590.00 W-92 MICROWILL PRECISION TOOLS 03/24/98 850.00 W-93 MICROWILL PRECISION TOOLS 03/09/98 840.91 W-94 MICROWILL PRECISION TOOLS 03/24/98 760.00 W-95 MIDDLE BY PHILIPPINES CORP. 09/22/98 1,227.27 W-97 MIRAGE IND'L RESOURCES 03/04/98 12,064.91 W-97 MIRAGE IND'L RESOURCES 03/04/98 49.09 W-98 MIRAGE IND'L RESOURCES 03/31/98 3,196.36 W-103, 104 MOLTEN STEEL CORPORATION 03/26/98 826.36 W-105, 106 MOLTEN STEEL CORPORATION 03/25/98 1,994.09 W-116, 117 MONARK EQUIPT. CORP. 07/17/98 82,954.55 W-121 N.P. LIBALIB 02/12/98 200.00 W-125 N.P. LIBALIB 07/07/98 1,020.00 W-134 OKASAKI INDUSTRIAL CORP. 03/09/98 1,620.20 W-173 PILTEL 07/17/98 197.05 W-173 PILTEL 07/17/98 186.75 W-173 PILTEL 07/17/98 220.31 W-173 PILTEL 07/17/98 590.05 W-173 PILTEL 07/17/98 204.20 W-187 PLDT 07/08/98 503.29 W-187 PLDT 07/08/98 1,993.35 W-190 PLDT 07/01/98 7,646.16 W-191 POLARIS 02/12/98 363.64 W-192 PRECY'S SUPERIOR PRODUCTS 03/07/98 4,890.91 W-193, 195 PRIME SALES, INC. 03/26/98 1,618.68 W-193, 197 PRIME SALES, INC. 03/06/98 1,464.55 W-199, 200 PRIME SALES, INC. 09/16/98 3,754.62 W-205 PROTECTIVE SYSTEMS 03/12/98 1,420.00 TECHNOLOGY, INC. W-206 PROTECTIVE SYSTEMS 03/12/98 2,140.00 TECHNOLOGY, INC. W-207 PVC INTERNATIONAL 03/13/98 265.68 W-208 PVC INTERNATIONAL 03/13/98 1,545.27 W-217 RELIABLE TOOLING SYSTEM, INC. 02/18/98 3,402.73 W-210 R-JELL MARKETING 02/20/98 2,121.82 W-224 RS UNITECH MFG. & TRDG. CORP. 01/28/98 818.18 W-225 RS UNITECH MFG. & TRDG. CORP. 01/28/98 1,236.36 W-236 SEIKO SERVICE CENTER 03/27/98 12,113.18 W-237 SEMICON INTEGRATED 02/06/98 414.00 ELECTRONICS CORP. W-238 SEMICON INTEGRATED 02/06/98 22.73 ELECTRONICS CORP. W-239 SEMICON INTEGRATED 02/10/98 319.73 ELECTRONICS CORP. W-414 SEMICON INTEGRATED 01/23/98 400.00 ELECTRONICS CORP. W-251 SERVANTECH ENTERPRISES 03/07/98 545.46 W-254 to 270 SKY FREIGHT FORWARDERS, INC. 09/25/98 100.00 W-254 to 270 SKY FREIGHT FORWARDERS, INC. 09/25/98 417.57 W-254 to 270 SKY FREIGHT FORWARDERS, INC. 09/25/98 424.72 W-254 to 270 SKY FREIGHT FORWARDERS, INC. 09/25/98 100.00 W-254 to 270 SKY FREIGHT FORWARDERS, INC. 09/25/98 100.00 W-254 to 270 SKY FREIGHT FORWARDERS, INC. 09/25/98 100.00 W-254 to 270 SKY FREIGHT FORWARDERS, INC. 09/25/98 281.33 W-254 to 270 SKY FREIGHT FORWARDERS, INC. 09/25/98 284.39 W-254 to 270 SKY FREIGHT FORWARDERS, INC. 09/25/98 311.95 W-254 to 270 SKY FREIGHT FORWARDERS, INC. 09/25/98 100.00 W-254 to 270 SKY FREIGHT FORWARDERS, INC. 09/25/98 100.00 W-254 to 270 SKY FREIGHT FORWARDERS, INC. 09/25/98 100.00 W-254 to 270 SKY FREIGHT FORWARDERS, INC. 09/25/98 100.00 W-254 to 270 SKY FREIGHT FORWARDERS, INC. 09/25/98 100.00 W-254 to 270 SKY FREIGHT FORWARDERS, INC. 09/25/98 100.00 W-254 to 270 SKY FREIGHT FORWARDERS, INC. 09/25/98 100.00 W-254 to 270 SKY FREIGHT FORWARDERS, INC. 09/25/98 120.00 W-254 to 270 SKY FREIGHT FORWARDERS, INC. 09/25/98 100.00 W-254 to 270 SKY FREIGHT FORWARDERS, INC. 09/25/98 811.47 W-254 to 270 SKY FREIGHT FORWARDERS, INC. 09/25/98 120.00 W-254 to 270 SKY FREIGHT FORWARDERS, INC. 09/25/98 1,336.02 W-254 to 270 SKY FREIGHT FORWARDERS, INC. 09/25/98 120.00 W-254 to 270 SKY FREIGHT FORWARDERS, INC. 09/25/98 100.00 W-254 to 270 SKY FREIGHT FORWARDERS, INC. 09/25/98 100.00 W-254 to 270 SKY FREIGHT FORWARDERS, INC. 09/25/98 100.00 W-254 to 270 SKY FREIGHT FORWARDERS, INC. 09/25/98 100.00 W-254 to 270 SKY FREIGHT FORWARDERS, INC. 09/25/98 621.87 W-317 SMC PNEUMATICS PHILS., INC. 02/26/98 967.27 W-318 SMC PNEUMATICS PHILS., INC. 03/05/98 880.91 W-320 STRAIGHTWAY TRADING 03/12/98 3,264.00 W-325 SYSTEMS CONTROLS 03/03/98 2,727.27 INSTRUMENTATIONS, INC. W-338, 339 T.I.Q. MARKETING 07/07/98 8,727.27 W-339, 340 T.I.Q. MARKETING 07/07/98 6,681.82 W-341 TAIHON CHEMICALS, INC. 03/20/98 10,909.09 W-371 THE UNITED POLYRESINS, INC. 12/29/97 3,218.18 W-377, 378 TRANE PHIL. 07/23/98 9,436.36 W-416, 417 TRANE PHIL. 08/19/98 9,436.36 W-380 TRELLEBORG 03/26/98 40,745.46 W-381 TRELLEBORG 01/08/98 5,363.64 W-383 TRI-S FILIPINAS, INC. 03/30/98 1,750.00 W-385 TRITON COMM'S CORP. 03/11/98 33,618.18 W-386 TRITON COMM'S CORP. 01/17/98 29,090.91 W-387 UNIMATE INT'L., INC. 03/12/98 2,320.77 W-388 UNIMATE INT'L., INC. 03/11/98 1,080.00 W-389 UNIMATE INT'L., INC. 03/11/98 1,275.46 W-392, 393 UNIWELL TECH. CORP. 07/06/98 16,351.05 W-394 UP-TOWN IND. SALES 03/31/98 4,484.18 W-418 WELLTECH SERVICE 07/06/98 1,227.27 CORPORATION W-403 WESOLV OPEN COMPUTING, INC. 01/22/98 7,396.55 W-404 WILLIAM & COMPANY PHILS., INC. 03/17/98 20,000.00 W-405 WINCEL ENTERPRISES 02/11/98 4,887.27 W-406 WINCEL ENTERPRISES 02/11/98 4,939.64 W-419, 420 WINCEL ENTERPRISES 02/04/98 2,618.18 Subtotal 624,852.42 Total 1,209,653.71 ========== Purchase of goods/services supported by invoice/OR but not in the name of petitioner. Batch #1 U-26 AMANTE AIR BALANCE, INC. 04/27/98 1,090.91 U-27 AMANTE AIR BALANCE, INC. 04/27/98 3,000.00 U-27, 30 AMANTE AIR BALANCE, INC. 04/27/98 4,363.64 U-29 AMANTE AIR BALANCE, INC. 05/08/98 2,727.27 U-28 AMANTE AIR BALANCE, INC. 04/22/98 5,181.82 U-31 AMANTE AIR BALANCE, INC. 05/20/98 3,272.73 U-32 AMANTE AIR BALANCE, INC. 06/08/98 1,090.91 U-32, 33 AMANTE AIR BALANCE, INC. 06/08/98 3,272.73 U-94, 95 BETA ELECTRIC 06/17/98 100,000.00 Subtotal 124,000.01 Batch #2 V-78 FILCONFAB, INC. 4/2/1998 2,272.73 Subtotal 2,272.73 Batch #3 W-408 AUTOMATED TOOL FAB. 05/15/98 1,928.50 RESOURCES W-409 AUTOMATED TOOL FAB. 05/15/98 402.00 RESOURCES W-410 AUTOMATED TOOL FAB. 05/15/98 90.00 RESOURCES W-46 MAEDAN ENTERPRISE 04/13/98 5,454.55 W-91 MICRO DATA SYSTEM & MGT., INC. 03/27/98 29,545.46 W-342, 343 TECHNI-TOOL ENG'G 03/23/98 5,190.00 W-342, 344, 345 TECHNI-TOOL ENG'G 03/23/98 20,760.00 W-342, 346, 347 TECHNI-TOOL ENG'G 03/23/98 10,380.00 W-342, 348, 349 TECHNI-TOOL ENG'G 03/23/98 10,380.00 W-342, 350, 351 TECHNI-TOOL ENG'G 03/23/98 10,380.00 W-342, 352, 353 TECHNI-TOOL ENG'G 03/23/98 10,380.00 W-342, 354, 355 TECHNI-TOOL ENG'G 02/26/98 5,190.00 W-342, 356, 357 TECHNI-TOOL ENG'G 02/26/98 5,190.00 W-342, 358, 359 TECHNI-TOOL ENG'G 02/26/98 5,190.00 W-415 TOP-MASTER METAL 04/02/98 20,056.00 W-421 ZUELLIG PHARMA 06/10/98 4,990.91 W-422 ZUELLIG PHARMA 06/08/98 1,756.18 W-423 ZUELLIG PHARMA 06/08/98 482.91 W-424 ZUELLIG PHARMA 06/08/96 1,409.09 Subtotal 149,155.60 Total 275,428.34 ========= Purchase of goods/services supported by "TIN-V" invoice/OR. Batch #1 U-1 A.T. TONIO ENTERPRISES 04/20/98 405.68 U-18 ADD SERVICES & SUPPLY 04/22/98 6,818.18 U-19 ADD SERVICES & SUPPLY 04/24/98 36,000.00 U-20 ADD SERVICES & SUPPLY 04/24/98 11,397.27 U-41, 43 ASIA PACIFIC COMPUTER 05/19/98 23,185.46 TECHNOLOGY CENTER U-44, 45 ASIA PACIFIC COMPUTER 06/24/98 9,541.82 TECHNOLOGY CENTER U-46, 47 ASIA PACIFIC COMPUTER 08/14/98 1,296.00 TECHNOLOGY CENTER U-159 DINGCA ENTERPRISE 04/16/98 1,820.70 U-160 DINGCA ENTERPRISE 04/06/98 5,106.66 U-161 DINGCA ENTERPRISE 02/20/98 5,762.21 U-162 DINGCA ENTERPRISE 04/07/98 3,122.73 U-183 DINGCA ENTERPRISE 05/05/98 11,281.82 Subtotal 115,738.53 Batch #2 V-273 GMV CORPORATION 5/19/1998 3,363.64 V-273 GMV CORPORATION 5/19/1998 2,943.18 V-273 GMV CORPORATION 5/19/1998 3,363.64 V-636 JAC INDUSTRIAL SALES 3/23/1998 2,113.64 V-637 JAC INDUSTRIAL SALES 3/23/1998 4,635.68 V-638 JAC INDUSTRIAL SALES 4/4/1998 4,510.91 V-639 JAC INDUSTRIAL SALES 4/4/1998 2,941.36 V-640 JAC INDUSTRIAL SALES 5/2/1998 2,200.00 V-641 JAC INDUSTRIAL SALES 5/2/1998 4,472.73 V-642 JAC INDUSTRIAL SALES 5/2/1998 1,363.64 V-643 JAC INDUSTRIAL SALES 4/21/1998 4,963.91 V-644 JAC INDUSTRIAL SALES 4/21/1998 279.55 V-645 JAC INDUSTRIAL SALES 4/21/1998 2,987.45 V-646 JAC INDUSTRIAL SALES 4/21/1998 509.09 V-647 JAC INDUSTRIAL SALES 4/22/1998 3,105.09 V-648 JAC INDUSTRIAL SALES 4/21/1998 721.36 V-649 JAC INDUSTRIAL SALES 4/21/1998 2,454.55 V-650 JAC INDUSTRIAL SALES 4/21/1998 627.27 V-651 JAC INDUSTRIAL SALES 4/22/1998 1,730.91 V-652 JAC INDUSTRIAL SALES 4/21/1998 855.00 V-653 JAC INDUSTRIAL SALES 4/21/1998 1,318.18 V-654 JAC INDUSTRIAL SALES 4/21/1998 3,072.73 V-655 JAC INDUSTRIAL SALES 4/21/1998 602.18 V-656 JAC INDUSTRIAL SALES 4/22/1998 4,309.08 V-657 JAC INDUSTRIAL SALES 4/21/1998 2,163.64 V-658 JAC INDUSTRIAL SALES 4/14/1998 208.45 V-659 JACINTO INDUSTRIAL 3/21/1998 5,600.00 Subtotal 67,416.85 Batch #3 W-16 L.C.U. DESIGNS, INC. 04/15/98 1,080.00 W-17 L.C.U. DESIGNS, INC. 04/20/98 14,236.36 W-18 L.C.U. DESIGNS, INC. 04/16/98 11,072.73 W-19 L.C.U DESIGNS, INC. 03/30/98 3,250.00 W-20 L.C.U. DESIGNS, INC. 04/30/98 16,663.64 W-21 L.C.U. DESIGNS, INC. 04/29/98 20,544.55 W-22 L.C.U. DESIGNS, INC. 04/23/98 2,570.00 W-23 L.C.U. DESIGNS, INC. 05/26/98 3,570.27 W-24 L.C.U. DESIGNS, INC. 06/01/98 2,590.91 W-24 L.C.U. DESIGNS, INC. 05/30/98 3,927.27 W-72 MDA WOODCRAFT 04/20/98 14,861.00 W-252 SINOFIL PHILS., INC. 04/07/98 9,672.73 W-253 SINOFIL PHILS., INC. 04/03/98 1,309.09 Subtotal 105,348.55 Total 288,503.93 ========= Purchase of goods/services not supported by the required documents. Batch #1 U-3 ABB KOPPEL, INC. 02/06/98 50,045.16 U-5 ABB KOPPEL, INC. 02/06/98 37,533.87 Subtotal 87,579.03 Batch #3 W-228 SCANDIA DESIGN 01/20/98 13,373.60 W-302, 303 SMART COMMUNICATIONS, INC. 04/17/98 389.21 W-304, 305 SMART COMMUNICATIONS, INC. 04/17/98 42.78 W-306, 307 SMART COMMUNICATIONS, INC. 06/08/98 158.21 W-308, 309 SMART COMMUNICATIONS, INC. 05/04/98 148.42 W-310, 311 SMART COMMUNICATIONS, INC. 05/05/98 86.77 W-312, 313 SMART COMMUNICATIONS, INC. 05/20/98 146.32 W-312, 314 SMART COMMUNICATIONS, INC. 05/20/98 169.32 W-312, 315 SMART COMMUNICATIONS, INC. 05/20/98 151.76 Subtotal 14,666.39 Total 102,245.42 ======== Purchase of goods supported by zero-rated sales invoice. Batch #1 U-141 CONSOLIDATED IND'L GASES, INC. 04/16/98 7,028.40 U-141 CONSOLIDATED IND'L GASES, INC. 04/16/98 5,299.47 U-141 CONSOLIDATED IND'L GASES, INC. 04/16/98 7,273.34 U-141 CONSOLIDATED IND'L GASES, INC. 04/16/98 5,510.77 U-141 CONSOLIDATED IND'L GASES, INC. 04/16/98 6,831.92 U-141 CONSOLIDATED IND'L GASES, INC. 04/16/98 6,750.99 U-141 CONSOLIDATED IND'L GASES, INC. 04/16/98 6,260.24 U-142 CONSOLIDATED IND'L GASES, INC. 04/16/98 6,938.33 U-142 CONSOLIDATED IND'L GASES, INC. 04/16/98 5,751.39 U-142 CONSOLIDATED IND'L GASES, INC. 04/16/98 7,162.41 U-142 CONSOLIDATED IND'L GASES, INC. 04/16/98 6,704.22 U-142 CONSOLIDATED IND'L GASES, INC. 04/16/98 6,487.19 U-142 CONSOLIDATED IND'L GASES, INC. 04/16/98 6,230.77 U-142 CONSOLIDATED IND'L GASES, INC. 04/16/98 7,333.52 U-143 CONSOLIDATED IND'L GASES, INC. 04/16/98 7,183.85 U-143 CONSOLIDATED IND'L GASES, INC. 04/16/98 7,237.78 U-143 CONSOLIDATED IND'L GASES, INC. 04/16/98 8,396.65 U-143 CONSOLIDATED IND'L GASES, INC. 04/16/98 6,422.30 U-143 CONSOLIDATED IND'L GASES, INC. 04/16/98 7,329.61 U-143 CONSOLIDATED IND'L GASES, INC. 04/16/98 7,468.89 U-143 CONSOLIDATED IND'L GASES, INC. 04/16/98 3,802.22 U-144 CONSOLIDATED IND'L GASES, INC. 04/16/98 7,305.10 U-144 CONSOLIDATED IND'L GASES, INC. 04/16/98 6,577.94 U-144 CONSOLIDATED IND'L GASES, INC. 04/16/98 3,621.44 U-144 CONSOLIDATED IND'L GASES, INC. 04/16/98 5,319.39 U-144 CONSOLIDATED IND'L GASES, INC. 04/16/98 6,684.54 U-144 CONSOLIDATED IND'L GASES, INC. 04/16/98 7,359.09 Total 176,271.76 ======== Purchase of goods supported by invoice not registered with the BIR Batch #3 W-368 TELPLUS 05/19/98 49,410.90 W-369 TELPLUS 05/19/98 51,908.01 Total 101,318.91 Grand Total 2,153,422.07 ========== Thus, petitioner was able to support by proper VAT invoices and/or official receipts input taxes in the amount of P7,548,478.78, computed as follows: Claimed Input Taxes for Refund P11,770,181.70 Less: Disallowances per Commissioned Independent CPA's Report P2,081,372.31 Adjustment on disallowances made by Commissioned Independent CPA as per this Court's further verification (13,091.46) Additional disallowances per this Court's further verification 2,153,422.07 4,221,702.92 Total Substantiated Amount P7,548,478.78 =========== WHEREFORE , premises considered, petitioner's claim for refund is hereby PARTIALLY GRANTED. Accordingly, respondent is hereby ORDERED TO REFUND in favor of petitioner the reduced amount of P7,548,478.78, representing petitioner's VAT input taxes on its domestic purchases of goods and services for the period April 1, 1998 to June 30, 1998. SO ORDERED . (SGD.) JUANITO C. CASTAEDA, JR. Associate Justice Ernesto D. Acosta, P.J., concurs. Lovell R. Bautista, J., is on leave. Footnotes 1. An Act Expanding the Jurisdiction of the Court of Tax Appeals (CTA), Elevating Its Rank to the Level of a Collegiate Court with Special Jurisdiction and Enlarging Its Membership, Amending for the Purpose Certain Sections of Republic Act No. 1125, As Amended, Otherwise Known as the Law Creating the Court of Tax Appeals, and for Other Purposes. 2. Paragraph 1, Stipulation of Facts, Joint Stipulation of Facts and Simplication of Issues (JSFSI), docket, pp. 47-48. 3. Exhibit "A"; Paragraph 2, Stipulation of Facts, JSFSI, docket, p. 48. 4. Exhibit "B"; Paragraph 3, Stipulation of Facts, JSFSI, docket, p. 48. 5. Exhibit "F". 6 . Exhibits "C" and "D". 7. Paragraph 4, Stipulation of Facts, JSFSI, docket, p. 48. 8. Exhibits "M" and "N". 9. Paragraph 7, Stipulation of Facts, JSFSI, docket, p. 49. 10. Docket, pp. 1-18. 11. Docket, pp. 20-21. 12. Docket, pp. 47-51. 13. Docket, p. 52. 14. Docket, p. 259. 15. Docket, p. 194. 16. Docket, pp. 199-209. 17. Docket, pp. 214-218. 18. Docket, pp. 220-224. 19. Docket, p. 227. 20. Docket, p. 235. 21. Docket, pp. 239-258. 22. Docket, p. 259. 23. Simplication of Issues, JSFSI, docket, pp. 49-50. 24. Docket, pp. 261-272. 25. Docket, p. 271. 26. Docket, pp. 274-280. 27. Docket, pp. 283-288. 28. Docket, pp. 294-298. 29. Docket, pp. 841-871. 30. Docket, p. 960. 31. Docket, pp. 961-962. 32. Docket, p. 963. 33. Docket, pp. 964-967. 34. Docket, pp. 968-970. 35. Exhibit "Q", Docket, pp. 143-184. 36. Exhibit "T", Docket, pp. 168-174. 37. P2,081,372.31 less P13,091.46 (total 2nd batch, exception B of ICPA report). 38. 2nd batch total, exception B of ICPA report.