Air Liquide Philippines, Inc. v. Commissioner of Internal Revenue

SPECIAL SECOND DIVISION [C.T.A. CASE NO. 8017. December 7, 2017.] For: Refund or issuance of a Tax Credit Certificate AIR LIQUIDE PHILIPPINES, INC. , petitioner , vs. COMMISSIONER OF INTERNAL REVENUE , respondent . AMENDED DECISION MINDARO-GRULLA , J p : This is a case remanded by the Supreme Court involving a Petition for Review filed by Air Liquide Philippines, Inc. on December 29, 2009, seeking the issuance of a tax credit certificate in the amount of Twenty-Three Million Two Hundred Fifty-Four Thousand Four Hundred Sixty-Five Pesos and 64/100 (P23,254,465.64),allegedly representing its unutilized input value-added tax (VAT) paid for the fourth quarter of calendar year (CY) 2007. Petitioner Air Liquide Philippines, Inc. is a domestic corporation duly organized and existing under Philippine laws, with Securities and Exchange Commission (SEC) Certificate No. AS094-00011713. 1 Its principal place of business is at Lot 37, DBP Avenue, FTI Complex, Taguig, Metro Manila. Petitioner is a VAT-registered entity since October 9, 1995, as evidenced by its Bureau of Internal Revenue (BIR) Certificate of Registration No. OCN 9RC0000057089. 2 On the other hand, respondent is the duly appointed Commissioner of the Bureau of Internal Revenue who has the power to decide 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. Petitioner is engaged in the manufacture, production, purchase, wholesale, importation, marketing and generally deal in all kinds of industrial, medical and specialty liquid gases, other chemicals and residual components. It sells products and renders certain related services to entities registered with the Philippine Economic Zone Authority (PEZA). 3 On December 23, 2009, petitioner filed with respondent, through BIR Revenue District Office (RDO) No. 121, an application for issuance of tax credit certificate for its unutilized input VAT for the fourth quarter of CY 2007. On December 29, 2009, the instant Petition for Review was filed. This Court issued a Decision 4 on July 3, 2012, the dispositive portion of which provides: " WHEREFORE ,premises considered, the present Petition for Review is hereby DISMISSED for lack of jurisdiction. SO ORDERED. " On July 20, 2012, petitioner filed a Motion for Reconsideration of the above Decision. On September 24, 2012, this Court denied petitioner's Motion for Reconsideration for lack of merit. On October 25, 2012, petitioner filed a Petition for Review with the CTA En Banc , docketed as CTA EB No. 943. On July 29, 2013, the CTA En Banc rendered a Decision granting the Petition for Review, the dispositive portion of which states: " WHEREFORE ,premises considered, the instant Petition for Review filed on October 25, 2012 is hereby GRANTED .The assailed Decision dated July 3, 2012 and the assailed Resolution dated September 24, 2012 promulgated by the CTA-Second Division which dismissed the Petition for Review docketed as CTA Case No. 8017, are hereby REVERSED and SET ASIDE . Accordingly, CTA Case No. 8017 is hereby REMANDED to the CTA-Second Division for the proper and immediate determination of the propriety of the claim for refund or tax credit certificate. Thereafter, the CTA-Second Division shall make a declaration of the specific amount of refund or tax credit certificate to which petitioner is entitled to, if any. SO ORDERED. " Respondent filed a Motion for Reconsideration of the above Decision on August 28, 2013. On December 17, 2013, the CTA En Banc denied respondent's Motion for Reconsideration for lack of merit. Aggrieved by the decision of the CTA En Banc ,respondent filed a Petition for Review on Certiorari with the Supreme Court entitled Commissioner of Internal Revenue vs. Air Liquide Philippines, Inc. ,with Docket No. G.R. No. 210646. On July 29, 2015, the Supreme Court rendered a Decision denying respondent's Petition for Review on Certiorari ,the dispositive portion of which provides: " WHEREFORE ,the Petition is DENIED . The July 29, 2013 Decision and the December 17, 2013 Resolution of the Court of Tax Appeals En Banc in CTA EB Case No. 943 are AFFIRMED in toto .Accordingly, the case is REMANDED to the CTA Second Division for the proper determination of the refundable or creditable amount due to the respondent, if any. SO ORDERED. " On March 18, 2016, 5 this Court received the Entry of Judgment issued by the Supreme Court on September 23, 2015 stating that the Decision rendered in Commissioner of Internal Revenue vs. Air Liquide Philippines, Inc. on July 29, 2015 has already become final and executory. As a result, the case was set for petitioner's presentation of evidence and petitioner was ordered to submit Supplemental Independent Certified Public Accountant (ICPA) Report. On August 15, 2016 6 and August 17, 2016, 7 in compliance with this Court's Order dated July 20, 2016, petitioner respectively submitted the Supplemental ICPA Report and the Supplemental Sworn Statements of Armando L. Magpantay Jr.,the Court-commissioned ICPA. Petitioner filed its Supplemental Formal Offer of Evidence 8 on August 26, 2016, with respondent's Comment filed on September 5, 2016. This Court issued a Resolution 9 on October 17, 2016, admitting petitioner's Exhibits "LLLL-10","LLLL-10-a","LLLL-10-1","LLLL-10-2","LLLL-10-3","LLLL-11",and "LLLL-11-A".Thereafter, the parties were directed to file their memoranda. Petitioner filed its Memorandum 10 on November 18, 2016; while respondent filed a Manifestation 11 on November 24, 2016, manifesting that he will adopt his Answer to the Petition for Review filed on March 12, 2010 12 as his Memorandum, in lieu of filing a Memorandum. Consequently, this Court issued a Resolution 13 on December 12, 2016, declaring the case submitted for decision. Based on the parties' Joint Stipulation of Facts and Issues, 14 the following are the issues to be resolved: 1. Whether or not petitioner is entitled to the issuance of a tax credit certificate for its unutilized/excess input VAT payments for the 4th Quarter of 2007 amounting to P23,254,465.64; 2. Whether or not petitioner is a value added taxpayer pursuant to the provisions of the National Internal Revenue Code ("NIRC") of 1997 as amended; 3. Whether or not petitioner has complied with the invoicing and accounting requirements for VAT-registered persons as well as the filing and payment of VAT in compliance with the provisions of Sections 113 and 114 of the NIRC; 4. Whether or not petitioner has complied with the submission of complete documents in support of the administrative claim for refund pursuant to Section 112 (D) of the NIRC; 5. Whether or not the input taxes of P23,254,465.64 representing petitioner's excess and unutilized input VAT for the 4th Quarter of 2007 were: a. Paid by petitioner; b. Attributable to zero-rated sales; c. Not applied against any output tax; and 6. Whether or not petitioner's claim for unutilized input VAT was filed within the period prescribed by law. Pertinent to the resolution of the case at bench is Section 112 (A) and (C) of the National Internal Revenue Code of 1997, as amended, which provides: "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 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. 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." Pursuant to the above-quoted provision and as laid down by the Supreme Court in a number of cases, 15 a taxpayer engaged in zero-rated or effectively zero-rated sales is entitled to a refund or tax credit of input taxes attributable to such sales upon compliance with the following requisites: 1. That the taxpayer-claimant must be VAT-registered; 2. That there must be zero-rated or effectively zero-rated sales; 3. That input taxes were incurred or paid; 4. That such input taxes are attributable to zero-rated or effectively zero-rated sales; 5. That the input taxes were not applied against any output VAT liability during and in the succeeding quarters; and 6. That the claim for refund was filed within the prescriptive period both in the administrative and judicial levels. Petitioner's administrative and judicial claims were timely filed The last requisite had been resolved by the CTA En Banc in its Decision in the case of Air Liquide Philippines, Inc. vs. Commissioner of Internal Revenue , 16 which was affirmed by the Supreme Court in its Decision in the case of Commissioner of Internal Revenue vs. Air Liquide Philippines, Inc. 17 The pertinent portion of the CTA En Banc Decision reads as follows: "Based on the foregoing, the Supreme Court reiterated that the observance of the 120+30-day period is mandatory and jurisdictional. Taxpayers who file their judicial claims for tax refund or issuance of tax credit certificate without observing the 120+30-day period are deemed to have prematurely filed their judicial claims, thus depriving the Court of Tax Appeals of jurisdiction over their claims. By way of exception, taxpayers who from December 10, 2003 up to October 6, 2010 filed their judicial claims for tax refund or issuance of tax credit certificate without regard to the 120+30-day period are exempted from the strict application of the same. As was discussed in San Roque, Taganito and Philex , premature filing during the excepted period does not constitute an infirmity on the jurisdiction of the Court of Tax Appeals to act on the claim . As can be seen from the records of this case, petitioner filed its administrative claim for its unutilized input VAT for the fourth quarter of taxable year 2007 on December 23, 2009 and its judicial claim on December 29, 2009. Clearly, the administrative claim was filed with the CIR within two years after the close of the taxable quarter when the zero-rated sales were made, as provided in Section 112 (A) of the 1997 Tax Code. Petitioner can also rely on BIR Ruling No. DA-489-03 since the instant judicial claim was filed within the excepted period." This Court will now proceed to determine petitioner's compliance with the remaining requisites for refund of input VAT. Petitioner is a VAT- registered entity with zero-rated sales for the fourth quarter of CY 2007 Petitioner is registered with the BIR as a VAT entity under Certificate of Registration No. OCN 9RC0000057089 and is duly registered with the Securities and Exchange Commission as a business engaged in the manufacture, production, purchase, wholesale, importation, marketing and generally dealing in all kinds of industrial, medical and specialty liquid gases, other chemicals and their residual components. For the fourth quarter of CY 2007, petitioner allegedly sold its products and rendered related services to entities registered with the PEZA, the Subic Bay Metropolitan Authority (SBMA), and the Board of Investments (BOI). Petitioner posits that such sales of goods and related services are considered export sales under Republic Act (RA) No. 7916, as amended by RA No. 8748, RA No. 7227, and Executive Order (EO) No. 226, subject to zero percent (0%) VAT under Sections 106 (A) (2) (a) (5) and 108 (B) (3) of the NIRC of 1997, as amended. "SEC. 106. Value-Added Tax on Sale of Goods or Properties . (A) Rate and Base of Tax. There shall be levied, assessed and collected on every sale, barter or exchange of goods or properties, a value-added tax equivalent to ten percent (10%) of the gross selling price or gross value in money of the goods or properties sold, bartered or exchanged, such tax to be paid by the seller or transferor: Provided ,That the President, upon the recommendation of the Secretary of Finance, shall, effective January 1, 2006, raise the rate of value-added tax to twelve percent (12%),after any of the following conditions has been satisfied: xxx xxx xxx (2) The following sales by VAT-registered persons shall be subject to zero percent (0%) rate: (a) Export Sales . The term ' export sales ' means: xxx xxx xxx (5) Those considered export sales under Executive Order No. 226, otherwise known as the Omnibus Investment Code of 1987, and other special laws ." (Emphasis 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 ." (Emphasis supplied) The Court agrees with petitioner. Sales by a VAT-registered taxpayer from the customs territory to entities located in export processing zones are considered export sales under EO 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 products 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 ;x x x" (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, 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 ." (Emphasis supplied) Further, RA No. 7916 otherwise known as "The Special Economic Zone Act of 1995," as amended by RA No. 8748, provides that ECOZONES are considered separate customs territory, and the business establishments operating within the ECOZONES are entitled to certain fiscal incentives. Sections 8 and 23 of RA No. 7916, as amended by RA No. 8748, provide: "SECTION 8. ECOZONE to be Operated and Managed as Separate Customs Territory . The ECOZONES shall be managed and operated by the PEZA as separate customs territory." "SECTION 23. Fiscal Incentives . Business establishments operating within the ECOZONES shall be entitled to the fiscal incentives as provided for under Presidential Decree No. 66, the law creating the Export Processing Zone Authority, or those provided under Book VI of Executive Order No. 226, otherwise known as the Omnibus Investment Code of 1987. x x x" RA No. 7227, otherwise known as the "Bases Conversion and Development Act of 1992," provides a similar provision treating the Subic Special Economic Zone as a separate customs territory, thus: "SECTION 12. Subic Special Economic Zone . x x x xxx xxx xxx (b) The Subic Special Economic Zone shall be operated and managed as a separate customs territory ensuring free flow or movement of goods and capital within, into and exported out of the Subic Special Economic Zone, as well as provide incentives such as tax and duty free importations of raw materials, capital and equipment. However, exportation or removal of goods from the territory of the Subic Special Economic Zone to the other parts of the Philippine territory shall be subject to customs duties and taxes under the Customs and Tariff Code and other relevant tax laws of the Philippines;" Since the Ecozone is considered 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%) VAT. This was elucidated by the Supreme Court in the case of Commissioner of Internal Revenue vs. Toshiba Information Equipment (Phils.), Inc. , 18 to wit: "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 xxx xxx 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 within the Philippines shall be imposed with ten percent (10%) VAT." (Emphasis supplied) Similarly, in the case of Commissioner of Internal Revenue vs. Sekisui Jushi Philippines, Inc. , 19 the Supreme Court held: "Notably, while an ecozone is geographically within the Philippines, it is deemed a separate customs territory and is regarded in law as foreign soil .Sales by suppliers from outside the borders of the ecozone to this separate customs territory are deemed as exports and treated as export sales. These sales are zero-rated or subject to a tax rate of zero percent ." (Emphasis supplied) With respect to sales by a VAT-registered supplier to a BOI-registered 100% exporter, Section 4.106-5 of Revenue Regulations (RR) No. 16-05 20 provides: "SECTION 4.106-5. Zero-Rated Sales of Goods or Properties . A zero-rated sale of goods or properties (by a VAT-registered person) is a taxable transaction for VAT purposes, but shall not result in any output tax. However, the input tax on purchases of goods, properties or services, related to such zero-rated sale, shall be available as tax credit or refund in accordance with these Regulations. The following sales by VAT-registered persons shall be subject to zero percent (0%) rate: (a) Export sales . 'Export Sales' shall mean: xxx xxx xxx (5) Transactions considered export sales under Executive Order No. 226, otherwise known as the Omnibus Investments Code of 1987, and other special laws. 'Considered export sales under Executive Order No. 226' 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 export products exported directly by a registered export producer, or the net selling price of export products 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 these provisions: (1) sales to bonded manufacturing warehouses of export-oriented manufacturers; (2) sales to export processing zones; (3) sales to registered export traders operating bonded trading warehouses supplying raw materials in the manufacture of export products under guidelines to be set by the Board in consultation with the Bureau of Internal Revenue (BIR) and the Bureau of Customs (BOC);(4) sales to diplomatic missions and other agencies and/or instrumentalities granted tax immunities, of locally manufactured, assembled or repacked products whether paid for in foreign currency or not. For purposes of zero-rating, the export sales of registered export traders shall include commission income. The exportation of goods on consignment shall not be deemed export sales until the export products consigned are in fact sold by the consignee; and Provided, finally ,that sales of goods, properties or services made by a VAT-registered supplier to a BOI-registered manufacturer/producer whose products are 100% exported are considered export sales .A certification to this effect must be issued by the Board of Investment (BOI) which shall be good for one year unless subsequently re-issued by the BOI." (Emphasis supplied) Clearly, petitioner's sales of goods and services to entities registered with the PEZA and SBMA and those registered with the BOI whose products are 100% exported are considered "export sales" subject to zero percent VAT rate pursuant to Sections 106 (A) (2) (a) (5) and 108 (B) (3) of the NIRC of 1997, as amended. To substantiate its reported zero-rated sales/receipts of P206,341,201.16 21 for the fourth quarter of CY 2007, petitioner presented the sales invoices 22 it issued to its clients for the subject period of claim, the Certification 23 from PEZA dated April 28, 2010 attesting that the enterprises listed therein are registered with PEZA, the Certificates 24 of Registration and Tax Exemption issued by SBMA on December 2, 2006 and December 3, 2007 to NIDEC Subic Philippines Corporation, the Certificate 25 of Registration and Tax Exemption issued by SBMA on March 3, 2007 to HHIC-PHIL.,Inc.,the Certification 26 issued by the BOI on December 3, 2010 confirming that Shinkozan Corporation and Team Pacific Corporation were endorsed to the BIR for VAT zero-rated transactions within the validity period of January 1 to December 31, 2007, and the letter 27 dated December 7, 2010 from PEZA to petitioner confirming that it has issued VAT zero-rating certifications to the PEZA-registered enterprises enumerated therein. A careful examination of these documents shows that petitioner's reported zero-rated sales/receipts in the amount of P57,978,201.30 should be disallowed for the following reasons: Exhibit Invoice No. Customer Name Amount of Sale In USD Forex Rate 28 Amount (in PHP) a) Sales of goods to MME Technologies, Inc. (MME) for which no PEZA Certification for 2007 VAT zero-rating of MME's transactions with its local suppliers of goods, properties and services was issued, as indicated in the PEZA letter dated December 7, 2010 (Exhibit "Y-5"). Moreover, while it was noted in the said letter that MME's PEZA registration date was November 25, 1999, the same is not indicative of the fact that the said entity was PEZA registered during the subject period of claim. For the month of October 2814 86921 MME Technologies, Inc. 500.00 44.9740 22,487.00 2815 86973 MME Technologies, Inc. 17,737.07 2816 87012 MME Technologies, Inc. 10,343.71 2817 87085 MME Technologies, Inc. 19,045.91 2818 87089 MME Technologies, Inc. 21,104.20 2819 87117 MME Technologies, Inc. 9,078.55 2820 87132 MME Technologies, Inc. 20,322.90 2821 87135 MME Technologies, Inc. 15,194.27 2822 87159 MME Technologies, Inc. 12,089.09 2823 87294 MME Technologies, Inc. 15,037.88 2824 87295 MME Technologies, Inc. 23,645.44 2825 87318 MME Technologies, Inc. 21,851.44 2826 87320 MME Technologies, Inc. 24,669.06 2827 87428 MME Technologies, Inc. 16,027.70 2828 87434 MME Technologies, Inc. 17,163.12 2829 87494 MME Technologies, Inc. 20,681.05 2830 87531 MME Technologies, Inc. 9,317.49 2831 87553 MME Technologies, Inc. 16,314.35 2832 87559 MME Technologies, Inc. 15,829.19 2833 87561 MME Technologies, Inc. 17,792.32 2834 87612 MME Technologies, Inc. 20,622.94 2835 87654 MME Technologies, Inc. 16,859.05 2836 87677 MME Technologies, Inc. 16,069.04 2837 87754 MME Technologies, Inc. 6,896.76 2838 87755 MME Technologies, Inc. 14,627.34 2839 87812 MME Technologies, Inc. 14,440.66 2840 87874 MME Technologies, Inc. 17,624.62 2841 87876 MME Technologies, Inc. 19,842.16 2842 87878 MME Technologies, Inc. 16,419.26 Subtotal 489,133.57 For the month of November 3515 88035 MME Technologies, Inc. 500.00 43.9470 21,973.50 3516 88120 MME Technologies, Inc. 13,212.29 3517 88125 MME Technologies, Inc. 12,139.92 3518 88126 MME Technologies, Inc. 18,887.96 3519 88150 MME Technologies, Inc. 12,279.15 3520 88187 MME Technologies, Inc. 18,109.91 3521 88238 MME Technologies, Inc. 13,822.12 3522 88317 MME Technologies, Inc. 11,017.76 3523 88336 MME Technologies, Inc. 14,880.84 3524 88337 MME Technologies, Inc. 13,133.38 3525 88338 MME Technologies, Inc. 28,147.73 3526 88339 MME Technologies, Inc. 12,212.20 3527 88349 MME Technologies, Inc. 13,947.05 3528 88380 MME Technologies, Inc. 15,635.62 3529 88412 MME Technologies, Inc. 22,594.13 3530 88416 MME Technologies, Inc. 7,597.20 3531 88418 MME Technologies, Inc. 19,663.93 3532 88479 MME Technologies, Inc. 11,518.39 3533 88500 MME Technologies, Inc. 15,251.99 3534 88632 MME Technologies, Inc. 23,634.39 3535 88644 MME Technologies, Inc. 10,647.78 3536 88690 MME Technologies, Inc. 21,610.55 3537 88712 MME Technologies, Inc. 9,053.07 3538 88717 MME Technologies, Inc. 12,806.17 3539 88750 MME Technologies, Inc. 19,680.44 3540 88765 MME Technologies, Inc. 14,864.72 3541 88833 MME Technologies, Inc. 35,954.88 3542 88906 MME Technologies, Inc. 20,880.08 3543 88920 MME Technologies, Inc. 12,297.22 Subtotal 477,454.37 For the month of December 4148 89064 MME Technologies, Inc. 500.00 42.7590 21,379.50 4149 89174 MME Technologies, Inc. 11,026.34 4150 89175 MME Technologies, Inc. 18,159.18 4151 89178 MME Technologies, Inc. 17,153.63 4152 89190 MME Technologies, Inc. 13,737.62 4153 89208 MME Technologies, Inc. 18,031.52 4154 89257 MME Technologies, Inc. 17,506.97 4155 89495 MME Technologies, Inc. 17,023.24 4156 89496 MME Technologies, Inc. 29,580.33 4157 89497 MME Technologies, Inc. 16,883.62 4158 89498 MME Technologies, Inc. 24,397.62 4159 89499 MME Technologies, Inc. 17,411.81 4160 89502 MME Technologies, Inc. 25,017.72 4161 89503 MME Technologies, Inc. 17,161.43 4162 89505 MME Technologies, Inc. 19,629.61 4163 89506 MME Technologies, Inc. 13,007.15 4164 89507 MME Technologies, Inc. 21,784.62 4165 89573 MME Technologies, Inc. 15,757.69 4166 89633 MME Technologies, Inc. 19,524.70 4167 89683 MME Technologies, Inc. 15,542.15 4168 89696 MME Technologies, Inc. 19,801.21 4169 89802 MME Technologies, Inc. 15,234.44 4170 89841 MME Technologies, Inc. 9,301.76 4171 89844 MME Technologies, Inc. 8,738.99 4172 89867 MME Technologies, Inc. 10,792.47 Subtotal 433,585.32 Total 1,400,173.26 b) Sales of goods without proof that the corresponding customers were PEZA or SBMA-registered entities or BOI 100% exporters during the fourth quarter of CY 2007. For the month of October 3177 87966 TST, Inc. 530,519.00 3179 86952 TST, Inc. 600.00 44.9740 26,984.40 3178 88016 TST, Inc. 36,400.00 3180 87374 Twin V Tech Systems, Inc. 420.00 Subtotal 594,323.40 For the month of November 3602 88845 NSG Micro Optics Phils.,Inc. 1,750.00 3725 88480 Pilipinas Shell Petroleum Corp. 14,624.00 3837 88993 TST, Inc. 542,214.65 3839 88066 TST, Inc. 600.00 43.9470 26,369.85 3838 89044 TST, Inc. 33,600.00 Subtotal 618,558.50 For the month of December 4230 89435 NSG Micro Optics Phils.,Inc. 1,500.00 4459 89944 TST, Inc. 524,237.07 4461 89095 TST, Inc. 600.00 42.7590 25,655.40 4460 89997 TST, Inc. 33,600.00 Subtotal 584,992.47 Total 1,797,874.37 c) Sale of goods supported by invoices without the term "zero-rated sale" written or printed thereon in violation of Section 113 (B) (2) (c) of the NIRC of 1997, as amended. Instead, the invoices bear the statement "Not to be issued for non-VAT/exempt sale of goods, properties, or services. If issued, sales shall be subjected to VAT." For the month of October 2561 86935 AGC Flat Glass Phils.,Inc. 1,448.72 44.9740 65,154.73 2562 87910 AGC Flat Glass Phils.,Inc. 5,103,105.01 2563 87911 AGC Flat Glass Phils.,Inc. 3,815,529.30 2564 87959 AGC Flat Glass Phils.,Inc. 226,672.95 2565 88003 AGC Flat Glass Phils.,Inc. 200.00 2587 87928 Air Liquide Pipeline Utilities Services 33,404.51 43.9470 1,468,028.00 2588 85798 Air Water Philippines, Inc. (224.00) 2595 87290 Amkor Anam Technology 34,500.00 2596 87508 Amkor Anam Technology 6,000.00 2597 87759 Amkor Anam Technology 34,500.00 2648 86987 Franke Foodservice Systems Phils.,Inc. 16,000.00 2649 86988 Franke Foodservice Systems Phils.,Inc. 950.00 2650 86989 Franke Foodservice Systems Phils.,Inc. 950.00 2651 87021 Franke Foodservice Systems Phils.,Inc. 16,000.00 2652 87033 Franke Foodservice Systems Phils.,Inc. 950.00 2653 87101 Franke Foodservice Systems Phils.,Inc. 6,400.00 2654 87102 Franke Foodservice Systems Phils.,Inc. 25,600.00 2655 87178 Franke Foodservice Systems Phils.,Inc. 25,600.00 2656 87179 Franke Foodservice Systems Phils.,Inc. 3,800.00 2657 87286 Franke Foodservice Systems Phils.,Inc. 25,600.00 2658 87292 Franke Foodservice Systems Phils.,Inc. 950.00 2659 87361 Franke Foodservice Systems Phils.,Inc. 12,800.00 2660 87362 Franke Foodservice Systems Phils.,Inc. 950.00 2661 87575 Franke Foodservice Systems Phils.,Inc. 16,000.00 2662 87638 Franke Foodservice Systems Phils.,Inc. 16,000.00 2663 87639 Franke Foodservice Systems Phils.,Inc. 950.00 2664 87688 Franke Foodservice Systems Phils.,Inc. 3,200.00 2665 87689 Franke Foodservice Systems Phils.,Inc. 25,600.00 2666 87690 Franke Foodservice Systems Phils.,Inc. 950.00 2667 87742 Franke Foodservice Systems Phils.,Inc. 2,800.00 2668 87758 Franke Foodservice Systems Phils.,Inc. 2,000.00 2710 87038 Imasen Philippine Mfg. Corp. 10,200.00 2711 87047 Imasen Philippine Mfg. Corp. 2,550.00 2712 87138 Imasen Philippine Mfg. Corp. 13,600.00 2713 87139 Imasen Philippine Mfg. Corp. 5,100.00 2714 87316 Imasen Philippine Mfg. Corp. 6,800.00 2715 87324 Imasen Philippine Mfg. Corp. 3,400.00 2716 87325 Imasen Philippine Mfg. Corp. 6,800.00 2717 87341 Imasen Philippine Mfg. Corp. 13,600.00 2718 87342 Imasen Philippine Mfg. Corp. 1,700.00 2719 87472 Imasen Philippine Mfg. Corp. 6,800.00 2720 87500 Imasen Philippine Mfg. Corp. 6,800.00 2721 87501 Imasen Philippine Mfg. Corp. 4,250.00 2722 87541 Imasen Philippine Mfg. Corp. 13,600.00 2723 87599 Imasen Philippine Mfg. Corp. 2,550.00 2724 87657 Imasen Philippine Mfg. Corp. 10,200.00 2725 87658 Imasen Philippine Mfg. Corp. 3,400.00 2726 87825 Imasen Philippine Mfg. Corp. 13,600.00 2727 87826 Imasen Philippine Mfg. Corp. 5,950.00 2728 87897 Imasen Philippine Mfg. Corp. 10,200.00 2729 87898 Imasen Philippine Mfg. Corp. 3,400.00 2746 86958 ISPL (Phils).,Inc. 45,600.00 2747 86959 ISPL (Phils).,Inc. 45,600.00 2748 87184 ISPL (Phils).,Inc. 91,200.00 2749 87566 ISPL (Phils).,Inc. 91,200.00 2750 87636 ISPL (Phils).,Inc. 45,600.00 2751 87697 ISPL (Phils).,Inc. 45,600.00 2752 87738 ISPL (Phils).,Inc. 45,600.00 2753 87774 ISPL (Phils).,Inc. 45,600.00 3131 86848 Shi Mfg. & Services (Phils.),Inc. (1,305.00) 45.0630 (58,806.85) 3134 87845 Shi Mfg. & Services (Phils.),Inc. 1,305.00 43.9470 57,350.83 3135 87962 Shi Mfg. & Services (Phils.),Inc. 6,525.00 43.9470 286,754.17 3137 87186 Shinkonzan Corporation 5,100.00 3138 87713 Shinkonzan Corporation 5,100.00 3139 87833 Shinkonzan Corporation 5,100.00 3140 87894 Shinkonzan Corporation 5,100.00 3141 88008 Shinkonzan Corporation 9,000.00 3176 87153 Tong Hsing 25,000.00 Subtotal 11,897,714.13 For the month of November 3230 88941 AGC Flat Glass Philippines, Inc. 4,005,819.14 3231 88942 AGC Flat Glass Philippines, Inc. 5,037,847.35 3232 88984 AGC Flat Glass Philippines, Inc. 343,209.37 3253 88957 Air Liquide Pipeline Utilities Services, Inc. 24,067.01 42.7980 1,030,019.89 3259 88105 Amkor Anam Technology 5,000.00 3260 88138 Amkor Anam Technology 3,000.00 3261 88296 Amkor Anam Technology 34,500.00 3262 88521 Amkor Anam Technology 6,000.00 3263 88591 Amkor Anam Technology 69,000.00 3264 88810 Amkor Anam Technology 2,500.00 3347 88077 Franke Foodservice Systems Phils.,Inc. 10,000.00 3348 88078 Franke Foodservice Systems Phils.,Inc. 1,500.00 3349 88079 Franke Foodservice Systems Phils.,Inc. 13,200.00 3350 88160 Franke Foodservice Systems Phils.,Inc. 25,600.00 3351 88161 Franke Foodservice Systems Phils.,Inc. 950.00 3352 88325 Franke Foodservice Systems Phils.,Inc. 6,400.00 3353 88326 Franke Foodservice Systems Phils.,Inc. 22,400.00 3354 88327 Franke Foodservice Systems Phils.,Inc. 1,900.00 3355 88328 Franke Foodservice Systems Phils.,Inc. 950.00 3356 88395 Franke Foodservice Systems Phils.,Inc. 25,600.00 3357 88396 Franke Foodservice Systems Phils.,Inc. 19,200.00 3358 88397 Franke Foodservice Systems Phils.,Inc. 6,400.00 3359 88398 Franke Foodservice Systems Phils.,Inc. 3,800.00 3360 88399 Franke Foodservice Systems Phils.,Inc. 950.00 3361 88503 Franke Foodservice Systems Phils.,Inc. 19,200.00 3362 88504 Franke Foodservice Systems Phils.,Inc. 9,600.00 3363 88650 Franke Foodservice Systems Phils.,Inc. 6,400.00 3364 88732 Franke Foodservice Systems Phils.,Inc. 9,600.00 3365 88746 Franke Foodservice Systems Phils.,Inc. 19,200.00 3366 88789 Franke Foodservice Systems Phils.,Inc. 16,000.00 3367 88877 Franke Foodservice Systems Phils.,Inc. 950.00 3368 88880 Franke Foodservice Systems Phils.,Inc. 950.00 3414 88240 Imasen Philippine Mfg. Corporation 10,200.00 3415 88241 Imasen Philippine Mfg. Corporation 3,400.00 3416 88446 Imasen Philippine Mfg. Corporation 10,200.00 3417 88447 Imasen Philippine Mfg. Corporation 4,250.00 3418 88461 Imasen Philippine Mfg. Corporation 10,200.00 3419 88462 Imasen Philippine Mfg. Corporation 4,250.00 3420 88558 Imasen Philippine Mfg. Corporation 10,200.00 3421 88559 Imasen Philippine Mfg. Corporation 4,250.00 3422 88640 Imasen Philippine Mfg. Corporation 13,600.00 3423 88641 Imasen Philippine Mfg. Corporation 1,700.00 3424 88667 Imasen Philippine Mfg. Corporation 1,700.00 3425 88668 Imasen Philippine Mfg. Corporation 6,800.00 3426 88724 Imasen Philippine Mfg. Corporation 17,000.00 3427 88725 Imasen Philippine Mfg. Corporation 2,550.00 3428 88848 Imasen Philippine Mfg. Corporation 13,600.00 3429 88849 Imasen Philippine Mfg. Corporation 2,550.00 3430 88927 Imasen Philippine Mfg. Corporation 6,800.00 3431 88928 Imasen Philippine Mfg. Corporation 1,700.00 3449 88114 ISPL (Phil.),Inc. 45,600.00 3450 88256 ISPL (Phil.),Inc. 45,600.00 3451 88351 ISPL (Phil.),Inc. 45,600.00 3452 88435 ISPL (Phil.),Inc. 45,600.00 3453 88568 ISPL (Phil.),Inc. 45,600.00 3454 88657 ISPL (Phil.),Inc. 45,600.00 3455 88798 ISPL (Phil.),Inc. 45,600.00 3795 88988 Shi Mfg. & Services (Phils.),Inc. 16,965.00 42.7980 726,068.07 3798 88638 Shinkozan Corporation 5,100.00 3799 88729 Shinkozan Corporation 5,100.00 3800 89036 Shinkozan Corporation 9,000.00 3831 88402 Tong Hsing Electronics (Philippines),Inc. 25,000.00 3832 88569 Tong Hsing Electronics (Philippines),Inc. 12,500.00 3833 88658 Tong Hsing Electronics (Philippines),Inc. 25,000.00 3834 88739 Tong Hsing Electronics (Philippines),Inc. 37,500.00 3835 88808 Tong Hsing Electronics (Philippines),Inc. 25,000.00 3836 88808 Tong Hsing Electronics (Philippines),Inc. 37,500.00 Subtotal 12,109,563.82 For the month of December 3889 89887 AGC Flat Glass Philippines, Inc. 4,701,809.68 3890 89888 AGC Flat Glass Philippines, Inc. 5,438,206.17 3891 89937 AGC Flat Glass Philippines, Inc. 248,498.91 3892 89984 AGC Flat Glass Philippines, Inc. 200.00 3910 89907 Air Liquide Pipeline Utilities Services, Inc. 43,924.33 41.4010 1,818,511.19 3916 89101 Amkor Anam Technology 13,800.00 3917 89102 Amkor Anam Technology 55,200.00 3918 89246 Amkor Anam Technology 69,000.00 3919 89262 Amkor Anam Technology 1,500.00 3920 89263 Amkor Anam Technology 7,500.00 3921 89310 Amkor Anam Technology 1,500.00 3922 89433 Amkor Anam Technology 2,000.00 3923 89434 Amkor Anam Technology 8,000.00 3924 89619 Amkor Anam Technology 2,000.00 3925 89620 Amkor Anam Technology 8,000.00 3926 89648 Amkor Anam Technology 10,000.00 3927 89658 Amkor Anam Technology 10,000.00 3928 89659 Amkor Anam Technology 10,000.00 3929 89660 Amkor Anam Technology 10,000.00 3930 89665 Amkor Anam Technology 2,000.00 3931 89668 Amkor Anam Technology 8,000.00 3932 89670 Amkor Anam Technology 9,000.00 3933 89765 Amkor Anam Technology 34,500.00 3993 89367 Fastech Electronique, Inc. 39,195.00 3994 89146 Franke Foodservice Systems Phils.,Inc. 2,850.00 3995 89154 Franke Foodservice Systems Phils.,Inc. 9,600.00 3996 89155 Franke Foodservice Systems Phils.,Inc. 9,600.00 3997 89217 Franke Foodservice Systems Phils.,Inc. 9,600.00 3998 89218 Franke Foodservice Systems Phils.,Inc. 9,600.00 3999 89219 Franke Foodservice Systems Phils.,Inc. 950.00 4000 89260 Franke Foodservice Systems Phils.,Inc. 3,200.00 4001 89261 Franke Foodservice Systems Phils.,Inc. 1,900.00 4002 89340 Franke Foodservice Systems Phils.,Inc. 19,200.00 4003 89404 Franke Foodservice Systems Phils.,Inc. 16,000.00 4004 89405 Franke Foodservice Systems Phils.,Inc. 22,400.00 4005 89406 Franke Foodservice Systems Phils.,Inc. 12,800.00 4006 89407 Franke Foodservice Systems Phils.,Inc. 1,500.00 4007 89408 Franke Foodservice Systems Phils.,Inc. 10,000.00 4008 89409 Franke Foodservice Systems Phils.,Inc. 10,000.00 4009 89597 Franke Foodservice Systems Phils.,Inc. 950.00 4010 89598 Franke Foodservice Systems Phils.,Inc. 1,900.00 4037 89814 HHIC-Phil.,Inc. 4,428,650.00 4038 89815 HHIC-Phil.,Inc. 3,921,730.00 4039 89839 HHIC-Phil.,Inc. 250,750.00 4040 89842 HHIC-Phil.,Inc. 374,000.00 4041 89843 HHIC-Phil.,Inc. 367,000.00 4042 89889 HHIC-Phil.,Inc. 336,500.00 4043 89890 HHIC-Phil.,Inc. 342,000.00 4044 89891 HHIC-Phil.,Inc. 400,000.00 4045 90001 HHIC-Phil.,Inc. 2,447,000.00 4063 89921 Imasen Philippine Mfg. Corporation 121,040.00 4078 89110 ISPL (Phils.),Inc. 45,600.00 4079 89326 ISPL (Phils.),Inc. 91,200.00 4080 89562 ISPL (Phils.),Inc. 45,600.00 4081 89654 ISPL (Phils.),Inc. 45,600.00 4082 89657 ISPL (Phils.),Inc. 45,600.00 4083 89769 ISPL (Phils.),Inc. 45,600.00 4415 89940 Shi Mfg. & Services (Phils.),Inc. 19,575.00 41.4010 810,424.57 4420 89272 Shinikozan Corp. 5,100.00 4421 89364 Shinikozan Corp. 5,100.00 4422 89375 Shinikozan Corp. 5,100.00 4423 89791 Shinikozan Corp. 5,100.00 4424 89796 Shinikozan Corp. 10,200.00 4425 89799 Shinikozan Corp. 5,100.00 4426 89800 Shinikozan Corp. 5,100.00 4427 89801 Shinikozan Corp. 5,100.00 4428 89832 Shinikozan Corp. 5,100.00 4455 89317 Tong Hsing Electronics (Philippines),Inc. 37,500.00 4456 89359 Tong Hsing Electronics (Philippines),Inc. 25,000.00 4457 89647 Tong Hsing Electronics (Philippines),Inc. 37,500.00 4458 89661 Tong Hsing Electronics (Philippines),Inc. 12,500.00 Subtotal 26,932,265.52 Total 50,939,543.48 d) Sales of services or lease of facilities and equipment were not supported by VAT zero-rated official receipts in violation of Section 113 (A) (2) of the NIRC of 1997, as amended. For the month of October 2895 85836 NT Philippines, Inc. (224.00) 3058 86933 PSI Technologies, Inc. 3,000.00 3062 86936 Samsung Electro-Mechanic Philippines 4,500.00 3158 86946 Team Pacific Corp. 8,150.00 3155 86947 Team Pacific Corp. 18,000.00 3171 86948 Temic Automotive Philippines 14,000.00 3174 86950 Tokyo Steel Philippines Corp. 38,250.00 3175 86951 Tokyo Steel Philippines Corp. 6,300.00 3181 86953 Vishay Philippines, Inc. 13,500.00 2586 86995 Air Liquide Pipeline Utilities Services 25,757.51 44.8630 1,155,559.17 2599 87969 Amkor Whitecap Asia Pacific 400.00 2623 87847 Cam Mechatronics (Phils.),Inc. 900.00 2896 87849 NT Philippines, Inc. 9,260.00 2590 87967 Air Water Philippines, Inc. 90.00 43.9470 3,955.23 2603 87970 Analog Devices Gen. Trias 5,040.00 2622 87974 Bell Electronics Corporation 360.00 2624 87976 Cam Mechatronics (Phils.),Inc. 450.00 2631 87979 Cirtek Electronics Corporation 2,050.00 2639 87980 Continental Temic Electronics Phils. 5,000.00 2731 87986 Integrated Microelectronics, Inc. 5,400.00 2757 87987 Ju-Young Electronics Phils.,Inc. 200.00 2768 87988 Kyocera Kinseki Philippines, Inc. 1,050.00 3016 87996 Orient Semiconductor Electronics 2,670.00 3128 88005 Samsung Electro-Mechanic Philippines 27,100.00 2889 88006 Nidec Subic Philippines Corp. 3,500.00 2968 88007 ON Semiconductors Phils.,Inc. 700.00 3154 88013 Tann Philippines 350.00 3173 88015 Temic Automotive Philippines 2,500.00 3227 88019 Yutaka Manufacturing Philippines, Inc. 20,000.00 Subtotal 1,351,920.40 For the month of November 3269 87972 Austriamicrosystems (Philippines),Inc. (22,500.00) 3266 88020 Analog Devices Gen. Trias, Inc. 70,000.00 3267 88021 Analog Devices Gen. Trias, Inc. 2,200.00 3447 88022 ISPL (Phil.),Inc. 37,000.00 3314 88023 Bell Electronics Corporation 20,000.00 3326 88024 Cirtek Electronics Corp. 25,000.00 3332 88025 Continental Temic Electronics (Philippines),Inc. 1,125.00 43.9470 49,440.37 3443 88029 Ionics Ems, Inc. 15,000.00 3445 88030 Ionics Ems, Inc. 15,000.00 3459 88031 Katolec Philippines Corporation 900.00 43.9470 39,552.30 3482 88032 Luzon Electronics Technology, Inc. 750.00 43.9470 32,960.25 3398 88040 Hoya Glass Disk Philippines, Inc. 600.00 43.9470 26,368.20 3715 88041 Orient Semiconductor Electronics Philippines, Inc. 24,000.00 3723 88042 Philippines Toei Chemical Corporation 18,000.00 3726 88044 Pricon Microelectronics, Inc. 600.00 43.9470 26,368.20 3755 88045 PSI Technologies, Inc. 9,000.00 3756 88046 PSI Technologies, Inc. 8,100.00 3757 88047 PSI Technologies, Inc. 3,000.00 3753 88048 PSI Technologies, Inc. 6,000.00 3229 88049 AGC Flat Glass Philippines, Inc. 1,448.72 43.9470 63,666.90 3761 88050 Samsung Electro-Mechanics Philippines Corporation 4,500.00 3590 88052 Nidec Subic Philippines Corporation 400.00 43.9470 17,578.80 3682 88053 ON Semiconductors Philippines, Inc. 798,000.00 3683 88054 ON Semiconductors Philippines, Inc. 65,000.00 3813 88060 Team Pacific Corporation 8,150.00 3825 88062 Temic Automotive (Phils.),Inc. 14,000.00 3840 88067 Vishay Philippines, Inc. 13,500.00 3292 88419 Austriamicrosystems (Philippines),Inc. 10,000.00 3842 88483 Walk-in Customers 2,400.00 3254 88995 Air Water Philippines, Inc. 90.00 42.7980 3,851.82 3265 88997 Amkor Whitecap Asia Pacific 400.00 3268 88998 Analog Devices Gen. Trias, Inc. 5,040.00 3312 89000 Austriamicrosystems (Philippines),Inc. 7,500.00 3318 89002 Bell Electronics Corporation 480.00 3319 89004 Cam Mechatronic (Phils.),Inc. 450.00 3331 89007 Cirtek Electronics Corp. 2,050.00 3338 89008 Continental Temic Electronics (Philippines),Inc. 5,800.00 3433 89014 Integrated Microelectronics, Inc. 5,400.00 3458 89015 Ju-Young Electronics (Philippines),Inc. 200.00 3472 89016 Kyocera Kinseki Philippines, Inc. 1,200.00 3481 89017 Littelfuse Philippine, Inc. 3,300.00 3549 89019 MSM Manila, Inc. 5,000.00 3720 89024 Orient Semiconductor Electronics Philippines, Inc. 2,670.00 3228 89029 2Pi Microwave Technology, Inc. 400.00 3233 89031 AGC Flat Glass Philippines, Inc. 200.00 3789 89033 Samsung Electro-Mechanics Philippines Corporation 27,100.00 3592 89034 Nidec Subic Philippines Corporation 3,500.00 3681 89035 ON Semiconductors Philippines, Inc. 700.00 3413 89039 Ibiden Philippines, Inc. 5,200.00 3808 89041 Tann Philippines, Inc. 350.00 3828 89043 Temic Automotive (Phils.),Inc. 2,500.00 3886 89047 Yutaka Manufacturing (Phils.),Inc. 12,500.00 Subtotal 1,497,076.84 For the month of December 3938 89049 Analog Devices Gen. Trias, Inc. 70,000.00 3939 89050 Analog Devices Gen. Trias, Inc. 2,200.00 4076 89051 ISPL (Phils.),Inc. 37,000.00 3966 89052 Bell Electronics Corporation 20,000.00 3972 89053 Cirtek Electronics Corp. 25,000.00 3979 89054 Continental Temic Electronics (Philippines),Inc. 1,125.00 42.7590 48,103.87 4072 89058 Ionics Ems, Inc. 15,000.00 4074 89059 Ionics Ems, Inc. 15,000.00 4088 89060 Katolec Phils.,Corp. 900.00 42.7590 38,483.10 4113 89061 Luzon Electronics Technology, Inc. 750.00 42.7590 32,069.25 4047 89069 Hoya Glass Disk Philippines, Inc. 600.00 42.7590 25,655.40 4332 89070 Orient Semiconductor Electronics Philippines, Inc. 24,000.00 4342 89071 Philippine Toei Chemical Corporation 18,000.00 4344 89073 Pricon Microelectronics, Inc. 600.00 42.7590 25,656.57 4371 89074 PSI Technologies, Inc. 9,000.00 4372 89075 PSI Technologies, Inc. 8,100.00 4373 89076 PSI Technologies, Inc. 3,000.00 4369 89077 PSI Technologies, Inc. 6,000.00 3888 89078 AGC Flat Glass Philippines, Inc. 1,448.72 42.7590 61,945.82 4376 89079 Samsung Electro-Mechanics Philippines Corporation 4,500.00 4377 89080 Samsung Electro-Mechanics Philippines Corporation 27,500.00 4220 89081 Nidec Subic Philippines, Inc. 400.00 42.7590 17,103.60 4301 89083 ON Semiconductors Philippines, Inc. 65,000.00 4443 89089 Team Pacific Corp. 8,150.00 4439 89090 Team Pacific Corp. 18,000.00 4450 89091 Temic Automotive (Phils.),Inc. 14,000.00 4070 89092 Ionics Ems, Inc. 15,000.00 4453 89093 Tokyo Steel Philippines Corporation 38,250.00 4454 89094 Tokyo Steel Philippines Corporation 6,300.00 4462 89096 Vishay Philippines, Inc. 13,500.00 4412 89114 Shi Mfg. & Services (Phils.),Inc. 725.00 42.7590 31,000.28 4221 89163 Nidec Subic Philippines, Inc. 54,591.65 3980 89274 Continental Temic Electronics (Philippines),Inc. 42,500.00 4413 89469 Shi Mfg. & Services (Phils.),Inc. 18,700.00 4414 89470 Shi Mfg. & Services (Phils.),Inc. 18,700.00 3935 89595 Amkor Technology Philippines, Inc. 36,400.00 3936 89596 Amkor Technology Philippines, Inc. 36,400.00 4222 89700 Nidec Subic Philippines, Inc. 41,817.32 3911 89946 Air Water Philippines, Inc. 90.00 41.4010 3,726.09 3937 89948 Amkor Whitecap Asia Pacific 400.00 3941 89949 Analog Devices Gen. Trias, Inc. 5,040.00 3965 89951 Austriamicrosystems (Philippines),Inc. 10,000.00 3968 89953 Bell Electronics Corporation 480.00 3969 89955 Cam Mechatronic (Phils.),Inc. 450.00 3978 89958 Cirtek Electronics Corp. 2,170.00 3986 89959 Continental Temic Electronics (Philippines),Inc. 4,600.00 4065 89966 Integrated Microelectronics, Inc. 5,400.00 4087 89967 Ju-Young Electronics (Philippines),Inc. 200.00 4104 89968 Kyocera Kinseki Philippines, Inc. 1,350.00 4112 89969 Littelfuse Philippines, Inc. 3,300.00 4177 89971 MSM Manila, Inc. 5,000.00 4339 89976 Orient Semiconductor Electronics Philippines, Inc. 2,670.00 3887 89982 2Pi Microwave Technology, Inc. 400.00 4406 89986 Samsung Electro-Mechanics Philippines Corporation 27,100.00 4223 89987 Nidec Subic Philippines, Inc. 3,500.00 4299 89988 ON Semiconductors Philippines, Inc. 700.00 4429 89989 Shinikozan Corp. 6,000.00 4062 89992 Ibiden Philippines, Inc. 5,200.00 4438 89994 Tann Philippines, Inc. 350.00 4452 89996 Temic Automotive (Phils.),Inc. 2,500.00 4219 - Nidec Subic Philippines, Inc. (84,000.00) 4411 - Shi Mfg. & Services (Phils.),Inc. (550.00) 4419 - Shinikozan Corp. (6,000.00) Subtotal 991,612.95 Total 3,840,610.19 GRAND TOTAL DISALLOWED ZERO-RATED SALES/RECEIPTS 57,978,201.30 Thus, out of the reported zero-rated sales/receipts of P206,341,201.16, only the amount of P148,362,999.86, representing petitioner's sales of goods, is properly supported by PEZA, SBMA and BOI certifications and VAT zero-rated sales invoices issued in accordance with Section 113 (A) (1) and (B) in relation to Section 106 (A) (2) (a) (5) of the NIRC of 1997, as amended. The amount of P148,362,999.86 is computed below: October November December Total Zero-Rated Sales/Receipts per VAT Return 29 P67,808,772.48 P64,179,474.93 P74,352,953.75 P206,341,201.16 Less: Disallowances Sale of goods to MME Technologies, Inc. for which no PEZA Certification for 2007 VAT zero-rating of MME's transactions with its local suppliers of goods, properties and services was issued, as indicated in the PEZA letter dated December 7, 2010 (Exhibit Y-5) . Moreover, while it was noted in the said letter that MME's PEZA registration date was November 25, 1999, the same is not indicative of the fact that the said entity was PEZA registered during the subject period of claim. 489,133.57 477,454.37 433,585.32 1,400,173.26 Sales of goods without proof that the corresponding customers were PEZA or SBMA-registered entities or BOI 100% exporters during the fourth quarter of CY 2007. 594,323.40 618,558.50 584,992.47 1,797,874.37 Sale of goods supported by invoices without the term "zero-rated sale" written or printed thereon in violation of Section 113 (B) (2) (c) of the NIRC of 1997, as amended. Instead, the invoices bear the statement "Not to be issued for non-VAT/exempt sale of goods, properties, or services. If issued, sales shall be subjected to VAT." 11,897,714.14 12,109,563.82 26,932,265.52 50,939,543.48 Sales of services or lease of facilities and equipment without supporting VAT zero-rated official receipts in violation of Section 113 (A) (2) of the NIRC of 1997, as amended. 1,351,920.40 1,497,076.84 991,612.95 3,840,610.19 Total P14,333,091.51 P14,702,653.53 P28,942,456.26 P57,978,201.30 Properly Substantiated Zero-Rated Sales P53,475,680.97 P49,476,821.40 P45,410,497.49 P148,362,999.86 Petitioner incurred/paid input taxes attributable to zero- rated sales for the fourth quarter of CY 2007 and said input taxes were not applied against any output VAT liability during and in the succeeding quarters After resolving that petitioner had VAT zero-rated sales for the subject period of claim in the total amount of P148,362,999.86, the Court proceeds to determine whether petitioner incurred input taxes in connection thereto. Petitioner submitted various suppliers' official receipts, invoices, Import Entry Internal Revenue Declarations (IEIRDs) and other documents 30 in support of the input VAT claim of P23,254,465.64 which was reflected in its Quarterly VAT Return for the fourth quarter of CY 2007 as follows: Input VAT Purchases of Capital Goods not exceeding P1Million P6,025.74 Purchases of Capital Goods exceeding P1Million 597,447.34 Domestic Purchases of Goods other than Capital Goods 8,331,076.25 Importation of Goods other than Capital Goods 3,077,082.28 Domestic Purchases of Services 11,242,834.03 Total P23,254,465.64 Upon verification of the aforesaid documents, the Court-commissioned ICPA, Mr. Armando L. Magpantay, Jr.,noted some exceptions on petitioner's input VAT claim in the aggregate amount of P7,307,683.83, with the following details: Findings Exhibit Input Tax Input VAT on importations and purchases of goods and services supported by sales invoices/official receipts which were dated outside the period of claim LLLL-9-1 P5,773,240.02 Input VAT on purchase of goods and services supported by documents with no printed authority to print LLLL-9-2 1,295,842.60 Input VAT on importations which original documents cannot be located LLLL-9-3 213,316.28 Input VAT on purchase of goods and services supported by documents other than official receipts and sales invoices (invalid documents) LLLL-9-4 20,097.92 Erroneous VAT computation LLLL-9-5 5,187.01 Total input VAT claims with exceptions P7,307,683.83 The above input taxes of P7,307,683.83 shall be disallowed for not being properly supported by VAT invoices, official receipts or IEIRDs in accordance with Sections 110 (A) and 113 (A) and (B) of the NIRC of 1997, as amended, and as implemented by Sections 4.110-8 and 4.113-1 of RR No. 16-05, as amended. In addition, input taxes in the amount of P2,892,660.84, shall likewise be disallowed for failure to meet the substantiation requirements prescribed under the afore-mentioned laws and regulations: Exhibit Supplier Name Invoice/Official Receipt No. Date Input VAT (In PHP) a) Input VAT on purchase of capital goods exceeding P1 Million supported by VAT official receipt instead of VAT invoice For the month of October 2007 32 Business Machines Corp. 03977 23-Oct-07 8,625.00 Subtotal 8,625.00 b) Input VAT on purchases of goods (other than capital goods) and services supported by invoices/official receipts but the amount of VAT was not separately indicated For the month of October 2007 126-130 Edupro, Inc. 7230 27-Nov-07 3,214.29 394 Mantrade Development Corp. 406051 A 17-Nov-07 209.83 395-401 Martian International Sales 39740 03-Oct-07 2,840.78 500-501 PLDT 127535 05-Nov-07 545.26 502-504 PLDT 127673 05-Nov-07 2,880.00 505 PLDT 127678 05-Nov-07 271.69 506 PLDT 127679 05-Nov-07 367.43 507 PLDT 127680 05-Nov-07 318.24 508 PLDT 127681 05-Nov-07 135.56 509 PLDT 127682 05-Nov-07 210.77 510 PLDT 127683 05-Nov-07 875.11 511 PLDT 127684 05-Nov-07 166.38 512 PLDT 127685 05-Nov-07 237.83 513 PLDT 127686 05-Nov-07 138.83 514 PLDT 127687 05-Nov-07 135.56 515 PLDT 127688 05-Nov-07 133.38 516 PLDT 127689 05-Nov-07 230.30 517 PLDT 127690 05-Nov-07 12.56 518 PLDT 127691 05-Nov-07 431.54 519 PLDT 127692 05-Nov-07 133.38 520 PLDT 127693 05-Nov-07 3,000.00 521 PLDT 127694 05-Nov-07 2,588.68 522 PLDT 127695 05-Nov-07 190.00 523 PLDT 127696 05-Nov-07 133.14 524 PLDT 127697 05-Nov-07 1,155.61 525 PLDT 127698 05-Nov-07 244.41 526 PLDT 127699 05-Nov-07 668.38 527 PLDT 127700 05-Nov-07 133.14 528 PLDT 127703 05-Nov-07 139.14 529 PLDT 127704 05-Nov-07 139.14 530 PLDT 127705 05-Nov-07 209.21 531 PLDT 127706 05-Nov-07 200.75 532 PLDT 127707 05-Nov-07 156.83 533 PLDT 127708 05-Nov-07 622.51 534 PLDT 127709 05-Nov-07 257.26 535 PLDT 127710 05-Nov-07 217.48 536 PLDT 127711 05-Nov-07 133.79 537 PLDT 127712 05-Nov-07 173.29 538 PLDT 127713 05-Nov-07 320.75 539 PLDT 127714 05-Nov-07 178.38 660-664 San Miguel Brewery, Inc. 632 27-Nov-07 81,215.88 672-688 Smart Communication, Inc. 8896 30-Oct-07 2,939.81 809 TSTC Corporation 199 26-Nov-07 6,458.40 For the month of November 2007 1458-1459 PLDT 29170 20-Nov-07 571.20 1460 PLDT 29173 20-Nov-07 216.11 1461 PLDT 29174 20-Nov-07 407.04 1462 PLDT 29175 20-Nov-07 133.68 1463 PLDT 29176 20-Nov-07 172.19 1464 PLDT 29177 20-Nov-07 371.87 1465 PLDT 29178 20-Nov-07 249.24 1466 PLDT 29179 20-Nov-07 515.78 1467 PLDT 29180 20-Nov-07 196.24 1468 PLDT 29181 20-Nov-07 328.59 1469 PLDT 29182 20-Nov-07 203.32 1470 PLDT 29183 20-Nov-07 178.19 1471 PLDT 29184 20-Nov-07 178.19 1472 PLDT 29185 20-Nov-07 172.19 1473 PLDT 29186 20-Nov-07 798.92 1474 PLDT 29187 20-Nov-07 246.11 1475 PLDT 29188 20-Nov-07 1,259.84 1476 PLDT 29189 20-Nov-07 172.19 1477 PLDT 29190 20-Nov-07 232.21 1478 PLDT 29191 20-Nov-07 3,116.53 1479 PLDT 29192 20-Nov-07 3,000.00 1480 PLDT 29193 20-Nov-07 172.19 1481 PLDT 29194 20-Nov-07 603.10 1482 PLDT 29195 20-Nov-07 19.51 1483 PLDT 29196 20-Nov-07 200.20 1484 PLDT 29197 20-Nov-07 172.19 1485 PLDT 29198 20-Nov-07 174.37 1486 PLDT 29199 20-Nov-07 177.64 1487 PLDT 29200 20-Nov-07 184.19 1488 PLDT 29201 20-Nov-07 175.19 1489 PLDT 29202 20-Nov-07 1,146.49 1490 PLDT 29203 20-Nov-07 274.08 1491 PLDT 29204 20-Nov-07 174.37 1492 PLDT 29205 20-Nov-07 314.43 1493 PLDT 29206 20-Nov-07 619.25 1494 PLDT 29207 20-Nov-07 264.18 1624-1639 Smart Communication, Inc. 10220 28-Nov-07 3,362.18 For the month of December 2007 2230 Officeland Furniture House 0161 08-Oct-07 278.57 2360 Puregold Price Club, Inc. 1212 10-Dec-07 16,742.83 2392 San Miguel Brewery, Inc. 0061 05-Dec-07 18,240.00 2393 San Miguel Brewery, Inc. 0055 27-Nov-07 21,096.00 2394 San Miguel Brewery, Inc. 0057 28-Nov-07 17,256.00 Subtotal 209,331.29 c) Input VAT on domestic purchase of goods (other than capital goods) supported by documents other than VAT invoice For the month of October 2007 47 Caloocan Gas Station 135 31-Oct-07 5,161.07 Subtotal 5,161.07 d) Input VAT on domestic purchases of services supported by documents other than VAT official receipts For the month of October 2007 391 Manila Water Company 3204778823 01-Oct-07 41,211.46 For the month of November 2007 1154-1155 General Electric Phils.,Inc. 160272 15-May-07 32,458.38 1331 Manila Water Company 3007584492 09-Nov-07 54,873.57 1495-1497 PLDT Various SOA 17-Oct-07 2,880.00 For the month of December 2007 1895-1899 Carry-All International Forwarders, Inc. 13461 05-Nov-07 4,821.42 2197 Manila Water Company VNH030157705409 21-Dec-07 45,545.15 Subtotal 181,789.98 e) Input VAT on domestic purchases of goods (other than capital goods) and services supported by VAT invoice/official receipt but dated outside the period of claim For the month of October 2007 667 Siemens 53515421014163 24-Sep-07 8,544.60 668 Siemens 53515421014160 24-Sep-07 9,185.88 669 Siemens 53515421014162 24-Sep-07 13,596.84 670 Siemens 53515421014162 24-Sep-07 22,644.12 671 Siemens 53515421014159 24-Sep-07 41,024.52 For the month of November 2007 879 Caloy Gonzales Paint & Auto Shop, Inc. 5466 18-Jan-08 765.00 967-969 Carry-All International Forwarders, Inc. 5065 05-Jun-09 16,553.57 970-973 Carry-All International Forwarders, Inc. 5214 08-May-09 2,790.00 983 Consolidated Industrial Gases, Inc. 555134388 01-Aug-07 68,388.19 984 Consolidated Industrial Gases, Inc. 555140361 29-Sep-07 38,990.33 1722 UPS-Delbros International Express, Ltd. 56149 11-Feb-08 11.05 For the month of December 2007 1929 Corrosion Technical Services, Inc. 1076 08-Feb-08 840.00 2140-2141 Honda Cars Makati, Inc. 381912 08-Apr-08 4,980.74 2181 Leadsteel Fabrications 0116 10-Mar-07 72,428.57 2442 Toyota Shaw Ortigas 287663 28-Mar-08 327.06 2443-2450 Toyota Shaw Ortigas 287664 28-Mar-08 1,018.32 2451-2452 Toyota Shaw Ortigas 287665 28-Mar-08 195.07 Subtotal 302,283.86 f) Input VAT on domestic purchase of services with assigned exhibit number but the corresponding supporting document cannot be found from the records For the month of December 2007 1894 Carry-All International Forwarders, Inc. - - 1,500.00 Subtotal 1,500.00 g) Input VAT on importation of goods (other than capital goods) supported by IEIRDs without machine validation or proof of VAT payment Exhibit Supplier Name AWB/BL Number Date of Arrival For the month of October 2007 2526 Union Engineering 4592460456 01-Oct-07 26,135.00 2527 Singapore Oxygen Air Liquide Pte. Ltd. MNLSE070923000 04-Oct-07 89,896.00 2528 Singapore Oxygen Air Liquide Pte. Ltd. SINCB7487820 23-Oct-07 179,120.00 2529 Singapore Oxygen Air Liquide Pte. Ltd. MNLSE071037500 23-Oct-07 80,559.00 For the month of November 2007 2531 Cryostar Singapore USI02391675 11/19/2007 62,438.00 2532 Singapore Oxygen Air Liquide Pte. Ltd. MNSE071103900 08-Nov-07 71,495.00 2535 Singapore Oxygen Air Liquide Pte. Ltd. ULA00872923 16-Nov-07 77,358.00 2536 Man Diesel Singapore Pte. Ltd. USI02400215 22-Nov-07 80,906.00 2537 SPX Vokes Ltd. 1036362 31-Oct-07 198,828.00 2538 Chart Cryogenic Engineering Systems GOSUNSNR8052198 - 796,903.00 For the month of December 2007 2543 Air Liquide Japan Ltd. 2192760986 31-Oct-07 8,401.00 2546 Tora International, Inc. 2073575276 14-Nov-07 5,851.00 2553 Singapore Oxygen Air Liquide Pte. Ltd. MNLSE071210100 14-Nov-07 69,727.00 2554 Turbocompressor 8166233202 04-Dec-07 76,836.00 2557 Sun Royal Ltd. - 24-Dec-07 278,433.00 2558 SSB Cryogenic Equipment Ltd. MISCSIN000059320 17-Nov-07 79,040.00 Subtotal 2,181,926.00 h) Input VAT on domestic purchase of services supported by official receipt without TIN-VAT and BIR authority to print 836 AGC Flat Glass Philippines, Inc. 210 08-Nov-07 2,043.64 Subtotal 2,043.64 Total Additional Input VAT Disallowances per this Court's Further Verification 2,892,660.84 Thus, out of the P23,254,465.64 input VAT claim for the fourth quarter of 2007, only the amount of P13,054,120.97 represents petitioner's properly substantiated input VAT, computed as follows: Input VAT Claim P23,254,465.64 Less: Disallowances Per ICPA's report 7,307,683.83 Per this Court's further verification 2,892,660.84 Properly Substantiated Input VAT P13,054,120.97 However, included in the aforesaid input VAT of P13,054,120.97 is the amount of P327,177.55 pertaining to petitioner's purchases of capital goods exceeding P1Million, detailed as follows: Input VAT on Purchases of Capital Goods Exceeding P1Million per VAT Return 31 P597,447.34 Less: Disallowances Per ICPA's report (Exhibit "LLLL-9-1") Exh. No. Supplier October 2 Accent Micro Technologies, Inc. P10,607.14 3 Accent Micro Technologies, Inc. 65,559.86 13 Arcco Corporation 206.17 14 Arcco Corporation 677.67 15 Arcco Corporation 2,237.00 16 Arcco Corporation 9,791.21 17 Arcco Corporation 10,179.79 18 Arcco Corporation 15,734.09 201 Fairchild Process Controls 8,820.00 356 I-Secure Networks & Business Solutions, Inc. 21,428.57 689 Stellite Commercial, Inc. 321.43 690 Stellite Commercial, Inc. 396.43 691 Stellite Commercial, Inc. 407.14 692 Stellite Commercial, Inc. 460.71 693 Stellite Commercial, Inc. 460.71 694 Stellite Commercial, Inc. 814.28 695 Stellite Commercial, Inc. 921.43 696 Stellite Commercial, Inc. 1,842.85 834 Zenith Electrical & Ind'l 3,750.00 November 1345 Materials Unlimited Corporation 6,428.57 1623 Shimadzu Philippines Corporation 88,392.86 1723 Up-Town Industrial Sales 2,322.94 1732 Vette Industrial Sales 1,135.18 1733 Vette Industrial Sales 1,141.61 1734 Vette Industrial Sales 1,714.29 1735 Vette Industrial Sales 5,892.86 261,644.79 Per this Court's further verification 8,625.00 Properly Substantiated Input VAT on Purchases of Capital Goods Exceeding P1Million P327,177.55 Pursuant to Section 110 (A) (2) of the NIRC of 1997, as amended, as implemented by Section 4.110-3 of RR No. 16-05, input VAT on capital goods purchases attributable to zero-rated sales may be claimed either in full during the month of acquisition, or spread over a period of time, depending on the aggregate acquisition cost of the capital goods in the calendar month. If the aggregate acquisition cost exceeds P1Million, the claim for input tax should be spread over 60 months or the estimated useful life of the capital goods, whichever is shorter. On the other hand, if aggregate acquisition cost does not exceed P1Million, the total input taxes shall be allowed as credit/refund in the month of acquisition. Applying the cited provisions to the present case, out of the P327,177.55 input VAT related to petitioner's purchases of capital goods exceeding P1Million, only the amount P12,577.91 is creditable for the fourth quarter of CY 2007, computed as follows: Exhibit Supplier Name Input Tax Useful Life in Months Monthly Input Tax Credit Allowable Input Tax for the Fourth Quarter of 2007 For the month of October 2007 1 Accent Micro Technologies, Inc. P48,214.28 60 P803.57 P2,410.71 188 Fairchild Process Controls 4,752.00 60 79.20 237.60 189 Fairchild Process Controls 1,440.00 60 24.00 72.00 190 Fairchild Process Controls 1,260.00 60 21.00 63.00 191 Fairchild Process Controls 4,200.00 60 70.00 210.00 192 Fairchild Process Controls 5,568.00 60 92.80 278.40 204 Fairchild Process Controls 2,376.00 60 39.60 118.80 205 Fairchild Process Controls 2,376.00 60 39.60 118.80 206 Fairchild Process Controls 6,960.00 60 116.00 348.00 207 Fairchild Process Controls 8,280.00 60 138.00 414.00 208 Fairchild Process Controls 10,920.00 60 182.00 546.00 213 Fairchild Process Controls 1,020.00 60 17.00 51.00 436 Nema Electric Co.,Inc. 506.25 60 8.44 25.31 638 Samaritan Industrial Sales 337.50 60 5.63 16.88 639 Samaritan Industrial Sales 636.43 60 10.61 31.82 640 Samaritan Industrial Sales 991.07 60 16.52 49.55 641 Samaritan Industrial Sales 482.14 60 8.04 24.11 Subtotal P5,015.98 For the month of November 2007 860 Best Value Trading Corp. 1,017.86 60 16.96 P33.93 861 Best Value Trading Corp. 1,017.86 60 16.96 33.93 862 Best Value Trading Corp. 1,285.71 60 21.43 42.86 863 Best Value Trading Corp. 1,285.71 60 21.43 42.86 1025 Contronics Computer Center, Inc. 10,017.86 60 166.96 333.93 1026 Contronics Computer Center, Inc. 15,482.14 60 258.04 516.07 1137 Fairchild Process Controls 420.00 60 7.00 14.00 1138 Fairchild Process Controls 1,188.00 60 19.80 39.60 1139 Fairchild Process Controls 2,880.00 60 48.00 96.00 1140 Fairchild Process Controls 6,960.00 60 116.00 232.00 1146 Fairchild Process Controls 21,456.00 60 357.60 715.20 1348 MFT International Corp. 1,900.98 60 31.68 63.37 1349 MFT International Corp. 2,230.75 60 37.18 74.36 1350 MFT International Corp. 4,847.20 60 80.79 161.57 1399 P.T. Cerna Corporation 42,000.00 60 700.00 1,400.00 1400 P.T. Cerna Corporation 63,000.00 60 1,050.00 2,100.00 1606 Samaritan Industrial Sales 62.14 60 1.04 2.07 1607 Samaritan Industrial Sales 107.14 60 1.79 3.57 1608 Samaritan Industrial Sales 291.43 60 4.86 9.71 1609 Samaritan Industrial Sales 392.14 60 6.54 13.07 1610 Samaritan Industrial Sales 787.50 60 13.13 26.25 1611 Samaritan Industrial Sales 1,125.00 60 18.75 37.50 1613 Samaritan Industrial Sales 1,982.15 60 33.04 66.07 1614 Samaritan Industrial Sales 2,485.72 60 41.43 82.86 1615 Samaritan Industrial Sales 3,715.17 60 61.92 123.84 1659 Stellite Commercial, Inc. 460.71 60 7.68 15.36 1660 Stellite Commercial, Inc. 1,842.85 60 30.71 61.43 1724 UP-Town Industrial Sales, Inc. 8,571.43 60 142.86 285.71 1725 UP-Town Industrial Sales, Inc. 9,642.86 60 160.71 321.43 1730 UP-Town Industrial Sales, Inc. 7,702.50 60 128.38 256.75 1736 Vette Industrial Sales 2,272.23 60 37.87 75.74 1737 Vette Industrial Sales 2,454.37 60 40.91 81.81 1738 Vette Industrial Sales 2,917.02 60 48.62 97.23 1739 Vette Industrial Sales 3,055.45 60 50.92 101.85 Subtotal P7,561.93 Total P327,177.55 P12,577.91 In sum, petitioner's net creditable input VAT amounts to P12,739,521.33, as computed below: Properly Substantiated Input VAT P13,054,120.97 Less: Unamortized Input VAT on purchases of capital goods exceeding P1 Million Input VAT on purchases of capital goods exceeding P1 Million P327,177.55 Less: Input VAT creditable for the fourth quarter of CY 2007 12,577.91 314,599.64 Net Creditable Input VAT P12,739,521.33 However, the net creditable input VAT of P12,739,521.33 is not entirely attributable to petitioner's declared zero-rated sales/receipts since petitioner had also reported VATable and exempt sales/receipts in its Quarterly VAT Return for the fourth quarter of CY 2007 as follows: 32 Amount VATable Sales/Receipts P61,385,521.08 Zero-Rated Sales/Receipts 206,341,201.16 Exempt Sales/Receipts 1,065,877.70 Total Sales/Receipts P268,792,599.94 Allocating the creditable input VAT of P12,739,521.33 based on the percentage of each type of sales/receipts to total sales/receipts would show that the amount of P9,779,614.97 is attributable to petitioner's declared zero-rated sales/receipts while the rest of the input VAT pertains to VATable sales/receipts and exempt sales/receipts, as shown below: Amount Allocation Factor (Percentage to Total Sales/Receipts) VATable Sales/Receipts P61,385,521.08 22.837504118% Zero-Rates Sales/Receipts 206,341,201.16 76.765953083% Exempt Sales/Receipts 1,065,877.70 0.396542799% Total Sales/Receipts P268,792,599.94 100.0000000% Net Creditable Input VAT P12,739,521.33 Allocated as follows: VATable Sales/Receipts P2,909,388.71 Zero-Rates Sales/Receipts 9,779,614.97 Exempt Sales/Receipts 50,517.65 Total P12,739,521.33 After deducting the input VAT attributable to VATable sales in the amount of P2,909,388.71 from petitioner's output VAT liability of P7,366,262.53, 33 petitioner still has a net output VAT payable of P4,456,873.82, computed as follows: Output VAT Payable P7,366,262.53 Less: Input VAT Attributable to VATable Sales 2,909,388.71 Net Output VAT Payable P4,456,873.82 Since petitioner failed to submit VAT invoices/receipts proving the existence of its reported input VAT carry-over from previous quarter in the amount of P115,409,407.95, 34 the net output VAT payable of P4,456,873.82 shall be offset against the P9,779,614.97 input VAT attributable to the declared zero-rated sales/receipts, thus, leaving an amount of P5,322,741.15 excess input VAT attributable to the declared zero-rated sales/receipts. However, only the amount of P3,827,145.72 input VAT is attributable to the properly substantiated zero-rated sales, as computed below: Input VAT Attributable to the Declared Zero-Rated Sales/Receipts P9,779,614.97 Less :Net Output VAT Payable 4,456,873.82 Excess Input VAT Attributable to the Declared Zero-Rated Sales/Receipts P5,322,741.15 Multiply by Properly Substantiated Zero-Rated Sales 148,362,999.86 Divide by Declared Zero-Rated Sales/Receipts Per VAT Return 206,341,201.16 Excess Input VAT Attributable to Properly Substantiated Zero-Rated Sales P3,827,145.72 Even though the claimed input VAT was carried over by petitioner in its succeeding Quarterly VAT Returns, 35 the same remained unutilized until it was deducted as "VAT Refund/TCC Claimed" 36 in its Quarterly VAT Return for the third quarter of taxable year 2009. Thus, the excess input VAT of P156,871,554.19 37 as of the end of the third quarter of taxable year 2009, which was to be carried over to the succeeding fourth quarter of the same taxable year, no longer includes the subject claim. In sum, petitioner has sufficiently proven its entitlement to refund or issuance of tax credit certificate in the amount of P3,827,145.72, representing its unutilized excess input VAT for the fourth quarter of CY 2007 which is attributable to its zero-rated sales for the same period. WHEREFORE ,premises considered, the Petition for Review is hereby PARTIALLY GRANTED .Accordingly, respondent Commissioner of Internal Revenue is ORDERED TO ISSUE A TAX CREDIT CERTIFICATE in the amount of P3,827,145.72 in favor of Air Liquide Philippines, Inc.,representing its unutilized excess input VAT for the fourth quarter of CY 2007. SO ORDERED. (SGD.) CIELITO N. MINDARO-GRULLA Associate Justice Juanito C. Castaeda, Jr. and Caesar A. Casanova, JJ. ,concur. Footnotes 1. Par. 1, Stipulation of Facts, Joint Stipulation of Facts and Issues (JSFI),Docket, Vol. 1, p. 454. 2. Par. 3, Stipulation of Facts, JSFI, Docket, Vol. 1, p. 455; Exhibit "B". 3. Pars. 1 and 2, Stipulation of Facts, JSFI, Docket, Vol. 1, p. 454. 4. Docket, Vol. 2, pp. 871-898. 5. Docket, Vol. 3, p. 1566. 6. Docket, Vol. 4, pp. 1611-1632. 7. Docket, Vol. 4, pp. 1634-1642. 8. Docket, Vol. 4, pp. 1645-1649. 9. Docket, Vol. 4, pp. 1655-1656. 10. Docket, Vol. 4, pp. 1657-1670. 11. Docket, Vol. 4, p. 1671. 12. Docket, Vol. 1, pp. 114-124. 13. Docket, Vol. 4, p. 1675. 14. Docket, Vol. 1, p. 456. 15. Commissioner of Internal Revenue vs. Toledo Power Company ,G.R. Nos. 195175 and 199645, August 10, 2015; Luzon Hydro Corporation vs. Commissioner of Internal Revenue ,G.R. No. 188260, November 13, 2013; Southern Philippines Power Corporation vs. Commissioner of Internal Revenue ,G.R. No. 179632, October 19, 2011; Silicon Philippines, Inc. (Formerly Intel Philippines Manufacturing, Inc.) vs. Commissioner of Internal Revenue ,G.R. No. 172378, January 17, 2011; AT&T Communications Services Philippines, Inc. vs. Commissioner of Internal Revenue ,G.R. No. 182364, August 3, 2010; San Roque Power Corporation vs. Commissioner of Internal Revenue , G.R. No. 180345, November 25, 2009; Intel Technology Philippines, Inc. vs. Commissioner of Internal Revenue , G.R. No. 166732, April 27, 2007. 16. CTA EB No. 943, July 29, 2013. 17. G.R. No. 210646, July 29, 2015. 18. G.R. No. 150154, August 9, 2005. 19. G.R. No. 149671, July 21, 2006. 20. Consolidated Value-Added Tax Regulations of 2005 issued on September 1, 2005. 21. Exhibit "M",line 17. 22. Exhibits "2560" to "4508". 23. Exhibit "Y". 24. Exhibits "Y-1" and "Y-2". 25. Exhibit "Y-3". 26. Exhibit "Y-4". 27. Exhibit "Y-5". 28. Exhibits "J","K",and "L". 29. Exhibits "M",line 17, "J-1","K-1",and "L-1". 30. Exhibits "1" to "1901","1903" to "2148",and "2152" to "2559". 31. Exhibit "M",line 21D. 32. Exhibit "M",Lines 15A, 17, 18, and 19A. 33. Exhibit "M",Line 15B. 34. Exhibit "M",Line 20A. 35. Exhibits "N" to "U" and "LLLL-10-1",pp. 1-14. 36. Exhibits "U-4" and "LLLL-10-1",page 13/14, Line 23D; "LLLL-10",p. 1. 37. Exhibits "U-5" and "LLLL-10-1",page 14/14, Line 29.