SANDOZ PHILIPPINES CORPORATION v. COMMISSIONER OF INTERNAL REVENUE

REPUBLIC OF THE PHILIPPINES COURT OF TAX APPEALS QUEZON CITY SPECIAL SECOND DIVISION SANDOZ PHILIPPINES CTA CASE N0.11060 CORPORATION, Petitioner, Members: -versus- RINGPIS-LIBAN, PJ Chairperson, MODESTO-SAN PEDRO, and FERRER-FLORES, JJ. COMMISSIONER OF Promulgated: INTERNAL REVENUE, Respondent. JUL _ ---- q:~ .....-- - )( - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - ~- - - - - - - - - - - )( DECISION MODESTO-SAN PEDRO, J.: The Case This Petition for Review filed on January 4, 2023, prays for the refund or issuance ofta)( credit certificate in the amount ofP81 ,970,841.12, allegedly representing petitioner's Value-Added Ta)( ("VAT") erroneously paid during the period January 1, 2021 to December 31, 2021 on its importations of prescription drugs and medicines for diabetes, high cholesterol and hypertension, as well as prescription drugs and medicine for cancer, mental illness and kidney diseases. 1 The Parties Petitioner Sandoz Philippines Corporation is a domestic corporation duly organized and existing under Philippine law,2 with principal office address at 5th- 6th Floor, Ayala North E)(change Tower 1, Ayala Avenue, cor. 1 Summary ofthe Case, Pre-Trial Order, Docket- Vol. I, p. 392. See Exhibit "P-1" (SEC Certificate of Filing of Amended Articles of Incorporation), Docket- Vol. II, p.~ 612.

DECISIOI\ CTA CASE NO. II 060 Page 2 of24 Salcedo and Amorsolo Streets, Makati City.3 It is also registered with the Bureau of Internal Revenue ("BIR") as a VAT taxpayer, with Taxpayer's Identification No. ("TIN") 220-706-109-00000.4 Respondent Commissioner of Internal Revenue is sued in his official capacity, having been duly appointed and empowered to perform the duties of his office, including, among others, the duty to act on and approve claims for refund as provided by law. He may be served with summons, notices and other court processes at the Legal Division, Bureau of Internal Revenue, RR8A- Makati City, 361h Fir. Exportbank Plaza Bldg., Sen. Gil Puyat Ave. cor. Chino Roces Ave., Makati City.5 The Facts On December 29, 2022, petitioner filed with the BIR a Letter and an Application for Tax Credits/Refunds (BIR Form No. 1914), based on Section 109(l)(AA) ofthe National internal Revenue Code of1997, ("the Tax Code") as amended by Republic Act ("R.A. ")Nos. 114676 and 11534,7 for the taxable year ("TY") 2021 amounting to P81,970,841.12.8 The following summarizes petitioner's importations forTY 2021: Item Imported VAT Payment SSDT No.9 Date of Payment (ddlmmlyyyy) EKOSART !OOMG 30FCT VI PH P561,768.53 R4400 05/01/2021 AVAMAX 80MG 30FCT UD PH 188,046.13 R4400 05/01/2021 EKOSART IOOMG 30FCT VI PH 286,226.37 R4400 05/01/2021 CRESART SDZ 40MG 30FCT UD PH 65,150.83 R 6695 06/01/2021 CRESART SDZ 20MG 30FCT UD PH 71,230.29 R 7925 07101/2021 XANTOR IOMG IOOFCT PH 136,758.78 R 7925 07/0112021 RITEMED OLMESARTAN 20MG 30FCT UDPH 32,138.74 R 7925 07/01/2021 XANTOR40MG TAB IOOS CARDJOVASC I OMG TAB IOO'S 272,616.57 R 6697 06/01/2021 AVAMAX 80MG 30FCT UD PH 692,783.35 R 30207 18/01/2021 CARDIOVASC IOMG TAB IOO'S 198,375.14 R 36139 20/0I/202I RITEMED AMLODIPINE 5MG IOOTAB 689,108.08 R 44778 25/01/2021 VI PH RITEMED AMLODIPINE 5MG lOOTAB 183,640.96 R 44779 25/0112021 VI PH RJTEMED AMLODIPINE 5MG IOOTAB 169,724.54 R 47420 26/0I/202I VI PH 176,127.28 R 44777 25/0I/202I ( Par. 3, Petition for Review, Docket- Vol. I, p. 8. 4 Exhibit "P-4", Docket- Vol. II, pp. 624 to 626. 5 Par. 2, Summary of Admitted Facts, Joint Stipulation of Facts and Issues, Docket- Vol. I, p. 375. 6 An Act Amending Sections I09,141, 142, 143,144, 147, 152, 263, 263-A, 265, and 288-A, and Adding a New Section 290-A to Republic Act No. 8424, as amended, Otherwise Known as the National Internal Revenue Code of 1997, and for Other Purposes. 7 An Act Reforming the Corporate Income Tax and Incentives System, Amending for the Purpose Sections 20, 22, 25, 27, 28, 29, 34, 40, 57, 109, 116,204 and 290 ofthe National Internal Revenue Code of 1997, as Amended, and Creating Therein New Title Xlll, and for Other Purposes, otherwise known as "Corporate Recovery and Tax Incentives for Enterprises Act" or "CREATE". 8 Exhibits "P-741" to "P-742", with sub-markings, Docket- Vol!!, pp. 628 to 722. 9 Exhibits "P-I 009-C.l" to "P-I 009-C.I85".

DECISIO~ CTA CASE NO. 11060 Page 3 of24 LODINE 5MG IOOPRT PH 88,794.26 R 47070 26/01/2021 26/01/2021 RITEMED FELODIPINE 5MG IOOPRT UD 99,431.90 R 47070 PH 05/02/2021 RITEMED AMLODIPINE 5MG IOOTAB 352,219.52 R 54312 VI 05/02/2021 176,056.15 R 70840 08/02/2021 CO-TAREG 80+12.5MG 28FCT PH 623,552.06 R 76066 08/02/2021 121,309.14 R 76068 TAREG 80MG 28FCT PH 15/02/2021 591,862.90 R 90163 VERAL 240MG IOOPRT UD PH 506,003.82 R 93209 RITEMED AMLODIPINE 1OMG 1OOTAB VI PH 358,674.40 R 90366 31,596.63 R 97541 RITEMED AMLODIPINE 1OMG IOOTAB 16/02/2021 VI PH 108,477.87 R 112945 CARDIOVASC 5MG IOOTAB VI PH 932,986.98 R 131654 15/02/2021 843,816.96 R 136365 18/02/2021 FREPAN 8MG 30TAB PH 173,739.70 R 153230 366,740.75 R 172862 RITEMED FELODIPINE 5MG IOOPRT UD 318,034.19 R 31246 26/02/2021 PH 194,307.69 R 174665 173,416.32 R 174665 TAREG 160MG 28FCT PH 08/03/2021 140,416.53 R 174665 TAREG 80MG 28FCT PH 10/03/2021 270,852.73 R 183165 CARDIOVASC 5MG IOOTAB VI PH 17/03/2021 120,141.10 R 185596 PROSTERA 5MG 30TAB PH 433,147.51 R 36344 24/03/2021 253,131.43 R 203662 I 249,369.19 R 203661 GLICLAZIDE 500KG 252,169.43 R 226936 22/03/2021 254,195.80 R 226937 PROSTERA 2MG 90TAB PH 251,436.42 R 226938 25/03/2021 I 252,229.73 R 226939 ROSALTA 20MG 30FCT PH 251,011.02 R211442 25/03/2021 252,959.62 R 210918 RITEMED ROSUVASTATIN 20MG 226,127.49 R211441 I 30FCT UD PH R210642 RITEMED AMLODIPINE 5MG IOOTAB 97,064.10 R210639 25/03/2021 VI PH 168,599.24 R213748 I 165,386.64 VIVASARTAN 50MG 30FCT VI PH R 213748 29/03/2021 I 147,352.05 R213748 AVAMAX 40MG I OOFCT PH 287,312.43 R 213745 ' 208,550.39 R 228821 140,708.97 30/03/2021 R 232306 444,636.74 06/04/2021 R 232305 LOSARTAN POTASSIUM 50MG 30FCT 615,064.68 08/04/2021 R 232309 08/04/2021 LOSARTAN POTASSIUM 50MG 30FCT 442,384.05 R 232586 LOSARTAN POTASSIUM 50MG 30FCT 74,298.13 19/04/2021 R 232586 19/04/2021 LOSARTAN POTASSIUM 50MG 30FCT 112,588.04 R 232587 LOSARTAN POTASSIUM 50MG 30FCT 129,771.30 R 235547 19/04/2021 324,361.89 R 238097 19/04/2021 LOSARTAN POTASSIUM 50MG 30FCT 293,106.64 R 245190 12/04/2021 292,472.49 R245192 12/04/2021 LOSARTAN POTASSIUM 50MG 30FCT R245192 12/04/2021 77,656.40 12/04/2021 LOSARTAN POTASSIUM 50MG 30FCT 151, 188.21 LOSARTAN POTASSIUM 50MG 30FCT LOSARTAN POTASSIUM 50MG 30FCT AVAMAX IOMG IOOFCT PH 12/04/2021 RITEMED ROSUVASTATIN IOMG 13/04/2021 30FCT UD PH FREPAN 16MG 30TAB PH 13/04/2021 13/04/2021 ROBESTAR IOMG 30FCT PH 13/04/2021 20/04/2021 XANTOR 20MG IOOFCT PH IRBENOX 150MG 28FCT PH RITEMED AMLODIPINE 5MG IOOTAB 21/04/2021 VI PH VIVASARTAN IOOMG 30FCT V2 PH 21/04/2021 RITEMED AMLODIPINE 5MG IOOTAB 21/04/2021 VI PH RITEMED FELODIPINE 5MG IOOPRT UD 21/04/2021 PH RTM VERAPAMIL 240MG IOOPRT UD 21/04/2021 PH 21/04/2021 RM GLIMEPIRIDE 2MG 22/04/2021 23/04/2021 LOSARTAN POTASSIUM IOOMG 30FCT 26/04/2021 26/04/2021 LOSARTAN POTASSIUM 100MG 30FCT 26/04/2021 LOSARTAN POTASSIUM 100MG 30FCT r GLICLAZIDE 30MG 60PRT PH FREPAN 8MG 30TAB PH - -

DECISION CTA CASE NO. 11060 Page 4 of24 PROLOHEX 100MG TAB IOO'S (IFG) 91,468.94 R 178603 29/04/2021 VIVASARTAN 50MG 30FCT VI PH 446,420.58 R 187757 05/05/2021 GLICLAZIDE 30MG 60PRT PH R 300850 18/05/2021 PROSTERA 2MG 90TAB PH 69,517.78 R 300850 18/05/2021 ROB ESTAR 20MG 30FCT PH I0 I, 140.20 R 300850 18/05/2021 CARDIOVASC 5MG 100TAB VI PH 306,069.80 R 291521 14/05/2021 EKOSART 50MG 30FCT VI PH 794,560.72 R 206199 18/05/2021 AMBESYL 5MG 30TAB VI PH R 298292 17/05/2021 RIMEPRIL SDZ 2MG I OOTAB PH 8,047.12 R 304824 19/05/202 I RITEMED AMLODIPINE IOMG IOOTAB 1,134,983.26 VI PH R 353984 07/06/2021 VALCAMP 80+5MG 7FCT PH 175,123.32 VALCAMP 160+5MG 7FCT PH R260229 18/06/2021 VALCAMP 160+10MG 7FCT PH 502,540.14 R 260229 18/06/2021 RITEMED AMLODIPINE IOMG 100TAB R 259706 17/06/2021 VI PH 253,586.34 RITEMED AMLODIPINE IOMG IOOTAB 239,065.49 R 367227 11/06/2021 VI PH 220,437.88 R 377566 15/06/2021 RITEMED AMLODIPINE IOMG IOOTAB 507,450.78 R 377567 15/06/2021 VI PH 508,880.45 TAREG 160MG 28FCT PH R380182 16/06/2021 Gliclazide 500 KG 507,502.63 R 260636 18/06/2021 RITEMED AMLODIPINE 5MG 1OOTAB VI PH 891,036.58 R380185 16/06/2021 RITEMED AMLODIPINE 5MG IOOTAB 311,874.55 VI PH R 380441 16/06/2021 RITEMED BISOPROLOL 5MG IOOFCT 605,496.85 i PH R 380440 TAREG 80MG 28FCT PH 406,726.17 16/06/2021 CARDIOVASC IOMG TAB IOO'S R 376920 CO-TAREG 160+12.5MG 28FCT PH 42,588.54 R 396175 15/06/2021 I RIMEPRIL SDZ 3MG 1OOTAB PH R 410249 22/06/2021 RITEMED BISOPROLOL 5MG IOOFCT I ,730,753.88 R 397990 28/06/2021 PH 1,078,475.70 23/06/2021 I RM GLIMEPIRIDE 3MG R 397990 ATAJEC 500MG 50FCT UD PH 391,839.25 23/06/2021 EBW PACLITAXEL IOOMG/16,7ML 111,412.40 R 397990 ILIVI PH R 423374 23/06/2021 I LOSARTAN POTASSIUM 50MG 30FCT 42,200.73 02/07/2021 LOSARTAN POTASSIUM 50MG 30FCT R 431451 LOSARTAN POTASSIUM 50MG 30FCT 41,648.89 05/07/2021 LOSARTAN POTASSIUM 50MG 30FCT 195,812.34 R 436633 LOSARTAN POTASSIUM 50MG 30FCT R 434229 07/07/2021 I LOSARTAN POTASSIUM 50MG 30FCT 166,868.73 R 434232 06/07/2021 XALIPTINE 200MG/40ML I LIVI LF PH R 433784 06/07/2021 RITEMED AMLODIPINE IOMG IOOTAB 289,915.11 R 434233 06/07/2021 VI PH 297,226.76 R 429919 06/07/2021 RIMSTAR 4-FDC FCT 60'S (IFG) 300,287.46 R 436844 05/07/2021 AMBESYL IOMG 30TAB VI PH 298,828.04 07/07/2021 ARIZOPRESS IOMG 30TAB PH 180,039.07 R 451482 LODINE 5MG IOOPRT PH 328,291.69 12/07/2021 RITEMED FELODIPINE 5MG IOOPRT UD 263,226.31 R451461 PH R 304825 12/07/2021 RM LOSARTAN 50MG 30FCT UD PH 969,311.51 R 454149 15/07/2021 RM LOSARTAN 50MG 30FCT UD PH R 453524 13/07/2021 RM LOSARTAN IOOMG 30FCT UD PH 275,814.38 13/07/2021 RM LOSARTAN IOOMG 30FCT UD PH 1,838,301.45 R 453524 RM LOSARTAN 50MG 30FCT UD PH 13/07/2021 RM LOSARTAN 50MG 30FCT UD PH 530,629.24 R 296153 RM LOSARTAN 50MG 30FCT UD PH 179,598.95 R 296995 12/07/2021 LOSARTAN POTASSIUM 50MG 30FCT R 303222 12/07/2021 231,985.99 R 311023 I 5/07/2021 R 311023 21107/2021 768,616.38 R 309562 21/07/2021 364,231.64 R 312870 19/07/2021 277,868.00 R 457081 21/07/2021 435,415.71 14/07/2021 156,208.48 774,402.10 I 305,063.49 30 I,251.75

DECISIOI\ CTA CASE NO. 11060 Page 5 of24 XANTOR IOMG IOOFCT PH 58,603.56 R 457077 I4/07/202I ROBESTAR 20MG 30FCT PH 4I4,89I .22 R 457077 I4/07/202 I LOSARTAN POTASSIUM 50MG 30FCT 303,268. I I R 457063 I4/07/2021 CARDIOVASC 5MG IOOTAB VI PH 165,502.62 R 477646 21107/2021 RITEMED AMLODIPINE IOMG IOOTAB VI PH 546,962.51 R477646 21/07/2021 AVAMAX 80MG 30FCT UD PH RM LOSARTAN 50MG 30FCT UD PH 179,647.85 R483174 23/07/2021 ZOFRAN 4MG/2ML 5LIAM PH 160,989.66 R 327744 30/07/2021 XANTOR 40MG TAB IOOS 536,826.42 R 509397 02/08/2021 GLICLAZIDE API 373,518.57 R55I716 17/08/2021 LOSARTAN POTASSIUM I OOMG 30FCT 344,382.18 R 92654 16/08/2021 LOSARTAN POTASSIUM IOOMG 30FCT 571,429.22 R 357871 19/08/2021 LOSARTAN POTASSIUM IOOMG 30FCT 565,316.89 R 358406 I 9/08/2021 CARVEDILOL 25MG IOOTAB UD PH 562,110.70 R3584I4 I 9/08/2021 XALIPTINE 200MG/40ML I LIVI LF PH 97,255.14 R 579323 27/08/2021 LOSARTAN POTASSIUM 50MG 30FCT 298,940.79 R 579862 27/08/2021 RITEMED AMLODIPJNE 10MG IOOTAB 911,787.09 R 381988 03/09/2021 VI PH CARDIOVASC 5MG IOOTAB VI PH 532,457.35 R 604188 07/09/2021 XALIPTINE 50MG/IOML I LIVI LF PH XALIPTINE IOOMG/20ML ILIVI LF PH 829,037.47 R 607228 08/09/202 I CRESART SDZ 40MG 30FCT UD PH 143,496.21 R 623101 14/09/2021 ESITALO IOMG 28FCT PH 334,594.54 R 62369I I4/09/202 I RM GLIMEPIRIDE 2MG IOOTAB PH 44,I48.5I R619587 13/09/2021 RM GLIMEPIRIDE 3MG IOOTAB PH 122,581.11 R 623168 14/09/2021 LOSARTAN POTASSIUM 50MG 30FCT 153,085.43 R 620127 I3/09/2021 LOSARTAN POTASSIUM 50MG 30FCT 33,549.26 R 620127 I3/09/2021 LOSARTAN POTASSIUM 50MG 30FCT 962,101.75 R 392124 09/09/2021 LOSARTAN POTASSIUM IOOMG 30FCT 919,451.52 R 396259 13/09/2021 LOSARTAN POTASSIUM IOOMG 30FCT 690,489.87 R 396255 13/09/2021 LOSARTAN POTASSIUM 50MG 30FCT 555,920.22 R 398972 14/09/2021 RITEMED AMLODIPINE 5MG IOOTAB 283,659.07 R 103637 13/09/2021 VI PH 307,755.48 R 103637 I3/09/2021 RITEMED FELODIPINE 5MG IOOPRT UD PH 640,993.63 R 627034 I 5/09/2021 AMD CARVEDILOL 25MG IOOTAB UD PH I85,249.69 R 640810 20/09/2021 VERAL 240MG 100PRT UD PH ZARZIO 30MIU/0.5ML 5LISY BI PH 33,828.I6 R 640810 20/09/2021 RIMEPRIL SDZ 2MG 1OOTAB PH TAREG 80MG 28FCT PH 127,004.79 R 640810 20/09/2021 ISORMED 60MG 50PRT PH 805,992.88 R 627033 15/09/2021 BIOCLAVID IOOOMG TAB 14'S 195,I45.21 R 649098 23/09/2021 ROBESTAR 20MG 30FCT PH 864,399.69 R 646906 22/09/2021 AVAMAX 80MG 30FCT UD PH 2 I0,652.05 R 666981 0 Ill 0/2021 XALIPTINE IOOMG/20ML ILlY! LF PH 114,301.94 R 677295 06/I0/2021 SIMVAS 20MG UD TAB IOO'S PH 305,318.75 R 674682 05/10/2021 VIDASTA T 20MG UD TAB IOO'S 310,392.61 R 686904 11/10/2021 RITEMED AMLODIPINE 5MG IOOTAB 607,087.12 R 707129 20/1 0/202I VI PH I03,574.49 R 680359 07/I0/2021 ZENITH 500MG 30FCT PH I 74, I07.65 R 680359 07/10/2021 RITEMED AMLODIPINE 1OMG IOOTAB VI PH 656,329.04 R 678057 06/10/2021 RIMEPRIL SDZ 3MG IOOTAB PH TAREG 160MG 28FCT PH 4I8,998.35 R 704890 I9/I 0/2021 PAIZU 2,25G I PSOIJ PH ZOFRAN 8MG/4ML 5LIAM PH I ,603,808.40 R 692774 13/I0/202I VALCAMP I60+ I OMG 7FCT PH 53,588.87 R695011 14/10/2021 565,152.93 R 69I858 13/10/2021 150,638.72 R 710508 2I/I0/202I I,450,9 I8.82 R 7I IOI3 2 Ill 0/202 I I 09,382.60 R 720677 26/10/2021 !

DECISION CTA CASE NO. 11060 Page 6 of24 AMOCLAV 250MG+62.5MG/5ML 60ML 61,508.53 R467511 27/10/2021 IPOS PH 56,192.20 R467511 AMOCLAV 125MG+31.25MG/5ML 60ML 431,511.24 27110/2021 IPOS PH R 734670 02/1 1/202 I 83,975.32 R 734671 02/11/202 I XANTOR 40MG TAB I OOS 586,834.41 R 740895 04/11/2021 09/11/2021 VALCAMP 160+5MG 7FCT PH 1,147,186.86 R 751437 08/1 1/2021 436,829.53 R 748417 RITEMED AMLODIPINE 5MG IOOTAB 08/11/2021 VI PH 70,373.35 R 748417 CARDIOVASC IOMG TAB IOO'S 433,065.18 R 751660 I ,207,790.93 R 754244 ARINIB I MG 28FCT PH R 759661 213,900.12 AMD METOPROLOL I OOMG IOOTAB UD R 764732 556,024.44 R 759662 PH I ,008,590.06 R 764733 RITEMED AMLODIPINE 5MG IOOTAB I, 164,648.79 09/11/2021 VI PH R 765637 10/1 1/202 I 625,937.62 R 773025 12/11/2021 AMBESYL 5MG 30TAB VI PH 558,937.54 R 784051 471,548.76 R 780812 RITEMED AZITHROMYCIN 500MG 280,931.41 R 789099 I5/11/202 I 30FCT PH 887,558.46 R 780808 RITEMED AMLODIPINE 5MG IOOTAB 130,841.85 R 776131 I VI PH 116,653.49 R 780813 12111/2021 CARDIOVASC 5MG IOOTAB VI PH 465,050.80 R 78081 I J 15/11/2021 RITEMED AMLODIPINE IOMG IOOTAB 457,709.69 VI PH R 780814 15/11/2021 437,649.40 18/11/2021 J ZARZIO 30MIU/0.5ML 5LISY Bl PH R 803972 23/1 1/2021 I 183,308.59 R 529438 22/11/2021 AVAMAX 20MG IOOFCT PH 504,497.83 R 812113 25/1 1/2021 I R 812117 22/11/2021 AZITHROMYCIN I HDR 500MG 3FCT PH 77,647.82 R 812115 19/11/2021 I I 04,533.42 R 812307 ROBESTAR 10MG 30FCT PH 298,726.98 R819528 22/11/202 I I, 193,260. I 8 R818953 AVAMAX 20MG I OOFCT PH 254,052.10 R 826653 I 67,708.09 R 826655 XANTOR 20MG TAB IOOS 143,331.33 R 826908 22/11/2021 648,582.55 FENAHEX 20MG 30FCT PH I 16,427.25 R 828243 R 832686 RITEMED AMLODIPINE 5MG IOOTAB 200,749.47 R 832686 71,709.56 VI PH 148,918.01 R 832687 RITEMED AMLODIPINE 5MG IOOTAB 442,005.81 R 835463 VI PH R 833822 22,255.18 R 838326 RITEMED AMLODIPINE 5MG IOOTAB 104,274.74 R 844101 22/11/2021 I VI PH 592,301.62 113,321.69 R 844353 AMPICIN 250MG I PSOIJ PH R 859400 02/12/202 I I,21 0,434.41 R 859400 I AMPICIN 500MG I PSOIJ PH 197,683.30 R 859400 I 08,476.82 03/12/2021 I FREPAN 16MG 30TAB PH 443,053.56 06/12/2021 06/12/202 I I XANTOR20MG TAB IOOS 06/12/2021 06/12/2021 AVAMAX 80MG 30FCT UD PH I AMLODIPINE BES IOMG I OOTAB C PH 09/12/2021 ZARZIO 30MIU/0.5ML 5LISY 81 PH 09/12/2021 13/12/2021 FREPAN 8MG 30TAB PH 13/12/2021 13/12/2021 AVAMAX 80MG 30FCT UD PH AUMOX 625MG IOOFCT ST PH VALCAMP I60+ I OMG 7FCT PH RITEMED AMLODIPINE 5MG IOOTAB 13/12/2021 VI PH RM PREGABALIN 75MG 56HGC VI PH 15/12/202 I I 15/12/2021 GAB! 75MG 56HGC VI PH RITEMED AMLODIPINE IOMG IOOTAB 15/12/2021 I VI PH RM GLIMEPIRIDE 3MG IOOTAB PH 16/12/202 I I 15/12/2021 EBEDOXO 50MG/25ML I LIVI PH ZOFRAN 8MG/4ML 5LIAM PH I 7112/2021 I RTM VERAPAMIL 240MG IOOPRT UD I PH 20/12/2021 AMLODIPINE BES 5MG IOOTAB C PH 20/12/2021 VIVASARTAN 50MG 30FCT VI PH 28/12/2021 LOSARTAN POTASSIUM 50MG 30FCT 28/12/2021 EKOSART 50MG 30FCT VI PH 28/12/2021 I - - - r

DECISIOl\ 147,573.14 R 846234 21/12/2021 CTA CASE NO. 11060 185,858.69 R 859402 28/12/2021 Page 7 of24 2,393,821.53 R 860344 28/12/202 I PSI ,970,841.12 CO-TAREG 80+ 12.5MG 28FCT PH i AROSTANIL 25MG 30FCT UD PH TAREG 80MG 28FCT PH Total Due to respondent's inaction on its claim for refund, petitioner filed a Petition for Review ("Petition") before this Court on January 4, 2023, 10 to which respondent filed his Answer on March 14, 2023 11 and transmitted to this Court the BIR Records of the case. 12 Respondent filed his Pre-Trial Brief on May 19, 2023, while petitioner filed its Pre-Trial Brief on May 22, 2023. 13 Thereafter, Pre-Trial Conference was held on September 28, 2023. 14 On October 27, 2023, the parties submitted their Joint Stipulation of Facts and Issues, 15 which was approved and adopted in the Pre-Trial Order issued and dated January 9, 2024. 16 Trial then ensued, with the parties presenting and offering their respective documentary and testimonial evidence. Petitioner offered the testimonies of the following individuals: (1) Ms. Cristina A. Alcantara, 17 petitioner's Financial Reporting and Accounting Head; (2) Mary Ann Evangelista, M.D., 18 petitioner's Head Medical Affairs & Patient Access; and (3) Mr. Enrico T. Pizzaro, 19 the Court-commissioned Independent Certified Public Accountant ("ICPA").20 r The Report of the ICPA was submitted on February 19,2024.21 10 Docket- Vol. I, pp. 6 to 84. 11 /d.at179to186. 12 Compliance dated March I3, 2023, id. at I76 to I77. 13 !d. at I90 to I92 and I96 to 239, respectively. 14 Minutes of the hearing held on, and Order dated, September 28, 2023, !d. at 247 to 248. 15 !d. at 374 to 383. 16 !d. at 392 to 398. 17 Exhibit "P-901 ",with accompanying USB containing the exhibits identified, Minutes of the hearing held on, and Order dated, February 15, 2024, id. at 286 to 342 and 410 to 41 0-A, respectively. 18 Exhibit "P-900", Minutes of the hearing held on, and Order dated, February 15,2024, id. at 134 to I67 and 4 I0 to 41 0-A, respectively. 19 Exhibit "P-902", Minutes of the hearing held on, and Order dated, March I9, 2024, id. at 427 to 546 and 556 to 558, respectively. 20 Oath of Commission dated January 18, 2024, Minutes of the hearing held on, and Order dated January 18, 2024, id. at 400 to 400-B. 21 Exhibits "P-903" and "P-903-2"; Compliance dated February 19, 2024, id. at 41 I to 417.

DECISION CTA CASE NO. 11060 Page 8 of24 Petitioner filed its Formal Offer of Evidence on April 18, 202422with respondent's Comment filed on April25, 2024.23 The Court resolved the same in a Resolution dated November 11, 2024.24 On the other hand, respondent presented his sole witness, Revenue Officer Julie Ann Alcantara.25 He filed his Formal Offer of Evidence on February 26, 2025.26, with petitioner's Comment filed on March 10, 2025.27 The Court resolved the same in a Resolution dated July 8, 2025.28 Respondent manifested that he adopts all his prior pleadings in relation to this case as his memorandum,29 while petitioner's Memorandum was submitted on September 4, 2025.30 Thus, in a Minute Resolution dated October 1, 2025, the case was deemed submitted for decision.31 Hence, this Decision. The Issue The lone issue stipulated by the parties is as follows: Whether or not the petitioner is entitled to its claim of tax refund or tax credit in the amount of Eighty-One Million Nine Hundred Seventy Thousand Eight Hundred Forty One and 12/100 Philippine Pesos (P81 ,970,841.12) allegedly representing erroneously paid VAT during the period of 01 January 2021 to 31 December 2021.32 Arguments of the Parties Petitioner's Arguments: Petitioner argues that its claim for the refund of erroneously paid VAT importations of prescription drugs and medicines for diabetes, high r cholesterol and hypertension, as well as prescription drugs and medicine for 22 Docket- Vol. II, pp. 563 to 609. 23 !d. at 746 to 751. 24 !d. at 762 to 768. 25 Exhibit "R-7", Docket- Vol. I, pp. 252 to 265; Minutes of the hearing held on, and Order dated, February 20,2025, Docket- Vol. II, pp. 771 to 772. 26 Docket- Vol. 11, pp. 774 to 779. 27 !d. at 783 to 786. 28 !d. at 790 to 791. 29 Manifestation dated August 13, 2025, id. at 793 to 794. 3c !d. at 798 to 886. 31 /d.at887. 32 Statement of the Issues, JSFI, Docket- Vol. I, p. 375.

DECISION CTA CASE NO. 11060 Page 9 of24 cancer, mental illness and kidney diseases for the period January l, 2021 to December 31, 2021 should be granted as these goods are exempted from VAT under Section 109(AA) ofthe Tax Code, as amended by R.A. Nos. 11467 and 11534 and is filed in accordance with Sections 204(C) and 229 of the same Code. Respondent's Counter-arguments: Respondent counter-argues that petitioner is not entitled to the refund being claimed as it failed to comply with the requirements under Revenue Memorandum Circular ("RMC'') No. 36-2020 and failed to prove that its VAT payments were erroneously paid or illegally collected. The Ruling of the Court The Petition must be partially granted. The provisions that govern the present claim for refund of erroneously paid taxes are Sections 204(C) and 229 ofthe Tax Code, as amended, which read as follows: SEC. 204. Authority of the Commissioner to Compromise, Abate and Refund or Credit Taxes.- The Commissioner may- (C) Credit or refund taxes erroneously or illegally received or penalties imposed without authority, refund the value of internal revenue stamps when they are returned in good condition by the purchaser, and, in his discretion, redeem or change unused stamps that have been rendered unfit for use and refund their value upon proof of destruction. No credit or refimd of taxes or penalties shall be allowed unless the taxpayer files in writing with the Commissioner a claim for credit or refund within two (2) years afier the payment of the tax or penalty: Provided, however, That a return filed showing an overpayment shall be considered as a written claim for credit or refund. SEC. 229. Recovery ofTax Erroneously or Illegally Collected. -No suit or proceeding shall be maintained in any courtfor the recovery ofany national internal revenue tax hereafter alleged to have been erroneously or illegally assessed or collected, or of any penalty claimed to have been collected without authority, of any sum alleged to have been excessively or in any manner wrongfully collected without authority, or of any sum alleged to have been excessively or in any manner wrongfully collected, until a claim for refund or credit has been duly filed with the Commissioner; but such suit or proceeding may be maintained, whether or not such tax, penalty, or sum has been paid under protest or duress. r

DECISION CTA CASE NO. 11060 Page 10 of24 In any case, no such suit or proceeding shall be .filed after the expiration of tvvo (2) years from the date ofpayment of the tax or penalty regardless of any supervening cause that may arise a/fer payment: Provided, however, That the Commissioner may, even without a written claim therefor, refund or credit any tax, where on the face of the return upon which payment was made, such payment appears clearly to have been erroneously paid. (Italics, Ours.) Based on the foregoing provisions, an erroneously paid or illegally collected tax may be refunded if: 1) the taxpayer files in writing with the CIR a claim for credit or refund within two years after the payment of the tax or penalty; 2) the claim for refund must first be filed before the CIR before maintaining a suit or proceeding in any court; and 3) such suit or proceeding shall be filed also within two years from the date of payment of the tax or penalty, regardless of any supervening cause that may arise after payment. As explained in Commissioner of Internal Revenue vs. Carrier Air Conditioning Philippines, Inc. 33 ("Carrier"): Section 204 refers to the Commissioner of Internal Revenue's administrative authority to credit or refund erroneously paid or illegally collected taxes. Under this provision, an administrative claim for refund or credit must be filed within two years from payment of the tax. Section 229, on the other hand, requires two conditions for the filing ofjudicial claims: (1) an administrative claim must be filed first; and (2) the judicial claim must be filed within two years after payment of the tax sought to be refunded. Reading the two provisions together, both administrative and judicial claims must be .filed within the tvvo-year period. Furthermore, the administrative claim must be.filed before the judicial claim. This Court has previously declared that "[t}imeliness ofthefiling ofthe claim is mandatory andjurisdictional. The [Court of Tax Appeals] cannot take cognizance of a judicial claim for refund filed either prematurely or out of time." Thus, while both administrative and judicial claims must be filed within two years after the payment of the alleged erroneously paid or illegally collected tax, the filing ofthe administrative claim must still precede the filing r ofjudicial claim. 33 G.R. No. 226592, July 27, 2021.

DECISION CTACASENO.II060 Page II of24 Moreover, the tax subject of the refund under Sections 204(C) and 229 ofthe Tax Code, as amended, must be erroneously paid or illegally collected, that is it has been collected without authority, or that of any sum alleged to have been excessively or in any manner wrongfully collected without authority, or of any sum alleged to have been excessively or in any manner wrongfully collected. An "erroneous or illegal tax" is defined as one levied without statutory authority, or upon property not subject to taxation or by some officer having no authority to levy the tax, or one which is some other similar respect is illegal. 34 In summary, in order for the present claim for refund to prosper, petitioner must show that: 1) the administrative and judicial claims were filed within two years from the payment of tax; and 2) that the tax was erroneously or illegally paid or collected. Petitioner's administrative and judicial claims were timely filed; thus, the Court acquired jurisdiction in this case. Petitioner alleges that it paid VAT on the importations of prescription drugs and medicines for diabetes, high cholesterol and hypertension, as well as prescription drugs and medicine for cancer, mental illness and kidney diseases from January 1, 2021 to December 31, 2021, which were supposedly exempt from VAT pursuant to Section 109(J)(AA) of the Tax Code, as amended by R.A. Nos. 11467 and 11534. Counting two years from the alleged earliest payment made, or from January 5, 2021,35 petitioner had until January 5, 2023 to file both its administrative and judicial claims for refund. Petitioner filed its Application for Tax Credits/Refunds with the BIRon December 29, 2022.36 and later filed its Petition before the Court on January 4, 2023.37 Clearly, petitioner timely r filed both claims before the two-year prescriptive period lapsed. 34 Commissioner ofInternal Revenue v. Pilipinas Shell Petroleum Corp., G.R. No. 188497, April 25, 2012. 35 See Par. 25, Petition for Review, Docket- Vol I, p. 45. 36 Exhibits "P-741" to "P-742", with sub-markings, Docket- Vol II, pp. 628 to 722. 37 Docket- Vol. I, pp. 6 to 84.

DECISION CTA CASE NO. 11060 Page 12of24 Petitioner's VAT payments on importation ofprescription drugs and medicines for diabetes, high cholesterol, hypertension, cancer, and mental illness for the period January 1, 2021 to December 31, 2021 were erroneous since these importations are exempt from VAT Section 109(1)(AA) of the Tax Code, as amended by R.A. Nos. 11467 and 11534, provides that: SEC. 109. Exempt Transactions.- (1) Subject to the provisions of Subsection 2 hereof, the following transactions shall be exempt from the value-added tax: (AA) Sale or importation o.fprescription drugs and medicines for: (i) Diabetes, high cholesterol, and hypertension beginning January 1, 2020; and (ii) Cancer, mental illness, tuberculosis, and kidney diseases beginning January 1, 2021. Provided, That the DOH shall issue a list ofapproved drugs and medicines for this purpose within sixty (60) days from the effectivity of this Act; Eventually, Revenue Regulations ("RR ") No. 04-21 was issued to implement the amendment to Section 109 introduced by R.A. No. 11534, as follows: SEC. 4.109-1. VAT-Exempt Transactions.- (B) Exempt transactions.- (aa) Sale or importation of prescription drugs and medicines for: (i) Diabetes, high cholesterol, and hypertension beginning January 1, 2020; and (ii) Cancer, mental illness, tuberculosis, and kidney diseases beginning January 1, 2021. r

DEC: lSI OJ\ CTA CASE NO. 11060 Page 13 of24 The exemption from VAT under this subsection shall only apply to the sale or importation by the manufacturers, distributors, wholesalers and retailer of drugs and medicines included in the "list of approved drugs and medicines" issued by the Department of Health (DOH) for this purpose. Based on the foregoing, the sale or importation of prescription drugs and medicines enumerated under Section 109(1)(AA) of the Tax Code, as amended by R.A. Nos. 11467 and 11534, are exempt from VAT if the following elements concur: 1) the products sold or imported are prescription drugs and medicines for treatment of diabetes, high cholesterol, hypertension, cancer, mental illness, tuberculosis, and kidn~y diseases; 2) the sale or importation was made on January 1, 2020 onwards for prescription drugs and medicines for treatment of diabetes, high cholesterol, and hypertension and on January 1, 2021 onwards for prescription drugs and medicines for treatment of cancer, mental illness, tuberculosis, and kidney diseases; and 3) the prescription drugs and medicines sold or imported must be included in the "list of approved drugs and medicines" issued by the Department of Health ("DOH")-Food and Drug Administration ("FDA"). However, petitioner alleges that it imported the following prescription drugs and medicines for diabetes, high cholesterol, hypertension, cancer, mental illness, and kidney diseases from January 1, 2021 to December 31, 2021, but still paid VAT thereon in the total amount of P81 ,970,841.12: Brand Name Generic Name Dosage Disease Strength and Treated Ambesyl Amlodipine Form Hypertension 10 MG Tablet 5 MG Tablet None (No Carvedilol 25 MG Tablet Hypertension Brand Name) Metoprolol Tartrate 100MG Hypertension None (No TABLET Brand Name) High 10 MG Film Cholesterol Avamax Atorvastatin Coated Tablet 20 MG Film Hypertension None (No Bisoprolol Fumarate Coated Tablet Brand Name) Amlodipine 40MGFilm r Coated Tablet Cardiovasc 5 MG Film- Coated Tablet 10 MG Tablet

DECISION CTA CASE NO. 11060 Page 14of24 5 MG Tablet High Cholesterol Co-Tareg Valsartan+ Hydrochlorothiazide 160112.5 MG Hypertension Cresart Olmesartan Medoxomil Tablet Hypertension 80/12.5 MG Tablet 20 MG Film- Coated Table 40 MG Film- Coated Tablet Ekosart Losartan Potassium 100 MG Film- Hypertension Coated Tablet 50 MG Film- Coated Tablet Frepan Candesartan Cilexetil 16 MG Tablet Hypertension 8 MG Tablet None (No Gliclazide 30 MG Modified Diabetes Brand Name) Release Tablet Gabi Pregabalin 75 MG Capsule Nerve Pain- Hypertension None (No Glimepiride 3 MG Tablet Diabetes Brand Name) Gluconex Mr Gliclazide 30MG Diabetes Modified- Released Tablet lrbenox lrbesartan 150 MG Film- Hypertension Coated Tablet Isormed Isosorbide Mononitrate 60MG Chest pain- Sustained- Hypertension Release Tablet Lifezar Losartan Potassium 100 MG Film- Hypertension Lodine Felodipine Coated Table Hypertension 50 MG Film- Coated Tablet 5 MG Modified- Release Tablet None (No Losartan Potassium 100 MG Film- Hypertension Brand Name) Coated Tablet 50 MG Film- Coated Tablet Prolohex Metroprolol Tartrate 100 MG Film- Hypertension Coated Tablet Prostera Terazosin 2 MG Tablet Hypertension 5 MG Tablet Rimepril Glimepiride 2 MG Tablet Diabetes 3 MG Tablet None (No Felodipine 5 MG Modified- Hypertension Brand) Release Tablet None (No Amlodipine 10 MG Tablet High Brand Name) 5 MG Tablet Cholesterol None (No Pregabalin 75 MG Capsule Diabetes Brand) r

DECISION CTA CASE NO. 11060 Page 15 of24 None (No Rosuvastatin 10 MG Film- High Brand Name) Coated Tablet Cholesterol 20 MG Film- None (No Terazosin Coated Tablet Hypertension Brand) Terazosin None (No Glimepiride 2 MG Tablet Brand Name) 5 MG Tablet Hypertension None (No Brand Name) 2 MG Tablet Diabetes 3 MG Tablet Robestar Rosuvastatin 10 MG Film High Coated Tablet Cholesterol 20 MG Film Coated Tablet Rosalta Rosuvastatin 20 MG Film High Coated Tablet Cholesterol None (No Verapamil Hydrochloride 240MG Brand Name) Sustained Hypertension Released Tablet Simvas Simvastatin 20 MG Film- High Coated Tablet Cholesterol Tareg Valsartan 160 MG Tablet Hypertension 80 MG Tablet 10 MG/160 MG Film-Coated Tablet Valcamp Amlodipine+ Valsartan 5 MG/80 MG Hypertension Film-Coated Tablet Veral Verapamil Hydrochloride 5 MG/ 160 MG Hypertension Verapamil Hydrochloride Film-Coated None (No Simvastatin Tablet Brand) 240MG Vidastat Sustained- Release Tablet Vivasartan Losartan Potassium 240MG Hypertension Sustained- High Release Tablet Cholesterol 20 MG Film- Coated Tablet Hypertension 50 MG Film- Coated Tablet 100 MG Film- Coated Tablet None (No Atorvastatin 40 MG Film- High Brand Name) Coated Tablet Cholesterol Xantor Atorvastatin 20 MG Film- High Coated Tablet Cholesterol 10 MG Film- Coated Tablet 40 MG Film- Coated Tablet Atajec Mycophenolate Mofetil 50 MG Film- Kidney C.- - Coated Tablet Diseases r

DECISION CTACASEN0.11060 Page 16 of24 None (No Paclitaxel 6 MG/ML Cancer Brand) Aripiprazole Arizopress 10 MG TABLET Mental Illness 2 MG/ML Zofran Ondansetron Solution for Cancer Injection (I.M./I.V.) Xaliptine Oxaliplatin 5 MG/ML Cancer Esitalo Escitalopram 10 MG Film- Mental Illness Coated Tablet 30 MU/0.5 ML Zarzio Filgrastim Solution for Cancer Injection/Infusio n (SC/IV) Bioclavid Co-Amoxiclav 1 G Film- Kidney Disease Zenith Azithromycin Coated Tablet Paizu Piperacillin+Tazobactam 500 MG Film- Kidney Disease Coated Tablet 2 G/250 MG Powder for Kidney Disease Injection (I.V.) Amoclav Co-Amoxiclav 156.25 MG/ 5 ML Powder for Oral Suspension Kidney Disease 312.5 MG/ 5 ML Arinib Anastrozole 1 MG Film- Cancer None (No Azithromycin Coated Tablet Brand) Azithromycin Azyth Tamoxifen 500 MG Film- Kidney Disease Coated Tablet Fenahex 500 MG Film- Kidney Disease Coated Tablet 20 MG Tablet Cancer 250 MG Powder for Injection Excillin Ampicillin (I.M./I.V) 500 MG Powder Kidney Disease for Injection (I.M/I.V) Bioclavid Co-Amoxiclav 625 MG Film- Kidney Disease Ebedoxo Coated Tablet Arostanil Doxorubicin Hydrochloride Aumox 50 MG/25 ML Exemestane Co-Amoxiclav+Clavulanic Solution for Cancer Acid Injection 25 MG Film- Cancer Coated Tablet 625 MG Film- Kidney Coated Tablet Diseases r

DECISIO:\ CTA CASE NO. 11060 Page 17 of24 In support of its claim, petitioner submitted the corresponding FDA- issued Certificates of Product Registration ("CPR"),38 commercial invoices,39 Single Administrative Documents ("SADs"),40 and Statements of Settlement of Duties and Taxes ("SSDTs"),41 which were all examined by the Court- commissioned ICPA.42 Testing petitioner's compliance with the first element, while it is notable that majority of commercial invoices and SADs submitted by petitioner reflects only the brand names, the corresponding generic names of each can, however, be cross-referred and verified in the FDA-issued CPRs of each brand, specifying the medicine's brand name, generic name, dosage, and form. In support thereto is the testimony of petitioner's witness Mary Ann Evangelista, M.D. ("Dr. Evangelista"), that the foregoing product brands, with their corresponding generic names, are used for treatment of diabetes, high cholesterol, hypertension, cancer, mental illness, and kidney disease.43 Further, compliance with the third element can also confirm if the foregoing medicines imported by petitioner are indeed used for treatment of diabetes, high cholesterol, hypertension, cancer, mental illness, and kidney disease, considering that the DOH-FDA provides a list of medicines which treat these particular diseases. Hence, We take reference from RMC No. 81- 2021, which circularized the List of VAT-Exempt Products issued by the FDA of the DOH on June 17, 2021. These listings were updated by RMC Nos. 103-2021, 5-2022, 124-2021 for the year 2021. However, the listings provided only the generic names, dosage, and forms of the VAT-exempt medicines. Nevertheless, as noted earlier, the generic names of the medicine brands imported by petitioner can be confirmed from the medicine's FDA- issued CPR, which can then be matched with the DOH-FDA list of medicines. Thus, in compliance with the third element, the foregoing medicines imported by petitioner, on the basis of the generic names either: (1) as reflected on the commercial invoices or SADs itself; or (2) as can be confirmed in the medicine brand's corresponding FDA-issued CPR, are verified to be included in the respective DOH-FDA lists of medicines for r diabetes, high cholesterol, hypertension, cancer, and mental illness. 38 Exhibits "P-771" to "P-809", "P-811" to "P-844", "'P-846" to "P-868" and "'P-1 007" (USB marked as Exhibit "P-903-2"); Exhibits "P-81 0" and "P-845'', Docket- V01. II, pp. 741 to 743. 39 Exhibits "P-1009-A.1" to "P-1009-A.215". 40 Exhibits "P-1009-8.1" to "P-1009-8.185". 41 Exhibits "P-1 009-C.l" to "P-1 009-C.185". 41 As summarized in Exhibit "P-1 009''. 43 Exhibit "P-900" (Q&A No. 20, Judicial Affidavit of Mary Ann Evangelista, M.D.), Docket- Vol. I, pp. 141 to 155.

DECISION CTA CASE NO. 11060 Page 18of24 Based on the foregoing, and after perusing the documents submitted by petitioner, the following disallowances on the following grounds, in the total amount of P18,321 ,551.91, were found by the Court: 1. VAT payments, aggregating P963,620.80, for the following medicine brands must be disallowed for failure of petitioner to provide their corresponding FDA-issued CPRs. Consequently, the Court cannot verify their respective generic names which can be cross-matched with the DOH-FDA list ofVAT-exempt medicines. Item VAT Exhibit Commercial Exhibit IEIRD/ Exhibit SSDT No. SSDT Description Payment Reference Invoice No. Reference SAD Reference R451461 Date P275,814.38 4190620893 No. R 803972 07/12/2021 RIMSTAR No. No. 87821 No. R 529438 4-FDC FCT 183,308.59 4190642443 12/02/2021 60'S (IFG) P-1 009- P-1009- 158410 P-1009- 504,497.83 A.101 4190633882 8.85 C.85 12/03/2021 AMP1CIN P963,620.80 377091 250MG P-1009- P-1009- P-1 009- -- IPSOIJ PH A.190 8.163 C.163 AMPICIN P-1009- P-1009- P-1009- 500MG A.l91 8.164 C.164 1PSOIJ PH Total 2. VAT payments, aggregating P2,135,671.17, for importation of medicines allegedly for kidney disease must be disallowed as these medicines are not included in the DOH-FDA list ofVAT- exempt medicines for kidney disease: Item VAT Exhibit Commercial Exhibit IEIRD/ Exhibit SSDT Description Payment Reference Invoice No. Date Reference SAD Reference SSDT No. 10/06/2021 8IOCLAVID No. I 0/19/2021 IOOOMG No. No. No. I 0/21/2021 TAB 14'S ZENITH p 114,301.94 P-1 009- 4190633183 P-1 009- 130949 P-1009- R 677295 10/27/2021 500MG A. I 52 8.128 C.l28 30FCT PH 10/27/2021 PAIZU 418,998.35 P-1 009- 4190635575 P-1009- 137028 P-1009- R 704890 2,25G A. I 59 8.134 C.l34 11/12/2021 1PSOIJ PH AMOCLAV 150,638.72 P-1009- 4190636241 P-1009- 138550 P-1009- R 710508 J 250MG+62.5 A.l63 8.138 C.l38 MG/5ML 60ML IPOS 61,508.53 P-1 009- 4190629529 331695 R 467511 PH A.l66 R 467511 AMOCLAV P-1009- 125MG+31.2 8.141 P-1009- 5MG/5ML C.141 60ML IPOS 331695 PH 56,192.20 P-1009- 4190629530 RITEMED A.l67 AZITHROM YCIN 213,900.12 P-1009- 4190639429 P-1009- 148751 P-1009- R 759661 A.l76 8.149 C.l49

DECISION CTA CASE NO. II 060 Page 19 of24 500MG 30FCT PH AZITHROM 471,548.76 P-1009- 4190640712 P-1009- 154130 P-1 009- R 784051 11123/2021 YCIN IHDR 648,582.55 A.182 8.155 C. I 55 500MG P2, 135,671.17 3FCT PH P-1 009- 4190645522 P-1009- 162922 P-1009- R 826655 12113/2021 I AUMOX A.199 8.172 C.172 I 625MG 100FCT ST - -� PH Total 3. VAT payments, aggregating P974,290.92, from the importation ofthe following medicines must be disallowed as the description reflected in their respective commercial invoices and SADs, indicating the medicine's dosage in "500 kg", do not match the medicine's dosage as reflected on FDA-issued CPR,44 nor can said medicine dosage be verified in the DOH-FDA list of medicines on diabetes. Item VAT Exhibit Commercial Exhibit IEIRD/ Exhibit SSDT SSDT Description Payment Reference Invoice No. Reference SAD Reference No. Date No. GLICLAZIDE P318,034.19 No. SDKY- No. 25246 No. R 31246 03/22/2021 500KG 311,874.55 20210227 R 06118/2021 Gliclazide 500 344,382.18 P-1 009- P-1009- 184594 P-1 009- KG A.30 SDKY- 8.25 C.25 260636 08/16/2021 P974,290.92 20210511 75093 R 92654 GLICLAZIDE P-1009- P-1009- P-1009- API A.81 SDKY- 8.67 C.67 20210713 Total P-1009- P-1 009- P-1 009- A.l23 8.103 C.I03 4. VAT payments, aggregating P220,627.57, from the importation ofthe following medicines must be disallowed as the description reflected in their respective commercial invoices and SADs, indicating the medicine's form in "56HGC VI", do not match the medicine's form as reflected on their respective FDA-issued CPRs,45 nor can said medicine form be verified in the DOH- FDA list of medicines on diabetes. Item VAT Exhibit Commercial Exhibit IEIRD/ Exhibit SSDT No. SSDT Description Payment Reference Invoice No. Reference SAD Reference R 832686 Date No. R 832686 RM p 71,709.56 No. 4190645987 No. No. 12/15/2021 PREGABALIN 164375 75MG 56HGC 148,918.01 P-1009- 4190645986 P-1009- P-1 009- 12/15/2021 VI PH P220,627.57 A.202 8.175 164375 C.175 r GAB! 75MG P-1 009- 56HGC VI PH A.203 Total 44 Exhibit "P-791 ". 45 Exhibits "P-811" and "P-792".

DECISIOI\ CTA CASE NO. 11060 Page 20 of24 5. VAT payments, aggregating Pl2,487,755.50, for the importation of the following medicine brands must be disallowed as the description in their respective commercial invoices and SADs, indicating the medicine brand in "tablet", "film-coated tablet", or "prolonged-release tablet" forms, do not match the medicine forms as declared in their respective FDA- issued CPRs. As such, the Court cannot verify whether the following medicine brands exist in tablet, film-coated tablet, or prolonged-release tablet forms. Item VAT Payment Exhibit Exhibit Commercial Exhibit IEIRD/ Exhibit SSDT SSDT Description Ref. Ref. Invoice No. Ref. SAD Ref. No. Date p 136,758.78 for No. No. No. No. XANTOR 272,616.57 FDA- 4190590834 1756 R 7925 01/07/2021 IOMG 88,794.26 issued P- 4190590841 P- 1743 P- IOOFCT PH 176,056.15 CPR 1009- 4190594467 1009- 9332 1009- R 6697 01/06/2021 623,552.06 P-835 A.6 4190595843 B.3 14494 C.3 XANTOR 121,309.14 4190596126 15392 R 01/26/2021 40MG TAB 932,986.98 P-836 P- P- 15397 P- 47070 IOOS 843,816.96 1009- 4190596650 1009- 27803 1009- 02/05/2021 LODINE 208,550.39 P-799 A.8 8.4 28991 C.4 R 5MG IOOPRT 91,468.94 4190601081 45199 70840 02/08/2021 PH 891,036.58 P-784 P- 4190601512 P- 124823 P- 4190606311 74434 R 02/08/2021 CO-TAREG 1,730,753.88 P-824 1009- 4190599577 1009- 74079 1008- 76066 80+12.5MG 391,839.25 A.15 4190617084 B.l1 80130 C.11 I 28FCT PH 179,598.95 P-828 4190616922/ 88220 R TAREG P- 4190616921 P- P- 76068 I 80MG 28FCT P-823 1008- 4190618137 1009- 1009- PH P-824 A.l8 4190621166 B.l3 C.l3 R 03/08/2021 1 VERAL 131654 240MG P-834 P- P- P- I IOOPRT UD 1008- 1009- 1009- R PH P-802 A.l9 B.l4 C.l4 136365 03/10/2021 TAREG 160MG P-823 P- P- P- R I 28FCT PH 1008- 1009- 1009- 213745 TAREG P-824 A.20 B.l5 C.l5 0411312021 1 80MG 28FCT R PH P-783 P- P- P- 178603 I 1009- 1009- 1009- XANTOR P-799 A.26 B.21 C.21 R 04/29/2021 20MG 380182 IOOFCT PH P- P- P- 06/16/2021 1009- 1009- 1009- R PROLOHEX A.27 B.22 C.22 376920 06115/2021 IOOMG TAB I OO'S (IFG) P- P- P- R 06/28/2021 TAREG 1009- 1009- 1009- 410249 160MG A.51 B.42 C.42 07/13/2021 28FCT PH R P- P- P- 453524 r TAREG 1009- 1009- 1009- 80MG 28FCT A.64 B.53 C. 53 PH P- P- P- CO-TAREG 1009- 1009- 1009- 160+12.5MG A.80 B.66 C.66 28FCT PH LODINE P- P- P- 5MG IOOPRT 1009- 1009- 1009- PH A.85 B.71 C.71 P- P- P- 1009- 1009- 1009- A.87 B.73 C.73 P- P- P- 1009- 1009- 1009- A.l04 B.88 C.88

DECISIOI\ CTA CASE NO. 11060 Page 21 of24 XANTOR 58,603.56 P-835 P- 4190620143 P- 89007 P- R 07/14/2021 IOMG 373,518.57 P-836 1009- 4190627069 1009- 105742 1009- 457077 IOOFCT PH 127,004.79 P-828 A.114 4190630794 8.96 122290 C.96 864,399.69 P-824 4190631531 124003 R 08/17/2021 XANTOR 210,652.05 P-796 P- P- 128600 P- 551716 40MG TAB 103,574.49 P-822 1009- 20210927 1009- 131875 1009- IOOS 174,107.65 P-830 A.l22 001 8.102 131875 C.l02 R 09/20/2021 VERAL 565,152.93 P-823 134334 640810 240MG 431,511.24 P-836 P- 4190633899 P- 143012 P- 100PRT UD 130,841.85 P-834 1009- 4190633900 1009- 153002 1009- R 09/22/2021 PH I 04,533.42 P-834 A.l47 4190634947 8.123 159717 C.l23 646906 TAREG P-821 4190637669 80MG 28FCT 113,321.69 P-784 P- 4190639943 P- P- I PH P-823 1009- 4190643294 1009- 1009- 147,573.14 A.150 8.126 C.126 R 10/01/2021 ISORMED 2,393,821.53 666981 60MG 50PRT P12,487,755.50 P- P- P- PH 1009- 1009- 1009- SIMVAS A.l51 8.127 C.l27 20MG UD TAB P- P- P- R IOO'S PH 1009- 1009- 1009- 680359 I0/07/2021 I A. I 56 B.l32 C.l32 VIDASTAT R I 20MG UD P- P- P- 680359 I0/07/2021 I TAB 100'S 1009- 1009- 1009- TAREG A. I57 8.137 C.l37 R I 0/13/2021 160MG 28FCT PH P- P- P- 691858 1009- 1009- 1009- XANTOR A.l62 8.142 C.142 R 11/02/2021 40MG TAB 734670 IOOS P- P- P- 1009- 1009- 1009- R 11/22/2021 XANTOR A.l68 B. I58 C.158 20MG TAB 780808 IOOS P- j)_ P- 1009- 1009- R 12/06/2021 XANTOR A.l85 1009- C.l66 812117 20MG TAB B.l66 IOOS P- RTM 1009- VERAPAMIL A.l93 240MG IOOPRT UD P- 4190646351 P- 166460 P- R 12/20/2021 PH 1009- 1009- 1009- 844101 A.208 8.180 C.l80 CO-TAREG 80+12.5MG P- 4190646618 P- 167037 P- R 12/21/2021 28FCT PH 1009- 1009- 170036 1009- 846234 A.213 4190646433/ 8.183 C.l83 TAREG 4190646434 R 12/28/2021 80MG 28FCT P- P- P- 860344 PH 1009- 1009- 1009- A.215 8.185 C.l85 Total 6. VAT payments, aggregating Pl ,318,520.04, for the importation of the following medicine brands must be disallowed as the description in their respective commercial invoices and SADs, indicating the medicine brand in "80mg" dosage, do not match the medicine dosage as declared in their respective FDA-issued CPRs (i.e. in lOmg, 20mg, and 40mg dosages).46 As such, the Court cannot verify whether the following medicine brands exist in 80mg dosage. r 46 Exhibits"P-776"to"P-778".

DECISIO:'>I CTA CASE NO. II 060 Page 22 of24 Item VAT Exhibit Commercial Exhibit IEIRD/ Exhibit SSDT Description Payment Reference Invoice No. Reference SAD Reference SSDT No. Date 4190582182 No. 01/05/2021 AVAMAX No. 4190593286 No. 3785 No. 01/20/2021 80MG 4190622579 07/23/2021 30FCT UD p 188,046.13 P-1009- 4190634476 P-1009- 7319 P-1009- R4400 I 0/11/2021 PH A.2 4190643504 8.1 C. I 12/06/2021 AVAMAX 4190645414 93747 12/13/2021 80MG 198,375.14 P-1009- P-1009- P-1009- R 36139 30FCT UD A.IO 8.6 132909 C.6 PH AVAMAX 179,647.85 P-1009- P-1009- 159716 P-1009- R 483174 80MG A.119 8.99 C.99 30FCT UD 162824 PH 310,392.61 P-1009- P-1009- P-1 009- R 686904 AVAMAX A. I 54 8.130 C.l30 80MG 30FCT UD 298,726.98 P-1009- P-1009- P-1009- R 812115 PH A.l94 8.167 C.167 AVAMAX 80MG P-1009- P-1009- P-1009- R 826653 30FCT UD 143,331.33 A.l98 8.171 C.l71 PH PI ,318,520.04 AVAMAX 80MG 30FCT UD PH Total 7. Importation of Ritemed Felodipine 5mg prolonged-release tablet, with VAT due amounting to P108,477.87 per SAD,47 must be disallowed as the supporting SSDT does not reflect the amount ofVAT payment.48 8. Importation of RTM Verapamil 240mg prolonged-release tablet, with VAT payment amounting to P112,588.04,49 must be disallowed as medicine's form (in prolonged-release tablet), based on its commercial invoice and SAD,50 is not included in the DOH-FDA list ofVAT-exempt medicine for hypertension. Finally, with respect to the second element, the documents show that the importations were made beyond January 1, 2020, for medicines used for treatment of diabetes, high cholesterol, and hypertension, and January 1, 2021, for medicines used for treatment of cancer, and mental illness, with January 5, 2021 as the earliest payment made based on petitioner's submitted SSDTs. r 47 Exhibit "P-I 009-8.20". 48 Exhibit "P-1009-C.20". 49 Exhibit "P-1009-C.47". 50 Exhibits "P-1009-A.57" and "P-1009-8.47".

DECISIOI\ CTA CASE NO. 11060 Page 23 of24 In summary, out of the total VAT payment on importation of medicines for treatment of diabetes, high cholesterol, hypertension, cancer, mental illness, and kidney diseases being claimed for refund by petitioner amounting to P81,970,841.12 for the period January 1, 2021 to December 31, 2021, only the amount ofP63,649,289.21, as computed below, are proven to be exempt from VAT in accordance with Section 109(l)(AA) ofthe Tax Code, as amended by R.A. Nos. 11467 and 11534, and RR No. 04-2021. Total VAT payment made on importation of P81,970,841.12 alleged VAT-exempt medicines 18,321,551.91 Less: Disallowances by the Court P63,649,289.21 VAT payment made on importation of VAT-exempt medicines as verified by the Court Meanwhile, as verified by the ICPA, the total VAT payments made on the importation ofthe foregoing VAT-exempt medicines were not declared in petitioner's quarterly VAT returns forTY 2021,51 thus negating the possibility of petitioner claiming the foregoing VAT payments as credits against any output tax. Considering that there were VAT payments made, in the amount of P63 ,649,289.21, on supposedly VAT-exempt importation ofmedicines during the taxable year 2021, the same becomes erroneous and must indeed be refunded to petitioner. ACCORDINGLY, in light of the foregoing considerations, the Petition for Review is PARTIALLY GRANTED. Respondent is ordered to REFUND or ISSUE A TAX CREDIT CERTIFICATE in favor of petitioner its erroneously paid VAT, in the reduced amount of P63,649,289.21, on its importations of prescription drugs and medicines for diabetes, high cholesterol and hypertension, as well as prescription drugs and medicine for cancer and mental illness, during the period January 1, 2021 to December 31, 2021. SO ORDERED. MARIA 51 Exhibit "P-903" (ICPA Report, pp. 51 to 54); Exhibits "P-I 0 10", "P-763" and "P-I 0 13" to "P-I 015".

DECISION CTACASENO.ll060 Page 24 of24 WE CONCUR: ()...,. ~~......., 1 - . MA. BELEN M. RINGPIS-LIBAN Associate Justice ~w-~~ CORAZ(SN.G. FERRER- Associate Justice CERTIFICATION Pursuant to Article VIII, Section 13 of the Constitution, it is hereby certified that the conclusions in the above Decision were reached in consultation before the case was assigned to the writer of the opinion of the Court. i,. ..d,J:,. ,__.# ----- MA. BELEN M. RINGPIS-LIBAN Presiding Justice