Manulife Data Services, Inc. v. Commissioner of Internal Revenue

SPECIAL THIRD DIVISION [C.T.A. CASE NO. 8878. November 14, 2018.] MANULIFE DATA SERVICES, INC. , petitioner , vs. COMMISSIONER OF INTERNAL REVENUE , respondent . DECISION RINGPIS-LIBAN , J p : THE CASE Before this Court is a Petition for Review 1 filed by Manulife Data Services, Inc. on August 22, 2014 to seek the refund or the issuance of tax credit certificate (TCC) in the amount of Forty Million Five Hundred Eleven Thousand Eight Hundred Thirty-One Pesos and Seventy-Eight Centavos (P40,511,831.78),allegedly representing its excess and unutilized input value-added tax (VAT) for the four quarters of calendar year (CY) 2012. STATEMENT OF FACTS Petitioner Manulife Data Services, Inc. is a multinational company organized and existing under the laws of Barbados, duly registered with and licensed by the Securities and Exchange Commission (SEC) to operate as a Regional Operating Headquarter (ROHQ) under SEC Registration No. FS200603505. 2 It is also a VAT-registered entity, as evidenced by its Certificate of Registration No. OCN 3RC0000421626. 3 Petitioner's registered address is at Manulife Building, UP North Science and Technology Park, Commonwealth Avenue, Diliman, Quezon City. Petitioner, as ROHQ, is engaged in the business of providing services to its affiliates and related parties in the Asia-Pacific Region and other foreign markets, such as general administration and planning, business planning and coordination, sourcing/procurement of raw materials and components, marketing control and sales promotion, training and personnel management, research and development services and product development, technical support and maintenance, data processing and communication, and business development, among others. On the other hand, respondent is the duly appointed Commissioner of the Bureau of Internal Revenue (BIR) 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. AcICHD Petitioner entered into several service agreements with its foreign affiliates. In the course of its operations, petitioner purportedly incurred and paid input VAT arising from its domestic purchases of goods and services. 4 By the end of CY 2012, petitioner claims that it has accumulated significant amounts of input VAT. On March 28, 2014, petitioner filed its administrative claim and an Application for Tax Credits/Refunds 5 (BIR Form No. 1914) with the BIR Revenue District Office No. 38, requesting the refund of its purported unutilized input VAT for the four quarters of calendar year 2012. However, respondent failed to act on the claim for refund, prompting petitioner to file the instant Petition for Review before this Court on August 22, 2014. Within the extended time granted by the Court, 6 respondent filed his Answer 7 on October 20, 2014, interposing the following special and affirmative defenses: "xxx xxx xxx 4. Petitioner's claim for the issuance of tax credit certificate is subject to administrative investigation/examination by respondent's Bureau. 5. Taxes paid and collected are presumed to have been paid in accordance with law and regulations, hence, not refundable. 6. Moreover, in order to validly claim for tax credit/refund, it is imperative for petitioner to prove its compliance with the following, viz. : a. The registration requirements of a value-added taxpayer under the pertinent provision of the National Internal Revenue Code (NIRC) of 1997, as amended, and its implementing revenue regulations. b. The invoicing and accounting requirements for VAT-registered persons, as well as the filing and payment of VAT pursuant to the provisions of Sections 113 and 114 of the 1997 NIRC, as amended. Failure to comply with the invoicing requirements on the documents supporting the sale of goods and services will result in the disallowance of the claim for input tax of the taxpayer claimant (Revenue Memorandum Circular No. 42-2003). c. The submission of complete documents in support of the administrative claim for tax refund pursuant to Section 112 (C) of the NIRC of 1997, as amended, otherwise, there would be no sufficient compliance with regard to the filing of administrative claim for tax credit/refund which is a condition sine qua non prior to the filing of the such claim. d. That the input taxes of P40,511,831.87 allegedly representing the unutilized input VAT from its domestic purchases of goods and services were: TAIaHE i. paid by petitioner; ii. attributable to its zero-rated or effectively zero-rated sales; and, iii. such input taxes paid should not have been applied against any output tax. e. That petitioner's claim for tax credit/refund allegedly representing unutilized input VAT in the amount of P40,511,831.87 was filed within two (2) years after the close of the taxable quarter when the sales were made in accordance with Section 112 (A) of the NIRC of 1997, as amended. 7. In an action for tax credit/refund, the burden of proof rests upon the taxpayer to establish by sufficient and competent evidence its entitlement to a claim for tax credit/refund. 8. Finally, it is a well-established rule that tax refunds, which are in the nature of tax exemptions, are construed strictly against the taxpayer and liberally in favor of the government. This is because taxes are the lifeblood of the nation. Thus, the burden of proof is upon the claimant of the tax refund to prove the factual basis of his claim ( Eastern Telecommunications Philippines, Inc. vs. The Commissioner of Internal Revenue, G.R. No. 168856, August 29, 2012 )." The pre-trial conference was originally scheduled on November 27, 2014. After several postponements, it was reset for the last time to April 7, 2015. 8 Accordingly, respondent filed his Pre-Trial Brief 9 on November 18, 2014, while petitioner filed its Pre-Trial Brief 10 by mail on March 31, 2015 and received by the Court on April 1, 2015. In compliance with the order of the Court during the pre-trial conference, the parties filed their Joint Stipulation of Facts and Issue 11 on April 17, 2015, which the Court approved in the Pre-Trial Order 12 dated April 30, 2015. During trial, petitioner presented Ms. Agnes Neria, its Accounting Specialist, 13 Ms. Lourdes Rosario Mantaring, petitioner's Vice-President and General Manager, 14 and Mr. Jerome Antonio B. Constantino, the Court-commissioned Independent Certified Public Accountant (ICPA) 15 as its witnesses. After presentation, marking and identification, petitioner formally offered its documentary evidence on June 27, 2016, consisting of Exhibits "P-1" to "P-2646-a",inclusive of submarkings. 16 The exhibits were admitted as part of petitioner's documentary evidence except for Exhibits "P-5" to "P-5-e","P-6","P-6-b" to "P-6-f","P-6-a" to "P-6-a-ii","P-6-g" to "P-6-g-ii","P-15-a","P-24-d","P-24-e","P-24-f","P-27","P-47","P-48","P-49",and "P-2181",pursuant to the Resolutions dated November 17, 2016 17 and February 17, 2017 18 and to the Court's Order 19 dated June 27, 2017. cDHAES When it was respondent's turn to present evidence, his counsel manifested that respondent will no longer present evidence. 20 Thus, upon motion of both counsels, the parties were granted thirty (30) days to file their memoranda. The Court declared the case submitted for decision on December 1, 2017, 21 after petitioner filed its Memorandum 22 On October 19, 2017 and respondent filed his Memorandum 23 on November 24, 2017. Hence, this decision. STATEMENT OF ISSUE The sole issue 24 for the Court's resolution as stipulated by the parties is: Whether or not petitioner is entitled to its claim for refund or issuance of a tax credit certificate for its unutilized/excess input VAT payments for the 1st to 4th 25 Quarters of 2012 amounting to P40,511,831.78. Petitioner's Arguments Petitioner maintains that it has timely filed its administrative and judicial claims for VAT refund. Moreover, petitioner contends that as a duly registered ROHQ, it performs qualifying services to its affiliates, subsidiaries, or branches in the Asia-Pacific Region and in other foreign markets; and that as an ROHQ, it is engaged in transactions subject to VAT zero-rating. Petitioner asserts that it incurred or paid input VAT arising from its purchases of goods and services from domestic suppliers. As such, the excess and unutilized input VAT is directly attributable to its VAT zero-rated sales. It asserts that it has complied with the submission of complete documents in support of its claim for refund. Respondent's Counter-Arguments Respondent argues that petitioner failed to show that it has submitted complete documents in support of its administrative claim for refund. Since refunds are in the nature of exemptions and are to be construed strictly against the claimant, petitioner has the burden of proving that it is entitled to a refund or tax credit, which it failed to establish. RULING OF THE COURT Pertinent to the resolution of petitioner's refund claim is Section 112 (A) and (C) of the NIRC of 1997, as amended, which is quoted hereunder for ready reference: "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. ASEcHI 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, in order to be entitled to a refund or tax credit of unutilized input VAT attributable to zero-rated or effectively zero-rated sales, the following requisites must be satisfied: 1. the claimant must be a VAT-registered person; 2. there must be zero-rated or effectively zero-rated sales; 3. input taxes were incurred or paid; 4. such input taxes are attributable to zero-rated or effectively zero-rated sales; 5. said input taxes were not applied against any output VAT liability; and 6. the administrative and judicial claims for refund were filed within the prescribed period. The Court shall first determine petitioner's compliance with the sixth requisite which pertains to the timeliness of the filing of petitioner's refund claim. Petitioner's administrative and judicial claims were timely filed Pursuant to Section 112 (A) of the NIRC of 1997, as amended, the application for issuance of tax credit certificate or refund of unutilized excess input VAT must be filed within two years after the close of the taxable quarter when the zero-rated or effectively zero-rated sales were made. The present claim covers the four quarters of CY 2012, which respectively closed on March 31, 2012, on June 30, 2012, on September 30, 2012, and on December 31, 2012. Counting two years from the said dates, petitioner had until March 31, 2014, June 30, 2014, September 30, 2014, and December 31, 2014, respectively, within which to file its administrative claim for refund or issuance of tax credit certificate. Thus, petitioner's administrative claim for the said quarters was timely filed on March 28, 2014, to wit: ITAaHc CY 2012 End of the Taxable Quarter Last Day to File Administrative Claim Date of Filing of Administrative Claim 1st Quarter 31-Mar-12 31-Mar-14 28-Mar-14 26 2nd Quarter 30-Jun-12 30-Jun-14 3rd Quarter 30-Sep-12 30-Sep-14 4th Quarter 31-Dec-12 31-Dec-14 Anent the timeliness of petitioner's judicial appeal, Section 112 (C) of the NIRC of 1997, as amended, states the time requirements for filing a judicial claim for the refund or tax credit of input VAT. The legal provision speaks of two periods: the period of 120 days, which serves as a waiting period to give time for the BIR Commissioner to act on the administrative claim for a refund or tax credit; and the period of 30 days, which refers to the period for filing a judicial claim with the CTA. 27 It must be noted that the 120-day period begins to run from the date of submission of complete documents supporting the administrative claim. If there is no evidence showing that the taxpayer was required to submit or actually submitted additional documents after the filing of the administrative claim, it is presumed that the complete documents accompanied the claim when it was filed. 28 In this case, petitioner simultaneously submitted its complete supporting documents upon filing of its administrative claim on March 28, 2014. Accordingly, respondent had 120 days from March 28, 2014, or until July 26, 2014 to decide on petitioner's claim. However, respondent failed to act on the claim within the allowable period of 120 days. Thus, petitioner had 30 days or until August 25, 2014 to appeal such inaction to the Court. Evidently, petitioner's judicial claim for refund or tax credit was also timely filed on August 22, 2014, as shown below: CY 2012 Date of Filing of Administrative Claim/Submission of Complete Documents End of 120 days for the CIR to decide on the claim End of 30 days from the expiration of the 120 days Date of Filing of Petition for Review 1st Quarter 28-Mar-14 26-Jul-14 25-Aug-14 22-Aug-14 2nd Quarter 3rd Quarter 4th Quarter Having determined that petitioner timely filed both its administrative and judicial claims, the Court shall now proceed to address petitioner's compliance with the other requisites. Petitioner is a VAT-registered entity and had zero-rated sales/receipts during the four quarters of CY 2012 Petitioner satisfied the first requisite considering that it is a VAT-registered taxpayer. 29 With regard to the second requisite, i.e. , the existence of zero-rated sales, petitioner claims that its sales of services were rendered to foreign corporations/affiliates engaged in business outside of the Philippines, which services were paid for in US dollars inwardly remitted to the Philippine banking system and as such, these sales are VAT zero-rated pursuant to Section 108 (B) (2) of the NIRC of 1997, as amended, which states that: CHTAIc "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: (1) Processing, manufacturing or repacking goods for other persons doing business outside the Philippines which goods are subsequently exported, where the services are paid for in acceptable foreign currency and accounted for in accordance with the rules and regulations of the Bangko Sentral ng Pilipinas (BSP); (2) Services other than those mentioned in the preceding paragraph rendered to a person engaged in business conducted outside the Philippines or to a nonresident person not engaged in business who is outside the Philippines when the services are performed, the consideration for which is paid for in acceptable foreign currency and accounted for in accordance with the rules and regulations of the Bangko Sentral ng Pilipinas (BSP);" In the case of Commissioner of Internal Revenue vs. Burmeister and Wain Scandinavian Contractor Mindanao, Inc. , 30 the Supreme Court held that in order for the supply of services to be VAT zero-rated under Section 108 (B) (2) of the NIRC of 1997, as amended, the following requisites must be met: 1. the services must be other than processing, manufacturing or repacking of goods; 2. the recipient of such services is doing business outside the Philippines; and 3. the payment for such services must be in acceptable foreign currency accounted for in accordance with the BSP rules and regulations. Anent the first requisite, petitioner is a multinational company organized and existing under the laws of Barbados and has established an ROHQ in the Philippines, under SEC Certificate of Registration and License No. FS200603505, "to engage in general administration and planning; business planning and coordination; sourcing/procurement of raw materials and components; corporate finance advisory services; marketing control and sales promotion; training and personnel management; logistic services; research and development services and product development; technical support and maintenance; data processing and communication and business development." 31 These services clearly fall within the scope of "services other than processing, manufacturing or repacking of goods" contemplated by the afore-mentioned provision. For the four quarters of CY 2012, petitioner rendered services to the following entities: 32 1. John Hancock Signature Services, Inc. 2. John Hancock Life Insurance Company (USA) 3. Manulife (International) Ltd 4. The Manufacturer's Life Insurance Company 5. Manulife Insurance Berhad 6. Manulife Singapore Pte Ltd 7. Manulife Asset Management Limited 8. Manulife Asset Management (Hong Kong) Limited 9. Manulife Asset Management (Malaysia) Sdn Bhd Manulife Asset Management (Singapore) Pte Ltd Reg No. 198002116D 10. Manulife Asset Management (Singapore) Pte Ltd 11. Manulife Asset Management Services Berhad 12. Manulife Bank & Trust 13. Manulife Sonichem 14. Manulife Financial Asia Ltd 15. PT Asuransi Jiwa Manulife Indonesia In order to comply with the second requisite of proving that the above-enumerated entities are non-resident foreign corporations doing business outside the Philippines, petitioner submitted several documents such as Certifications of Non-Registration of Company issued by the Securities and Exchange Commission, Articles/Certificates of Incorporation/Registration and/or other similar documents, and Service Agreements, detailed as follows: EATCcI Document Exhibit Articles/Certificate of Incorporation/Registration and/or other similar documents: Amended Articles of Redomestication of John Hancock Life Insurance Company (USA) "P-16" Certificate of Incorporation, Memorandum of Association, First Schedule to the Companies, Certificate of Deposit of Memorandum of Association and By Laws, Certificate of Registration of Change of Name of Oversea Company of Manulife (International) Limited "P-17" to "P-17-a" Business Registration, Assessment Demanding Final Tax for 2010/2011 and Notice for Payment of Provisional Tax for 2011/2012, Notice of Refund of Tax for 2011/2012, Articles of Association, Memorandum of Articles and Association of Manulife Asset Management (Hong Kong) Limited "P-18" to "P-18-d" Memorandum of Association and Articles of Incorporation, Certificate of Incorporation of Private Company, Certificate of Residence of Manulife Singapore Pte Ltd "P-22" to "P-22-b" Letters of Patent, Letters of Patent of Amalgamation, Certificate of Confirmation, Certificate of Good Standing, Certificate of Filing an Act of Articles of Incorporation and By Laws of a Foreign Corporation, General Information Sheet of The Manufacturer's Life Insurance Company "P-24" to "P-24-c" SEC Certificate of Non-Registration of Company: SEC Certificate of Non-Registration of Company of John Hancock Life Insurance Company (USA) "P-16-a" SEC Certificate of Non-Registration of Company of Manulife (International) Limited "P-17-b" SEC Certificate of Non-Registration of Company of Manulife Asset Management (Hong Kong) Limited "P-18-e" SEC Certificate of Non-Registration of Company of Manulife Asset Management (Malaysia) Sdn Bhd "P-19" SEC Certificate of Non-Registration of Company of Manulife Asset Management (Singapore) Pte Ltd "P-20" SEC Certificate of Non-Registration of Company of Manulife Insurance Berhad "P-21" SEC Certificate of Non-Registration of Company of Manulife Singapore Pte Ltd "P-22-c" SEC Certificate of Non-Registration of Company of PT Asuransi Jiwa Manulife Indonesia "P-23" SEC Certificate of Non-Registration of Company of Manulife Asset Management Limited "P-2605" SEC Certificate of Non-Registration of Company of Manulife Asset Management Services "P-2606" SEC Certificate of Non-Registration of Company of Manulife Bank & Trust "P-2607" SEC Certificate of Non-Registration of Company of Manulife Financial Asia Ltd "P-2608" SEC Certificate of Non-Registration of Company of John Hancock Life Insurance "P-2609" Service Agreement: Services Agreement between the Petitioner and John Hancock Life Insurance Company (USA) "P-2" Service Level Agreement between the Petitioner and John Hancock Signature Services "P-3" Business Processing Services Agreement between the Petitioner and Manulife (International) Limited "P-4" Services Agreement between the Petitioner and Manulife Asset Management (Hong Kong) Limited "P-5" Master Administrative Services Agreement between the Petitioner and Manulife Asset Management (Malaysia) Sdn. Bhd. "P-6" Services Agreement between the Petitioner and Manulife Asset Management (Singapore) Pte. Ltd. "P-7" Service Agreement between the Petitioner and Manulife Insurance Berhad "P-8" Master Services Agreement between the Petitioner and Manulife Singapore Pte. Ltd. "P-9" Master Administrative Services Agreement between the Petitioner and Manulife Life Insurance Company "P-10" This Court has consistently held that in order to be considered a non-resident foreign corporation doing business outside the Philippines, each entity must be supported, at the very least, by both SEC Certificate of Non-registration of Corporation/Partnership and Proof of Incorporation/Association/Business Registration in a foreign country and that there is no other indication that would disqualify said entity in being classified as a non-resident foreign corporation. Thus, only the following client-affiliates of petitioner shall be considered as non-resident foreign corporations doing business outside the Philippines: Client Articles/Certificate of Incorporation/Registration and/or other similar documents: SEC Certificate of Non-Registration of Company Exhibit No. Document John Hancock Life Insurance Company (USA) "P-16" Amended Articles of Redomestication "P-16-a" Manulife (International) Limited "P-17" to "P-17-a" Certificate of Incorporation, Memorandum of Association, First Schedule to the Companies, Certificate of Deposit of Memorandum of Association and By Laws, Certificate of Registration of Change of Name of Oversea Company "P-17-b" Manulife Asset Management (Hong Kong) Limited "P-18" to "P-18-d" Business Registration, Assessment Demanding Final Tax for 2010/2011 and Notice for Payment of Provisional Tax for 2011/2012, Notice of Refund of Tax for 2011/2012, Articles of Association, Memorandum of Articles and Association "P-17-e" Manulife Singapore Pte Ltd "P-22" to "P-22-b" Memorandum of Association and Articles of Incorporation, Certificate of Incorporation of Private Company, Certificate of Residence "P-22-c" As to the third requisite, Sections 113 (A) (2), (B) (1), (2) (c) and (3) of the NIRC of 1997, as amended, as implemented by Sections 4.113-1 (A) (2), (B) (1) and (2) (c) of Revenue Regulations (RR) No. 16-05, provide that a VAT taxpayer, like herein petitioner, shall for every lease of goods or properties and for every sale, barter or exchange of services issue a VAT official receipt which must contain the following information: DHITCc "SEC. 113. Invoicing and Accounting Requirements for VAT-Registered Persons . (A) Invoicing Requirements . A VAT-registered person shall issue: xxx xxx xxx (2) A VAT official receipt for every lease of goods or properties, and for every sale, barter or exchange of services . (B) Information Contained in the VAT Invoice or VAT Official Receipt . The following information shall be indicated in the VAT invoice or VAT official receipt: (1) A statement that the seller is a VAT-registered person, followed by his Taxpayer's Identification Number (TIN); (2) The total amount which the purchaser pays or is obligated to pay to the seller with the indication that such amount includes the value-added tax: Provided ,That: xxx xxx xxx (c) If the sale is subject to zero percent (0%) value-added tax, the term 'zero-rated sale' shall be written or printed prominently on the invoice or receipt; xxx xxx xxx (3) The date of transaction, quantity, unit cost and description of the goods or properties or nature of the service; and" (Emphasis supplied) "SECTION 4.113-1. Invoicing Requirements . (A) A VAT-registered person shall issue: xxx xxx xxx (2) A VAT official receipt for every lease of goods or properties, and for every sale, barter or exchange of services . Only VAT-registered persons are required to print their TIN followed by the word 'VAT' in their invoice or official receipts .Said documents shall be considered as a 'VAT Invoice' or VAT official receipt. All purchases covered by invoices/receipts other than VAT Invoice/VAT Official Receipt shall not give rise to any input tax. VAT invoice/official receipt shall be prepared at least in duplicate, the original to be given to the buyer and the duplicate to be retained by the seller as part of his accounting records. (B) Information contained in VAT invoice or VAT official receipt . The following information shall be indicated in VAT invoice or VAT official receipt: (1) A statement that the seller is a VAT-registered person, followed by his TIN; (2) The total amount which the purchaser pays or is obligated to pay to the seller with the indication that such amount includes the VAT; Provided, That: xxx xxx xxx (c) If the sale is subject to zero percent (0%) VAT, the term 'zero-rated sale' shall be written or printed prominently on the invoice or receipt"; (Emphasis supplied) cEaSHC Pursuant to the foregoing provisions, the foreign currency remittances referred to under Section 108 (B) (2) of the NIRC of 1997, as amended, must likewise be supported by VAT zero-rated official receipts. To prove that it rendered services to its non-resident foreign client-affiliates and was paid in US dollars duly accounted for in accordance with the rules and regulations of the BSP for the four quarters of CY 2012, petitioner presented its Schedule of Zero-Rated Sales and Bank Credit Memo, 33 bank statements, 34 and the related official receipts 35 and sales invoices, 36 which were examined by the Court-commissioned ICPA. As aptly found by the ICPA, out of the P1,767,160,491.54 37 zero-rated sales/receipts reflected per petitioner's Schedule of Zero-Rated Sales and Bank Credit Memo, the amount of P619,287,176.99 was derived from services rendered to John Hancock Life Insurance Company (USA),Manulife (International) Ltd.,Manulife Asset Management (Hong Kong Limited),and Manulife (Singapore) Pte Ltd, detailed as follows: 38 CY 2012 John Hancock Life Insurance Company (USA) Manulife (International) Ltd Manulife Asset Management (Hong Kong) Limited Manulife (Singapore) Pte Ltd Total First Quarter Amount of Sales/Receipts in PHP January 40,030,504.88 8,739,567.63 555,993.64 26,388.56 49,352,454.71 February 41,158,533.14 8,394,580.42 544,270.25 25,832.15 50,123,215.96 March 40,502,672.50 9,005,608.28 555,415.81 105,335.69 50,169,032.28 Subtotal 121,691,710.52 26,139,756.33 1,655,679.70 157,556.40 149,644,702.95 Second Quarter April 39,949,413.34 8,676,061.97 561,320.28 25,831.48 49,212,627.07 May 42,019,196.02 8,805,721.46 706,300.32 25,985.97 51,557,203.77 June 41,572,346.73 8,852,146.18 701,010.32 25,861.00 51,151,364.23 Subtotal 123,540,956.09 26,333,929.61 1,968,630.92 77,678.45 151,921,195.07 Third Quarter July 41,953,264.32 8,491,048.77 798,072.70 25,364.81 51,267,750.60 August 41,061,980.34 8,802,258.92 796,339.24 25,467.75 50,686,046.25 September 42,371,150.82 8,864,986.22 793,156.11 - 52,029,293.15 Subtotal 125,386,395.48 26,158,293.91 2,387,568.05 50,832.56 153,983,090.00 Fourth Quarter October 44,527,347.99 8,874,348.22 781,435.24 - 54,183,131.45 November 44,067,649.82 10,048,521.11 830,351.05 - 54,946,521.98 December 44,377,015.84 9,451,302.53 780,217.17 - 54,608,535.54 Subtotal 132,972,013.65 28,374,171.86 2,392,003.46 - 163,738,188.97 Total 503,591,075.74 107,006,151.71 8,403,882.13 286,067.41 619,287,176.99 As stated earlier, only these entities qualify as non-resident foreign corporations doing business outside the Philippines. Thus, petitioner's remaining sales/receipts in the amount of P1,147,873,314.55 (P1,767,160,491.54 less P619,287,176.99) shall be denied VAT zero-rating for petitioner's failure to prove that the entities to whom it rendered services are non-resident foreign corporations doing business outside the Philippines. 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter CY 2012 Per Schedule of Zero-Rated Sales and Bank Credit Memo P425,445,309.20 P430,607,458.87 P434,591,924.68 P476,515,798.79 P1,767,160,491.54 Less :Sales/receipts to qualified non-resident foreign corporations doing business outside the Philippines 149,644,702.95 151,921,195.07 153,983,090.00 163,738,188.97 619,287,176.99 Disallowed Zero-Rated Sales/Receipts P275,800,606.25 P278,686,263.80 P280,608,834.68 P312,777,609.82 P1,147,873,314.55 Further, out of petitioner's sales/receipts of P619,287,176.99, the amount of P12,229,790.39 should be disallowed for the following reasons: Findings OR No. OR Date Amount in US$ Amount in PHP Exhibit No. Sale of services supported by zero-rated official receipt issued in the name of Customer's Department "Hong Kong Operations" Manulife (International) Ltd 3565 30-Apr-12 48,479.50 2,077,965.79 P-416 Sale of services supported by zero-rated official receipt issued to "John Hancock" only John Hancock Life Insurance Company (USA) 4523 30-Oct-12 111,169.54 4,638,771.31 P-1229 Sale of services supported by undated zero-rated official receipt John Hancock Life Insurance Company (USA) 3920 30-Jun-12 5,150.57 221,037.41 P-807 Difference in the amounts reflected per zero-rated official receipt and per schedule Manulife (International) Ltd per Schedule 115,835.69 4,965,038.85 per Official Receipt 3567 30-Apr-12 110,453.34 4,734,336.41 P-421 Disallowance 5,382.35 230,702.44 Manulife (International) Ltd per Schedule 108,768.15 4,640,049.28 per Official Receipt 3693 30-May-12 103,408.13 4,411,390.83 P-808 Disallowance 5,360.02 228,658.45 Sale of services without supporting zero-rated official receipt John Hancock Life Insurance Company (USA) - - 117,567.49 4,832,654.99 P-50, Annex 27 TOTAL 293,109.47 12,229,790.39 In addition, the following sales/receipts in the total amount of P44,342,468.71 ($1,055,548.28),which do not have corresponding inward remittances, should be denied VAT zero-rating, to wit: CTIEac Exhibit CLIENT OR NO. OR DATE Amount in US$ Amount in PhP Exhibit Reference to "Schedule of Zero-Rated Sales and Bank Credit Memo" SECOND QUARTER OF CY 2012 P-535 Manulife Asset Management (Hong Kong) Limited 3831 30-Jun-12 2,930.07 125,744.35 P-52, page 3 of 8 P-637 Manulife Asset Management (Hong Kong) Limited 3961 30-Jul-12 3,005.74 128,371.40 P-52 page 5 of 8 Manulife (Singapore) Pte Ltd 4078 30-Jul-12 497.45 21,245.47 P-52, page 7 of 8 Subtotal 6,433.26 275,361.22 THIRD QUARTER OF CY 2012 P-968 John Hancock Life Insurance Company (USA) 4270 28-Sep-12 25,566.78 1,075,338.87 P-53, page 4 of 9 P-983 John Hancock Life Insurance Company (USA) 4287 28-Sep-12 27,938.97 1,175,112.94 P-53, page 5 of 9 P-984 John Hancock Life Insurance Company (USA) 4288 28-Sep-12 15,447.63 649,727.32 P-985 John Hancock Life Insurance Company (USA) 4289 28-Sep-12 58,101.80 2,443,761.80 P-986 John Hancock Life Insurance Company (USA) 4290 28-Sep-12 79,752.15 3,354,375.50 P-987 John Hancock Life Insurance Company (USA) 4291 28-Sep-12 4,305.51 181,089.75 P-988 John Hancock Life Insurance Company (USA) 4292 28-Sep-12 10,400.00 437,424.00 P-989 John Hancock Life Insurance Company (USA) 4293 28-Sep-12 46,961.26 1,975,190.76 P-995 John Hancock Life Insurance Company (USA) 4299 28-Sep-12 304,048.50 12,788,279.79 P-996 John Hancock Life Insurance Company (USA) 4300 28-Sep-12 13,000.00 546,780.00 P-997 John Hancock Life Insurance Company (USA) 4301 28-Sep-12 29,233.55 1,229,563.21 P-998 John Hancock Life Insurance Company (USA) 4302 28-Sep-12 7,573.91 318,558.78 P-999 John Hancock Life Insurance Company (USA) 4303 28-Sep-12 2,600.00 109,356.00 P-1000 John Hancock Life Insurance Company (USA) 4304 28-Sep-12 15,600.00 656,136.00 P-1001 John Hancock Life Insurance Company (USA) 4305 28-Sep-12 14,300.00 601,458.00 P-1002 John Hancock Life Insurance Company (USA) 4306 28-Sep-12 29,270.38 1,231,112.07 P-1003 John Hancock Life Insurance Company (USA) 4307 28-Sep-12 14,300.00 601,458.00 John Hancock Life Insurance Company (USA) 4308 28-Sep-12 43,747.83 1,840,033.57 P-1004 John Hancock Life Insurance Company (USA) 4309 28-Sep-12 12,337.50 518,915.25 P-1005 John Hancock Life Insurance Company (USA) 4310 28-Sep-12 6,500.00 273,390.00 P-1006 John Hancock Life Insurance Company (USA) 4311 28-Sep-12 2,965.35 124,722.53 P-1007 John Hancock Life Insurance Company (USA) 4312 28-Sep-12 12,701.09 534,207.97 P-1027 John Hancock Life Insurance Company (USA) 4336 28-Sep-12 14,297.49 601,352.37 P-1038 John Hancock Life Insurance Company (USA) 4352 28-Sep-12 4,449.99 187,166.58 P-53 page 6 of 9 P-1040 John Hancock Life Insurance Company (USA) 4354 28-Sep-12 12,762.73 536,800.33 P-1041 John Hancock Life Insurance Company (USA) 4355 28-Sep-12 15,623.00 657,103.54 P-1042 John Hancock Life Insurance Company (USA) 4356 28-Sep-12 7,497.18 315,331.39 P-1043 John Hancock Life Insurance Company (USA) 4357 28-Sep-12 7,569.50 318,373.04 P-1044 John Hancock Life Insurance Company (USA) 4358 28-Sep-12 4,217.23 177,376.88 P-1045 John Hancock Life Insurance Company (USA) 4359 28-Sep-12 10,372.15 436,252.76 P-1046 John Hancock Life Insurance Company (USA) 4360 28-Sep-12 15,774.46 663,473.64 P-1056 John Hancock Life Insurance Company (USA) 4371 28-Sep-12 107,055.58 4,502,757.69 P-887 Manulife Asset Management (Hong Kong) Limited 4173 30-Aug-12 500.00 20,945.00 P-53, page 2 of 9 P-888 Manulife Asset Management (Hong Kong) Limited 4174 30-Aug-12 2,898.54 121,419.97 P-929 Manulife Asset Management (Hong Kong) Limited 4224 30-Aug-12 2,895.09 121,275.11 P-53 page 3 of 9 P-1049 Manulife Asset Management (Hong Kong) Limited 4364 28-Sep-12 2,882.62 121,242.82 P-53 page 6 of 9 P-1177 Manulife Asset Management (Hong Kong) Limited 4472 30-Oct-12 450.00 18,777.15 P-53, page 8 of 9 P-1178 Manulife Asset Management (Hong Kong) Limited 4473 30-Oct-12 2,895.07 120,802.74 P-1226 Manulife Asset Management (Hong Kong) Limited 4515 30-Oct-12 2,905.15 121,223.15 P-53 page 9 of 9 Subtotal 991,697.99 40,527,436.97 FOURTH QUARTER OF CY 2012 P-1485 Manulife Asset Management (Hong Kong) Limited 4805 30-Dec-12 12,758.00 524,422.29 P-54 page 6 of 9 P-1320 Manulife Asset Management (Hong Kong) Limited 4624 30-Nov-12 2,829.54 117,222.18 P-54 page 2 of 9 P-1322 Manulife Asset Management (Hong Kong) Limited 4626 30-Nov-12 3,274.95 135,674.63 P-1450 Manulife Asset Management (Hong Kong) Limited 4768 30-Dec-12 3,023.07 124,264.41 P-54 page 5 of 9 P-1451 Manulife Asset Management (Hong Kong) Limited 4769 30-Dec-12 4,419.48 181,664.35 P-1470 Manulife (Singapore) Pte Ltd 4788 30-Dec-12 200.00 8,221.07 P-1348 Manulife (Singapore) Pte Ltd 4654 30-Nov-12 200.00 8,258.60 P-54, page 3 of 9 P-1611 Manulife Asset Management (Hong Kong) Limited 4921 31-Jan-13 3,357.12 137,698.99 P-54, page 8 of 9 P-1612 Manulife Asset Management (Hong Kong) Limited 4923 31-Jan-13 2,906.68 119,223.29 P-1618 Manulife (Singapore) Pte Ltd 4929 31-Jan-13 2,310.00 94,749.27 P-1620 Manulife Asset Management (Hong Kong) Limited 4933 31-Jan-13 12,758.00 523,294.89 P-1641 Manulife (Singapore) Pte Ltd 4956 31-Jan-13 9,380.19 384,747.25 Subtotal 57,417.03 2,359,441.22 TOTAL SALES OF SERVICES WITHOUT INWARD REMITTANCES 1,055,548.28 44,342,468.71 ' In sum, petitioner's valid zero-rated sales/receipts for CY 2012 amounted only to P562,714,917.89, computed as follows: DcHSEa 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter CY 2012 In Philippine Pesos Zero-Rated Sales/Receipts Per Schedule 425,445,309.20 430,607,458.87 434,591,924.68 476,515,798.79 1,767,160,491.54 Less: Disallowances Sales of services to entities not considered as non-resident foreign corporations doing business outside the Philippines 275,800,606.25 278,686,263.80 280,608,834.68 312,777,609.82 1,147,873,314.55 Sale of services supported by zero-rated official receipt issued to "Hong Kong Operations" 2,077,965.79 - - - 2,077,965.79 Sale of services supported by zero-rated official receipt issued to "John Hancock" - - 4,638,771.31 - 4,638,771.31 Sale of services supported by undated zero-rated official receipt 221,037.41 - - - 221,037.41 Difference in the amounts reflected per zero-rated official receipt and per schedule 230,702.44 228,658.45 - - 459,360.89 Sales of services without supporting official receipts - - - 4,832,654.99 4,832,654.99 Sales of services without corresponding inward remittances - 275,361.22 41,707,666.27 2,359,441.22 44,342,468.71 Total Disallowances 278,330,311.89 279,190,283.47 326,955,272.26 319,969,706.03 1,204,445,573.65 VALID ZERO-RATED SALES/RECEIPTS 147,114,997.31 151,417,175.40 107,636,652.42 156,546,092.76 562,714,917.89 A comparison of the amount of zero-rated sales/receipts as reflected in the Schedule of Zero-Rated Sales and Bank Credit Memo vis--vis the amount declared in petitioner's Quarterly VAT Returns shows the following discrepancies: SaCIDT 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter CY 2012 Per Schedule of Zero-Rated Sales and Bank Credit Memo P425,445,309.20 P430,607,458.87 P434,591,924.68 P476,515,798.79 P1,767,160,491.54 Per Quarterly VAT Return 424,765,644.87 425,513,821.38 435,877,878.68 488,303,415.85 1,774,460,760.78 Difference P679,664.33 P5,093,637.49 P(1,285,954.00) P(11,787,617.06) P(7,300,269.24) Apparently, for the first and second quarters of 2012, petitioner failed to declare its sales/receipts in the respective amounts of P679,664.33 and P5,093,637.49; whereas for the third and fourth quarters of 2012, petitioner failed to provide supporting documents for its declared zero-rated sales/receipts in the respective amounts of P1,285,954.00 and P11,787,617.06. Therefore, for purposes of input VAT allocation, the basis of petitioner's total amount of zero-rated sales/receipts per quarter is the higher between the amount per schedule and per Quarterly VAT Returns, to wit: 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter CY 2012 Zero-Rated Sales/Receipts P425,445,309.20 P430,607,458.87 P435,877,878.68 P488,303,415.85 P1,780,234,062.60 Consequently, only the portion of the input VAT claim attributable to the substantiated zero-rated sales/receipts will be considered for refund using the following rates: CY 2012 Valid Zero-Rated Sales/Receipts Should-be Total Amount of Declared Zero-Rated Sales/Receipts 39 Rate of Valid Zero-Rated Sales/Receipts to Should-Be Total Amount of Declared Zero-Rated Sales/Receipts 1st Quarter P147,114,997.31 P425,445,309.20 34.5790620% 2nd Quarter 151,417,175.40 430,607,458.87 35.1636211% 3rd Quarter 107,636,652.42 435,877,878.68 24.6942223% 4th Quarter 156,546,092.76 488,303,415.85 32.0591844% Total P562,714,917.89 P1,780,234,062.60 Petitioner incurred/paid input taxes attributable to zero-rated sales/receipts and said input taxes were not applied against any output VAT liability Having resolved that petitioner had valid VAT zero-rated sales/receipts for the four quarters of CY 2012 in the amount of P562,714,917.89, the Court shall determine whether petitioner incurred input taxes in connection therewith and if said input taxes were not applied against any output VAT liability of petitioner. cHECAS In its Quarterly VAT Returns for the four quarters of CY 2012, petitioner reflected a total amount of P35,539,243.54 allowable input VAT arising from its amortization of input VAT on purchases of capital goods exceeding P1Million, domestic purchases of capital goods not exceeding P1Million, domestic purchases of goods other than capital goods, and domestic purchases of services, detailed as follows: 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter CY 2012 Input Tax Deferred on Capital Goods exceeding P1Million from Previous Quarter P13,878,120.81 P12,059,596.71 P13,267,406.92 P18,414,477.23 P13,878,120.81 Add: Input Tax on Capital Goods exceeding P1Million Purchased this Quarter - 3,026,707.02 7,223,181.50 3,756,898.28 14,006,786.80 Total Unamortized Input Tax on Capital Goods Exceeding P1Million P13,878,120.81 P15,086,303.73 P20,490,588.42 P22,171,375.51 P27,884,907.61 Less: Input Tax on Purchases of Capital Goods exceeding P1Million deferred for the succeeding period 12,059,596.71 13,267,406.92 18,414,477.23 19,898,300.57 19,898,300.57 Amortization of Input Tax on Capital Goods exceeding P1Million P1,818,524.10 P1,818,896.81 P2,076,111.19 P2,273,074.94 P7,986,607.04 Add: Input Tax on: Domestic Purchases of Capital Goods not exceeding P1Million 170,926.43 671,484.16 1,731,074.23 1,058,956.98 3,632,441.80 Domestic Purchases of Goods Other than Capital Goods 325,002.86 173,505.75 274,263.52 281,847.17 1,054,619.30 Domestic Purchases of Services 11,921,532.57 4,517,850.75 2,143,764.92 4,282,427.16 22,865,575.40 Total 12,417,461.86 5,362,840.66 4,419,102.67 5,623,231.31 27,552,636.50 Total Allowable Input Tax P14,235,985.96 P7,181,737.47 P6,225,213.86 P7,896,306.25 P35,539,243.54 It must be noted that the input VAT being claimed for refund in the amount of P40,511,831.78 is higher by P4,972,588.24 when compared to the reported input VAT of P35,539,243.54, hence, such difference of P4,972,588.24 shall be denied outright. In support of its input VAT claim, petitioner presented Monthly Summary of Purchases with Input VAT, 40 and the corresponding invoices, official receipts and other documents, 41 which were all examined by the Court-commissioned ICPA. With regard to the P27,552,636.50 input VAT claim on domestic purchases of capital goods not exceeding P1Million, domestic purchases of goods other than capital goods, and domestic purchases of services, a comparison of the said amount as reflected in the Quarterly VAT Returns with that indicated in the Summary of Purchases with Input VAT reveals a discrepancy in the amount of P64,125.02, as computed below, which shall be disallowed for being unsupported: CY 2012 Domestic Purchases of Capital Goods not exceeding P1M Domestic Purchases of Goods Other than Capital Goods Domestic Purchases of Services Total First Quarter Per Quarterly VAT Return P170,926.43 P325,002.86 P11,921,532.57 P12,417,461.86 Per Summary of Purchases with Input VAT (Exhibits P-1707 to P-1709) January 63,197.17 180,125.50 9,548,290.31 9,791,612.98 February 6,712.27 106,116.90 1,900,257.18 2,013,086.35 March 101,016.99 38,760.46 472,985.07 612,762.52 Total 170,926.43 325,002.86 11,921,532.56 12,417,461.85 Difference - - P0.01 P0.01 Second Quarter Per Quarterly VAT Return P671,484.16 P173,505.75 P4,517,850.75 P5,362,840.66 Per Summary of Purchases with Input VAT (Exhibits P-1710 to P-1712) April 118,380.89 72,010.13 1,883,377.12 2,073,768.14 May 297,424.00 30,981.37 631,184.71 959,590.08 June 255,679.27 70,514.25 1,948,378.20 2,274,571.72 Total 671,484.16 173,505.75 4,462,940.03 5,307,929.94 Difference - - P54,910.72 P54,910.72 Third Quarter Per Quarterly VAT Return P1,731,074.23 P274,263.52 P2,143,764.92 P4,149,102.67 Per Summary of Purchases with Input VAT (Exhibits P-1713 to P-1715) July 331,248.55 105,571.23 568,684.69 1,005,504.47 August 836,105.90 36,437.69 343,010.80 1,215,554.39 September 563,719.79 132,254.60 1,222,855.14 1,918,829.53 Total 1,731,074.24 274,263.52 2,134,550.63 4,139,888.39 Difference (P0.01) - P9,214.29 P9,214.28 Fourth Quarter Per Quarterly VAT Return P1,058,956.98 P281,847.17 P4,282,427.16 P5,623,231.31 Per Summary of Purchases with Input VAT (Exhibits P-1716 to P-1718) October 265,007.63 80,995.51 2,312,211.63 2,658,214.77 November 284,180.58 82,017.06 754,475.27 1,120,672.91 December 509,768.77 118,834.60 1,215,740.25 1,844,343.62 Total 1,058,956.98 281,847.17 4,282,427.15 5,623,231.30 Difference - - P0.01 P0.01 Total Input VAT per Quarterly VAT Return P3,632,441.80 P1,054,619.30 P22,865,575.40 P27,552,636.50 Total Input VAT per Summary of Purchases with Input VAT 3,632,441.81 1,054,619.30 22,801,450.37 27,488,511.48 Difference (P0.01) - P64,125.03 P64,125.02 Further, based on the validation and review of the ICPA report together with petitioner's documents supporting the input VAT claim of P27,552,636.50, the Court finds that the amount of P3,092,342.21 should be disallowed for not being properly substantiated by VAT invoices or official receipts as prescribed under Sections 110 (A) and 113 (A) and (B) and 237 and 238 of the NIRC of 1997, as amended, in relation to Sections 4.110-1, 4.110-8, and 4.113-1 of Revenue Regulations No. 16-05, as amended, to wit: cAaDHT Input Tax on Domestic Purchases of Goods Other than Capital Goods 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter CY 2012 1. Input tax claimed on domestic purchases of goods other than capital goods without Petitioner's TIN (Annexes 42, 43, 44 and 45) P18,498.54 P3,250.24 P9,978.20 P8,541.60 P40,268.58 2. Input tax claimed on domestic purchases of goods other than capital goods supported by VAT registered invoices not dated within the quarter but within the period of claim and the amount of VAT is not shown separately in the invoice (Annex 46) - - - 384.78 384.78 3. Input tax claimed on domestic purchases of goods other than capital goods supported by VAT registered invoices dated outside the period of claim (Annex 47) 153,258.12 - - - 153,258.12 4. Input tax claimed on domestic purchases of goods other than capital goods supported by VAT registered invoices dated outside the period of claim and without Petitioner's TIN (Annex 48) 6,364.29 - - - 6,364.29 5. Input tax claimed on domestic purchases of goods other than capital goods supported by registered invoices with the amount of VAT not shown separately in the invoice: a. VAT REG TIN invoice (Annexes 49, 50, 51 and 52) 223.93 1,639.29 2,239.28 34,122.39 38,224.89 b. TIN VAT invoice (Annexes 53 and 54) - - 6,642.86 6,964.29 13,607.15 6. Input tax claimed on domestic purchases of goods other than capital goods supported by TIN VAT invoices without date indicated (Annexes 55 and 56) 12,065.14 - 2,880.92 - 14,946.06 7. Input tax claimed on domestic purchases of goods other than capital goods supported by registered invoices with incorrect Petitioner's TIN indicated therein: a. VAT REG TIN invoice (Annex 57) - - 5,785.71 - 5,785.71 b. TIN VAT invoice (Annex 58) - - 115.20 - 115.20 8. Input tax claimed on domestic purchases of goods other than capital goods supported by other documents such as statement of account, delivery receipt, miscellaneous account charge (Annexes 59, 60, 61 and 62) 12,285.60 11,957.57 16,074.52 12,898.36 53,216.05 9. Input tax claimed on domestic purchases of goods other than capital goods with no supporting documents (Annexes 63, 64, 65 and 66) 13,278.32 2,731.58 22,162.64 72,181.99 110,354.53 Total Disallowed Input Tax on Domestic Purchases of Goods Other than Capital Goods P215,973.94 P19,578.68 P65,879.33 P135,093.41 P436,525.36 Input Tax on Domestic Purchases of Services 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter CY 2012 1. Input tax claimed on domestic purchases of services supported by VAT REG TIN official receipt not dated within the year of claim (Annexes 81 and 82) - - P2,991.43 P77,015.86 P80,007.29 2. Input tax claimed on domestic purchases of services supported by VAT registered official receipts not dated within the quarter but within the period of claim and without Petitioner's TIN (Annexes 83, 84, 85 and 86) P12,936.48 37,109.24 58,075.21 89,667.96 197,788.89 3. Input tax claimed on domestic purchases of services supported by VAT registered official receipts not dated within the quarter but within the period of claim and amount of VAT is not shown separately in the official receipt (Annexes 87, 88, 89 and 90) 9,238.83 1,603.61 84,077.20 292,027.51 386,947.15 4. Input tax claimed on domestic purchases of services supported by TIN NON VAT registered official receipt or collection receipts with comment of "not valid as source of input tax" (Annexes 91, 92, 93 and 94) 908.16 1,781.12 642.86 4,162.50 7,494.64 5. Input tax claimed on domestic purchases of services supported by VAT registered official receipts without Petitioner's TIN and VAT amount is not shown separately (Annexes 95 and 96) - 73,993.55 - 137,290.97 211,284.52 6. Input tax claimed on domestic purchases of services representing excess claim (Annexes 97, 98 and 99) 900.68 - 3,036.61 96,332.52 100,269.81 7. Input tax claimed on domestic purchases of services supported by other documents such as statement of account, delivery receipt, miscellaneous account charge, tape receipt (Annexes 100, 101, 102 and 103) 108,291.85 90,462.83 82,609.80 105,274.81 386,639.29 8. Input tax claimed on domestic purchases of services with no supporting documents (Annexes 104, 105, 106 and 107) 89,569.84 237,702.70 100,231.68 157,830.13 585,334.35 Total Disallowed Input Tax on Domestic Purchases of Services P221,845.84 P442,653.05 P331,664.79 P959,602.26 P1,955,765.94 Input Tax on Purchases of Capital Goods Not Exceeding P1Million 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter CY 2012 1. Input tax claimed on domestic purchases of capital goods not exceeding P1 million supported by no vat registration invoices and receipts and/or with comment of "not valid source of input tax" (Annexes 116 and 117) - P84,382.35 P214,780.31 - P299,162.66 2. Input tax claimed on domestic purchases of capital goods not exceeding P1 million supported by VAT registered invoices and receipts without Petitioner's TIN (Annexes 121, 122, 123 and 124) P6,712.27 14,764.29 65,442.64 P114,142.11 201,061.31 3. Input tax claimed on domestic purchases of capital goods not exceeding P1 million supported TIN VAT invoice not dated within the year (Annex 125) 63,197.17 - - - 63,197.17 4. Input tax claimed on domestic purchases of capital goods not exceeding P1 million supported by TIN VAT invoice but amount of VAT is not shown separately in the invoice (Annexes 126 and 127) - - 40,539.23 840.00 41,379.23 5. Input tax claimed on domestic purchases of capital goods not exceeding P1 million without supporting documents (Annexes 129, 130, 131 and 132) 8,640.00 7,520.01 24,213.10 54,877.43 95,250.54 Total Disallowed Input Tax on Purchases of Capital Goods Not Exceeding P1 Million P78,549.44 P106,666.65 P344,975.28 P169,859.54 P700,050.91 TOTAL P516,369.22 P568,198.38 P742,519.40 P1,264,555.21 P3,092,342.21 In addition, input VAT in the amount of P40,332.43 should likewise be disallowed for the reasons indicated below: Exhibit Supplier Invoice/ O.R. No. Date Input VAT Reason for Disallowance Domestic Purchase of Goods other than Capital Goods First Quarter P-1725 Romeo V. Austria Trading 157382 06-Jan-12 P1,392.86 Amount of VAT is not separately indicated in the Invoice Second Quarter P-1808 Philippine Vending Corporation 110442 11-Apr-12 14,010.38 Supported by blank invoice Third Quarter P-1857 Accent Micro Technologies, Inc. 137121 23-Aug-12 2,464.29 Amount of VAT is not clearly shown in the invoice P-1858 Accent Micro Technologies, Inc. 137766 04-Sep-12 2,346.86 P-1859 Accent Micro Technologies, Inc. 137076 22-Aug-12 561.86 P-1860 Accent Micro Technologies, Inc. 136588 31-Jul-12 128.57 subtotal P20,904.82 Domestic Purchase of Services Second Quarter P-2057 Anscor Casto Travel Corporation 012773 17-May-12 P51.50 Amount of VAT is not readable Anscor Casto Travel Corporation 51.50 Anscor Casto Travel Corporation 51.50 Third Quarter P-2181 Teledatacom Phils.,Inc. 5641 26-Sep-12 15,491.15 Official Receipt is not in the records subtotal P15,645.65 Domestic Purchase of Capital Goods not exceeding P1 Million Fourth Quarter P-2485 Accent Micro Technologies, Inc. 138453 26-Sep-12 3,781.96 Amount of VAT is not clearly shown in the Invoice subtotal P3,781.96 Additional Disallowances per this Court's further verification P40,332.43 Hence, out of the P27,552,636.50 declared input VAT claim on domestic purchases of capital goods not exceeding P1Million, domestic purchases of goods other than capital goods, and domestic purchases of services, only P24,355,836.84 represents petitioner's valid input VAT, computed as follows: HCaDIS 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter CY 2012 Domestic Purchases of Capital Goods not exceeding P1Million P170,926.43 P671,484.16 P1,731,074.23 P1,058,956.98 P3,632,441.80 Domestic Purchases of Goods Other than Capital Goods 325,002.86 173,505.75 274,263.52 281,847.17 1,054,619.30 Domestic Purchases of Services 11,921,532.57 4,517,850.75 2,143,764.92 4,282,427.16 22,865,575.40 Total 12,417,461.86 5,362,840.66 4,149,102.67 5,623,231.31 27,552,636.50 Less: Disallowances Difference in the input VAT per Quarterly VAT Returns and per Summary of Purchases with Input VAT 0.01 54,910.72 9,214.28 0.01 64,125.02 Per ICPA Report 516,369.22 568,898.38 742,519.40 1,264,555.21 3,092,342.21 Per this Court's further verification 1,392.86 14,164.88 20,992.73 3,781.96 40,332.43 Total Disallowance P517,762.09 P637,973.98 P772,726.41 P1,268,337.18 P3,196,799.66 Properly substantiated input VAT on domestic purchases of capital goods not exceeding P1M, domestic purchases of goods other than capital goods and domestic purchases of services P11,899,699.77 P4,724,866.68 P3,376,376.26 P4,354,894.13 P24,355,836.84 The Court will now proceed to the substantiation of the P7,986,607.04 amortization of input VAT on purchases of capital goods exceeding P1Million which, as earlier presented, originated from the input tax deferred on capital goods exceeding P1Million from previous quarter (P13,878,120.81) and from the input VAT on capital goods exceeding P1Million purchased during the four quarters of CY 2012 (P14,006,786.80). A perusal of the schedule of amortization of input VAT deferred on capital goods exceeding P1Million from previous quarter, attached to the Quarterly VAT Return for the first quarter of CY 2012, shows an input VAT balance of P13,877,587.24 42 which is P533.57 lower than the declared amount of P13,878,120.81. As to the substantiation of the latter figure of P13,878,120.81, the Court finds that the following input VAT totaling P9,730,269.41 should be disallowed for the reasons stated as follows: Date Purchase Supplier Balance of Input VAT from Previous Period 1. On Input VAT Deferred from Previous Quarter A. Without Supporting Documents Purchased during the CY 2008 29-Feb-08 CWC INTERNATIONAL CORPORATION P141,480.74 14-Mar-08 TRENDS AND TECHNOLOGIES, INC. 230,359.74 12-Mar-08 BARRINGTON CARPETS, INC. 76,295.83 12-Mar-08 IBMS TECHNOLOGY PHILS. 43,461.88 31-Mar-08 TOTAL VENTURES, INC. 491,961.02 24-Apr-08 BARRINGTON CARPETS, INC. 36,361.58 16-Apr-08 CWC INTERNATIONAL CORPORATION 104,542.68 16-Apr-08 TOTAL VENTURES, INC. 221,679.80 24-Apr-08 TOTAL VENTURES, INC. 338,117.53 05-May-08 TOTAL VENTURES, INC. 360,658.70 07-May-08 IBMS TECHNOLOGY PHILS. 35,960.42 13-May-08 ACCENT MICRO TECHNOLOGIES, INC. 88,866.26 12-Jun-08 ACCENT MICRO TECHNOLOGIES, INC. 50,572.93 10-Jun-08 CALVELO ENGINEERED SYSTEMS 36,673.88 12-Jun-08 IBMS TECHNOLOGY PHILS. 101,560.41 12-Jun-08 TOTAL VENTURES, INC. 383,199.87 29-Jul-08 ACCENT MICRO TECHNOLOGIES, INC. 39,848.33 22-Jul-08 IBMS TECHNOLOGY PHILS. 80,910.95 09-Jul-08 BARRINGTON CARPETS, INC. 75,509.28 09-Jul-08 CWC INTERNATIONAL CORPORATION 363,962.19 09-Jul-08 HOFFSMAN SYSTEMATIC DESIGNS, INC. 41,510.23 09-Jul-08 TOTAL VENTURES, INC. 266,112.19 09-Jul-08 TOTAL VENTURES, INC. 266,112.19 14-Aug-08 BARRINGTON CARPETS, INC. 92,115.99 14-Aug-08 CWC INTERNATIONAL CORPORATION 264,841.46 18-Sep-08 ACCENT MICRO TECHNOLOGIES, INC. 34,329.53 24-Sep-08 HOFFSMAN SYSTEMATIC DESIGNS, INC. 61,776.67 24-Sep-08 CWC INTERNATIONAL CORPORATION 67,400.41 24-Sep-08 CWC INTERNATIONAL CORPORATION 46,463.41 15-Dec-08 ACCENT MICRO TECHNOLOGIES, INC. 37,238.39 15-Dec-08 ACCENT MICRO TECHNOLOGIES, INC. 73,552.29 15-Dec-08 ACCENT MICRO TECHNOLOGIES, INC. 88,262.77 08-Dec-08 TOTAL VENTURES, INC. 259,223.45 22-Dec-08 TOTAL VENTURES, INC. 113,344.08 Purchased during the CY 2009 09-Mar-09 TRENDS AND TECHNOLOGIES, INC. 77,428.77 07-Aug-09 ULTRA MODULAR CONCEPT 133,516.77 14-Oct-09 ULTRA MODULAR CONCEPT 284,261.47 22-Dec-09 ACCENT MICRO TECHNOLOGIES, INC. 297,961.92 Subtotal P5,807,436.01 B. Without Supporting VAT Official Receipts Purchases of Services) Purchased during the CY 2009 07-Aug-09 IBMS TECHNOLOGY PHILS. P81,375.00 22-Dec-09 TOTAL VENTURES, INC. 179,571.25 Purchased during the CY 2010 10-Nov-10 TELEDATACOM PHILS.,INC. 316,713.98 Subtotal P577,660.23 2. On Input VAT Purchased During the CY 2012 A. Without corresponding VAT Official Receipts (Purchases of Services) 31-Aug-12 BARRINGTON CARPETS, INC. P290,768.40 28-Sep-12 IBMS TECHNOLOGY PHILS. CORP. 126,720.00 28-Sep-12 IBMS TECHNOLOGY PHILS. CORP. 126,720.00 31-Aug-12 ULTRA MODULAR CONCEPTS, INC. 378,206.28 31-Aug-12 ULTRA MODULAR CONCEPTS, INC. 378,206.28 B. VAT is not separately indicated in the Official Receipt 31-Aug-12 BARRINGTON CARPETS, INC. 290,768.40 19-Jun-12 ULTRA MODULAR CONCEPTS, INC. 378,206.28 C. Without Supporting Documents 26-Sep-12 MICRODATA SYSTEMS AND MANAGEMENT, INC. 229,103.68 12-Oct-12 NETT DRIVEN CORP. 278,247.02 20-Dec-12 MICRODATA SYSTEMS AND MANAGEMENT, INC. 290,871.54 28-Dec-12 NETT DRIVEN CORP. 577,355.29 Subtotal P3,345,173.17 Total Disallowed Input VAT on Purchases of Capital Goods exceeding P1Million P9,730,269.41 Thus, out of the P27,884,907.61 total declared input VAT on capital goods exceeding P1Million, only the amount of P18,154,104.64 was properly substantiated by VAT invoices/official receipts and of the said amount, only P3,585,637.87 is creditable for the four quarters of CY 2012 pursuant to Section 110(A)(2) of the NIRC of 1997, as amended, to wit: AHCETa Date Purchase Supplier Invoice/ O.R. No. Exhibit Balance of Input VAT Estimated Useful Life Allowable Input Tax for the CY 2012 During the CY 2009 09-Mar-09 JEBSEN AND JESSEN 6000 P-2547-a P53,711.70 60 P24,790.00 09-Mar-09 ACCENT MICRO TECHNOLOGIES, INC. 99023 P-2546 115,828.01 48 99,281.16 12-May-09 ACCENT MICRO TECHNOLOGIES, INC. 100521 P-2548 127,890.20 48 95,917.96 29-Jul-09 TOTAL VENTURES, INC. 2716 P-2552-a 461,754.64 60 184,701.84 14-Jul-09 ACCENT MICRO TECHNOLOGIES, INC. 63615 P-2554 123,699.73 48 79,806.32 14-Jul-09 ACCENT MICRO TECHNOLOGIES, INC. 63615 P-2555 203,660.18 48 135,773.44 07-Aug-09 BARRINGTON CARPETS, INC. 11533 P-2549-a 104,915.16 60 40,612.32 03-Sep-09 TOTAL VENTURES, INC. 4279 P-2553-a 492,538.29 60 184,701.84 23-Sep-09 TRENDS AND TECHNOLOGIES, INC. 29094 P-2550 231,292.63 60 86,734.72 14-Oct-09 TOTAL VENTURES, INC. 2745 P-2559-a 507,930.11 60 184,701.84 14-Oct-09 BARRINGTON CARPETS, INC. 11644 P-2557-a 139,604.85 60 50,765.40 14-Oct-09 HOFFSMAN SYSTEMATIC DESIGNS, INC. 6656 P-2560-a 75,225.15 60 27,354.60 14-Oct-09 TELEDATACOM PHILS.,INC. 2877 P-2563 71,724.47 60 26,081.64 06-Oct-09 FUTURE PROOF ASIA, INC. 95 P-2556-a 135,828.00 60 49,392.00 16-Nov-09 IBMS TECHNOLOGY PHILS. 1164 P-2558-a 178,500.00 60 63,000.00 10-Dec-09 ACCENT MICRO TECHNOLOGIES, INC. 105472 P-2562 125,763.41 60 43,118.88 Subtotal P3,149,866.53 P1,376,733.96 During the CY 2010 04-Jan-10 ACCENT MICRO TECHNOLOGIES, INC. 107474 P-2545 181,623.00 48 90,811.52 04-Jan-10 TELEDATACOM PHILS.,INC. 2878 P-2544 83,466.68 60 27,822.24 05-Feb-10 ACCENT MICRO TECHNOLOGIES, INC. 107871 P-2537 339,959.96 48 163,180.76 09-Apr-10 ACCENT MICRO TECHNOLOGIES, INC. 109654 P-2542 90,766.70 60 27,928.20 09-Apr-10 ACCENT MICRO TECHNOLOGIES, INC. 109652 P-2543 176,828.86 48 78,590.60 25-May-10 ACCENT MICRO TECHNOLOGIES, INC. 110208 P-2538 201,336.21 48 86,086.44 25-May-10 ACCENT MICRO TECHNOLOGIES, INC. 110132 P-2539 255,499.65 48 109,836.80 25-May-10 ACCENT MICRO TECHNOLOGIES, INC. 109998 P-2540 92,873.11 48 39,710.28 26-Nov-10 TRENDS AND TECHNOLOGIES, INC. 31894 P-2536 152,349.91 60 39,743.44 Subtotal P1,574,704.08 P663,710.28 During the CY 2011 05-Jan-11 HOFFSMAN SYSTEMATIC DESIGNS, INC. 5349 P-2636-a P120,151.52 60 P31,343.88 25-Jan-11 RDT JR ASSOCIATES, INC. 1149 P-2634 104,278.01 60 27,202.96 21-Mar-11 ACCENT MICRO TECHNOLOGIES, INC. 117303 P-2635 121,197.41 48 38,272.88 26-Apr-11 MICROPINNACLE TECHNOLOGY 00031 P-2639 99,058.03 36 44,025.80 13-May-11 ACCENT MICRO TECHNOLOGIES, INC. 118569 P-2638 478,144.14 48 143,443.24 03-May-11 TELEDATACOM PHILS.,INC. 4809 P-2637-a 440,574.58 60 101,671.04 22-Jul-11 ACCENT MICRO TECHNOLOGIES, INC. 123702 P-2640 556,326.00 48 158,950.28 08-Jul-11 RDT JR ASSOCIATES, INC. 1240 P-2645 244,826.63 60 54,405.92 26-Jul-11 TOTAL VENTURES, INC. 2926 P-2641-a 113,400.00 60 25,200.00 16-Aug-11 HOFFSMAN SYSTEMATIC DESIGNS, INC. 5651 P-2642-a 126,107.20 60 27,514.28 02-Aug-11 TOTAL VENTURES, INC. 2928 P-2643-a 231,000.00 60 50,400.00 11-Nov-11 TELEDATACOM PHILS.,INC. 5060 P-2644-a 132,856.88 60 27,598.04 Subtotal P2,767,920.40 P730,028.32 During the CY 2012 16-May-12 ACCENT MICRO TECHNOLOGIES, INC. 133193 2513 P179,012.34 48 P29,835.39 19-Jun-12 TOTAL VENTURES, INC. 3051 2514-a 2,052,000.00 60 239,400.00 25-Jun-12 BARRINGTON CARPETS, INC. 13297 2510-a 290,768.40 60 33,922.98 25-Jun-12 IBMS TECHNOLOGY PHILS. CORP. 01830 2511-a 126,720.00 60 14,784.00 31-Jul-12 TOTAL VENTURES, INC. 3011 2515-a 2,052,000.00 60 205,200.00 31-Aug-12 NETT DRIVEN CORP. 0186 2521 586,837.94 48 61,128.95 14-Sep-12 TOTAL VENTURES, INC. 3022 2520-a 2,052,000.00 60 136,800.00 26-Sep-12 NETT DRIVEN CORP. 0198 2522 120,223.83 60 8,014.92 26-Sep-12 NETT DRIVEN CORP. 0193 2523 272,715.57 60 18,181.04 28-Sep-12 NETT DRIVEN CORP. 0200 2524 318,911.12 60 21,260.75 26-Nov-12 ACCENT MICRO TECHNOLOGIES, INC. 140539 2528 125,208.19 48 5,217.01 28-Dec-12 BARRINGTON CARPETS, INC. 11069 2527 193,785.12 60 3,229.75 20-Dec-12 TOTAL VENTURES, INC. 0428 2529 1,145,715.56 60 19,095.26 20-Dec-12 TOTAL VENTURES, INC. 0429 2530 1,145,715.56 60 19,095.26 Subtotal P10,661,613.63 P815,165.31 Properly Substantiated Input VAT on Purchases of Capital Goods exceeding P1Million P18,154,104.64 P3,585,637.87 In sum, petitioner's total allowable input VAT amounted only to P27,941,474.71, as computed below: 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter CY 2012 Properly substantiated input VAT claim on domestic purchases of capital goods not exceeding P1Million, domestic purchases of goods other than capital goods and domestic purchases of services P11,899,699.77 P4,724,866.68 P3,376,376.26 P4,354,894.13 P24,355,836.84 Amortization of input VAT on purchases of capital goods exceeding P1Million 692,618.14 741,235.13 1,000,396.59 1,151,388.01 3,585,637.87 Total Allowable Input VAT P12,592,317.91 P5,466,101.81 P4,376,772.85 P5,506,282.14 P27,941,474.71 Since petitioner did not submit VAT invoices/receipts proving the existence of its reported input VAT carry-over from previous quarter in the amount of P42,428,091.98, 43 its output VAT liability for the four quarters of CY 2012 in the aggregate amount of P2,055,852.68, shall be offset against the total allowable input VAT of P27,941,474.71. Hence, only the remaining input VAT of P25,885,622.03 can be attributed to the "should be" total amount of declared zero-rated sales/receipts of P1,780,234,062.60 and only the input VAT of P8,460,225.24 is attributable to the valid zero-rated sales/receipts of P562,714,917.89, as computed below: ScHADI 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter CY 2012 Total Allowable Input VAT P12,592,317.91 P5,466,101.81 P4,376,772.85 P5,506,282.14 P27,941,474.71 Less Output VAT 44 123,012.98 58,658.51 24,056.29 1,850,124.90 2,055,852.68 Excess Input VAT P12,469,304.93 P5,407,443.30 P4,352,716.56 P3,656,157.24 P25,885,622.03 Multiply by Rate of Valid Zero-Rated Sales/Receipts to Should-be Total Amount of Declared Zero-Rated Sales/Receipts 34.5790620% 35.1636211% 24.6942223% 32.0591844% Excess Input VAT Attributable to Valid Zero-Rated Sales/Receipts P4,311,768.68 P1,901,452.87 P1,074,869.50 P1,172,134.19 P8,460,225.24 Even though the claimed input VAT was carried over by petitioner in its succeeding Quarterly VAT Returns, 45 the same remained unutilized until it was deducted as "VAT Refund/TCC Claimed" 46 in its amended Monthly VAT Declaration for the month of February of CY 2014, thus, preventing the carry over or application of the claimed input VAT in the next taxable periods. In sum, petitioner has sufficiently proven its entitlement to refund or issuance of tax credit certificate in the amount of P8,460,225.24 representing unutilized excess input VAT attributable to its zero-rated sales/receipts for the four quarters of CY 2012. WHEREFORE ,premises considered, the instant Petition for Review is PARTIALLY GRANTED .Accordingly, respondent is ORDERED TO REFUND OR ISSUE A TAX CREDIT CERTIFICATE in favor of petitioner in the amount of EIGHT MILLION FOUR HUNDRED SIXTY THOUSAND TWO HUNDRED TWENTY-FIVE PESOS AND TWENTY-FOUR CENTAVOS (P8,460,225.24), representing its excess input VAT attributable to its zero-rated sales/receipts for the four quarters of CY 2012. DACcIH SO ORDERED . (SGD.) MA. BELEN M. RINGPIS-LIBAN Associate Justice Esperanza R. Fabon-Victorino, J. ,concurs. Footnotes 1. Docket, vol. 1, pp. 6-21. 2. Exhibit "P-14",docket, vol. 4, p. 1741. 3. Exhibit "P-15-a",docket, vol. 4, p. 1770. 4. Par. 10, Petitioner's Memorandum, docket, vol. 5, p. 2329. 5. Exhibit "P-45",docket, vol. 5, pp. 2171-2182. 6. Resolution dated October 1, 2014, docket, vol. 1, p. 129. 7. Docket, vol. 1, pp. 130-133. 8. Docket, vol. 1, p. 165. 9. Docket, vol. 1, pp. 136-139. 10. Docket, vol. 2, pp. 166-189. 11. Docket, vol. 2, pp. 960-964. 12. Docket, vol. 2, pp. 967-978. 13. Minutes of the Hearing dated July 6, 2015, docket, vol. 2, p. 1000. 14. Minutes of the Hearings dated September 7, 2015, March 28, 2016, and June 27, 2017, docket, vols. 3 and 5, pp. 1371, 1453, and 2321, respectively. 15. Minutes of the Hearing dated June 6, 2016, docket, vol. 3, p. 1472. 16. Docket, vol. 3, pp. 1476-1493. 17. Docket, vol. 5, pp. 2284-2286. 18. Docket, vol. 5, pp. 2296-2297. 19. Docket, vol. 5, pp. 2322-2323. 20. Minutes of the Hearing dated September 25, 2017, docket, vol. 5, p. 2324. 21. Resolution, docket, vol. 5, p. 2358. 22. Docket, vol. 5, pp. 2326-2345. 23. Docket, vol. 5, pp. 2351-2356. 24. Issue, JSFI, docket, vol. 2, p. 962. 25. Erroneously indicated as "2nd" in the JSFI. 26. Exhibit "P-45",docket, vol. 5, pp. 2171-2182. 27. Rohm Apollo Semiconductor Philippines vs. Commissioner of Internal Revenue , G.R. No. 168950, January 14, 2015. 28. Silicon Philippines, Inc. (Formerly Intel Philippines Manufacturing, Inc.) vs. Commissioner of Internal Revenue , G.R. No. 182737, March 2, 2016. 29. Exhibits "P-15" and "P-15-a",docket, vol. 4, pp. 1769-1770. 30. G.R. No. 153205, January 22, 2007. 31. Exhibit "P-14". 32. Exhibit "P-50",Annex 3, docket, vol. 3, p. 1070. 33. Exhibits "P-51" to "P-54". 34. Exhibits "P-56" to "P-67". 35. Exhibits "P-68" to "P-1680". 36. Exhibits "P-68-a" to "P-1680-a". 37. Total of P425,445,309.20 (Exhibit "P-51"),P430,607,458.87 (Exhibit "P-52"),P434,591,924.68 (Exhibit "P-53"),and P476,515,798.79 (Exhibit "P-54"). 38. Exhibit "P-50",Annex 3, docket, vol. 3, pp. 1065-1070. 39. Higher between the amount per Schedule of Zero-Rated Sales and Bank Credit Memo (Exhibits "P-51" to "P-54") and per Quarterly VAT Returns (Exhibits "P-26","P-27","P-30" and "P-34"). 40. Exhibits "P-1707" to "P-1718". 41. Exhibits "P-1719" to "P-2180","P-2182" to "P-2602","P-2618" to "P-2629",and "P-2634" to "P-2545". 42. Attachment for Schedule 3 (B) of Exhibit "P-26",docket, vol. 5, pp. 2067-2068. 43. Exhibit "P-26",Line 20A, docket, vol. 5, p. 2064. 44. Exhibits "P-26","P-27","P-30",and "P-34". 45. Exhibits "P-36" (1st Qtr of CY 2013),"P-38" (2nd Qtr of CY 2013),"P-40" (3rd Qtr of CY 2013),"P-42" (4th Qtr of CY 2013),docket, vol. 5, pp. 2128-2155. 46. Exhibit "P-43",Line 20D, docket, vol. 5, p. 2159.