Deutsche Knowledge Services Pte. Ltd. v. Commissioner of Internal Revenue

THIRD DIVISION [C.T.A. CASE NOS. 8510, 8546 & 8595. October 13, 2015.] DEUTSCHE KNOWLEDGE SERVICES PTE. LTD. , petitioner , vs. COMMISSIONER OF INTERNAL REVENUE , respondent . AMENDED DECISION FABON-VICTORINO , J p : This resolves the two (2) Motions for Partial Reconsideration separately filed by petitioner and respondent on May 28, 2015 1 and on May 29, 2015, 2 respectively, assailing the Decision 3 promulgated on May 8, 2015, the dispositive portion of which reads as follows: ITCcAD WHEREFORE , the Petitions for Review filed on June 28, 2012, September 27, 2012, and December 28, 2012 are PARTIALLY GRANTED . Accordingly, respondent Commissioner of Internal Revenue is hereby ORDERED TO REFUND or TO ISSUE A TAX CREDIT CERTIFICATE in favor of petitioner Deutsche Knowledge Services Pte. Ltd. the reduced amount of FIFTY-THREE MILLION FIFTY-EIGHT THOUSAND SEVEN HUNDRED SEVENTY-NINE PESOS AND 67/100 (P53,058,779.67) , representing its unutilized excess input VAT for the 2nd, 3rd, and 4th quarters of 2010 attributable to its zero-rated receipts for the same period. SO ORDERED . In the Resolution of June 11, 2015, petitioner and respondent were granted a period of fifteen (15) days within which to file their respective Comment/Opposition to each other's Motion for Partial Reconsideration . On July 9, 2015, petitioner filed its Comment/Opposition to respondent's Motion for Partial Reconsideration . Respondent, on the other hand, failed to file her Comment/Opposition to petitioner's Motion for Partial Reconsideration despite due notice, per Records Verification Report of the Judicial Records Division dated July 8, 2015. Respondent's Motion for Partial Reconsideration: In her motion partly assailing the Decision of May 8, 2015, respondent insists that petitioner's claim for refund should be denied in its entirety for its failure to submit complete documents in the administrative level required under Section 112 (C) of the NIRC of 1997, as amended. She argues that pursuant to Section 112 (C) of the NIRC, as amended, the 120-day audit period shall commence only after the submission of complete documents in support of the application filed with the Bureau of Internal Revenue (BIR) and only after the expiration of the said period may the taxpayer seek judicial intervention. aHECST In its Comment/Opposition thereto, petitioner denied respondent's contention saying that it submitted complete documents in support of its administrative claims for refund or issuance of tax credit certificate for its unutilized input VAT attributable to zero-rated sales for the 2nd, 3rd, and 4th quarters of 2010. Its supporting documents were submitted on January 31, 2012, May 3, 2012, and August 1, 2012, simultaneous with the filing of the respective administrative claims for refund with the BIR Large Taxpayers Regular Audit Division 3. Citing Commissioner of Internal Revenue vs. Team Energy Corporation , 4 petitioner contends that it is the taxpayer, and not the Commissioner of Internal Revenue, who determines what constitutes "complete documents" under Section 112 (C) of the NIRC of 1997, as amended. Respondent's motion must fail. In cases more than one, 5 this Court has consistently ruled that the alleged non-submission of complete documents at the administrative level is not fatal to a claim for refund in the judicial level. The Court En Banc , in the case of Commissioner of Internal Revenue vs. Philippine Airlines, Inc. , 6 ruled that: "It has been settled in several CTA en banc cases that judicial claims should not be denied on the sole ground that the taxpayer allegedly failed to submit before the BIR the complete documents in support of its administrative claim for refund. In the case of Philippine Bank of Communications vs. Commissioner of Internal Revenue , We passed upon the issue on the non-submission of supporting documents in the administrative level as NOT fatal to a claim for refund. The pertinent portion of the Decision provides: ' Non-submission of supporting documents in the administrative level is not fatal to a claim for refund. Judicial claims are litigated de novo and decided based on what has been presented and formally offered by the parties during the trial . In the case of CIR vs. Manila Mining Corporation , it was explained that 'Under Section 8 of RA 1125, the CTA is described as a court of record. As cases filed before it are litigated de novo , party litigants should prove every minute aspect of their cases.' Finally, pieces of evidence submitted in the administrative proceeding have no evidentiary value unless presented and formally offered before the Court.' EHACcT This Court is not barred from receiving, evaluating and appreciating evidence formally offered before it. Once the claim for refund has been elevated to the Court, the admissibility, materiality, relevancy, probative value and weight of evidence presented therein become subject to the Rules of Court. The question of whether or not the evidence submitted by a party is sufficient to warrant the granting of a claim for refund lies within the sound discretion and judgment of the Court . . ." (Emphasis supplied and citations omitted) To repeat, petitioner in the instant cases was able to sufficiently substantiate its judicial claim in accordance with law and jurisprudence to the satisfaction of the Court. Precisely the Court granted the prayer for refund or issuance of tax credit, albeit partially. Petitioner's Motion for Partial Reconsideration: In its motion, petitioner disagrees with the Court's conclusion that "[t]o be considered as non-resident foreign corporation doing business outside the Philippines, each entity must be supported, at the very least, by both Securities and Exchange Commission (SEC) certificate of non-registration of corporation/partnership and AMInet Company Profile Fact Sheet, Memorandum & Articles of Association, Certificate of Incorporation, and Certificate of Registration on Change o[f] Name" . According to petitioner, there is no law or regulation which expressly specifies or limits the document to prove that a non-resident foreign corporation is engaged in business conducted outside the Philippines under Section 108 (B) (2) of the Tax Code. Allegedly, the submission of certificate/articles of foreign incorporation/association is not necessary when the information provided therein can be supplied through other forms of documentation and evidence like: (1) the various business registration documents (Exhibit "HHH", inclusive of submarkings), which do not merely prove the organization of its foreign clients, but also show that its foreign clients are actually conducting business outside the country; and (2) the IntraGroup Service Agreements (Exhibit "GGG", inclusive of submarkings), which clearly indicate the place where its non-resident clients are doing business. Thus, petitioner submits that the following entities be considered as non-resident foreign corporations doing business outside the Philippines: Supported by SEC Certification Intragroup Foreign of Non- Service Registration Registration Agreements Documents Client (Exhibit No.) (Exhibit No.) (Exhibit No.) AO DB Securities (Kazakhstan) DB Consortio S. Cons. ARL "III-44" "GGG-342" to "HHH-529" to "GGG-347" "HHH-553" DB Finance, Inc. "III-21", - - "III-81" DB HedgeWorks LLC "III-23" - - DB International (Asia) Limited "III-22" "GGG-330" to - "GGG-332" DB Securities Services NJ, Inc. - "GGG-40" to "HHH-558" to "GGG-58" "HHH-564" DB Services New Jersey, Inc. "III-20", "GGG-40" to - "III-32" "GGG-58" DB Trust Company Limited Japan "III-22" "GGG-327" to - "GGG-329" Deutsche Asia Pacific Holdings Pte. Ltd. "III-42", "GGG-16" to "HHH-75" to "III-79" "GGG-18" "HHH-79" Deutsche Bank (Malaysia) Berhad "III-51" "GGG-75" to - "GGG-86", "GGG-90" to GGG-94" Deutsche Aktiengesellshaft Filiale Abu Dhabi - "GGG-180" to "HHH-88" to "GGG-182" "HHH-91" Deutsche Aktiengesellshaft Filiale Amsterdam "III-3", "GGG-183" to "HHH-1" to "III-30" "GGG-187" "HHH-19" Deutsche Aktiengesellshaft Filiale Bangkok "III-75" "GGG-221" to - "GGG-225" Deutsche Aktiengesellshaft Filiale Jakarta "III-71" "GGG-135" to - "GGG-242" Deutsche Aktiengesellshaft Filiale Labuan - "GGG-75" to - "GGG-86" Deutsche Aktiengesellshaft Filiale Mumbai "III-73" "GGG-226" to "HHH-217" to "GGG-229" "HHH-219" Deutsche Aktiengesellshaft Filiale Prague "III-10" "GGG-130" to - "GGG-134" Deutsche Aktiengesellshaft Filiale Riad "III-56" "GGG-188" to - "GGG-193" Deutsche Aktiengesellshaft Filiale Seoul "III-36", "GGG-252" to "HHH-38" to "III-70" "GGG-257" "HHH-40" Deutsche Aktiengesellshaft Filiale Taipei "III-64" "GGG-87" to - "GGG-89" Deutsche Aktiengesellshaft Filiale Tokyo "III-8", "GGG-263" to - "III-28" "GGG-270" Deutsche Aktiengesellshaft Filiale Wien "III-57" "GGG-72" to "HHH-166" to "GGG-74" "HHH-172" Deutsche Aktiengesellshaft Filiale Zurich "III-5", "GGG-205" to "HHH-21" to "III-59" "GGG-210" "HHH-23" Deutsche Aktiengesellshaft Filiale "III-2", "GGG-175" to - Inlandsbank "III-77" "GGG-179" Deutsche Bank Luxembourg S.A. "III-11" "GGG-271" to "HHH-52", "GGG-275" "HHH-265" to "HHH-275" Deutsche Bank National Trust Company "III-25" - - Deutsche Bank PBC Spolka Akcyjna "III-18", "GGG-317" to - "III-62" "GGG-321" Deutsche Bank Sociedad Anomina Espanola "III-4" - - Deutsche Bank Societa per Azioni "III-49", "GGG-282" to "HHH-519" to "III-60" "GGG-287" "HHH-528" Deutsche Bank Societa Trustees Malaysia - "GGG-75" to "HHH-554" to Berhad "GGG-86" "HHH-557" Global Markets Centre Private Limited "III-54" "GGG-339" to "HHH-565" "GGG-341" P.T. Deutsche Securities Indonesia "III-17" "GGG-309" to "HHH-83" "GGG-313" RREEF Management GMBH "III-24" "GGG-153" to "HHH-318" to "GGG-157" "HHH-321" RREEF Management L.L.C. - "GGG-40" to - "GGG-58" Reud Blass and CIE AG - "GGG-333" to "HHH-466" to "GGG-338" "HHH-479" Petitioner also seeks to set aside the disallowance of its claimed input VAT of P14,401,339.27, representing its out-of-period claims, citing Revenue Memorandum Circular (RMC) No. 42-03 which allegedly allows out-of-period claims. Petitioner as well pleads to reverse the disallowance of the amount of P14,817,885.67, representing its input VAT supported by invoices and Official Receipts (OR) wherein the input VAT was not separately indicated. It argues that the requirement of separately indicating the amount of input VAT in ORs and invoices is for the purpose of determining the exact amount of input tax due on the transaction. Petitioner opines that the substantiation requirement will still be served despite the absence of the required separate indication of input VAT as the input tax due may still be computed from the information in the ORs and invoices issued to it. The error belongs to its suppliers, hence, it should not be penalized for the same. Petitioner also gives premium to the report of the Court-commissioned Independent Certified Public Accountant (ICPA) to the effect that all its input VAT incurred on purchases of capital goods exceeding P1 Million for the 2nd, 3rd, and 4th quarters of CY 2010 are duly substantiated, hence, refundable. DaCTcA Lastly, petitioner disagrees with the Court's holding applying its substantiated input VAT for the 2nd, 3rd, and 4th quarters of CY 2010 against its output tax liability in the amount of P5,787,909.33 for the same period. According to petitioner, Section 4.110-7 (b) of Revenue Regulations (RR) No. 6-2005 ( sic ), in relation to Section 110 (B) of the NIRC of 1997, as amended, allows a taxpayer to apply the amount of its input tax carried over from the previous period to its output tax liability. It points out that its excess input tax carried over from the previous quarters is more than enough to cover its output tax liability for the 2nd, 3rd, and 4th quarters of CY 2010. Petitioner's motion is partly meritorious. On petitioner's disallowed zero-rated sales Consistent is the rule that to be considered a non-resident foreign corporation doing business outside the Philippines, each entity must be supported at the very least by the Certification of Non-Registration of Corporation/Partnership duly issued by the SEC and either the articles/certificate of foreign incorporation/association or printed screenshots of US SEC (or the official regulatory body of a particular jurisdiction) website showing the state/province/country where the entity was organized or any other equivalent document. To reiterate, each of the documents submitted by petitioner in the instant case, namely, the SEC Certifications of Non-Registration of Company; 7 Intragroup Service Agreements; 8 and various registration documents ( i.e. , Aminet Company Profile Fact Sheet, Memorandum of Association & Articles of Association, Certificate of Incorporation and Certificate of Registration on Change on Name) 9 on their own are deemed insufficient. While the SEC Certificates of Non-Registration show that the entities named therein are not registered corporations/partnerships in the Philippines, it does not indicate, much more prove, that such entities are non-resident foreign corporations doing business outside the Philippines. The same with the service agreements which only show the names and addresses of petitioner's customers to whom it renders services. Also, with the AMinet Company Profile Fact Sheet, Memorandum and Articles of Association, Certificate of Incorporation, and Certificate of Registration on Change on Name which only establish that the entities named therein were incorporated/organized abroad but not necessarily not doing business in the Philippines. Moreover, the various foreign registration documents presented by petitioner on which it relied its present action could not be given probative value as they were written or printed in foreign language without English translation. There was no way by which the Court might be able to determine the contents thereof and ascertain the name of the entity indicated therein as well as the attestations/certifications made. ACIEaH As tax refunds are in the nature of tax exemptions, there is need to employ a stricter standard in determining whether the submissions filed by the taxpayer is sufficient to support his claim for refund or issuance of tax credit certificate. On petitioner's out-of-period claim Petitioner submits that the disallowance of the out-of-period claims is untenable given that RMC No. 42-03 specifically allows it. The Court is not convinced. Petitioner should declare the input VAT in the corresponding taxable quarters when the purchases of goods were consummated or when the purchases of services were paid, as the case may be, pursuant to Section 110 (A) (2) of the National Internal Revenue Code (NIRC) of 1997, as amended, which reads as follows: SEC. 110. Tax Credits . (A) Creditable Input Tax . xxx xxx xxx (2) The input tax on domestic purchase or importation of goods or properties by a VAT-registered person shall be creditable: (a) To the purchaser upon consummation of sale and on importation of goods or properties; and (b) To the importer upon payment of the value-added tax prior to the release of the goods from the custody of the Bureau of Customs. Provided, That the input tax on goods purchased or imported in a calendar month for use in trade or business for which deduction for depreciation is allowed under this Code, shall be spread evenly over the month of acquisition and the fifty-nine (59) succeeding months if the aggregate acquisition cost for such goods, excluding the VAT component thereof, exceeds One million pesos (P1,000,000): Provided, however, That if the estimated useful life of the capital good is less than five (5) years, as used for depreciation purposes, then the input VAT shall be spread over such a shorter period: Provided, finally, That in the case of purchase of services , lease or use of properties, the input tax shall be creditable to the purchaser , lessee or licensee upon payment of the compensation , rental, royalty or fee. (Emphasis supplied) The discussion of the Court on the foregoing provision in the case of Lepanto Consolidated Mining Co. vs. CIR , 10 is instructive, thus: cDCSET The alleged unutilized input VAT of P5,820,863.87 should be denied since the supporting invoices and official receipts thereof bore dates which were earlier than the period of petitioner's claim. Section 110(A)(2) of the 1997 Tax Code provides: 'Sec. 110. Tax Credits . A. Creditable Input Tax . 2. The input tax on domestic purchases of goods or properties shall be creditable: (a) To the purchaser upon consummation of sale and on importation of goods or properties; and However, in the case of purchases of services, lease or use of properties, the input tax shall be creditable to the purchaser, lessee or licensee upon payment of the compensation, rental, royalty or fee.' It is clear from the above-quoted provisions of law that for purchases of goods, the corresponding input value added taxes of which is creditable to the purchaser upon consummation of sale, that is, upon the issuance of the corresponding invoice. On the other hand, for purchases of services, the corresponding input value added taxes of which is creditable to the purchaser upon payment of compensation, rental, royalty or fee, that is, upon the date of official receipt. Section 110(A) is explicit. It states 'upon consummation', in the case of domestic purchases of goods, and 'upon payment', in the case of purchases of services. It does not provide any qualification, such as 'upon delivery of invoice or official receipt' which is the main thesis of petitioner's contention. IAcDET In a resolution of the case entitled Telecommunications Technologies Philippines, Inc. vs. Commissioner of Internal Revenue , CTA Case No. 6168, promulgated on July 28, 2004, this Court elucidated that 'the input VAT on domestic purchases of goods or properties shall be allowed as tax credit to the purchaser upon consummation of sale, which means upon issuance by the seller of the VAT sales invoice evidencing the sale of goods/properties. On the other hand, the input VAT on purchases of services shall be available as tax credit to the purchaser only upon payment of the compensation or fee i.e. , upon issuance by the seller of the VAT official receipt evidencing receipt of the payment for services performed or yet to be performed.' Thus, it is indubitable on the part of the petitioner to declare the input value added taxes on domestic purchases of goods and services at the end of the corresponding taxable quarter where purchases of goods were consummated, as evidenced by VAT invoice and for payment of services, as evidenced by VAT official receipt. Therefore, the amount of input VAT of P5,820,863.87 which is supported by VAT invoices and official receipts dated earlier than the period of petitioner's claims can no longer be claimed for refund pursuant to Section 110(A) in relation with Section 112(A) of the 1997 National Internal Revenue Code. In fine, petitioner's claimed input VAT on purchases of goods/services supported by invoices/OR dated outside the period of claim cannot be considered since the input taxes should have been declared in the corresponding taxable quarter when the purchases of goods were consummated or when purchases of services were paid pursuant to Section 110 (A) (2) in relation to Section 112 (A) of the NIRC of 1997, as amended. On petitioner's input taxes not separately indicated in the receipts/invoices Petitioner also insists that it should not be penalized for its client's error in not separately indicating the amount of VAT in the OR's. The law is however clear. Section 113 (B) (2) (a) of the NIRC of 1997, as amended, provides: "SEC. 113. Invoicing and Accounting Requirements for VAT-registered Persons . 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: TSHEIc xxx xxx xxx (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: (a) The amount of the tax shall be shown as a separate item in the invoice or receipt;" (Emphasis supplied) Hence, input taxes covered with invoices or ORs wherein the amount of input VAT was not separately indicated were properly disallowed for it was in violation of Section 113 (B) (2) (a) of the NIRC of 1997, as amended. On applying petitioner's input VAT for the 2nd, 3rd and 4th quarters of CY 2010 against its output VAT liability for the same period instead of its input VAT carried over from previous quarters. Citing Section 110 (B) of the 1997 NIRC, as amended, in relation to Section 4.110-7 (b) of RR No. 6-2005 ( sic ), petitioner asserts that a taxpayer may apply the amount of its input VAT carried over from the previous period to its output VAT liability. The Court does not agree. Under the NIRC of 1997, specifically Section 110, the rule is that any input tax shall be creditable against the output tax only if it is evidenced by a VAT invoice or official receipt. Quoted below is the relevant portion of the said provision: "SEC. 110. Tax Credits . "(A) Creditable Input Tax . "(1) Any input tax evidenced by a VAT invoice or official receipt issued in accordance with Section 113 hereof on the following transactions shall be creditable against the output tax : . . ." (Emphasis supplied) In this case, petitioner failed to present and offer in evidence any VAT invoice or official receipt to support the "Input Tax Carried Over from Previous Quarter" which petitioner seeks to be credited or charged against its output VAT liability for the 2nd, 3rd, and 4th quarters of CY 2010. On petitioner's input VAT on purchases of capital goods exceeding one (1) million pesos As aptly found by the ICPA, out of the P2,573,272.70 input VAT claim on capital goods exceeding P1 Million, only P2,099,626.27 is duly substantiated in accordance with law and regulations: aSIHcT Accounted as: CY 2010 Per Return Substantiated Disallowed per Input VAT ICPA findings 2nd Quarter P824,557.71 P373,211.78 P451,345.93 3rd Quarter 517,803.43 517,803.43 - 4th Quarter 1,230,911.56 1,208,611.06 22,300.50 Total P2,573,272.70 P2,099,626.27 P473,646.43 =========== =========== =========== The ICPA disallowed the input VAT of P451,345.93 on the ground that the supporting sales invoices were not dated within the period of claim, detailed as follows: 11 Invoice Date of Supplier Number Invoice Input VAT Accent Micro Technologies, Inc. 109303 3/9/2010 P439,066.07 Accent Micro Technologies, Inc. 109683 3/25/2010 1,347.43 Accent Micro Technologies, Inc. 109734 3/26/2010 4,180.50 Accent Micro Technologies, Inc. 109736 3/26/2010 2,571.43 Accent Micro Technologies, Inc. 109754 3/26/2010 4,180.50 P51,345.93 ========= With regard to the input VAT of P22,300.50 pertaining to petitioner's purchases from Accent Micro Technologies, Inc. purportedly under invoice number 111493 dated June 8, 2010, 12 the ICPA found that it has no supporting sales invoice. In the assailed Decision, the Court held that out of the P373,211.78 and P517,803.43 totalling P891,015.21 substantiated input VAT on capital goods exceeding P1 Million for the second and third quarters of CY 2010, only the amount of P137,648.00 is creditable for the said taxable quarters pursuant to Section 110 (A) (2) of the NIRC of 1997, as amended. As to the fourth quarter of CY 2010, this Court noted that in the schedule 13 of input VAT submitted by petitioner, the purchases were classified only by either "Goods" or "Services" without distinctively classifying the capital goods exceeding P1 million in the amount of P1,230,911.56. Hence, the Court allowed the entire amount of P1,208,611.06 as creditable input VAT for the fourth quarter of CY 2010. But as correctly pointed out by petitioner, based on Schedule 3 14 (Purchases/Importation of Capital Goods Aggregated Amount Exceeds P1 Million) of its Quarterly VAT Return for the fourth quarter of CY 2010, the input VAT of P1,230,911.56 pertains to capital goods exceeding P1 Million purchased on December 01, 2010 with estimated useful life of 48 months. Hence, the substantiated amount of P1,208,611.06 out of the total input VAT claim of P1,230,911.56 shall be amortized as follows: CSEHcT Allowable Input Month Useful Life Monthly Input VAT for the 4th Acquired Input VAT (in months) Tax Credit Quarter of 2010 Dec. 2010 P1,208,611.06 48 P25,179.40 P25,179.40 In fine, the amount of P70,989,948.30 substantiated input taxes for the 2nd, 3rd, and 4th quarters of CY 2010 as found in the May 8, 2015 Decision, shall be reduced to P69,332,870.21, computed as follows: 2nd Quarter 3rd Quarter 4th Quarter Total Input VAT Claim P41,465,493.51 P35,225,151.47 P43,150,363.14 P119,841,008.12 Less: Disallowances Per ICPA Findings P9,555,114.73 P3,534,112.42 P17,448,022.10 P30,537,249.25 Per this Court's further verification 8,036,029.91 4,898,360.14 4,626,053.31 17,560,443.36 Input VAT on Purchase of Capital Goods exceeding P1 Million 824,557.71 517,803.43 1,230,911.56 2,573,272.70 Less: Allowable Input Tax Credit for the Period of Claim (69,707.00) (67,941.00) (25,179.40) (162,827.40) Total Disallowances P18,345,995.35 P8,882,334.99 P23,279,807.57 P50,508,137.91 Substantiated excess Input VAT P23,119,498.16 P26,342,816.48 P19,870,555.57 P69,332,870.21 ============ ============ ============ ============ Subsequently, only the excess input VAT of P63,544,960.88 can be attributed to the entire zero-rated receipts declared by petitioner in the amount of P5,288,593,152.05 and only the input VAT of P51,726,310.11 is attributable to the valid zero-rated receipts of P4,241,066,062.98, as computed below: 2nd Qtr 2010 3rd Qtr 2010 4th Qtr 2010 Total Substantiated Input VAT P23,119,498.16 P26,342,816.48 P19,870,555.57 P69,332,870.21 Output Tax Due 1,204,717.15 3,443,351.07 1,139,841.11 5,787,909.33 Excess Input VAT P21,914,781.01 P22,899,465.41 P18,730,714.46 P63,544,960.88 Valid Zero-Rated Receipts P1,320,006,170.61 P1,457,036,341.73 P1,464,023,550.64 P4,241,066,062.98 Total Declared Zero-Rated Receipts P1,431,219,805.14 P1,930,688,594.64 P1,926,684,752.27 P5,288,593,152.05 % of Valid Zero-Rated Receipts to Total Declared 92.2294511% 75.4671854% 75.9866682% Zero-Rated Receipts Multiplied by Excess Input VAT P21,914,781.01 P22,899,465.41 P18,730,714.46 P63,544,960.88 Excess Input VAT Attributable to Valid Zero Rated Receipts P20,211,882.24 P17,281,582.02 P14,232,845.85 P51,726,310.11 =============== =============== =============== =============== WHEREFORE , respondent's Motion for Partial Reconsideration is DENIED for lack of merit. On the other hand, petitioner's Motion for Partial Reconsideration is hereby PARTIALLY GRANTED . The May 8, 2015 Decision of the Court is hereby MODIFIED . Accordingly, respondent Commissioner of Internal Revenue is hereby ORDERED TO REFUND or TO ISSUE A TAX CREDIT CERTIFICATE in favor of petitioner Deutsche Knowledge Services Pte. Ltd. the reduced amount of FIFTY-ONE MILLION SEVEN HUNDRED TWENTY-SIX THOUSAND THREE HUNDRED TEN PESOS and 11/100 (P51,726,310.11) , representing its unutilized excess input VAT attributable to its zero-rated sales for the second, third and fourth quarters of calendar year 2010. SO ORDERED. IASTDE (SGD.) ESPERANZA R. FABON-VICTORINO Associate Justice Lovell R. Bautista and Ma. Belen M. Ringpis-Liban, JJ., concur . Footnotes 1. Docket, pp. 1414-1433. 2. Docket, pp. 1435-1440. 3. Docket, pp. 1307-1392. 4. CTA EB No. 652, October 4, 2011. 5. Commissioner of Internal Revenue vs. San Roque Power Corporation , CTA EB Case No. 657, April 4, 2012; Commissioner of Internal Revenue vs. Panay Power Company , CTA EB Case No. 683, November 29, 2011; Commissioner of Internal Revenue vs. Toledo Power Company , CTA EB Case No. 589, Resolution dated January 12, 2011; and C ommissioner of Internal Revenue vs. CE Luzon Geothermal Power Company, Inc ., CTA EB Case No. 474, September 1, 2009. 6. CTA EB Case No. 775, Resolution dated November 13, 2012. 7. Exhibits "III-1" to "III-84" and "AA" to "AA-2". 8. Exhibits "GGG-1" to "GGG-401" and "Y" to "Y-3". 9. Exhibits "HHH-1" to "HHH-565", "X" to "X-2", and "Z" to "Z-2". 10. CTA Case Nos. 6368 and 6480, December 15, 2004. 11. Exhibit "JJJ", Annex A.3. 12. Exhibit "JJJ", Annex A.1. 13. Exhibit "JJJ", Annex B, pp. 181-267. 14. Exhibit "DDD-12".