Taganito Mining Corp. v. Commissioner of Internal Revenue

SPECIAL SECOND DIVISION [C.T.A. CASE NO. 9369. December 6, 2018.] TAGANITO MINING CORPORATION , petitioner , vs. COMMISSIONER OF INTERNAL REVENUE , respondent . DECISION MANAHAN , J p : This involves a Petition for Review filed on May 27, 2016 by Taganito Mining Corporation as petitioner, against the Commissioner of Internal Revenue, as respondent, before the Court in Division. HTcADC Petitioner seeks the refund of its alleged excess/unutilized input VAT for taxable year 2014. PARTIES Petitioner is a corporation duly organized and existing under and by virtue of the laws of the Philippines with former principal office at 4th Floor, NAC Center (formerly Solid Mills/BMMC Building),Dela Rosa Street, Legaspi Village, Makati City and current business address at 29/F NAC Tower, 32nd Street, Bonifacio Global City, Taguig/Makati City. 1 Respondent is the duly appointed Commissioner of the Bureau of Internal Revenue (BIR),vested with authority to exercise the functions of said office, including inter alia ,the power to decide refunds of internal revenue taxes, fees or other charges, penalties imposed in relation thereto, or other matters arising under the 1997 National Internal Revenue Code (NIRC) or other laws administered by the BIR under Section 4 of the Tax Code, and holding office at the BIR National Office Building, Diliman, Quezon City, Metro Manila, where he may be served with summons and other legal processes of the Court. 2 Petitioner is duly registered with the Securities and Exchange Commission (SEC) with Certificate of Registration No. 138682 issued on March 4, 1987 with the following primary purpose: 3 CAIHTE "To carry on the business, for itself and for others, of mining lode and/or placer mining, developing, exploiting, extracting, milling, concentrating, converting, smelting, treating, refining, preparing for market, manufacturing, buying, selling, exchanging, shipping, transporting, and otherwise producing and dealing in nickel, chromite, cobalt, gold, silver, copper, lead, zinc, brass, iron, steel, limestone, and all kinds of ores, metals and their by-products and which by-products thereof of every kind and description and by whatsoever process the same can be or may hereafter be produced, and generally and without limit as to amount, to buy, sell, locate, exchange, lease, acquire and deal in lands, mines, and mineral rights and claims and to conduct all business appertaining thereto, to purchase, locate, lease or otherwise acquire, mining claims and rights, timber rights, water rights, concessions and mines, buildings, dwellings, plants machinery, spare parts, tools and other properties whatsoever which this corporation may from time to time find to be to its advantage, to mine lands, and to explore, work, exercise, develop or turn to account the same, and to acquire, develop and utilize water rights in such manner as may be authorized or permitted by law; to purchase, hire, make, construct or otherwise, acquire, provide, maintain, equip, alter, erect, improve, repair, manage, work and operate private roads, barges, vessels, aircraft and vehicles, private telegraph and telephone lines, and other communication media, as may be needed by the corporation for its own purpose, and to purchase, import, construct, machine, fabricate, or otherwise acquire, and maintain and operate bridges, piers, wharves, wells, reservoirs, plumes, watercourses, waterworks, aqueducts, shafts, tunnels, furnaces, coke ovens, crushing works, gasworks, electric lights and power plants and compressed air plants, chemical works of all kinds, concentrators, smelters, smelting plants, and refineries, matting plants, warehouses, workshops, factories, dwelling houses, stores, hotels or other buildings, engines, machinery, spare parts, tools, implements and other works, conveniences, and properties of any description in connection with or which may be directly or indirectly conducive to any of the objects of the corporation, and to contribute to, subsidize or otherwise aid or take part in any operations." aScITE Petitioner is also a VAT-registered entity with updated Certificate of Registration (BIR Form No. 2303) No. OCN 8RC0000685884E duly issued by respondent. 4 In addition, it is registered with the Board of Investments (BOI) with BOI Certificate of Registration No. EP 88-306 dated April 14, 1988. 5 On December 29, 2015, petitioner filed with respondent, through respondent's Excise Taxpayers' Assistance Division under the Large Taxpayers Division, a claim for refund of excess input taxes paid on its domestic purchases and importation of taxable goods and services and importation of goods including capital goods. 6 On June 7, 2013, respondent informed the Commissioner of the Bureau of Customs (BOC) that the former has approved in favor of petitioner VAT credit in the amount of P20,817,854.93 representing input tax amortized in the calendar year 2014 on importations for the period from January 1, 2010 to December 31, 2014, attributable to zero-rated export sales of nickel ore sources. 7 DETACa On the other hand, the BOC stated that it has not issued any refund on VAT in favor of petitioner for the calendar years 2009 to 2014. 8 Hence, this petition. Respondent filed a Motion to Admit Attached Answer, 9 with attached Answer, 10 on July 26, 2016, which the Court granted on September 2, 2016. 11 A Notice of Pre-Trial Conference 12 was issued by this Court on October 12, 2016, setting the case for pre-trial conference on November 10, 2016. Accordingly, petitioner's Pre-Trial Brief 13 was filed on October 28, 2016, while the Pre-Trial Brief for the Respondent 14 was filed on November 3, 2016. Pre-trial conference ensued. The parties submitted their Joint Stipulation of Facts and Issues 15 (JSFI) on November 21, 2016. On November 28, 2016, the Court issued a Pre-Trial Order 16 adopting the parties' JSFI, and the pre-trial was deemed terminated. HEITAD Upon petitioner's motion, 17 the Court commissioned Mr. George V. Villaruz, a partner in the auditing firm of Villaruz Villaruz & Co.,CPAs, as Independent Certified Public Accountant (ICPA). 18 During trial, petitioner presented as its witnesses (1) Mr. George V. Villaruz, 19 the ICPA; and (2) Ms. Lennie A. Terre, 20 petitioner's Vice-President for Finance. Petitioner filed its Formal Offer of Evidence 21 on July 26, 2017. In the Resolution dated September 4, 2017, 22 the Court admitted all of petitioner's evidence. On the other hand, respondent manifested that there is no report of investigation in this case, and hence, he is submitting the case for the decision of the Court. 23 The case was submitted for decision on December 12, 2017, 24 considering petitioner's Memorandum 25 filed on November 8, 2017, and respondent's Memorandum 26 filed on November 29, 2017. ISSUE The parties jointly stipulated that the sole issue to be resolved in this case is as follows: 27 aDSIHc Whether or not petitioner is entitled to the refund of its alleged excess input VAT in the amount of Twenty Eight Million Nine Hundred Twenty Six Thousand Eight Hundred Thirty Seven Pesos (P28,926,837.00). Petitioner's Arguments Petitioner began its arguments by submitting the timeliness of its claim for refund both in the administrative and judicial levels. It maintains that pursuant to Sections 112 and 229 of the 1997 NIRC and existing jurisprudence, the claim for refund lodged with the Bureau of Internal Revenue (BIR) and its subsequent appeal to the Court of Tax Appeals (CTA) are both within the prescriptive period. As to the substantive aspect of the claim for refund, its entitlement to the grant of the entire amount is anchored on Section 106 (A) (2) (a) of the 1997 NIRC, which specifically states that export sales by a VAT-registered entity are subject to value-added tax (VAT) at zero percent. Being registered with the Board of Investments (BOI) as one primarily engaged in the business of exploring and eventually exporting nickel silicate ores and chromite ores, petitioner claims that it is covered by the said Section 106 (A) (2) (a) of the 1997 NIRC. ATICcS Petitioner also maintains that all of its generated and recorded zero-rated sales from January 1, 2014 to December 31, 2014 were all paid for in acceptable foreign currency, specifically in US Dollars which were inwardly remitted to the Philippines and accounted for in accordance with the rules and regulations of the Bangko Sentral ng Pilipinas (BSP) pursuant to Section 106 (a) (2) (a) (1) of the 1997 NIRC, as amended. Overall, petitioner anchored its rationale for entitlement to the full amount of its claim for refund on the following propositions, thus: 1. The VAT input taxes, subject of the claim, were paid for in the course of its trade or business and are directly attributable to its zero-rated export sales. 2. The excess input taxes being claimed for refund/tax credit have not been applied against or are undiminished by any VAT output taxes for the same or subsequent periods. 3. The evidence shows that the input taxes being claimed for refund have not been carried forward to the succeeding quarter or quarters as these were already deducted from its accumulated input taxes upon the filing of its application with the BIR. 4. All the VAT sales and purchases were duly recorded in its books of accounts and duly indicated its VAT sales and purchases in its monthly VAT declarations and quarterly VAT returns. 5. The VAT input taxes are duly supported by VAT-registered invoices and/or official receipts issued by its suppliers of goods and services as well as by official receipts issued by the Bureau of Customs (BOC). ETHIDa Respondent's Counter-Arguments In his Answer filed on July 26, 2016, respondent interposed the following Special and Affirmative Defenses, to wit: "SPECIAL AND AFFIRMATIVE DEFENSES On the basis of the foregoing allegations and in further support of the Specific Denials herein set forth, respondent respectfully alleges as her defense that: It is incumbent upon petitioner to prove that it is entitled to the refund sought because a claim for refund is not ipso facto granted upon filing of the claim. 4. As a matter of course, a claim for refund is subject to investigation as it involves removal of accrued revenue from the coffers of the Government. It has been held by the Supreme Court that a claim for refund is not ipso facto granted because the Commissioner of Internal Revenue still has to investigate and ascertain the veracity of the claim. TIADCc 5. Respondent submits that petitioner failed to demonstrate that the amount of P28,926,837.00 which is the subject of the case at bar was erroneously or illegally collected. Taxes remitted to the BIR are presumed to have been made in the regular course of business and in accordance with provisions of law. 6. Before the instant Petition for Review should be given due course, petitioner should prove that it submitted the relevant pieces of documents to substantiate its claim and had observed the procedure laid down in Section 112(C) of the National Internal Revenue Code (NIRC) of 1997, as amended, which reads: xxx xxx xxx 7. In case of full or partial denial of the claim for tax refund or tax credit, or the failure on the part of the Commissioner to act on the application within the period prescribed above, the taxpayer affected may, within thirty (30) days from the receipt of the decision denying the claim or after the expiration of the one-hundred-twenty-day period, appeal the decision or the unacted claim with the Court of Tax Appeals. 8. Clearly, the law requires the submission of complete documents in support of the application filed with the Bureau of Internal Revenue before the 120-day audit period shall apply, and before the taxpayer could avail of judicial remedies as provided for in the law ,petitioner's failure to comply with the duly mandated legal requirements in such claims for refund/tax credit warranted the denial by inaction of the administrative claim. cSEDTC 9. Furthermore, said Section 112 (C) clearly states that there should be a prior administrative claim filed with respondent before judicial resort can be had in the Court of Tax Appeals, where relevant documents must be submitted by the taxpayer to support its claim for refund. Failure on the part of the taxpayer to file the administrative claim and submit relevant documents on administrative level, makes the administrative claim for tax refund or credit pro-forma and shall be construed as if no administrative claim was filed at all. 10. In cases such as this, before judicial inquiry into the issue of whether taxpayers, in general, are entitled to a refund/tax credit under substantive law may be considered, they have an initial burden to discharge. They must prove that they complied with all the administrative requirements continuing up to judicial review. In other words, before trial de novo proceeds and disposes of the issue of refund entitlement under substantive law, it must first be proved that there was procedural compliance in pursuing the administrative claim leading to the appellate proceedings. As stated by the Honorable Supreme Court: AIDSTE 'Petitioner's contention that non-compliance with Revenue Regulations 3-88 could not have adversely affected its case in the CTA indicates a failure on its part to appreciate the nature of the proceedings in that court. First, a judicial claim for refund or tax credit in the CTA is by no means an original action but rather an appeal by way of petition for review of a previous, unsuccessful administrative claim. Therefore, as in every appeal or petition for review, a petitioner has to convince the appellate court that the quasi-judicial agency a quo did not have any reason to deny its claims. In this case, it was necessary for petitioner to show the CTA not only that it was entitled under substantive law to the grant of its claims but also that it satisfied all the documentary and evidentiary requirements for an administrative claim for refund or tax credit .Second, cases filed in the CTA are litigated de novo .Thus, a petitioner should prove every minute aspect of its case by presenting, formally offering and submitting its evidence to the CTA. Since it is crucial for a petitioner in a judicial claim for refund or tax credit to show that its administrative claim should have been granted in the first place, part of the evidence to be submitted to the CTA must necessarily include whatever is required for the successful prosecution of an administrative claim .' (Emphasis and underscoring supplied) 11. As can be seen, proper substantiation begins in the administrative level. So if the denial (by inaction) of the administrative claim is because of non-compliance with legal procedural requirements, then true to its appellate nature, the Honorable Court must sustain the decision of the BIR since it suffers no infirmity. SDAaTC 12. The purpose of requiring the filing of the administrative claim for refund/tax credit and submission of supporting documents relevant to a claim for tax refund/credit is to give the administrative agency concerned the opportunity to ascertain the veracity and validity of the claim. This is the very essence, the very substance of the doctrine of exhaustion of administrative remedies. The doctrine rests upon the presumption that the administrative body, board, or officer, if given the chance to correct its mistake or error, may amend its decision on a given matter and decide it properly. Thus, non-compliance with a condition precedent renders the Petition for Review dismissible. 13. The doctrine of exhaustion of administrative remedies ensures an orderly procedure which favors a preliminary sifting process, particularly with respect to matters peculiarly within the competence of the administrative agency. After this sifting process comes the availability of judicial review of administrative decisions. Judicial review of administrative decisions entails the Court to examine the method in which the decision was arrived at, and finding no error, lets the administrative decision stand. This is precisely because there are matters peculiarly within the competence of the administrative agency. AaCTcI 14. The above-mentioned periods are clearly given for strict compliance as a prerequisite before seeking redress in a competent court. Such statutory periods are set to prevent delays as well as enhance the orderly and speedy discharge of judicial functions (Agpalo, Statutory Construction, Third Edition 1995, p. 266) .For this reason, the courts construe these provisions of statutes as mandatory (Ibid.,citing Alvero vs. De la Rosa, 76 Phil. 428, 434) . 15. Settled is the rule that the non-exhaustion of administrative remedies is jurisdictional. In this case the right of petitioner to apply or request for refund has prescribed and it has no cause of action to ventilate in court. The case is susceptible of dismissal for failure to state a cause of action. Petitioner has only until March 31, 2011 within which to request or demand for refund/tax credit. Considering that as of even date, petitioner has not yet made a written request for refund before the office of the respondent, it has no more right to assert to, more so with this Honorable Court, because there is nothing to appeal. There was no decision, neither, inaction because in the first place there was no written claim for refund ever made, which categorically demanded for reimbursement. 16. The implementing rule for these complete documents required by law is RMO No. 53-98. Annex B-1 of said RMO lists all the required documents as follows: acEHCD xxx xxx xxx As stated above, the first documentary requirement is that provided in Annex B of the same RMO. Annex B provides for more requirements as follows: xxx xxx xxx 17. In the case entitled Commissioner of Internal Revenue vs. Rosemarie Acosta ,the Supreme Court had occasion to say: xxx xxx xxx 18. In the present case, petitioner failed to submit all the necessary documents needed for the application of its VAT refund. 19. The purpose of requiring the filing of the administrative claim for refund/tax credit and submission of supporting documents relevant to a claim for tax refund/credit is to give the administrative agency concerned the opportunity to ascertain the veracity and validity of the claim. This is the very essence, the very substance of the doctrine of exhaustion of administrative remedies. The doctrine rests upon the presumption that the administrative body, board, or officer, if given the chance to correct its mistake or error, may amend its decision on a given matter and decide it properly. Thus, non-compliance with a condition precedent renders the Petition for Review dismissible. EcTCAD 20. The failure of petitioner to substantiate its claim for refund before the office of the respondent and the filing of the instant petition before this Honorable Court deprived respondent of the opportunity to fully exercise her function to decide claims for refund, correct, modify or affirm the findings of her subordinates. It must be remembered, that in the case of Jariol vs. Commission on Elections ,the Supreme Court reasoned that a party must not merely initiate the prescribed administrative procedure to obtain relief, the party concerned must pursue this relief until the appropriate conclusion takes place before seeking judicial intervention in order to give the administrative body an opportunity to decide the matter by itself correctly and prevent unnecessary and premature resort to the court. 21. The power to tax is the most effective instrument to raise needed revenues to finance and support the myriad activities of the government for the delivery of basic services essential to the promotion of the general welfare and enhancement of peace, progress and prosperity of the people. Consequently, any delay in implementing tax measures would be to the detriment of the public. It is for this reason that claims for refund are required to be done within certain time frames. 22. Exemptions from taxation are highly disfavored in law and he who claims exemption must be able to justify his claim by the clearest grant of organic or statutory law. An exemption from the common burden cannot be permitted to exist upon vague implications (Asiatic Petroleum Co. vs. Llanes, 49 Phil. 466 cited in Collector of Internal Revenue v. Manila Jockey Club, Inc.,98 Phil. 670) . SDHTEC 23. In an action for refund, the burden of proof is on the taxpayer to establish its right to refund, and failure to sustain the burden is fatal to the claim for refund. Hence, a taxpayer is charged with the heavy burden of proving that he has complied with and satisfied all the statutory and administrative requirements to be entitled to the tax refund. Failure to comply therewith warrants a dismissal of the taxpayer's claim for refund. Respondent humbly submits that petitioner failed to establish its right to refund. 24. It can never be emphasized enough that in this jurisdiction tax refunds/credits are in the nature of tax exemptions, hence, laws relating to them call for a strict application against the claimant. As held by the Honorable Supreme Court: 'Tax refunds are in the nature of tax exemptions, and are to be construed strictissimi juris against the entity claiming the same. Thus, the burden of proof rests upon the taxpayer to establish by sufficient and competent evidence, its entitlement to a claim for refund.' 25. Taxes collected are presumed to be in accordance with laws and regulations. HSAcaE 26. Claims for refund are construed strictly against the claimant for the same partake of the nature of exemption from taxation (Commissioner of Internal Revenue vs. Ledesma, 31 SCRA 95) and as such, they are looked upon with disfavor (Western Minolco Corp. vs. Commissioner of Internal Revenue, 124 SCRA 1211) .Basic is the rule that tax refunds are regarded as tax exemptions that are in derogation of the sovereign authority and are to be construed in strictissimi juris against the person or entity claiming the exemption (Philippine Phosphate Fertilizer Corporation v. Commissioner of Internal Revenue, G.R. No. 141973, June 28, 2005) .The law does not look with favor on tax exemptions and that he who would seek to be thus privileged must justify it by words too plain to be mistaken and too categorical to be misinterpreted (Sea-Land Service vs. Court of Appeals, 357 SCRA 444) . 27. Based on the foregoing, petitioner's claim for refund has no basis in fact and in law. Thus, the instant petition should be dismissed for lack of jurisdiction and/or for lack of merit." In his Memorandum, respondent additionally expressed his objections to the claim for refund by asserting that petitioner failed to substantiate its claim for refund during trial, specifically its compliance with the requirements provided under Revenue Memorandum Order (RMO) No. 53-98 and other existing rules and regulations relative to applications of this nature. Further respondent theorizes that for a judicial claim for refund of input VAT to prosper, the petitioner must prove the following: AScHCD 1. That there must be zero-rated or effectively zero-rated sales; 2. That input taxes were incurred or paid; 3. That the input taxes are attributable to zero-rated or effectively zero-rated sales; 4. That the input taxes were not applied against any VAT output VAT liability; 5. That the claim for refund/tax credit must be filed within the two-year prescriptive period. Respondent maintains that petitioner did not fully comply with all of the above requirements, thus the claim for refund of input VAT for the taxable year 2014 must be denied. HESIcT RULING OF THE COURT Foremost among the issues to be resolved in claims for refund of excess/unutilized VAT input taxes is the timeliness of the filing of the claim or claims as this is determinative of the jurisdiction of this Court. The claim before the administrative level and the subsequent Petition for Review before the Court were seasonably filed Pursuant to Section 112 (A) of NIRC of 1997, as amended, the application for tax credit certificate/refund of unutilized excess input VAT must be filed within two years after the close of the taxable quarter when the zero-rated or effectively zero-rated sales were made, and we quote: "SEC. 112. Refunds or Tax Credits of Input Tax . (A) Zero-Rated or Effectively Zero-rated Sales . Any VAT-registered person, whose sales are zero-rated or effectively zero-rated may, within two (2) years after the close of the taxable quarter when the sales were made, apply for the issuance of a tax credit certificate or refund of creditable input tax due or paid attributable to such sales, except transitional input tax, to the extent that such input tax has not been applied against output tax: Provided, however ,That in the case of zero-rated sales under Section 106(A)(2)(a)(1),(2) and (b) and Section 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 or properties or services, and the amount of creditable input tax due or paid cannot be directly and entirely attributed to any one of the transactions, it shall be allocated proportionately on the basis of the volume of sales: Provided, finally ,That for a person making sales that are zero-rated under Section 108(B)(6),the input taxes shall be allocated ratably between his zero-rated and non-zero-rated sales." AcICHD xxx xxx xxx The present claim covers the four quarters of CY 2014, which closed on March 31, 2014, June 30, 2014, September 30, 2014 and December 31, 2014. Counting two years from the said dates, petitioner had until March 31, 2016, June 30, 2016, September 30, 2016 and December 31, 2016, respectively, within which to file its administrative claim for tax credit certificate/refund. Thus, petitioner's administrative claims for the said quarters were seasonably filed on December 29, 2015, to wit: CY 2014 Close of the Taxable Quarter Last Day to File Administrative Claim Date of Filing of Administrative Claim 1st Quarter 31-Mar-14 31-Mar-16 29-Dec-15 28 2nd Quarter 30-Jun-14 30-Jun-16 3rd Quarter 30-Sep-14 30-Sep-16 4th Quarter 31-Dec-14 31-Dec-16 Anent the timeliness of petitioner's judicial appeal, Section 112 (C) of the NIRC of 1997, as amended, states the time requirements for filing a judicial claim for the refund or tax credit of input VAT. The legal provision speaks of two periods: the period of 120 days, which serves as a waiting period to give time for the CIR to act on the administrative claim for a refund or credit; and the period of 30 days, which refers to the period for filing a judicial claim with the CTA. 29 We quote Section 112 (C) of the 1997 NIRC, thus: caITAC "Section 112. x x x (C) Period within which Refund or Tax Credit of Input Taxes shall be Made . In proper cases, the Commissioner shall grant. 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." It is to be noted that the 120-day period begins to run from the date of submission of complete documents supporting the administrative claim. If there is no evidence showing that the taxpayer was required to submit or actually submitted additional documents after the filing of the administrative claim, it is presumed that the complete documents accompanied the claim when it was filed. 30 TAIaHE In this case, petitioner simultaneously submitted its complete supporting documents upon filing of its administrative claim on December 29, 2015. Accordingly, respondent had 120 days from December 29, 2015, or until April 27, 2016 to decide on petitioner's claim. However, respondent failed to act on the claim within the allowable period of 120 days. Thus, petitioner had 30 days or until May 27, 2016 to appeal such inaction to the Court. Evidently, petitioner's judicial claim for refund on May 27, 2016 was timely filed as well, as shown below: Date of filing of administrative claim/submission of complete documents End of 120 days for the BIR Commissioner to decide on the claim End of 30 days to appeal before the CTA Date of Filing of Petition for Review 29-Dec-15 27-Apr-16 27-May-16 27-May-16 We now proceed to the substantive aspects of the claim for refund of alleged excess/unutilized input VAT for the four quarters of 2014 and whether or not petitioner complied with the well-established requisites to substantiate the same. ICHDca Pertinent to the resolution of this issue is Section 110 (B) of the 1997 NIRC, and we quote: "SECTION 110. Tax Credits . xxx xxx xxx (B) Excess Output or Input Tax . If at the end of any taxable quarter the output tax exceeds the input tax, the excess shall be paid by the VAT-registered person. If the input tax exceeds the output tax, the excess shall be carried over to the succeeding quarter or quarters: Provided, however ,That any input tax attributable to zero-rated sales by a VAT-registered person may at his option be refunded or credited against other internal revenue taxes, subject to the provisions of Section 112." Pursuant to the above provisions in relation to the aforequoted Section 112 (A) and (C) of the 1997 NIRC, the requisites for a refund or tax credit of unutilized excess input VAT attributable to zero-rated or effectively zero-rated sales are as follows: cDHAES 1) the taxpayer-claimant is VAT-registered; 2) there must be zero-rated or effectively zero-rated sales; 3) input taxes were incurred or paid; 4) such input taxes are attributable to zero-rated or effectively zero-rated sales; 5) said input taxes were not applied against any output VAT liability; and 6) the claim was filed within the prescribed periods both in the administrative and judicial levels. Petitioner is a VAT- registered entity and had zero-rated sales/receipts during the subject period of the claim It is undisputed that petitioner is a VAT-registered entity with updated Certificate of Registration (BIR Form No. 2303) No. OCN 8RC0000685884E duly issued by the respondent, 31 hence, satisfying the first requisite. TCAScE On the second requisite, i.e. ,the existence of zero-rated sales, petitioner, in its Quarterly VAT Returns for the four quarters of CY 2014, reflected a total amount of P8,800,661,932.71 zero-rated sales/receipts, broken down as follows: Exhibit CY 2014 Zero-Rated Sales/Receipts "P-11-A-42" 1st Quarter P579,928,809.92 "P-11-A-43" 2nd Quarter 2,960,901,412.91 "P-11-A-44" 3rd Quarter 4,590,263,340.57 "P-11-A-45" 4th Quarter 669,568,369.31 Total P8,800,661,932.71 The Court-commissioned ICPA 32 examined and verified the supporting documents of petitioner and accordingly classified petitioner's reported zero-rated sales/receipts into the following categories: 33 ASEcHI Reference to Exhibit "P-11-B" Amount in US Dollars Amount in Philippine Pesos A. Export zero-rated sales of goods to non-resident foreign corporations (NRFCs) supported by Export Declaration forms, Sales Invoices (SIs),Security Bank's Client's Advise forms and Bills of Lading (BLs) Annex F1 160,560,943.83 7,044,757,401.94 B. Local zero-rated sales of goods to PEZA-registered companies supported by SIs, and Client's Advise forms issued by Security Bank Annex F2 32,382,545.45 1,434,219,965.79 C. Zero-rated sales of services to non-resident foreign corporations representing dispatch supported by VAT registered Official Receipts and Billing Statements and Client's Advise forms issued by Security Bank Annex F3 527,010.92 23,478,725.99 D. Zero-rated sales of services to PEZA-registered companies representing materials handling, drilling services and equipment rental supported by VAT registered Official Receipts and Billing Statements Annex F4 298,205,838.98 Total 8,800,661,932.70 34 Export sales to non-resident foreign corporations (NRFCs) With regard to its reported zero-rated export sales of goods to non-resident foreign corporations in the amount of P7,044,757,401.94, records show that petitioner is primarily engaged in the mining and exporting of nickel saprolite and limonite ore, and exploration activities. 35 Petitioner claims that during the CY 2014, it generated export sales of nickel ores from its mining operations that were all paid for in US Dollars inwardly remitted to its bank account in the Philippines and duly accounted for in accordance with the rules and regulations of the BSP. Petitioner posits that such export sales are subject to zero percent (0%) VAT pursuant to Section 106 (A) (2) (a) (1) of the NIRC of 1997, as amended, which states: cTDaEH "SEC. 106. Value-Added Tax on Sale of Goods or Properties . (A) Rate and Base of Tax . x x x xxx xxx xxx (2) Zero-rated Sales The following sales by VAT-registered persons shall be subject to zero percent (0%) rate: (a) Export Sales . The term "export sales" means: (1) The sale and actual shipment of goods from the Philippines to a foreign country, irrespective of any shipping arrangement that may be agreed upon which may influence or determine the transfer of ownership of the goods so exported and paid for in acceptable foreign currency or its equivalent in goods or services, and accounted for in accordance with the rules and regulations of the Bangko Sentral ng Pilipinas (BSP);" Based on the aforequoted provisions of Section 106 (A) (2) (a) (1) of the NIRC of 1997, as amended, in order for an export sale to qualify as zero-rated, the following conditions must be present: 1.) there was sale and actual shipment of goods from the Philippines to a foreign country; 2.) the sale was made by a VAT registered person; 3.) the sale was paid for in acceptable foreign currency or its equivalent in goods or services; and 4.) the payment was accounted for in accordance with the rules and regulations of the BSP. Corollary to the first requisite, Section 113 (A) (1), (B) (1), (2) (c) and (3) of the NIRC of 1997, as amended, and as implemented by Section 4.113-1 (A) (1), B (1) and (2) (c) of Revenue Regulations (RR) No. 16-05, as amended, provides that a VAT taxpayer, like herein petitioner, shall for every sale, barter or exchange of goods or properties, issue a VAT invoice which must contain the following information: "SEC. 113. Invoicing and Accounting Requirements for VAT-Registered Persons . CHTAIc (A) Invoicing Requirements . A VAT-registered person shall issue: (1) A VAT invoice for every sale, barter or exchange of goods or properties; and xxx xxx xxx (B) Information Contained in the VAT Invoice or VAT Official Receipt . The following information shall be indicated in the VAT invoice or VAT official receipt: (1) A statement that the seller is a VAT-registered person, followed by his Taxpayer's Identification Number (TIN); (2) The total amount which the purchaser pays or is obligated to pay to the seller with the indication that such amount includes the value-added tax: Provided, that : xxx xxx xxx (c) If the sale is subject to zero percent (0%) value-added tax, the term 'zero-rated sale' shall be written or printed prominently on the invoice or receipt; cHDAIS xxx xxx xxx (3) The date of transaction, quantity, unit cost and description of the goods or properties or nature of the service; and x x x" "SEC. 4.113-1. Invoicing Requirements . (A) A VAT-registered person shall issue : (1) A VAT invoice for every sale, barter or exchange of goods or properties; and xxx xxx xxx Only VAT-registered persons are required to print their TIN followed by the word "VAT" in their invoice or official receipts. Said documents shall be considered as a "VAT Invoice" or "VAT Official Receipt." All purchases covered by invoices/receipts other than VAT Invoice/VAT Official Receipt shall not give rise to any input tax. VAT invoice/official receipt shall be prepared at least in duplicate, the original to be given to the buyer and the duplicate to be retained by the seller as part of his accounting records. EATCcI (B) Information contained in VAT Invoice or VAT Official Receipt . The following information shall be indicated in VAT invoice or VAT official receipt: (1) A statement that the seller is a VAT-registered person, followed by his TIN; (2) The total amount which the purchaser pays or is obligated to pay to the seller with the indication that such amount includes the VAT; Provided ,That: xxx xxx xxx (c) If the sale is subject to zero percent (0%) VAT, the term " zero-rated sale " shall be written or printed prominently on the invoice or receipt;" (Underscoring supplied) In addition to the above requirements, the invoices must be duly registered with the BIR as prescribed under Section 237 in relation to Section 238 of the 1997 NIRC, as amended, to wit: "SEC. 237. Issuance of Receipts or Sales or Commercial Invoices . All persons subject to an internal revenue tax shall, for each sale or transfer of merchandise or for services rendered valued at Twenty-five pesos (P25.00) or more, issue duly registered receipts or sales or commercial invoices ,prepared at least in duplicate, showing the date of transaction, quantity, unit cost and description of merchandise or nature of service: x x x" (Underscoring supplied) "SEC. 238. Printing of Receipts or Sales or Commercial Invoices . All persons who are engaged in business shall secure from the Bureau of Internal Revenue an authority to print receipts or sales or commercial invoices before a printer can print the same. ISHCcT No authority to print receipts or sales or commercial invoices shall be granted unless the receipts or invoices to be printed are serially numbered and shall show, among other things, the name, business style, Taxpayer Identification Number (TIN) and business address of the person or entity to use the same, and such other information that may be required by rules and regulations to be promulgated by the Secretary of Finance, upon recommendation of the Commissioner. xxx xxx xxx" Pursuant to the foregoing provisions of Section 106 (A) (2) (a) (1) of the 1997 NIRC, as amended, in relation to Section 113 (A) (1), (B) (1), (2) (c), and (3) of the same Code and Sections 4.113-1 (A) (1), B (1), and (2) (c) of RR No. 16-05, any VAT registered person claiming VAT zero-rated direct export sales must present at least three (3) types of documents, to wit: (a) the sales invoice as proof of sale of goods; (b) bill of lading or airway bill as proof of actual shipment of goods from the Philippines to a foreign country; and (c) bank credit advice, certificate of bank remittance or any other document proving payment for the goods in acceptable foreign currency or its equivalent in goods and services. Further, the sales invoices supporting the export sales must be registered with the BIR and contain all the required information under the law and regulations, such as the imprinted word "zero-rated" and the taxpayer's TIN-VAT number. DHITCc After careful examination of the evidence on record, the Court finds that petitioner submitted the aforesaid documents except for the following sales amounting to P101,378,116.27 which have no corresponding bank credit advice or proof of foreign currency inward remittances, thus, must be denied VAT zero-rating: Customer Name Invoice No. Zero-rated Sales per Invoice Exhibit Inward Remittance per Security Bank's Client Advice Exhibit Difference Philippine Peso Equivalent Regent Sound Ltd. 0859 US$2,312,811.00 P-11-B-17 - - US$2,312,811.00 P101,289,557.75 Boasteel Resources International Co.,Ltd. 0930 660,340.00 P-11-B-34.1 US$658,319.50 P-11-B-34.4 2,020.50 88,558.52 36 Total US$2,973,151.00 US$658,319.50 US$2,314,831.50 P101,378,116.27 Sales of goods and services to entities registered with the Philippine Economic Zone Authority (PEZA) As to petitioner's claimed zero-rated sales of goods and services in the respective amounts of P1,434,219,965.79 and P298,205,838.98, to PEZA-registered entities, pertinent provisions of Sections 106 (A) (2) (a) (5) and 108 (B) (3) of the 1997 NIRC of 1997, as amended, state: CAacTH "SEC. 106. Value-Added Tax on Sale of Goods or Properties . (A) Rate and Base of Tax . x x x xxx xxx xxx 2) Zero-rated Sales The following sales by VAT-registered persons shall be subject to zero percent (0%) rate: (a) Export Sales . The term 'export sales' means: xxx xxx xxx (5) Those considered export sales under Executive Order No. 226, otherwise known as the 'Omnibus Investments Code of 1987,' and other special laws ;and xxx xxx xxx" (Underscoring supplied) "SEC. 108. Value-Added Tax on Sale of Services and Use or Lease of Properties . cEaSHC xxx xxx xxx (B) Transactions Subject to Zero Percent (0%) Rate . The following services performed in the Philippines by VAT-registered persons shall be subject to zero percent (0%) rate: xxx xxx xxx (3) Services rendered to persons or entities whose exemption under special laws or international agreements to which the Philippines is a signatory effectively subjects the supply of such services to zero percent (0%) rate ;" (Underscoring supplied) Indeed, sales by a VAT taxpayer from the customs territory to entities located in export processing zones are considered export sales under Executive Order (E.O.) No. 226, otherwise known as the "Omnibus Investments Code of 1987," the relevant portions of which read as follows: "ARTICLE 23. "Export sales" shall mean the Philippine port F.O.B. value, determined from invoices, bills of lading, inward letters of credit, landing certificates, and other commercial documents, of exports products exported directly by a registered export producer or the net selling price of export product sold by a registered export producer to another export producer, or to an export trader that subsequently exports the same: Provided, That sales of export products to another producer or to an export trader shall only be deemed export sales when actually exported by the latter, as evidenced by landing certificates or similar commercial documents: Provided, further, That without actual exportation the following shall be considered constructively exported for purposes of this provision :(1) sales to bonded manufacturing warehouses of export-oriented manufacturers; (2) sales to export processing zones ;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. IAETDc (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 .x x x" (Emphasis supplied) Further, Section 8 of Republic Act (RA) No. 7916, 37 as amended, mandates that the PEZA shall manage and operate the ecozones as a separate customs territory, thus: "SEC. 8. ECOZONE to be Operated and Managed as Separate Customs Territory . The ECOZONE shall be managed and operated by the PEZA as separate customs territory. CTIEac The PEZA is hereby vested with the authority to issue certificate of origin for products manufactured or processed in each ECOZONE in accordance with the prevailing rules or origin, and the pertinent regulations of the Department of Trade and Industry and/or the Department of Finance." Since the ecozone is viewed as a foreign territory by legal fiction, sales of goods and services made by a VAT-registered person in the Philippine customs territory to an entity registered and operating within the ecozone are considered exports to a foreign country subject to zero percent (0%) VAT. This was elucidated by the Supreme Court in the case of Commissioner of Internal Revenue vs. Toshiba Information Equipment (Phils.), Inc. , 38 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 . x x x An ECOZONE or a Special Economic Zone has been described as ...[S]elected areas with highly developed or which have the potential to be developed into agro-industrial, industrial, tourist, recreational, commercial, banking, investment and financial centers whose metes and bounds are fixed or delimited by Presidential Proclamations. An ECOZONE may contain any or all of the following: industrial estates (IEs),export processing zones (EPZs),free trade zones and tourist/recreational centers. DcHSEa The national territory of the Philippines outside of the proclaimed borders of the ECOZONE shall be referred to as the Customs Territory. Section 8 of Rep. Act No. 7916, as amended, mandates that the PEZA shall manage and operate the ECOZONES as a separate customs territory; thus, creating the fiction that the ECOZONE is a foreign territory. As a result, sales made by a supplier in the Customs Territory to a purchaser in the ECOZONE shall be treated as an exportation from the Customs Territory. Conversely, sales made by a supplier from the ECOZONE to a purchaser in the Customs Territory shall be considered as an importation into the Customs Territory. Given the preceding discussion, what would be the VAT implication of sales made by a supplier from the Customs Territory to an ECOZONE enterprise? SaCIDT 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." 39 (Emphasis supplied) To substantiate its zero-rated sales/receipts to PEZA-registered entities, petitioner presented Sales Invoices, 40 Security Bank's Credit Advices, 41 Billing Statements, 42 Official Receipts 43 and Certifications 44 from PEZA. These documents proved that for the year 2014, petitioner sold its products, i.e. , nickel ores, to Taganito HPAL Nickel Corporation (THPAL) and rendered services (materials handling services and equipment rental) to Visayas Slaked Lime Corporation (VSLC) and THPAL. Since it was established that both THPAL and VSLC are registered with the PEZA, petitioner's sales to/receipts from these entities in the amounts of P1,434,219,965.79 and P298,205,838.98 which are duly covered by VAT zero-rated sales invoices and official receipts qualify for VAT zero-rating under Sections 106 (A) (2) (a) (5) and 108 (B) (3) of the 1997 NIRC, as amended. Sales of services to non- resident foreign corporations With reference to petitioner's declared zero-rated sales of services to non-resident foreign corporations, Section 108 (B) (2) and (3) of the 1997 NIRC, as amended, provides as follows: "SEC. 108. Value-Added Tax on Sale of Services and Use or Lease of Properties . SCaITA xxx xxx xxx (B) Transactions Subject to Zero Percent (0%) Rate . The following services performed in the Philippines by VAT-registered persons shall be subject to zero percent (0%) rate: xxx xxx xxx (2) Services other than those mentioned in the preceding paragraph rendered to a person engaged in business conducted outside the Philippines or to a non-resident 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);x x x" In the case of Commissioner of Internal Revenue vs. Burmeister and Wain Scandinavian Contractor Mindanao, Inc. , 45 the Supreme Court held that in order for the supply of services to be VAT zero-rated under Section 108 (B) (2) of the NIRC of 1997, as amended, the following requisites must be met: cHECAS 1. the services must be other than processing, manufacturing or repacking of goods; 2. payment for such services must be in acceptable foreign currency accounted for in accordance with the BSP rules and regulations; and 3. the recipient of such services is doing business outside the Philippines. Based on petitioner's submitted billing statements, official receipts and bank credit advices, 46 the claimed zero rated sales/receipts of P23,478,725.99 arose from "Laytime Saved" by petitioner at loading point for the nickle ore shipments. In her Judicial Affidavit, 47 petitioner's Vice-President for Finance, Ms. Lennie A. Terre, explained that this represents "Dispatch income which is a form of premium payment or reward for early completion of ore loading or when ore loading is made earlier than the allowed loading days based on the contract terms. This is an additional payment to the contract price of the ores and is billed by and paid to petitioner in US Dollars thru the Philippine banking system." Clearly, petitioner complied with the first and second requisites considering that the amount of P23,478,725.99 pertains to services which fall within the scope of "services other than processing, manufacturing or repacking of goods" and that the same was paid for in acceptable foreign currency duly accounted for in accordance with the rules and regulations of the BSP. However, petitioner failed to comply with the equally important third requisite, i.e. ,that its non-resident foreign clients were doing business outside the Philippines. This Court has consistently held that for an entity to be considered a non-resident foreign corporation doing business outside the Philippines, the said entity must be supported at the very least, by the Certification of Non-Registration of Corporation/Partnership duly issued by the Securities and Exchange Commission (SEC) and proof of incorporation or registration in a foreign country ( e.g. ,Certificate of Incorporation, Memorandum and Articles of Association, or Certificate of Registration) or any other equivalent document. aTHCSE For failure to present the aforesaid documents, petitioner's reported zero-rated sales/receipts in the amount P23,478,725.99 shall be disallowed. In sum, out of the reported sales in CY 2014 of P8,800,661,932.71, only the amount of P8,675,805,090.45 represents petitioner's valid zero-rated sales/receipts, computed as follows: Zero-Rated Sales/Receipts per VAT Returns P8,800,661,932.71 Less: Disallowances a. Sales of goods to non-resident foreign corporations without foreign currency inward remittances P101,378,116.27 b. Sales of services to non-resident foreign corporations without proof that such were doing business outside the Philippines 23,478,725.99 Total Disallowances P124,856,842.26 Valid Zero-Rated Sales/Receipts P8,675,805,090.45 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 2014 in the amount of P8,675,805,090.46, we proceed to the determination of whether petitioner incurred input taxes in connection therewith and if said input taxes were not applied against any output VAT liability of petitioner. AHDacC In its Quarterly VAT Returns for the four quarters of CY 2014, petitioner reflected a total amount of P30,160,760.33 allowable input VAT arising from its amortization of input VAT on purchases of capital goods exceeding P1 million, domestic purchases and importation of goods other than capital goods, and domestic purchases of services, detailed as follows: 1st Quarter 48 2nd Quarter 49 3rd Quarter 50 4th Quarters 51 Total Input Tax Deferred on Capital Goods exceeding P1 Million from Previous Quarter P65,384,924.63 P60,066,168.09 P56,834,972.27 P50,250,798.32 P65,384,924.63 Add: Input Tax on Capital Goods exceeding P1 Million Purchased this Quarter 1,255,570.43 3,566,657.57 245,892.87 401,110.00 5,469,230.87 Total Unamortized Input Tax on Capital Goods exceeding P1 Million 66,640,495.06 63,632,825.66 57,080,865.14 50,651,908.32 70,854,155.50 Less: Input Tax on Purchases of Capital Goods exceeding P1 Million deferred for the succeeding period 60,066,168.09 56,834,972.27 50,250,798.32 43,803,818.55 43,803,818.55 Amortization of Input Tax on Capital Goods exceeding P1 Million P6,574,326.97 P6,797,853.39 P6,830,066.82 P6,848,089.77 P27,050,336.95 Add: Input Tax on: Domestic Purchases of Goods Other than Capital Goods 15,859.23 6,925.68 3,150.17 6,276.66 32,211.74 Importation of Goods other than Capital Goods - 205,237.00 2,403,204.00 - 2,608,441.00 Domestic Purchase of Services 54,688.10 59,663.36 106,620.99 248,798.19 469,770.64 Total 70,547.33 271,826.04 2,512,975.16 255,074.85 3,110,423.38 Total Allowable Input Tax P6,644,874.30 P7,069,679.43 P9,343,041.98 P7,103,164.62 P30,160,760.33 Of the P30,160,760.33 declared input VAT, petitioner's application for refund/tax credit filed with the BIR was only P29,581,266.94 52 representing P26,972,825.94 53 input VAT amortization on capital goods exceeding P1 million and P2,608,441.00 input VAT on importation of goods other than capital goods. However, the administrative claim of P29,581,266.94 was reduced to P28,926,837.00 when petitioner filed its Petition for Review before this Court. The reduction in petitioner's claim was explained by petitioner's Vice-President for Finance, Ms. Lennie A. Terre, in her Judicial Affidavit, 54 as follows: cAaDHT "Q31: Can you tell us what has happened to the claim filed with the Respondent? A31: On May 12, 2016, Petitioner received from the Respondent an undated letter stating that out of Petitioner's claim in the amount of P29,581,267.00, it is approving for refund the amount of P21,330,738.32, as follows: PARTICULARS BIR BOC TOTAL Total applied for TCC 654,430.00 28,926,837.00 29,581,267.00 Less: Disallowance 141,546.61 8,108,982.07 8,250,528.68 NET REFUNDABLE AMOUNT 512,883.39 20,817,854.93 21,330,738.32 Simultaneous with the issuance of the aforesaid letter, Respondent issued to the Petitioner, a tax credit certificate in the amount of P512,883.39. Subsequently, we were furnished a copy of an endorsement letter addressed to the Commissioner of the Bureau of Customs (BOC) stating the Respondent's approval of Petitioner's VAT credit claim from importation of goods in the amount of P20,817,854.93. Q33: Why are you still pursuing this claim despite the said endorsement? IDSEAH A32: Petitioner disagrees with the disallowance of Eight Million One Hundred Eight Thousand Nine Hundred Eighty Two and 07/Pesos (P8,108,982.07) on the BOC portion of the total claim amounting to Twenty Eight Million Nine Hundred Twenty Six Thousand Eight Hundred Thirty Seven Pesos (P28,926,837.00) .Also, the BOC endorsement has not translated into the issuance of any TCC by or cash refund from the BOC, so that at this point, it is still worth nothing but a piece of paper which would not ensure the enforcement of the company's right to refund. We are, however, following up the approval of the release of any TCC or cash refund from the BOC and in the event that this actually happens, we undertake to advice to this Court." The Court-commissioned ICPA confirmed that petitioner's input VAT claim of P28,926,837.00 pertains only to importation of capital goods and non-capital goods as supported by the following documents: 55 HCaDIS Particulars Input VAT Claim 1. Input VAT on Importation of capital goods supported by Import Entry and Internal Revenue Declarations (IEIRDs) and Security Bank's Debit Advice forms P25,498,784.85 2. Input VAT on Importation of capital goods supported by Certified True Copy IEIRDs and Security Bank's Debit Advice forms 819,612.00 3. Input VAT on Importation of non-capital goods supported by IEIRDs, Sales Invoices and Security Bank's Debit Advice forms 2,608,441.00 Total Input VAT P28,926,837.85 The input VAT claims of P25,498,784.85 and P819,612.00 totalling P26,318,396.85 represent the amortized portion on petitioner's importation of capital goods exceeding P1 million, detailed as follows: Reference to Exhibit "P-11-B" Exhibit Description 56 Date Purchased 57 Input VAT Amortization for CY 2014 Annex D P-11-A-30 to P-11-A-30.3 5 Volvo Dump Truck 03-Jun-10 P819,612.00 Annex C1 P-11-A-1 to P-11-A-1.2 12 Volvo Dump Truck 19-Apr-11 3,005,490.52 P-11-A-2 to P-11-A-2.3 1 Volvo Motor 10-May-11 229,672.25 P-11-A-3 to P-11-A-3.3 4 Volvo Dump Truck 28-Jun-11 771,129.00 Annex C2 P-11-A-5 to P-11-A-5.2 Volvo FMX37064R 10-Feb-12 163,839.00 P-11-A-4 to P-11-A-4.3 6 Caterpillar Wheel 10-Feb-12 1,939,248.00 P-11-A-6 to P-11-A-6.2 9 Volvo Dump Truck 21-Mar-12 1,520,336.00 P-11-A-7 to P-11-A-7.1 2 Caterpillar Motor 10-Apr-12 577,718.00 P-11-A-8 to P-11-A-8.2 9 Volvo Dump Truck 16-Apr-12 1,980,087.00 P-11-A-9 to P-11-A-9.1 10 Volvo Dump Truck 24-May-12 2,195,266.75 P-11-A-10 to P-11-A-10.1 Volvo Motor Grade 03-Jul-12 228,766.99 P-11-A-11 to P-11-A-11.1 2 Volvo Wheel Loader 14-Aug-12 567,932.50 P-11-A-12 to P-11-A-12.2 Forklift 12-Nov-12 60,364.99 P-11-A-13 to P-11-A-13.1 Sandvik 27-Dec-12 466,294.00 Annex C3 P-11-A-14 to P-11-A-14.2 7 Volvo Hyd Excavator 21-Jan-13 1,239,405.75 P-11-A-16 to P-11-A-16.2 5 Wheel Loader 06-Mar-13 1,270,289.00 P-11-A-15 to P-11-A-15.2 2 Hydraulic Excavator 06-Mar-13 489,021.25 P-11-A-17 to P-11-A-17.2 Wheel Loader 12-Mar-13 291,355.00 P-11-A-18 to P-11-A-18.1 5 Dump Truck 12-Mar-13 1,108,712.75 P-11-A-19 to P-11-A-19.2 2 Volvo Motor Grade 01-Apr-13 226,505.25 P-11-A-20 to P-11-A-20.1 2 Volvo Dump Truck 03-Apr-13 436,490.25 P-11-A-21 to P-11-A-21.1 7 Volvo Dump Truck 18-Apr-13 1,560,936.00 P-11-A-22 to P-11-A-22.2 12 Volvo Dump Truck 10-May-13 2,644,348.25 P-11-A-23 to P-11-A-23.1 1 Unit FMX 20-May-13 225,178.00 P-11-A-24 to P-11-A-24.1 6 Volvo FMX 25-Jun-13 1,438,683.25 Annex C4 P-11-A-25 to P-11-A-25.1 1 Terrain Crane 06-Feb-14 216,161.23 P-11-A-27 to P-11-A-27.1 Lowbed Trailer 01-Apr-14 81,921.56 P-11-A-26 to P-11-A-26.1 2 Wheel Loader 01-Apr-14 468,846.19 P-11-A-28 to P-11-A-28.1 1 Truck Tractor 02-Jun-14 69,715.77 P-11-A-29 to P-11-A-29.1 1 Manlift Truck 29-Oct-14 25,069.37 Total P26,318,395.88 58 A scrutiny of petitioner's supporting documents shows that the input VAT claim of P26,318,395.88 requires a downward adjustment in the amount of P2,007,306.40 for not being properly substantiated in accordance with Section 4.110-8 (a) (1) of RR No. 16-05: aCIHcD Reference to ICPA Report Exhibit Description Date Purchased Disallowed Input VAT Amortization for CY 2014 Supported by Certified True Copy of IEIRD and Security Bank's Debit Advice but the payment reflected in the Debit Advice is insufficient Annex D P-11-A-30 to P-11-A-30.3 5 Volvo Dump Truck 03-Jun-10 Advance Duties paid P1,093,531.00 P799,455.40 Less: CUD/IPF 992,748.00 Amount attributed to VAT 100,783.00 Input VAT claimed 4,098,060.00 Input VAT payment deficiency 3,997,277.00 Divide by amortization period (in months) 60 Multiply by period amortized for 1st to 4th qtrs. 2014 12 Supported by IEIRD and Sales Invoice but without proof of VAT payment Annex C2 P-11-A-5 to P-11-A-5.2 Volvo FMX37064R 10-Feb-12 163,839.00 Supported by unreadable IEIRD and Security Bank's Debit Advice which does not show VAT payment Annex C2 P-11-A-7 to P-11-A-7.1 2 Caterpillar Motor 10-Apr-12 577,718.00 P-11-A-13 to P-11-A-13.1 Sandvik 27-Dec-12 466,294.00 Total P2,007,306.40 With regard to the P2,608,441.00 input VAT claim on importation of non-capital goods, the same is broken down as follows: AHCETa Reference to ICPA Report Exhibit Supplier Date Purchased Allowable Input for CY 2014 Annex E P-11-A-31 to P-11-A-31.3 Ellton Conveyers 28-Apr-14 59 P205,237.00 P-11-A-32 to P-11-A-32.2 YBM Co. Ltd. 13-Jun-14 91,181.00 P-11-A-33 to P-11-A-33.6 Ellton Conveyers Pty. Ltd. 06-Jun-14 2,312,023.00 Total P2,608,441.00 The Court observed that the importation made by petitioner from YBM Co. Ltd. is supported by IEIRD showing a VAT amount of only P25,476.64. Hence, the difference of P65,704.36 (P91,181.00 less P25,476.64) shall be disallowed from petitioner's claim. cHaCAS In sum, petitioner was able to properly substantiate its input VAT claim to the extent of P26,853,826.24, computed as follows: Input VAT Claim P28,926,837.00 Less: Disallowances 1. Supported by Certified True Copy of IEIRD and Security Bank's Debit Advice but the payment reflected in the Debit Advice is insufficient P799,455.40 2. Supported by IEIRD and Sales Invoice but without proof of VAT payment 163,839.00 3. Supported by unreadable IEIRD and Security Bank's Debit Advice which does not show VAT payment 1,044,012.00 4. Supported by IEIRD showing a lower amount of input VAT 65,704.36 Total Disallowances P2,073,010.76 Properly Substantiated Input VAT P26,853,826.24 However, considering that petitioner had also reported VATable and exempt sales/receipts, and its input VAT cannot be directly identified with specific sales, we shall allocate the valid input VAT proportionately on the basis of the volume of petitioner's sales pursuant to Section 112 (A) of the NIRC of 1997, as amended, computed as follows: ScHADI Amount 60 Allocation Factor (Percentage to Total Sales/Receipts) VATable Sales/Receipts P1,593,836.60 0.01782949% Zero-Rates Sales/Receipts 8,800,661,932.71 98.4487820% Exempt Sales/Receipts 137,074,667.05 1.5333885% Total Sales/Receipts P8,939,330,436.36 100.0000000% Net Substantiated Input VAT P26,853,826.24 Allocated as follows: VATable Sales/Receipts 4,787.90 Zero-Rates Sales/Receipts 26,437,264.85 Exempt Sales/Receipts 411,773.49 Total P26,853,826.24 After deducting the input VAT attributable to VATable sales/receipts in the amount of P4,787.90 from petitioner's output VAT liability of P191,260.39, petitioner still has a net output VAT payable of P186,472.49, computed as follows: Output VAT Payable 1st Quarter (Exhibit "P-11-A-42") P32,022.86 2nd Quarter (Exhibit "P-11-A-43") 39,557.89 3rd Quarter (Exhibit "P-11-A-44") 76,933.93 4th Quarter (Exhibit "P-11-A-45") 42,745.71 P191,260.39 Less: Input VAT attributable to VATable Sales 4,787.90 Net Output VAT Payable P186,472.49 Petitioner also submitted in evidence the documents supporting its reported input VAT on domestic purchases of services and goods (other than capital goods) for CY 2014 in the respective amounts of P469,770.64 and P32,211.74 which were summarized in Annex I of the ICPA report. 61 However, the summary shows a higher input VAT amount of P979,540.45. DACcIH Further, the Court noted that the amount of P979,540.45 included an input VAT of P709,392.86 related to petitioner's domestic purchases of capital goods, the amortized portion of which in the amount of P106,962.50 formed part of the P512,883.39 claim for which a TCC was already issued in favor of petitioner. Below is the breakdown of the amount of P106,962.50: 62 Exhibit Date Purchased Sales Invoice No. Description Input VAT Est. Life (in months) Amortized Portion allowable for the CY 2014 1st Quarter P-11-A-81 29-Jan-14 V112916 Toyota Hi-Lux P146,250.00 60 P29,250.00 P-11-A-132 26-Feb-14 A123355 1 Toyota Grandia 166,071.43 60 30,446.43 2nd Quarter P-11-A-221 30-Apr-14 B38858 Toyota Hi-Lux 151,178.57 60 22,676.79 3rd Quarter P-11-A-341, P-11-A-341.1 and P-11-A-341.2 02-Jul-14 6472, 6473 and 6474 3 Suzuki Jimny 245,892.86 60 24,589.29 Total P709,392.86 P106,962.50 As to the remaining input VAT of P270,147.59 (P979,540.45 less P709,392.86), the amount of P200,184.83 should be disallowed for not being properly substantiated by VAT invoices or receipts as prescribed under Sections 110 (A), 113 (A) and (B), 237, and 238 of the NIRC of 1997, as amended, and as implemented by Sections 4.110-1, 4.110-2, 4.110-8, and 4.113-1 of RR No. 16-05, as amended: aICcHA Exhibit Supplier Name Document No. Date Input VAT INPUT VAT SUPPORTED BY UNDATED SALES INVOICE P-11-A-240 New Family Drug & General Merchandise (Lim, Lance Lemuel Ling) 163989 - P16.93 INPUT VAT SUPPORTED BY ACKNOWLEDGEMENT RECEIPTS P-11-A-54 LBC Express, Inc. SUG01143990 07-Jan-14 17.14 P-11-A-55 LBC Express, Inc. SUG01144077 08-Jan-14 14.46 P-11-A-56 LBC Express, Inc. SUG01143988 07-Jan-14 18.21 P-11-A-57 LBC Express, Inc. SUG01144348 10-Jan-14 14.46 P-11-A-58 LBC Express, Inc. SUG01144345 10-Jan-14 18.21 P-11-A-59 LBC Express, Inc. SUG01144351 10-Jan-14 26.79 P-11-A-60 LBC Express, Inc. SUG01144576 12-Jan-17 580.18 P-11-A-61 LBC Express, Inc. SUG01144876 15-Jan-14 26.79 P-11-A-62 LBC Express, Inc. SUG01144349 10-Jan-14 18.21 P-11-A-63 LBC Express, Inc. SUG01145034 16-Jan-14 18.21 P-11-A-64 LBC Express, Inc. SUG01145607 22-Jan-14 26.79 P-11-A-65 LBC Express, Inc. SUG01145114 17-Jan-14 18.21 P-11-A-66 LBC Express, Inc. SUG01145807 24-Jan-14 234.64 P-11-A-67 LBC Express, Inc. SUG01145789 24-Jan-14 18.21 P-11-A-68 LBC Express, Inc. SUG01145860 25-Jan-14 18.21 P-11-A-69 LBC Express, Inc. SUG01146315 29-Jan-14 26.79 P-11-A-70 LBC Express, Inc. SUG01146316 29-Jan-14 26.79 P-11-A-71 LBC Express, Inc. SUG01146104 28-Jan-14 18.21 P-11-A-72 LBC Express, Inc. SUG01146550 31-Jan-14 18.21 P-11-A-103 LBC Express, Inc. SUG01146820 02-Feb-14 33.75 P-11-A-104 LBC Express, Inc. SUG01147285 06-Feb-14 10.71 P-11-A-105 LBC Express, Inc. SUG01147425 07-Feb-14 26.79 P-11-A-106 LBC Express, Inc. SUG01147423 07-Feb-14 18.21 P-11-A-107 LBC Express, Inc. SUG01147422 07-Feb-14 18.21 P-11-A-108 LBC Express, Inc. SUG01147826 11-Feb-14 26.79 P-11-A-109 LBC Express, Inc. SUG01147828 11-Feb-14 26.79 P-11-A-110 LBC Express, Inc. SUG01147829 11-Feb-14 26.79 P-11-A-111 LBC Express, Inc. SUG01148040 12-Feb-14 26.79 P-11-A-112 LBC Express, Inc. SUG01148268 14-Feb-14 26.79 P-11-A-113 LBC Express, Inc. SUG01148269 14-Feb-14 18.21 P-11-A-114 LBC Express, Inc. SUG01148431 15-Feb-16 18.21 P-11-A-115 LBC Express, Inc. SUG01148598 16-Feb-14 84.11 P-11-A-116 LBC Express, Inc. SUG01148833 18-Feb-14 14.46 P-11-A-117 LBC Express, Inc. SUG01149178 21-Feb-14 14.46 P-11-A-118 LBC Express, Inc. SUG01149433 23-Feb-14 10.71 P-11-A-119 LBC Express, Inc. SUG01149540 24-Feb-14 15.00 P-11-A-143 LBC Express, Inc. SUG0001150464 04-Mar-14 26.79 P-11-A-144 LBC Express, Inc. SUG01151148 08-Mar-14 26.79 P-11-A-145 LBC Express, Inc. SUG01151183 09-Mar-14 26.79 P-11-A-146 LBC Express, Inc. SUG01151185 09-Mar-14 26.79 P-11-A-147 LBC Express, Inc. SUG01151281 09-Mar-14 95.89 P-11-A-148 LBC Express, Inc. SUG01151478 11-Mar-14 26.79 P-11-A-149 LBC Express, Inc. SUG01151826 14-Mar-14 26.79 P-11-A-150 LBC Express, Inc. SUG01151827 14-Mar-14 26.79 P-11-A-151 LBC Express, Inc. SUG01151878 14-Mar-14 14.46 P-11-A-152 LBC Express, Inc. SUG01152090 16-Mar-14 26.79 P-11-A-153 LBC Express, Inc. SUG01152091 16-Mar-14 26.79 P-11-A-154 LBC Express, Inc. SUG01152968 23-Mar-14 26.79 P-11-A-155 LBC Express, Inc. SUG01153180 25-Mar-14 271.61 P-11-A-156 LBC Express, Inc. SUG01153185 25-Mar-14 255.54 P-11-A-157 LBC Express, Inc. SUG01153184 25-Mar-14 279.64 P-11-A-158 LBC Express, Inc. SUG01153183 25-Mar-14 287.68 P-11-A-159 LBC Express, Inc. SUG01153609 28-Mar-14 26.79 P-11-A-160 LBC Express, Inc. SUG01153610 28-Mar-14 26.79 P-11-A-186 LBC Express, Inc. SUG01156524 27-Apr-14 18.21 P-11-A-187 LBC Express, Inc. SUG01154956 09-Apr-14 26.79 P-11-A-188 LBC Express, Inc. SUG01154902 09-Apr-14 18.21 P-11-A-189 LBC Express, Inc. SUG01154233 02-Apr-14 17.14 P-11-A-190 LBC Express, Inc. SUG01155762 17-Apr-14 26.79 P-11-A-191 LBC Express, Inc. SUG01155951 22-Apr-14 18.21 P-11-A-192 LBC Express, Inc. SUG01155182 12-Apr-14 26.79 P-11-A-193 LBC Express, Inc. SUG01156684 29-Apr-14 18.21 P-11-A-194 LBC Express, Inc. SUG01155284 13-Apr-14 10.71 P-11-A-195 LBC Express, Inc. SUG01155282 13-Apr-14 10.71 P-11-A-196 LBC Express, Inc. SUG01155283 13-Apr-14 10.71 P-11-A-228 LBC Express, Inc. SUG01157614 08-May-14 26.79 P-11-A-229 LBC Express, Inc. SUG01157822 10-May-14 26.79 P-11-A-230 LBC Express, Inc. SUG01158945 22-May-14 10.71 P-11-A-231 LBC Express, Inc. SUG01158348 15-May-14 26.79 P-11-A-232 LBC Express, Inc. SUG01157821 10-May-14 26.79 P-11-A-233 LBC Express, Inc. SUG01157819 10-May-14 26.79 P-11-A-234 LBC Express, Inc. SUG01159327 25-May-17 17.14 P-11-A-235 LBC Express, Inc. SUG01159612 28-May-14 41.79 P-11-A-236 LBC Express, Inc. SUG01159607 28-May-14 10.71 P-11-A-237 LBC Express, Inc. SUG01156941 01-May-14 14.46 P-11-A-238 LBC Express, Inc. SUG01157621 08-May-14 18.21 P-11-A-263 LBC Express, Inc. SUG01161293 14-Jun-14 57.86 P-11-A-264 LBC Express, Inc. SUG01161059 12-Jun-14 41.79 P-11-A-265 LBC Express, Inc. SUG01160349 04-Jun-14 18.21 P-11-A-266 LBC Express, Inc. SUG01161128 12-Jun-14 18.21 P-11-A-267 LBC Express, Inc. SUG01160506 06-Jun-14 18.21 P-11-A-268 LBC Express, Inc. SUG01162307 25-Jun-14 26.79 P-11-A-269 LBC Express, Inc. SUG01160505 06-Jun-14 18.21 P-11-A-270 LBC Express, Inc. SUG01162575 28-Jun-14 18.21 P-11-A-271 LBC Express, Inc. SUG01160994 11-Jun-14 18.21 P-11-A-272 LBC Express, Inc. SUG01161058 12-Jun-14 18.21 P-11-A-273 LBC Express, Inc. SUG011610225 03-Jun-14 10.71 P-11-A-312 LBC Express, Inc. SUG01163826 10-Jul-14 18.21 P-11-A-313 LBC Express, Inc. SUG01165036 23-Jul-14 18.21 P-11-A-314 LBC Express, Inc. SUG01164492 17-Jul-14 18.21 P-11-A-315 LBC Express, Inc. SUG01163108 03-Jul-14 18.21 P-11-A-316 LBC Express, Inc. SUG01163687 09-Jul-14 18.21 P-11-A-317 LBC Express, Inc. SUG01164902 22-Jul-14 10.71 P-11-A-318 LBC Express, Inc. SUG01163110 03-Jul-14 18.75 P-11-A-319 LBC Express, Inc. SUG01164126 13-Jul-14 18.21 P-11-A-320 LBC Express, Inc. SUG01164047 12-Jul-14 26.79 P-11-A-321 LBC Express, Inc. SUG01165763 31-Jul-14 14.46 P-11-A-354 LBC Express, Inc. 01165860 01-Aug-14 18.21 P-11-A-355 LBC Express, Inc. 01166957 12-Aug-14 26.79 P-11-A-356 LBC Express, Inc. 01166956 12-Aug-14 18.21 P-11-A-357 LBC Express, Inc. 01167082 13-Aug-14 18.21 P-11-A-358 LBC Express, Inc. 031000062876 19-Jul-14 18.75 P-11-A-359 LBC Express, Inc. 01167918 21-Aug-14 81.96 P-11-A-403 LBC Express, Inc. SUG01168884 02-Sep-14 14.46 P-11-A-404 LBC Express, Inc. SUG01169367 05-Sep-14 26.79 P-11-A-405 LBC Express, Inc. SUG01169763 10-Sep-14 26.79 P-11-A-406 LBC Express, Inc. SUG01169914 19-Sep-14 18.21 P-11-A-407 LBC Express, Inc. SUG01170742 11-Sep-14 11.25 P-11-A-437 LBC Express, Inc. SUG01171819 01-Oct-14 18.21 P-11-A-438 LBC Express, Inc. SUG01173323 16-Oct-14 18.21 P-11-A-439 LBC Express, Inc. SUG01173076 14-Oct-14 18.21 P-11-A-440 LBC Express, Inc. SUG01174416 28-Oct-14 10.71 P-11-A-441 LBC Express, Inc. SUG01173170 15-Oct-14 18.21 P-11-A-442 LBC Express, Inc. SUG01173609 19-Oct-14 41.79 P-11-A-443 LBC Express, Inc. SUG01172122 03-Oct-14 18.21 P-11-A-444 LBC Express, Inc. SUG01173607 19-Oct-14 18.21 P-11-A-445 LBC Express, Inc. SUG01172874 11-Oct-14 10.71 P-11-A-446 LBC Express, Inc. SUG01173696 20-Oct-14 44.46 P-11-A-447 LBC Express, Inc. SUG01174002 23-Oct-14 11.25 P-11-A-448 LBC Express, Inc. SUG01172558 08-Oct-14 10.71 P-11-A-449 LBC Express, Inc. SUG01172147 03-Oct-14 10.71 P-11-A-450 LBC Express, Inc. SUG01172758 10-Oct-14 18.21 P-11-A-451 LBC Express, Inc. SUG01172876 11-Oct-14 26.79 P-11-A-452 LBC Express, Inc. SUG01174214 26-Oct-14 26.79 P-11-A-453 LBC Express, Inc. SUG01174537 29-Oct-14 26.79 P-11-A-489 LBC Express, Inc. SUG01174860 03-Nov-14 18.21 P-11-A-490 LBC Express, Inc. SUG01175407 07-Nov-14 18.21 P-11-A-491 LBC Express, Inc. SUG01175488 10-Nov-14 18.21 P-11-A-492 LBC Express, Inc. SUG01175742 11-Nov-14 26.79 P-11-A-493 LBC Express, Inc. SUG01175741 11-Nov-14 18.21 P-11-A-494 LBC Express, Inc. SUG01175939 13-Nov-14 42.32 P-11-A-495 LBC Express, Inc. SUG01176068 15-Nov-14 26.79 P-11-A-496 LBC Express, Inc. SUG01176861 22-Nov-14 18.21 P-11-A-497 LBC Express, Inc. SUG01177533 29-Nov-14 10.71 P-11-A-498 LBC Express, Inc. SUG01176939 23-Nov-14 10.71 P-11-A-557 LBC Express, Inc. SUG01180395 28-Dec-14 26.79 P-11-A-558 LBC Express, Inc. SUG01178103 05-Dec-14 26.79 P-11-A-559 LBC Express, Inc. SUG01178774 13-Dec-14 18.21 P-11-A-560 LBC Express, Inc. SUG01178903 14-Dec-14 18.21 P-11-A-561 LBC Express, Inc. SUG01178773 13-Dec-14 26.79 P-11-A-562 LBC Express, Inc. SUG01179067 16-Dec-14 26.79 P-11-A-563 LBC Express, Inc. SUG01179422 19-Dec-14 26.79 P-11-A-564 LBC Express, Inc. SUG01179423 19-Dec-14 26.79 P-11-A-565 LBC Express, Inc. SUG01179381 19-Dec-14 18.21 P-11-A-566 LBC Express, Inc. SUG01179383 19-Dec-14 26.79 INPUT VAT SUPPORTED BY BILLING STATEMENTS P-11-A-53 J.A.R.C. Construction Company 0205 24-Jan-14 2,014.29 P-11-A-552 Infor International Software, Inc. 0169 17-Dec-14 136,741.38 INPUT VAT SUPPORTED BY STATEMENT OF ACCOUNTS P-11-A-133 Wayfair Tours, Inc. 1755 11-Feb-14 858.00 P-11-A-134 Wayfair Tours, Inc. 1950 22-Feb-14 1,388.00 P-11-A-135 Wayfair Tours, Inc. 1957 22-Feb-14 727.00 P-11-A-136 Wayfair Tours, Inc. 2060 28-Feb-14 528.00 P-11-A-137 Wayfair Tours, Inc. 2059 28-Feb-14 432.00 P-11-A-76 and P-11-A-76.1 PLDT PHILCOM 0215201204 01-Jan-14 75.76 P-11-A-77 and P-11-A-77.1 PLDT PHILCOM 0215201342 01-Jan-14 180.29 P-11-A-79 and P-11-A-79.1 Smart Broadband, Inc. 0215267508 01-Jan-14 49.20 P-11-A-80 Smart Broadband, Inc. 0215267695 01-Jan-14 131.03 P-11-A-126 and P-11-A-126.1 PLDT PHILCOM 0218340178 01-Feb-14 189.23 P-11-A-127 and P-11-A-127.1 PLDT PHILCOM 0218339433 01-Feb-14 73.31 P-11-A-128 and P-11-A-128.1 Smart Broadband, Inc. 0218407135 01-Feb-14 116.36 P-11-A-129 and P-11-A-129.1 Smart Broadband, Inc. 0218405506 01-Feb-14 49.20 P-11-A-165 and P-11-A-165.1 PLDT PHILCOM 221504844 01-Mar-14 195.45 P-11-A-166 and P-11-A-166.1 PLDT PHILCOM 221503707 01-Mar-14 74.29 P-11-A-170 and P-11-A-170.1 Smart Broadband, Inc. 221569828 01-Mar-14 49.20 P-11-A-171 and P-11-A-171.1 Smart Broadband, Inc. 221570600 01-Mar-14 163.75 P-11-A-176 Wayfair Tours, Inc. 2259 14-Mar-14 1,248.00 P-11-A-216 and P-11-A-216.1 PLDT PHILCOM 224693030 01-Apr-14 93.93 P-11-A-217 and P-11-A-217.1 PLDT PHILCOM 224693601 01-Apr-14 202.21 P-11-A-220 and P-11-A-220.1 Smart Broadband, Inc. 224759390 01-Apr-14 134.45 P-11-A-222 Wayfair Tours, Inc. 2809 05-Apr-14 1,006.00 P-11-A-223 Wayfair Tours, Inc. 2852 08-Apr-14 1,006.00 P-11-A-243 and P-11-A-243.1 PLDT PHILCOM 227908673 01-May-14 180.07 P-11-A-244 and P-11-A-244.1 PLDT PHILCOM 227908863 01-May-14 89.02 P-11-A-245 and P-11-A-245.1 PLDT PHILCOM 231137368 01-Jun-14 31.25 P-11-A-246 and P-11-A-246.1 Smart Broadband, Inc. 224759133 01-Apr-14 62.29 P-11-A-247 and P-11-A-247.1 Smart Broadband, Inc. 231203985 01-Jun-14 84.03 P-11-A-248 and P-11-A-248.1 Smart Broadband, Inc. 227976384 01-May-14 49.20 P-11-A-250 Wayfair Tours, Inc. 3300 10-May-14 1,356.00 P-11-A-251 Wayfair Tours, Inc. 3368 15-May-14 1,200.00 P-11-A-282 and P-11-A-282.1 PLDT PHILCOM 231137024 01-Jun-14 84.60 P-11-A-283 and P-11-A-283.1 PLDT PHILCOM 231137368 01-Jun-14 172.49 P-11-A-291 and P-11-A-291.1 Smart Broadband, Inc. 227975806 01-May-14 88.21 P-11-A-292 and P-11-A-292.1 Smart Broadband, Inc. 231203485 01-Jun-14 49.20 P-11-A-293 and P-11-A-293.1 Smart Broadband, Inc. 234451216 01-Jul-14 156.67 P-11-A-294 and P-11-A-294.1 Smart Broadband, Inc. 231203985 01-Jun-14 49.20 P-11-A-296 Wayfair Tours, Inc. 3669 04-Jun-14 883.00 P-11-A-297 Wayfair Tours, Inc. 3623 29-May-14 1,211.00 P-11-A-298 Wayfair Tours, Inc. 3966 26-Jun-14 432.00 P-11-A-325 and P-11-A-325.1 PLDT PHILCOM 0237705407 01-Aug-14 47.62 P-11-A-326 and P-11-A-326.1 PLDT PHILCOM 0234384694 01-Jul-14 107.67 P-11-A-327 and P-11-A-327.1 PLDT PHILCOM 0234383651 01-Jul-14 191.96 P-11-A-328 PLDT PHILCOM 234451216 01-Jul-14 (156.67) P-11-A-329 and P-11-A-329.1 PLDT Smart Broadband, Inc. 0237773871 01-Aug-14 142.78 P-11-A-338 and P-11-A-338.1 Smart Broadband, Inc. 0227975806 01-May-14 88.21 P-11-A-339 and P-11-A-339.1 Smart Broadband, Inc. 0234451216 01-Jul-14 156.67 P-11-A-340 and P-11-A-340.1 Smart Broadband, Inc. 0235551353 01-Jul-14 98.40 P-11-A-342 Wayfair Tours, Inc. 4015 30-Jun-14 432.00 P-11-A-343 Wayfair Tours, Inc. 4352 30-Jul-14 978.00 P-11-A-353 JLD Travel & Tours Corp. 1348 08-Aug-14 280.94 P-11-A-366 and P-11-A-366.1 PLDT PHILCOM 0234383651 01-Jul-14 172.49 P-11-A-367 and P-11-A-367.1 PLDT PHILCOM 0237705591 01-Aug-14 97.36 P-11-A-368 and P-11-A-368.1 PLDT PHILCOM 0241009081 01-Sep-14 20.98 P-11-A-369 and P-11-A-369.1 PLDT PHILCOM 0241008041 01-Sep-14 65.46 P-11-A-370 and P-11-A-370.1 PLDT PHILCOM 0241008041 01-Sep-14 18.05 P-11-A-371 and P-11-A-371.1 PLDT Smart Broadband, Inc. 0237773871 01-Aug-14 49.20 P-11-A-375 Wayfair Tours, Inc. 4435 04-Aug-14 864.00 P-11-A-376 Wayfair Tours, Inc. 4537 08-Aug-14 883.00 P-11-A-377 Wayfair Tours, Inc. 4436 04-Aug-14 864.00 P-11-A-378 Wayfair Tours, Inc. 4437 04-Aug-14 864.00 P-11-A-379 Wayfair Tours, Inc. 4541 08-Aug-14 42.00 P-11-A-380 Wayfair Tours, Inc. 4542 08-Aug-14 84.00 P-11-A-381 Wayfair Tours, Inc. 4543 08-Aug-14 84.00 P-11-A-382 Wayfair Tours, Inc. 4613 14-Aug-14 451.00 P-11-A-383 Wayfair Tours, Inc. 4610 14-Aug-14 95.00 P-11-A-384 Wayfair Tours, Inc. 4612 14-Aug-14 42.00 P-11-A-385 Wayfair Tours, Inc. 4609 14-Aug-14 883.00 P-11-A-386 Wayfair Tours, Inc. 4660 15-Aug-14 299.00 P-11-A-387 Wayfair Tours, Inc. 4665 15-Aug-14 479.00 P-11-A-388 Wayfair Tours, Inc. 4662 15-Aug-14 479.00 P-11-A-389 Wayfair Tours, Inc. 4703 19-Aug-14 299.00 P-11-A-390 Wayfair Tours, Inc. 4703 19-Aug-14 299.00 P-11-A-391 Wayfair Tours, Inc. 4693 19-Aug-14 624.00 P-11-A-392 Wayfair Tours, Inc. 4694 19-Aug-14 271.00 P-11-A-393 Wayfair Tours, Inc. 4721 22-Aug-14 598.00 P-11-A-394 Wayfair Tours, Inc. 4753 23-Aug-14 479.00 P-11-A-395 Wayfair Tours, Inc. 4838 29-Aug-14 294.00 P-11-A-396 Wayfair Tours, Inc. 4815 29-Aug-14 534.00 P-11-A-409 and P-11-A-409.1 PLDT PHILCOM 0241009081 01-Sep-14 172.49 P-11-A-410 and P-11-A-410.1 PLDT PHILCOM 0244342640 01-Oct-14 206.17 P-11-A-412 and P-11-A-412.1 Smart Broadband, Inc. 0241075473 01-Sep-14 134.44 P-11-A-413 and P-11-A-413.1 Smart Broadband, Inc. 0241075003 01-Sep-14 49.20 P-11-A-419 Wayfair Tours, Inc. 4907 03-Sep-14 299.00 P-11-A-420 Wayfair Tours, Inc. 4902 03-Sep-14 5,980.00 P-11-A-421 Wayfair Tours, Inc. 4975 06-Sep-14 598.00 P-11-A-422 Wayfair Tours, Inc. 4977 06-Sep-14 598.00 P-11-A-423 Wayfair Tours, Inc. 5073 12-Sep-14 451.00 P-11-A-459, P-11-A-459.1, P-11-A-459.2 and P-11-A-459.3 PLDT PHILCOM 0244342640 01-Oct-14 172.49 P-11-A-460, P-11-A-460.1 and P-11-A-461 PLDT PHILCOM 0244343397 01-Oct-14 94.91 P-11-A-465 Smart Broadband, Inc. 0244410770 01-Oct-14 49.20 P-11-A-467 Wayfair Tours, Inc. 5311 27-Sep-14 655.00 P-11-A-468 Wayfair Tours, Inc. 5447 04-Oct-14 864.00 P-11-A-469 Wayfair Tours, Inc. 5432 03-Oct-14 1,310.00 P-11-A-470 Wayfair Tours, Inc. 5473 07-Oct-14 328.00 P-11-A-471 Wayfair Tours, Inc. 5508 08-Oct-14 682.00 P-11-A-472 Wayfair Tours, Inc. 5807 23-Oct-14 864.00 P-11-A-473 Wayfair Tours, Inc. 5796 23-Oct-14 642.00 P-11-A-474 Wayfair Tours, Inc. 5792 24-Oct-14 299.00 P-11-A-475 Wayfair Tours, Inc. 5864 27-Oct-14 902.00 P-11-A-506 and P-11-A-506.1 PLDT PHILCOM 0229859331 01-Nov-14 82.15 P-11-A-507 and P-11-A-508 PLDT PHILCOM 0229860097 01-Nov-14 65.45 P-11-A-525 Wayfair Tours, Inc. 5912 30-Oct-14 1,804.00 P-11-A-526 Wayfair Tours, Inc. 5927 31-Oct-14 69.00 P-11-A-527 Wayfair Tours, Inc. 5928 31-Oct-14 42.00 P-11-A-528 Wayfair Tours, Inc. 6016 05-Nov-14 902.00 P-11-A-529 Wayfair Tours, Inc. 6064 08-Nov-14 1,284.00 P-11-A-530 Wayfair Tours, Inc. 6200 14-Nov-14 432.00 P-11-A-531 Wayfair Tours, Inc. 6205 14-Nov-14 1,798.00 P-11-A-532 Wayfair Tours, Inc. 6210 14-Nov-14 328.00 P-11-A-533 Wayfair Tours, Inc. 6267 19-Nov-14 655.00 P-11-A-534 Wayfair Tours, Inc. 6324 22-Nov-14 432.00 P-11-A-535 Wayfair Tours, Inc. 6325 22-Nov-14 328.00 P-11-A-536 Wayfair Tours, Inc. 6342 26-Nov-14 451.00 P-11-A-537 Wayfair Tours, Inc. 6349 26-Nov-14 354.00 P-11-A-538 Wayfair Tours, Inc. 6409 28-Nov-14 887.00 P-11-A-573 and P-11-A-573.1 PLDT PHILCOM, INC. 0251083469 01-Dec-14 93.49 P-11-A-574 and P-11-A-574.1 PLDT PHILCOM, INC. 0251083849 01-Dec-14 129.05 P-11-A-579 Wayfair Tours, Inc. 6512 06-Dec-14 1,804.00 P-11-A-580 Wayfair Tours, Inc. 6570 11-Dec-14 864.00 P-11-A-581 Wayfair Tours, Inc. 6633 15-Dec-14 432.00 Total P200,184.83 Only the amount of P69,962.75 (P979,540.45 less the sum of P709,392.87 and P200,184.83) represents petitioner's valid input VAT on domestic purchases of services and goods other than capital goods, detailed as follows: HSCATc Exhibit Supplier Name Document No. Date Input VAT P-11-A-47 Absolute Essentials Traders, Incorporated 000500 21-Jan-14 P578.57 P-11-A-48 Bad- As Petron Station (Lourberto S. Lerio) 102550 05-Jan-14 32.14 P-11-A-49 Bad- As Petron Station (Lourberto S. Lerio) 102778 11-Jan-14 10.71 P-11-A-50 Bad- As Petron Station (Lourberto S. Lerio) 102816 13-Jan-14 53.57 P-11-A-51 Claver General Merchandise (Jerry S. Mainit) 001000 16-Jan-14 166.07 P-11-A-52 Claver General Merchandise (Jerry S. Mainit) 001053 16-Jan-14 128.57 P-11-A-73 Ocean Bounties Seafood Market & Restaurant (Ocean Bounties Fresh & Frozen Foods, Inc.) 006022 13-Jan-14 85.71 P-11-A-74 Ocean Bounties Seafood Market & Restaurant (Ocean Bounties Fresh & Frozen Foods, Inc.) 005965 21-Jan-14 82.50 P-11-A-75 Palma Superstore (Palma, Joselito Ramos) 15044 14-Jan-14 24.70 P-11-A-78 Rose Pharmacy, Inc. 6120 03-Jan-14 158.28 P-11-A-82 Almont Hotel & Inland Resort (Almont Hotel, Inc.) A2275 12-Feb-14 69.64 P-11-A-83 Brilliant Star Food Corporation 018128 07-Feb-14 512.04 P-11-A-84 Brilliant Star Food Corporation 018135 08-Feb-14 163.82 P-11-A-85 Brilliant Star Food Corporation 018138 09-Feb-14 104.25 P-11-A-86 Brilliant Star Food Corporation 018167 13-Feb-14 78.00 P-11-A-87 Butuan Grand Palace Restaurant (Karaga 4 Aces Development Corp.) 0454 05-Feb-14 48.75 P-11-A-88 Butuan Grand Palace Restaurant (Karaga 4 Aces Development Corp.) 0455 05-Feb-14 1,211.79 P-11-A-89 Doctor's Choice Pharmacy Co. 000687 26-Feb-14 6.21 P-11-A-90 Figaro Coffee Shop (Cebu Knots berry Food Corp.) 0167 09-Feb-14 43.18 P-11-A-91 Freemont Foods Corporation 6250 10-Feb-14 85.71 P-11-A-92 Gaisano Superstore (Interpace Corporation) 436430 10-Feb-14 79.59 P-11-A-93 Gerry's Grill (MM Cuisine Connoisseurs, Inc.) 0272 10-Feb-14 53.57 P-11-A-94 Gevans General Merchandise (Shaine Oliver V. Tamayo) 000076 08-Feb-14 10.71 P-11-A-95 Goat 2geder Hotel & Restaurant (Kim Lian T. Tan) 26980 09-Feb-14 157.93 P-11-A-96 Greenwich Golden Lion Pizza (Surigao) Corporation 31598 06-Feb-14 106.93 P-11-A-97 Greenwich Golden Lion Pizza (Surigao) Corporation 31639 15-Feb-14 68.14 P-11-A-98 Jollibee Golden Lion Foods (Surigao) Corporation 49268 09-Feb-14 57.86 P-11-A-99 Jollibee Golden Lion Foods (Surigao) Corporation 49261 08-Feb-14 72.43 P-11-A-100 Jollibee Golden Lion Foods (Surigao) Corporation 49279 11-Feb-14 103.50 P-11-A-101 Jollibee Golden Lion Foods (Surigao) Corporation 49326 15-Feb-14 37.93 P-11-A-102 Jollibee Golden Lion Foods (Surigao II) Corporation 15386 05-Feb-14 35.36 P-11-A-120 Mang Inasal Restaurant (L. Cubillan) 1572 15-Feb-14 22.18 P-11-A-121 Mang Inasal Restaurant (L. Cubillan) 1567 14-Feb-14 44.36 P-11-A-122 Nickel Sales Center (Jerick Chua Cubillan) 005843 27-Feb-14 86.79 P-11-A-123 Peng-U Ventures, Inc. 35846 11-Feb-14 128.57 P-11-A-124 Philippine Ports Authority CG-L0594149-5 07-Mar-14 334.26 P-11-A-125 PIGAR Trading (Pigar, Cesar So) 29101 19-Feb-14 26.79 P-11-A-130 Southwinds Hotel (Jose C. Agudo III) 97073 28-Feb-14 278.57 P-11-A-131 Surigaonon Visayan Marketing Corporation 58532 08 Feb-14 8.04 P-11-A-138 Webforge Philippines, Inc. PH16848 12-Feb-14 5,100.51 P-11-A-139 ASM FOODS (AURELIO S. MARASIGAN, JR.) 1327 04-Mar-14 92.14 P-11-A-140 ASM FOODS (AURELIO S. MARASIGAN, JR.) 917 24-Mar-14 41.57 P-11-A-141 CafeFrance Corp. 3173 27-Mar-14 36.32 P-11-A-142 Copylandia Office Systems Corporation 12964 25-Mar-14 334.82 P-11-A-161 Mercury Drug Corporation 58077 26-Feb-14 246.16 P-11-A-162 Moraco Food Corp. 4012 28-Feb-14 77.14 P-11-A-163 Philippine Ports Authority CG-L0594149-5 07-Mar-14 501.39 P-11-A-164 PHO NAM, INC. 1533 27-Mar-14 150.21 P-11-A-167 Rosario's Seafood Restaurant & Grillhouse Chinese Cuisine 1165 28-Mar-14 59.89 P-11-A-168 Rose Pharmacy, Inc. 48 09-Mar-14 117.32 P-11-A-169 Rose Pharmacy, Inc. 30 04-Mar-14 38.62 P-11-A-172 Smart Broadband, Inc. PGQOR000058916 12-Mar-14 19.44 P-11-A-173 Traknology, Incorporated 1039 01-Feb-14 5,760.00 P-11-A-174 Tri-Mix Enterprises (B. KIM LEASING & DEVELOPMENT CORPORATION) 55150 05-Mar-14 2.68 P-11-A-175 Uni-City General Merchandise, Inc. 2088 05-Mar-14 6.38 P-11-A-177 A. Zarate General Hospital (Albert L. Zarate) 103440 14-Jan-14 214.29 P-11-A-178 A. Zarate General Hospital (Albert L. Zarate) 106053 22-Apr-14 163.93 P-11-A-179 Absolute Essentials Traders, Incorporated 756 27-Mar-14 1,025.91 P-11-A-180 D & L Medical Equipments Supplies (Sheridan L. Castro) 88978 25-Jan-14 548.57 P-11-A-181 Doctor's Choice Pharmacy Co. 838 03-Apr-14 38.79 P-11-A-182 E. Simtoco Enterprises (Elisa T. Simtoco) 169640 29-Mar-14 19.29 P-11-A-183 Gaisano City-Mall (Unipace Corp.) 25034 04-Apr-14 166.07 P-11-A-184 Gaisano Superstore Butuan City Branch 439070 22-Apr-14 27.21 P-11-A-185 Jerome Anthony S. Asuncion, MD, FPOA 321 09-Apr-14 48.00 P-11-A-197 Mang Inasal Restaurant 1754 19-Apr-14 51.00 P-11-A-198 Megavalue Drugstore (MEGAVALUE TRADE SALES CORP.) 5472 11-Apr-14 590.61 P-11-A-199 Mercury Drug Corporation 637-10122 30-Jan-14 63.75 P-11-A-200 Mercury Drug Corporation 637-10090 14-Jan-14 13.50 P-11-A-201 Mercury Drug Corporation 637-10104 20-Jan-14 27.00 P-11-A-202 Mercury Drug Corporation 637-10100 19-Jan-14 158.14 P-11-A-203 Mercury Drug Corporation 637-10108 22-Jan-14 67.50 P-11-A-204 Mercury Drug Corporation 637-10110 25-Jan-14 24.43 P-11-A-205 Mercury Drug Corporation 637-10264 12-Apr-14 351.05 P-11-A-206 Mercury Drug Corporation 637-10283 22-Apr-14 517.18 P-11-A-207 Mercury Drug Corporation 114-32531 16-Jan-14 60.11 P-11-A-208 Mercury Drug Corporation 114-32534 17-Jan-14 66.86 P-11-A-209 Mercury Drug Corporation 114-32526 19-Jan-14 19.26 P-11-A-210 Mercury Drug Corporation 114-32536 21-Jan-14 53.04 P-11-A-211 Mercury Drug Corporation 531-10299 21-Jan-14 66.54 P-11-A-212 Oro Celestial Petron Service Station 454 11-Apr-14 107.14 P-11-A-213 Pigar Trading (Pigar Cesar So) 31856 07-Apr-14 66.96 P-11-A-214 Pigar Trading (Pigar Cesar So) 29794 03-Apr-13 72.86 P-11-A-215 Pigar Trading (Pigar Cesar So) 31852 06-Apr-14 33.43 P-11-A-218 Rose Pharmacy, Inc. 18102 30-Mar-14 52.04 P-11-A-219 Rose Pharmacy, Inc. 1380 09-Apr-14 94.18 P-11-A-224 C & C Pharmacy branch (Anecita C. Uy) 4277 20-Mar-14 112.53 P-11-A-225 C & C Pharmacy branch (Anecita C. Uy) 4743 16-Apr-17 15.75 P-11-A-226 Cagayan River View Inn & Restaurant (Tansitiam & Sons, Inc.) 31353 29-May-14 75.00 P-11-A-227 Greenwich Golden Lion Pizza (Surigao) Corporation 31887 23-Apr-14 90.86 P-11-A-239 Metrosphere Corporation Ellis Ecotel 26688 29-May-14 192.86 P-11-A-241 Philippine Ports Authority H000-000000002081 19-May-14 1,071.43 P-11-A-242 Philippine Ports Authority H000-000000002082 19-May-14 128.57 P-11-A-249 Starlane Caltex Station 756210 11-May-14 160.71 P-11-A-252 Asialink Central Mall, Incorporated 5644 02-May-14 97.29 P-11-A-253 Asialink Central Mall, Incorporated 5642 02-May-14 84.10 P-11-A-254 Bad-as Petron Station 109117 06-Jun-14 10.71 P-11-A-255 Dales Food Haus 18434 19-Jun-14 280.71 P-11-A-256 Gardenstate Enterprises, Inc. 123690 04-Jun-14 53.57 P-11-A-257 Greenwich (Fresh N' Famous Foods, Inc.) 508 02-Jul-14 97.61 P-11-A-258 Greenwich Golden Lion Pizza (Surigao) Corporation 32061 06-Jun-14 40.61 P-11-A-259 GV Hotel-Cagayan Branch (Vismin GV Hotel, Inc.) 9780 12-Jun-14 53.57 P-11-A-260 Jollibee Golden Lion Foods (Surigao) Corporation 49991 01-Jun-14 20.46 P-11-A-261 Jollibee Golden Lion Foods (Surigao II) Corporation 15827 20-Jun-14 47.36 P-11-A-262 Jollibee Golden Lion Foods (Surigao II) Corporation 15828 20-Jun-14 51.43 P-11-A-274 Lutong Bahay ni Aling Cora Restaurant (Corazon Uy Yu) 18187 19-Jun-14 131.57 P-11-A-275 Margarita Mobile Shop (Lim, Cindy Enrile) 35101 09-Jun-14 30.86 P-11-A-276 Margarita Mobile Shop (Cindy E. Lim) 1653 07-Jun-14 75.00 P-11-A-277 Marlowe S. Indo Internal Medicine & Neurology Clinic 64 18-Jun-14 60.00 P-11-A-278 Marlowe S. Indo Internal Medicine & Neurology Clinic 347 19-Jun-14 60.00 P-11-A-279 Mercury Drug Corporation 30253 29-May-17 53.04 P-11-A-280 Moon Caf (Cebu Knotsberry Foods Corporation) 599 17-Jun-14 80.79 P-11-A-281 New Family Drug & General Merchandise 209469 16-Jun-14 17.52 P-11-A-284 Ra PHOENIX GAS STATION 60538 25-Jun-14 125.25 P-11-A-285 Red Ribbon-Robinsons Butuan (Red Ribbon Bakeshop, Inc.) 333 21-May-14 69.64 P-11-A-286 Rosecake Specialties 2904 19-Jun-14 81.96 P-11-A-287 Rose Pharmacy, Inc. 25098 20-May-14 16.15 P-11-A-288 Rose Pharmacy, Inc. 24393 21-May-14 71.33 P-11-A-289 Rose Pharmacy, Inc. 17302 03-Jun-14 186.97 P-11-A-290 Rose Pharmacy, Inc. 347 02-Jun-14 93.86 P-11-A-295 Watsons Personal Care Stores (Phils.),Inc. 35298 21-May-14 31.07 P-11-A-299 YC Rainbow Food, Inc. 2142 25-Jun-14 51.00 P-11-A-300 American Technologies, Inc. 025038 03-Jul-14 21,565.42 P-11-A-301 A. Zarate General Hospital (Albert L. Zarate) 106786 21-May-14 32.14 P-11-A-302 A. Zarate General Hospital (Albert L. Zarate) 107600 18-Jun-14 32.14 P-11-A-303 Almirante Shell Super Station II (April Twinkle Almirante Corral) 70575 21-Jul-14 160.71 P-11-A-304 Bad-as Petron Station (Lourberto S. Lerio) 110777 15-Jul-14 16.07 P-11-A-305 Bad-as Petron Station (Lourberto S. Lerio) 108736 08-Jul-14 10.71 P-11-A-306 C & C Pharmacy-Branch (Anecita C. Uy) 13397 14-Jul-14 178.18 P-11-A-307 CD-R King Gen. Merchandise (Haleiwa International Corporation) 204152 18-Jul-14 72.86 P-11-A-308 Gaisano Superstore Butuan City Branch (Interpace Corporation) 471645 26-Jul-14 34.95 P-11-A-309 Greenwich Golden Lion Pizza (Surigao) Corporation 32171 04-Jul-14 48.96 P-11-A-310 Hemado Phoenix Fuel Business Trading (Ma. Theresa L. Docallos) 016357 14-Jul-14 107.14 P-11-A-311 Hotel Karaga, Inc. 2415 10-Jul-14 428.57 P-11-A-322 Ocean Bounties Seafood Market & Restaurant (Ocean Bounties Seafood Market and Restaurant) 007526 11-Jul-14 182.14 P-11-A-323 Philippine Ports Authority CG-L0594149-5 07-Mar-14 (334.26) P-11-A-324 Pigar Trading (Cesar So Pigar) 34328 12-Jul-14 111.86 P-11-A-330 Rose Pharmacy, Inc. 16320 11-Jul-14 90.54 P-11-A-331 Rose Pharmacy, Inc. 0054 21-Jun-14 193.90 P-11-A-332 Rose Pharmacy, Inc. 18130 16-Jul-14 186.94 P-11-A-333 Rose Pharmacy, Inc. 25207 01-Jul-14 28.65 P-11-A-334 Rose Pharmacy, Inc. 25178 20-Jun-14 148.19 P-11-A-335 Rose Pharmacy, Inc. 25177 20-Jun-14 123.94 P-11-A-336 Rose Pharmacy, Inc. 25199 27-Jun-14 162.80 P-11-A-337 Rose Pharmacy, Inc. 0411 21-Jun-14 188.12 P-11-A-344 Almirante Shell Super Station II 71033 05-Aug-14 160.71 P-11-A-345 Asia Link Shopping Center 8209 19-Jul-14 26.89 P-11-A-346 Bad-as Petron Station 111561 04-Aug-14 12.08 P-11-A-347 Bad-as Petron Station 110441 08-Aug-14 20.36 P-11-A-348 Bad-as Petron Station 110567 10-Aug-14 25.22 P-11-A-349 Dales Food Haus 019026 27-Aug-14 94.29 P-11-A-350 E.C. Nickel Drug Branch 032368 30-Jun-14 13.04 P-11-A-351 Goat 2geder Hotel & Restaurant 29275 07-Aug-14 45.54 P-11-A-352 Kingsway Inn 28336 19-Aug-14 160.71 P-11-A-360 Limbros Shell Service Station 20161 15-Aug-14 202.27 P-11-A-361 New Family Drug & General Merchandise 255233 13-Aug-14 17.81 P-11-A-362 Oro Celestial Petron Service Station 0770 14-Aug-14 107.14 P-11-A-363 Pearlmont Inn 180402 15-Aug-14 522.32 P-11-A-364 People's Choice Pharmacy 283574 19-Aug-14 122.16 P-11-A-365 People's Choice Pharmacy 283842 23-Aug-14 30.05 P-11-A-372 Rosario's Seafood Restaurant & Grillhouse Chinese Cuisine 001090 14-Aug-14 144.64 P-11-A-373 Southwinds Hotel 100487 21-Aug-14 390.00 P-11-A-374 Thaore De Oro Food Corporation 000120 14-Aug-14 142.02 P-11-A-397 1 Windsoar Hotel 1886 29-Sep-14 96.00 P-11-A-398 Almont Hotel & Inland Resort 7598 30-Sep-14 720.25 P-11-A-399 Almont Hotel & Inland Resort 10993 29-Sep-14 17.68 P-11-A-400 Co Ban Kiat Hardware, Inc. 544553 09-Sep-14 458.57 P-11-A-401 Gaisano Superstore Butuan City Branch 465940 22-Sep-14 43.23 P-11-A-402 Greenwich Golden Lion Pizza (Surigao) Corporation 32514 25-Sep-14 353.79 P-11-A-408 New Family Drug & General Merchandise 279403 12-Sep-14 16.39 P-11-A-411 Rose Pharmacy, Inc. 29962 05-Sep-14 74.79 P-11-A-414 Southwinds Hotel 100812 11-Sep-14 1,032.86 P-11-A-415 Starlane Caltex Station 775342 10-Sep-14 214.29 P-11-A-416 Surigaonon Visayan Marketing Corporation 79019 15-Sep-14 34.82 P-11-A-417 Surigaonon Visayan Marketing Corporation 77458 26-Aug-14 72.32 P-11-A-418 The Golden Peak Hotel & Suites 49157 05-Sep-14 321.43 P-11-A-424 Alba Copy Center 11662 08-Sep-14 143.36 P-11-A-425 Almont Hotel & Inland Resort 7391 05-Oct-14 104.47 P-11-A-426 Almont Hotel & Inland Resort 8142 19-Oct-14 139.29 P-11-A-427 A. Zarate General Hospital 105729 11-Apr-14 32.14 P-11-A-428 A. Zarate General Hospital 106034 22-Apr-14 227.68 P-11-A-429 A. Zarate General Hospital 109408 16-Aug-14 199.28 P-11-A-430 A. Zarate General Hospital 109422 06-Aug-14 32.14 P-11-A-431 Caf Breton 2308 24-Oct-14 103.71 P-11-A-432 Gaisano Superstore Butuan City Branch 460739 27-Oct-14 26.23 P-11-A-433 Gaisano Superstore Butuan City Branch 470805 01-Oct-14 100.61 P-11-A-434 Gerry's Grill 1597 15-Oct-14 403.93 P-11-A-435 Greenwich 0800 15-Oct-14 82.50 P-11-A-436 Janet C. De Grano, M.D. 2873 28-Oct-14 85.18 P-11-A-454 Mercury Drug 11289 17-Oct-14 4.90 P-11-A-455 New Family Drug & General Merchandise 295237 02-Oct-14 32.92 P-11-A-456 New Family Drug & General Merchandise 295331 02-Oct-14 12.19 P-11-A-457 Pats Electronics Shoppe 645035 09-Oct-14 225.00 P-11-A-458 Philippine Ports Authority BP21-000000075767 31-Oct-14 3,600.00 P-11-A-462 Princity, Inc. 000126 15-Oct-14 33.97 P-11-A-463 Rophacs Venture Corporation 07790 16-Sep-14 16.07 P-11-A-464 Rose Pharmacy, Inc. 2994 14-Oct-14 233.46 P-11-A-466 United Bookstore-Butuan 6968 01-Oct-14 53.57 P-11-A-476 YHL Commercial 2711 13-Sep-14 21.32 P-11-A-477 Asia Link Shopping Center (Melona Cuajao Regis) 8445 29-Oct-14 48.32 P-11-A-478 El Cielito Inn (Los Angeles Corporation) 107981 15-Nov-14 138.79 P-11-A-479 Gaisano Superstore Butuan City Branch (Interpace Corporation) 460112 22-Nov-14 33.69 P-11-A-480 Gerry's Grill (MM Cuisine Connoisseurs, Inc.) 1775 16-Nov-14 136.07 P-11-A-481 Jollibee Golden Lion Foods (Surigao II) Corporation 16355 30-Oct-14 109.93 P-11-A-482 L. Mailig Store (Lourdes G. Mailig) 174643 17-Jul-14 39.64 P-11-A-483 L. Mailig Store (Lourdes G. Mailig) 174644 17-Jul-14 39.64 P-11-A-484 L. Mailig Store (Lourdes G. Mailig) 174698 18-Jul-14 37.50 P-11-A-485 L. Mailig Store (Lourdes G. Mailig) 175054 23-Jul-14 27.86 P-11-A-486 Lasertech Copier Services (Elizalde L. Nepomuceno) 10831 16-Oct-14 115.71 P-11-A-487 Lasertech Copier Services (Elizalde L. Nepomuceno) 10822 16-Oct-14 144.86 P-11-A-488 Lasertech Copier Services (Elizalde L. Nepomuceno) 11365 11-Nov-14 15.00 P-11-A-499 New Family Drug & General Merchandise (Lance Lemuel Ling Lim) 338122 25-Nov-14 36.75 P-11-A-500 New Family Drug & General Merchandise (Lance Lemuel Ling Lim) 342530 01-Dec-14 31.97 P-11-A-501 Palma Commercial (James R. Palma) 004585 17-Jul-14 45.43 P-11-A-502 Palma Commercial (James R. Palma) 004584 17-Jul-14 49.60 P-11-A-503 Palma Commercial (James R. Palma) 005493 16-Sep-14 139.26 P-11-A-504 Pearlmont Inn (Perla G. Gotil) 183308 12-Nov-14 450.00 P-11-A-505 Philippine Spring Water Resources, Inc. 002424 29-Oct-14 70.57 P-11-A-509 Prince Plaza Hotel & Restaurant (Operated by: Baguio AY & F Co.,Inc.) 123317 11-Nov-14 320.89 P-11-A-510 Robinsons Department Store-Butuan (Owned and Operated by: Robinsons, Incorporated) 003515 18-Nov-14 822.68 P-11-A-511 Robinsons Department Store-Butuan (Owned and Operated by: Robinsons, Incorporated) 003526 23-Nov-14 208.47 P-11-A-512 Rosario's Seafood Restaurant & Grillhouse Chinese Cuisine (Operated by: New Rosario Food Corporation) 01808 26-Nov-14 156.96 P-11-A-513 Rose Pharmacy, Inc. 0166 13-Nov-14 24.20 P-11-A-514 Rose Pharmacy, Inc. 0402 21-Nov-14 48.22 P-11-A-515 Rose Pharmacy, Inc. 0407 24-Dec-14 81.95 P-11-A-516 Gaisano Superstore Butuan City Branch (Interpace Corporation) 144031 05-Jun-14 24.56 P-11-A-517 Southwinds Hotel (Jose C. Agudo III) 101656 27-Oct-14 125.36 P-11-A-518 Ultra Shell Motorist Center, Inc. 30404 27-Oct-14 107.14 P-11-A-519 Uni-City General Merchandise, Inc. 2848 19-Nov-14 363.32 P-11-A-520 Uni-City General Merchandise, Inc. 2867 19-Nov-14 62.14 P-11-A-521 Uni-City General Merchandise, Inc. 2868 19-Nov-14 72.86 P-11-A-522 Uni-City General Merchandise, Inc. 3155 30-Nov-14 171.42 P-11-A-523 Uni-City General Merchandise, Inc. 3153 30-Nov-14 183.00 P-11-A-524 Unite General Merchandise (Rosario Q. Co) 1457 29-Oct-14 55.71 P-11-A-539 Almont Hotel & Inland Resort (Almont Hotel Inc.) 8619 19-Dec-14 69.64 P-11-A-540 Asia Link Shopping Center (Melona Cuajao Regis) 8526 07-Dec-14 51.43 P-11-A-541 Bo's Coffee (Samping Realty and Development Corporation) 1839 14-Nov-14 43.93 P-11-A-542 Bo's Coffee (Samping Realty and Development Corporation) 1928 28-Nov-14 101.25 P-11-A-543 Claver Petron Station (Roland Entenia Mira) 19723 22-Dec-14 32.14 P-11-A-544 CD-R King Gen. Merchandise (Princess Sapphire Corporation) 215283 09-Nov-14 8.57 P-11-A-545 E. Simtoco Enterprises (Elisa T. Simtoco) 180961 17-Dec-14 6.75 P-11-A-546 Gerry's Grill (MM Cuisine Connoisseurs, Inc.) 1918 12-Dec-14 39.64 P-11-A-547 GMI Greatfit Makers, Inc. 17814 04-Dec-14 150.00 P-11-A-548 Hotel Karaga, Inc. 3269 05-Dec-14 85.71 P-11-A-549 Hotel Karaga, Inc. 3334 16-Dec-14 85.71 P-11-A-550 Hukad Butuan (VDCU Prince Hotel, Inc.) 1699 28-Nov-14 31.50 P-11-A-551 Hukad Butuan (VDCU Prince Hotel, Inc.) 1763 12-Dec-14 31.50 P-11-A-553 Karjel Photoshoppe (Lourdes Navales Go) 27339 17-Dec-14 52.07 P-11-A-554 Kenny Rogers Roasters (Epicurean Partners Exchange, Inc.) 6311 12-Dec-14 43.93 P-11-A-555 Lasertech Copier Services (Elizalde L. Nepomuceno) 9318 19-Aug-14 144.43 P-11-A-556 Laughing Buddha Food Corp. 17832 28-Nov-14 47.46 P-11-A-567 Mang Inasal Restaurant (L. Cubillan) 2454 16-Dec-14 12.32 P-11-A-568 Mercury Drug Corporation 611-10252 10-Dec-14 184.66 P-11-A-569 Mercury Drug Corporation 340-30679 22-Dec-14 215.14 P-11-A-570 Palma Commercial (James R. Palma) 4503 12-Jul-14 38.04 P-11-A-571 Palma Commercial (James R. Palma) 4704 26-Jul-14 28.71 P-11-A-572 Palma Commercial (James R. Palma) 9802 19-Dec-14 45.86 P-11-A-575 Southwinds Hotel (Jose C. Agudo III) 102614 21-Dec-14 139.29 P-11-A-576 Uni-City General Merchandise, Inc. 2590 01-Dec-14 91.05 P-11-A-577 Uni-City General Merchandise, Inc. 3261 03-Dec-14 280.13 P-11-A-578 Unite General Merchandise (Rosario Q. Co) 1419 10-Dec-14 1,227.32 P-11-A-582 Yahotsia Corp. 0716 28-Nov-14 47.14 P-11-A-583 Yahotsia Corp. 0785 12-Dec-14 37.61 Total P69,962.75 The valid input VAT of P69,962.75 should be reduced by P1,072.80, 63 a portion attributable to petitioner's declared Exempt Sales/Receipts, hence, leaving a balance of P68,889.95. EHaASD Since petitioner did not submit VAT invoices/receipts proving the existence of its reported input VAT carry-over from previous quarter in the amount of P21,001,409.58 64 and the valid input VAT on domestic purchases of services and goods other than capital goods after deducting the amount attributable to exempt sales/receipts is only P68,889.95, the net output VAT liability still has a balance of P117,582.54. 65 The remaining output VAT due of P117,582.54 shall be offset against the input VAT on importation of capital goods exceeding P1 million and non-capital goods attributable to the declared zero-rated sales/receipts, thus, leaving an excess input VAT of P26,319,682.31 (P26,437,264.85 minus P117,582.54). However, as stated earlier, petitioner was able to properly substantiate only the amount of P8,675,805,090.45 out of its total declared zero-rated sales/receipts of P8,800,661,932.71. Thus, the excess input VAT attributable to petitioner's valid zero-rated sales/receipts of P8,675,805,090.45 amounts only to P25,946,279.40, as computed below: IDTSEH Excess Input VAT attributable to declared zero-rated sales/receipts P26,319,682.31 Divided by declared zero-rated sales/receipts 8,800,661,932.71 Multiplied by valid zero-rated sales/receipts x 8,675,805,090.45 Refundable excess input VAT attributable to valid zero-rated sales/receipts P25,946,279.40 In fine, petitioner has sufficiently proven its entitlement to a refund in the amount of P25,946,279.40 representing its unutilized excess input VAT for the four quarters of CY 2014 which is attributable to its zero-rated sales/receipts for the same period. WHEREFORE ,in view of the foregoing, the instant Petition for Review is PARTIALLY GRANTED .Accordingly, respondent is ORDERED to refund or issue a tax credit certificate in favor of petitioner in the reduced amount of P25,946,279.40 representing its unutilized excess input VAT for the four quarters of CY 2014. DaIAcC SO ORDERED. (SGD.) CATHERINE T. MANAHAN Associate Justice Juanito C. Castaeda, Jr.,J. ,concurs. Footnotes 1. Stipulated Facts, Joint Stipulation of Facts and Issues (JSFI),Paragraph (par.) 1, Court docket, p. 109. 2. JSFI, Par. 2, Court docket, p. 110. 3. JSFI, docket, Par. 3, pp. 110-111. 4. JSFI, paragraph 4, Court docket, p. 111. 5. JSFI, paragraph 5, Court docket, p. 111. 6. JSFI, docket, paragraph 6, p. 111; Exhibits "P-1","P-1-A","P-1-B","P-1-C",and "P-2" Court docket, pp. 198-205. 7. Exhibit "P-7",Court docket, p. 212. 8. Exhibit "P-4",Court docket, p. 207. 9. Court Docket, pp. 51-55. 10. Id. ,pp. 57-68. 11. Resolution dated September 2, 2016, Court docket, p. 75. 12. Court Docket, pp. 77-78. 13. Id. ,pp. 79-87. 14. Id. ,pp. 88-91. 15. Id. ,pp. 109-114. 16. Id. ,pp. 119-123. 17. Motion to Commission an Independent CPA, Court docket, pp. 99-101. 18. Minutes of the Hearing dated January 23, 2017, Court docket, p. 130. 19. Exhibits "P-11" and "P-11-D",docket, pp. 135-141 and 181-184, respectively; Minutes of the Hearing dated March 29, 2017 and dated July 17, 2017, Court docket, pp. 155 and 185, respectively. 20. Exhibit "P-10",docket, pp. 144-153; Minutes of the Hearing dated March 29, 2017, Court docket, p. 155. 21. Court docket, pp. 187-197. 22. Id. ,pp. 388-389. 23. Minutes of the Hearing dated October 9, 2017, Court docket, p. 393. 24. Resolution dated December 12, 2017, Court docket, p. 426. 25. Court docket, pp. 400-416. 26. Id. ,pp. 418-424. 27. JSFI, Court docket, p. 111. 28. JSFI, paragraph 6, Court docket, pp. 111; Exhibits "P-1" to "P-1-C" and "P-2",Court docket, pp. 198 to 205. 29. Rohm Apollo Semiconductor Philippines vs. Commissioner of Internal Revenue ,G.R. No. 168950, January 14, 2015. 30. Silicon Philippines, Inc. (Formerly Intel Philippines Manufacturing, Inc.) vs. CIR ,G.R. No. 182737, March 2, 2016. 31. JSFI, paragraph 4, Court docket, p. 111. 32. Villaruz, Villaruz & Co.,CPAs through its Partner, Mr. George V. Villaruz. 33. Exhibit "P-11-B",Court docket, p. 10. 34. Total amount is P0.01 lower due to rounding-off. 35. Exhibit "P-8",Notes to Financial Statements for the years ended December 31, 2014 and 2013, Note 1.a, Court docket, p. 220. 36. Computed based on the peso equivalent of U$660,340.00 (P28,942,702.20). 37. An Act Providing for the Legal Framework and Mechanisms for the Creation, Operation, Administration, and Coordination of Special Economic Zones in the Philippines, Creating for this Purpose, the Philippine Economic Zone Authority (PEZA), and for Other Purposes. 38. G.R. No. 150154, August 9, 2005. 39. Now at 12% VAT rate. 40. Exhibits "P-11-B-59" to "P-11-B-70". 41. Exhibits "P-11-B-59.1" to "P-11-B-70.1". 42. Exhibits "P-11-B-105" to "P-11-B-141". 43. Exhibits "P-11-B-105.1" to "P-11-B-141.1". 44. Exhibits "P-11-B-142" to "P-11-B-143". 45. G.R. No. 153205, January 22, 2007. 46. Exhibits "P-11-B-71" to "P-11-B-104.2". 47. Exhibit "P-10",Q & A No. 5 (e),Court docket, p. 145. 48. Exhibits "P-11-A-42" to "P-11-A-42.5". 49. Exhibits "P-11-A-43" to "P-11-A-43.5". 50. Exhibits "P-11-A-44" to "P-11-A-44.5". 51. Exhibits "P-11-A-45" to "P-11-A-45.5". 52. Exhibit "P-1-C". 53. Lower by P77,511.01 when compared to the reported amount of P27,050,336.95. 54. Exhibit "P-10". 55. Exhibit "P-11-B",Findings and Observations, p. 8. 56. Per Schedule 3 of the Quarterly VAT Returns. 57. Id. 58. Lower by P0.97 due to rounding-off. 59. Per IEIRD. 60. Exhibits "P-11-A-42" to "P-11-A-45". 61. Exhibit "P-11-B". 62. BIR Records, pp. 440-442. 63. P69,962.75 x 1.5333885% (Allocation factor for exempt sales/receipts). 64. Exhibit "P-11-A-42",Line 20A. 65. Net Output VAT Payable (P186,472.49) minus P68,889.95.