DOLE PHILIPPINES, INC. v. COMMISSIONER OF INTERNAL REVENUE

REPUBLIC OF THE PHILIPPINES Court ofTax Appeals QUEZON CITY Third Division DOLE PHILIPPINES, INC., CTA CASE NO. 8665 Petitioner, Members: versus - Bautista, Chairperson Fa bon-Victorino, and Ringpis-Liban, JJ. COMMISSIONER OF Promulgated: INTERNAL REVENVERespondent. M~--~~J~.L'~=:::__________x X---------------------------------------------------------------- DECISION BAUTISTA, J: The Case Before the Court is a Petition for Review1 filed by petitioner DOLE Philippines, Inc. ("DOLE") on June 28, 2013, pursuant to Section 7(a)(2)2 of Republic Act (RA") No. 11253, as amended by RA No. 92824 1 Records, CTA Case No. 8665, Vol. 1, Petition for Review, pp. 6-1911, with Annexes. ,-/ 2 Sec. 7. Jurisdiction.- The Court of Tax Appeals shall exercise: (a) Exclusive appellate jurisdiction to review by appeal, as herein provided: (1) Decisions of the Commissioner of Internal Revenue in cases involving disputed assessments, refunds of internal revenue taxes, fees or other charges, penalties in relation thereto, or other matters arising under the National Internal Revenue Code or other laws administered by the Bureau of Internal Revenue; (2) Inaction by the Commissioner of Internal Revenue in cases involving disputed assessments, refunds of internal revenue taxes, fees or -other charges, penalties in relation thereto, or other matters arising under the National Internal Revenue Code or other laws administered by the Bureau of Internal Revenue, where the National Internal Revenue Code or other applicable law provides a specific period for action: Provided, that in case of disputed assessments, the inaction of the Commissioner of Internal Revenue within the one hundred eighty day-period under Section 228 of the National Internal revenue Code shall be deemed a denial; xxx. 3 An Act Creating the Court of Tax Appeals, as amended. 4 An Act Expanding the Jurisdiction of the Court of Tax Appeals (CTA), Elevating its Rank to the Level of a Collegiate Court with Special Jurisdiction and Enlarging its Membership, Amending for the Purpose Certain Sections of Republic Act No. 1125, as amended, Otherwise Known as the Law Creating the Court of Tax Appeals, and for Other Purposes.

DECISION CTA CASE NO. 8665 Page2of27 and RA No. 95035, in relation to Rule 46 of the Revised Rules of the Court of Tax Appeals (RRCTA")7, which seeks for the Court to render judgment ordering respondent Commissioner of Internal Revenue ("CIR") to issue a cash /tax refund in the amount of Seven Hundred Seventy Eight Million Seven Hundred Eighty Six Thousand Eight Hundred Thirty One Pesos and Thirty Four Centavos (Php778,786,831.34) representing the unutilized input taxes for the period of January 1, 2011 to December 31, 2011, which are all attributable to the its zero-rated sales for the said period, pursuant to Sections 108(B)(1) and 112(A) of the 1997 National Internal Revenue Code ("1997 NIRC"), as amended. The PartiesB Petitioner is a corporation duly organized and existing under and by virtue of the laws of the Republic of the Philippines, with principal office address at Polomok, South Cotabato. Respondent is the duly appointed Commissioner of Internal Revenue ("CIR") vested with authority to act as such, including inter alia, the power to decide, approve and grant refunds or tax credit of creditable input VAT due or paid that are attributable to zero-rated sales or erroneously or illegally collected internal revenue taxes as provided by law, and with office address at the BIR National Building, Diliman, Quezon City. The Facts Petitioner is a Value-Added Tax ("VAT") registered entity with TIN 000-428-573 and Certificate of Registration OCN 2004-111-0003909 dated May 28, 2004, issued by respondent.1� It is also registered as a large taxpayer under the Large Taxpayers Service ("LTS") and was issued Certificate of Registration OCN 8Rc0000019984, dated s An Act Enlarging the Organizational Structure of the Court of Tax Appeals, Amending for the Purpose Certain Sections of the Law Creating the Court of Tax Appeals, and for Other Purposes. 6 Rule 4. Jurisdiction ofthe Court, Sec. 3. Cases within the jurisdiction ofthe Court in Division. -The Court in Division shall exercise: (a) Exclusive original over or appellate jurisdiction to review by appeal the following: (1) xxxxx; (2) Inaction by the Commissioner of Internal Revenue in cases involving disputed assessments, refunds of internal revenue taxes, fees or other charges, penalties in relation thereto, or other matters arising under the National Internal Revenue Code or other applicable law provides a specific period for action: xxx. 7 A.M. No. 05-11-07-CTA, November 22,2005. ( s Records, Vol. 3, Joint Stipulation of Facts and Issues ("JSFI"), pp. 2139-2140. 9 Records (box), Exhibit "P-5" (also found in soft copy of FOE, Disk 1). to Records, JSFI, p. 2140.

DECISION CTA CASE NO. 8665 Page3of27 November 14, 1997, issued by respondent through Large Taxpayer District Office ("LTDO") 122-Makati City.n Petitioner filed its Monthly Value-Added Tax Declaration (BIR Form No. 2550-M) and Quarterly Value-Added Tax Return (BIR Form No. 2550-Q) for taxable year 2011, as follows: Month Date Filed BIRForm Exhibit No. January February 18, 201112 2550-M February March 17, 201113 2550-M P-7 1st Quarter April20, 201114 2550-Q P-8 April May 20,201115 2550-M P-9 May 20, 2011 2550-M P-10-a May (amended)16 P-10 2nd Quarter June 17, 201117 2550-M July July 25, 201118 2550-Q P-11 August August 19, 201119 2550-M P-12 3rd Quarter September 20, 201120 2550-M P-13 October October 20, 201121 2550-Q P-14 November November 23, 201122 2550-M P-15 4th Quarter December 22, 201123 2550-M P-16 January)9, 201224 2550-Q P-17 L--..- P-18 ------- - Petitioner likewise filed its Quarterly Income Tax Return (BIR Form No. 1702Q) for the 1st,25 2nd,26 and 3rd27 Quarters on May 25,2011, August 8, 2011 and November 29, 2011, respectively. Petitioner filed its Amended Annual Income Tax Return2B on May 18, 2012. 11 Records, the Court notes that JSFI provide OCN 8Rc0000017970, p. 2140; Exhibit "P-6" (also found in soft copy of FOE, Disk 1). 12 Id., JSFI, par. g, p. 2140. 13 Id. 14 Id., JSFI, par. h, p. 2141. 1s Id., JSFI, par. g, p. 2140. 16 Id. 17 Id. 1s Id., JSFI, par. h, p. 2141. 19 Id., JSFI, par. g, p. 2140. 20 Id. 21 Id, JSFI, par. h, p. 2141. 22 Id., JSFI, par. g, p. 2140. 23 Id. 24 Id., JSFI, par. h, p. 2141. 25 Records (box), Exhibit "P-19" (also found in soft copy of FOE, Disk 1). 26 Id., Exhibit "P-20" (also found in soft copy of FOE, Disk 1). ( 27 Id., Exhibit "P-21" (also found in soft copy of FOE, Disk 1). 28 Id., Exhibit "P-22" (also found in soft copy of FOE, Disk 1).

DECISION CTA CASE NO. 8665 Page4of27 On January 30, 2013, respondent received a letter29 from petitioner dated January 17, 2013, applying for a cash refund of its excess input VAT on its purchase of goods and services attributable to zero-rated sales for the period January to December 2011 in the amount of Seven Hundred Seventy Eight Million Seven Hundred Eighty Six Thousand Eight Hundred Thirty One Pesos and Thirty Four Centavos (Php778,786,831.34). Petitioner also filed its Application for Tax Credits/Refunds (BIR Form No. 1914).30 On June 28, 2013, petitioner filed the instant Petition for Review.31 On July 12, 2013, the Court issued the Summons32 addressed to respondent, ordering her to file her Answer to the Petition for Review within fifteen (15) days from receipt thereof. On July 25, 2013, respondent filed a Motion for Extension of Time to File Answer33 praying for an extension of fifteen (15) days within which to file her answer, which was granted by the Court in its Resolution34 dated July 29,2013. On August 16, 2013 and by registered mail, respondent filed her Answer3s, raising the following Special and Affirmative Defenses:36 3. She reiterates, restates, and repleads the preceding paragraphs of this Answer as part of her Special and Affirmative Defenses; 4. Petitioner's alleged claim for issuance of tax credit certificate/ refund is still subject to administrative routinary investigation/ examination by the respondent's [sic] Bureau; 5. Taxes paid and collected are presumed to have been made in accordance with law, hence, not refundable. 29 Records (box), Exhibit "P-3" (also found in soft copy of FOE, Disk 1). 3� Id., Exhibit "P-4" (also found in soft copy of FOE, Disk 1). 31 Records, Vol. 1, Petition for Review, pp. 6-1911, with Annexes. 32 Id., Vol. 3, p. 1912. 33 Id., Vol. 3, pp. 1914-1915. 34 Id., Vol. 3, p. 1916. ~ 35 Id., Vol. 3, Answer, pp. 1917-1918. 36 Id.

DECISION CTA CASE NO. 8665 PageS of27 6. Petitioner's claim for cash refund in the amount of [Php]778,786,831.34, as alleged unutilized input VAT paid on local purchases of taxable goods and services attributable to its zero-rated sales for the period covering January to December 31, 2011 were not fully substantiated by proper documents, such [as] sales invoices, official receipts, import documents and others [sic] pertinent records. 7. In an action for refund/ credit, the burden of proof is upon petitioner to establish its right to the claimed refund and failure to adduce sufficient proof is fatal to its claim. 8. Petitioner's sales of goods and services to various alleged clients/ affiliates do not qualify as zero-rate [sic] VAT. 9. The amount subject of the claim for cash refund of petitioner does not pertain in full to its input VAT attributable to its zero-rated sales for the period covering January to December 31,2011. 10. Petitioner failed to comply with the substantiation requirements under Section 113 and 237 of the 1997 Tax Code in relation to Revenue Regulations No. 16-2005. 11. Petitioner failed to comply with the conditions/requirements under Section 112(A)(B)(C)(D) of the 1997 Tax Code. 12. Claims for refund are construed strictly against herein petitioner for the same partakes 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). On August 27, 2013, petitioner filed an Urgent Motion for Extension of Time to File Reply (To: Respondent's Answer dated August 12, 2013)37, praying for an additional period of ten (10) days or until September 6, 2013 within which to file its reply, which was granted by the Court in its Order3s dated August 28, 2013. Petitioner filed its Reply (To: Respondent's Answer dated August 12, 2013)39 on September 6, 2013. r 37 Records., Vol. 3, pp. 1921-1923. 38 Id., Vol. 3, p. 1924. 39 Id., pp. 1925-1929.

DECISION CTA CASE NO. 8665 Page6of27 On January 30, 2014, the Court ordered40 the parties to submit their JSFI, and ordered petitioner to file a Motion for the Commissioning of an Independent Certified Public Accountant ("ICPA") within five (5) days from January 30, 2014 or until February 4, 2014. On February 4, 2014, petitioner filed a Motion to Appoint Independent Certified Public Accountant.41 On February 10, 2014, the parties, through their respective counsels, filed their JSFJ.42 On February 20, 2014, a Pre-trial Order43 was issued by the Court terminating pre-trial and setting the date/s for the presentation of evidence by the parties. During the hearing on March 24, 2014, counsel for petitioner presented and qualified Mr. Michael L. Aguirre ("Mr. Aguirre") as an ICPA without any objection from the counsel for respondent.44 This was later confirmed in the Resolution45 dated March 27, 2014, hence, on May 9, 2014, Mr. Aguirre filed his Partial ICPA Report.46 During the hearing held on May 15, 2014, petitioner's counsel presented the following witnesses: 1) Mr. Teodoro Santos, Jr., petitioner's Finance Director47; 2) Ms. Bernadith C. Milo, petitioner's Accounting Facilitator48; and 3) Ms. Dorothy Jane D. Milo, petitioner's Tax Supervisor/ Facilitator49.so On May 26,2014, ICPA Aguirre filed his ICPA Report.sl 40 Records, Vol. 3, Minutes of Hearing January 30, 2014, p. 2119. 41 Id., Vo. 3, p. 2123. 42 Id, Vol. 3, pp. 2139-2150. 43 Id., Vol. 3, Pre-Trial Order, pp. 2169-2175. 44 Id., Vol. 4, p. 2176. 45 Id., Vol. 4, pp. 2179-2180. 46 Id., Vol. 4, pp. 2185-2204. r 47 Id., Vol. 3, Judicial Affidavit, pp. 1970-1986. 48 Id., Vol. 3, Judicial Affidavit, pp. 1987-1991. 49 Id., Vol. 3, Judicial Affidavit, pp. 2022-2024. so Id., Vol. 4, Minutes ofHearing May 15, 2014, p. 2205. s1 Id., Vol. 4, pp. 2206-2223.

DECISION CTA CASE NO. 8665 Page 7 o�27 On July 18, 2014, ICPA Aguirre transmitted four (4) original copies of his Supplemental Independent CPA Report.52 On July 22, 2014, petitioner its Compliance with Notice of Submission53 with attached Judicial Affidavit54 of ICPA Aguirre. On July 24, 2014, petitioner presented its last witness, ICPA Aguirre, who identified his Judicial Affidavit55 dated July 21,2014, and his Supplemental Judicial Affidavit56 dated July 23, 2014 which was executed to correct the markings provided in the original Judicial Affidavit and in the ICPA Report submitted to the Court. On August 8,2014, petitioner filed its Formal Offer of Evidence57 ("FOE"). In response thereto and on September 9, 2015, respondent filed, by registered mail, her Comment (Petitioner's Formal Offer of Evidence).58 Thus, on September 16, 2014, the Court issued a Resolution59 denying petitioner's FOE for failure to submit the duly- marked exhibits. On September 26, 2014, petitioner filed a Motion for Reconsideration with Manifestation6�, stating that it already submitted to the Court the duly marked original documents/exhibits on August 8, 2014 when it filed its FOE; that counsel for petitioner immediately requested for examination of the records of the case on September 23, 2014; that upon checking the records, which was conducted in the presence of the Court personnel of the Judicial Records Division, all the duly-marked documents/exhibits were located and found in the Records Division; and praying that the Court's Resolution dated September 16, 2014, be set aside and that the Exhibits submitted and offered be duly admitted as evidence for petitioner. On October 29, 2014, the Court issued a Resolution61, granting petitioner's Motion for Reconsideration, thus, the Resolution dated 52 Records, Vol. 4, pp. 2237-2366. 53 Id., Vol. 4, pp. 2367-2370. 54 Id., Vol. 4, Judicial Affidavit, pp. 2371-2544, with Annexes. 55 Id. 56 Id., Vol. 5, Supplemental Judicial Affidavit, pp. 2731-2735. I 57 Id., Vol. 5, Petitioner's FOE, pp. 2743-2770. ss Id., Vol. 5, pp. 2780. 59 Id., Vol. 5, pp. 2778-2779. 6o Id., Vol. 5, pp. 2789-2792. 61 Id., Vol. 5, pp. 2820-2821.

DECISION CTA CASE NO. 8665 Page 8 o�27 September 16, 2014 was set aside and petitioner's Exhibits were admitted. On November 24, 2014, respondent filed her Formal Offer of Evidence,62 with petitioner's Comment (To Respondent's Formal Offer of Evidence)63 filed on December 5, 2014. On January 12, 2015, the parties filed a Manifestation with Supplemental To Joint Stipulation of Facts and Issues64 wherein they stipulated that the ultimate issue to be resolved is the amount of cash refund/ tax refund petitioner is entitled to. On January 30, 2015, the Court issued a Resolution65 admitting respondent's Evidence, noting the parties' Manifestation; and granting the parties a period of thirty (30) days from notice within which to file their respective Memoranda. On March 5, 2015, petitioner filed its Memorandum (For the Petitioner)66, while respondent filed by registered mail, her Manifestation and Motion67, which states that she is adopting all her arguments (factual and legal) found in the special and affirmative defenses of her Answer dated August 12, 2013, as well as the arguments/ purposes for which all of her documentary evidence were formally offered and admitted by the Court. On April 1, 2015, the Court resolved to submit the case for decision, at the same time noting the Memorandum filed by petitioner on March 5, 2015, and respondent's Manifestation and Motion.68 On July 22, 2015, petitioner filed a Manifestation Cum Urgent Motion for Early Resolution69 alleging that since the parties have already manifested, in their Supplemental to Joint Stipulations of Facts and Issues dated January 12, 2015, that the sole issue to be resolved by the Court is the amount of refund that it is entitled to, hence, it prayed for the early resolution of the case. 62 Records, Vol. 5, Respondent's FOE, pp. 2828-2832. 63 Id., Vol. 5, pp. 2835-2837. 64 Id., Vol. 5, pp. 2838-2841. I 65 Id., Vol. 5, pp. 2843-2844. 66 Id., Vol. 5, Petitioner's Memorandum, pp. 2849-2871. 67 Id., Vol. 5, pp. 2872-2873. 68 Id., Vol. 5, pp. 2876-2877. 69 Id., Vol. 5, pp. 2878-2882.

DECISION CTA CASE NO. 8665 Page9of27 On July 31, 2015, the Court issued a Resolution7o ordering respondent to file her Comment on petitioner's Manifestation Cum Urgent Motion for Early Resolution. On October 14, 2015, the Judicial Records Division issued a Records Verification Report71, stating that respondent failed to file her Comment on petitioner's Manifestation Cum Urgent Motion for Early Resolution. On November 16,2015, the Court noted and granted petitioner's Manifestation Cum Urgent Motion for Early Resolution, hence, this decision.n The Issue73 For resolution of the Court is the sole issue: THE AMOUNT OF TAX REFUND/TAX CREDIT FOR THE UNUTILIZED INPUT TAXES FOR THE PERIOD OF JANUARY 1, 2011 TO DECEMBER 31, 2011, THAT THE PETITIONER IS ENTITLED TO. Petitioner's Arguments Petitioner alleges that considering the joint manifestation and limitation by the parties of the ultimate issue that is left to be resolved by the Court, it has fully complied with all the requirements of the law, the implementing rules and regulations and existing jurisprudence for tax refund cases; that it timely filed its administrative and judicial claims for refund; that it complied with the requirements for cash refund under Section 112(A) of the 1997 NIRC and RR No. 16-2005; and that respondent's witness also made the admission during cross- examination that all the requirements for its VAT refund claim were complied with and submitted. Respondent's Counter-Arguments .,/ 70 Records, Vol. 5, pp. 2884-2885. n Id., Vol. 5, p. 2886. 72 Id., Vol. 5, pp. 2889-2891. 73 Id., Vol. 5, Manifestation with Supplemental to JSFI, pp. 2838-2841.

DECISION CTA CASE NO. 8665 Page 10of27 Respondent counter-argues that petitioner's alleged claim for issuance of tax credit certificate/ tax refund is still subject to her administrative routinary investigation/examination; that taxes paid and collected are presumed to have been made in accordance with law, hence, not refundable; that petitioner failed to substantiate its claim for cash refund amounting to Php778,786,831.34; that the burden of proof is upon petitioner to establish its right to the claimed refund; and that claims for refund are construed strictly against the petitioner for the same partakes the nature of exemption from taxation. The Ruling of the Court The Court must first determine whether it has jurisdiction over the case at bar. Section 112 of the 1997 NIRC, as amended, provides as follows: SEC. 112. Refunds or Tax Credits ofInput Tax.- (A) Zero-Rated or Effectively Zero-Rated Sales.- any VAT- registered person, whose sales are zero-rated or effectively zero-rated may, within two (2) years after the close of the taxable quarter when the sales were made, apply for the issuance of a tax credit certificate or refund of creditable input tax due or paid attributable to such sales, except transitional input tax, to the extent that such input tax has not been applied against output tax: Provided, however, That in the case of zero- rated sales under Section 106(A)(2)(a)(1), (2) and (B) and Section 108 (B)(1) and (2), the acceptable foreign currency exchange proceeds thereof had been duly accounted for in accordance with the rules and regulations of the Bangko Sentral ng Pilipinas (BSP): Provided, further, That where the taxpayer is engaged in zero-rated or effectively zero-rated sale and also in taxable or exempt sale of goods of properties or services, and the amount of creditable input tax due or paid cannot be directly and entirely attributed to any one of the transactions, it shall be allocated proportionately on the basis of the volume of sales. (Underscoring ours) I

DECISION CTA CASE NO. 8665 Page 11 o�27 As to the timeliness of the judicial claim for refund, Section 112(C) of the 1997 NIRC, as amended, in relation to RR No. 16-200574 provides as follows: (C) Period within which Refund or Tax Credit ofInput Taxes shall be Made.- In proper cases, the Commissioner shall grant a refund or issue the tax credit certificate for creditable input taxes within one hundred twenty (120) days from the date of submission of complete documents in support of the application filed in accordance with Subsections (A) and (B) hereof. In case of full or partial denial of the claim for tax refund or tax credit, or the failure on the part of the Commissioner to act on the application within the period prescribed above, the taxpayer affected may, within thirty (30) days from the receipt of the decision denying the claim or after the expiration of the one hundred twenty day-period, appeal the decision or the unacted claim with the Court of Tax Appeals. (Underscoring ours) XXX XXX XXX Corollary, RR No. 16-2005 states the following: Sec. 4.112-1. Claims for Refund/Tax Credit Certificate ofInput Tax. XXX XXX XXX (d) Period within which refund or tax credit certificate/refund ofinput taxes shall be made In proper cases, the Commissioner of Internal Revenue shall grant a tax credit certificate/refund for creditable input taxes within one hundred twenty (120) days from the date of submission of complete documents in support of the application filed in accordance with subparagraph (a) above. In case of full or partial denial of the claim for tax credit certificate/refund as decided by the Commissioner of Internal Revenue, the taxpayer may appeal to the Court of Tax Appeals (CTA) within thirty (30) days from the receipt of said denial, otherwise the decision shall become final. However, if no action on the claim for tax credit certificate/refund has been taken by / the Commissioner of Internal Revenue after the one hundred 74 Consolidated Value-Added Tax Regulations of 2005, effective November 1, 2005.

DECISION CTA CASE NO. 8665 Page 12of27 twenty (120) day period from the date of submission of the application with complete documents, the taxpayer may appeal to the CTA within 30 days from the lapse of the 120-day period. (Underscoring ours) Records disclose the following pertinent dates relative to the filing of the administrative and judicial claims: Quarter Return Filed Admin Due Date Admin 120days + 30 days Judicial Apr. 20, 201F5 (2 yrs from close of Qtr) Claim Filed July 1, 2013 Claim Filed 1st Close of Qtr: July 25, 201F6 March 31, 2011 Oct. 20,201177 March 31, 2013 Jan.30,2013 May30,2013 June 28, 2013 ! 2nd Close of Qtr: Jan. 19,201278 June 30, 2011 June 30, 2013 I 3rd Close of Qtr: Sept. 30, 2011 Sept. 30, 2013 4th Close of Qtr.: Dec. 31, 2011 Dec. 31, 2013 ---�- Based on Section 112 (A), petitioner had two (2) years from the close of the taxable quarter when the sales were made to file its administrative claim. Thus, it had until March 31, June 30, September 30, and December 31, 2013, within which to file its administrative claims for the 1st, 2nd, 3rd and 4th quarters of 2011. Petitioner filed its claim for all the taxable quarters of 2011 on January 30, 2013, thus complying with the two (2)-year prescriptive period. In accordance with Section 112(C) of the 1997 NIRC, as amended, in relation to RR No. 16-2005, respondent had one hundred twenty (120) days from January 30, 2013 or until May 30, 2013, within which to issue its decision on the administrative claim. However, as borne by the records, no decision was taken by the respondent, hence, petitioner had thirty (30) days from May 30, 2013 or until June 29, 2013, within which to file its judicial claim for tax credit or refund before the CTA. However, since June 29,2013 falls on a Saturday, the last day for filing the judicial claim falls on July 1, 2013, a Monday. As enunciated by the Supreme Court in Commissioner of Internal Revenue v. San Roque Power Corporation, et al.,79 strict compliance with the mandatory 120 + 30-day period is necessary for a claim for tax refund or credit. In the instant case, petitioner filed its judicial claim for refund on June 28, 2013, thus complying with the mandatory 75 Records, Vol. 3, JSFI, par. h, p. 2141. ( 76 Id. 77 Id. 78 Id. 79 G.R. No. 187485, February 12, 2013, 690 SCRA 336.

DECISION CTA CASE NO. 8665 Page 13of27 periods. Hence, both the administrative and judicial claims for refund were filed on time. Having settled the issue of jurisdiction, the Court now proceeds to discuss petitioner's compliance with the requirements for VAT refund. Based on the aforecited Section 112(A) of the 1997 NIRC, a taxpayer engaged in zero-rated or effectively zero-rated sales is entitled to a refund or tax credit of unutilized input VAT attributable to such zero-rated or effectively zero-rated sales upon compliance with the following requisites:so 1. that there must be zero-rated or effectively zero-rated sales; 2. that input taxes were incurred or paid; 3. that such input taxes were attributable to zero-rated or effectively zero-rated sales; 4. that the input taxes were not applied against any output VAT liability; and 5. that the claim for refund was filed within the two-year prescriptive period. The fifth requisite was already discussed above, in relation to the Court's jurisdiction. Anent the first and second requisites, petitioner duly filed its Quarterly VAT Return for the four quarters of CY2011 with the BIR, declaring, among others, the following: v so Commissioner of Internal Revenue v. Team Sual Corporation, G.R. No. 205055, July 18, 2014.

DECISION CTA CASE NO. 8665 Page 14of27 1st Quarterlll 2nd Quarter82 3rd Quarter83 4th Quarter84 Total Vatable 376,132,636.92 358,665,757.67 735,841,301.08 510,408,403.67 1,981,048,099.34 Sales/Receipts- Private 5,736,106,135.87 5,981,754,781.95 8,895,357,050.87 5,846,348,179.16 26,459,566,147.85 Zero-Rated 159,350,622.36 157,299,073.96 213,447,084.81 177,090,128.38 707,186,909.51 Sales/Receipts 6,271,589,395.15 6,497,719,613.58 9,844,645,436. 76 6,533,846,711.21 Exempt Sales 29,147,801,156.70 Total SalesjR.eceipts Based on the ICPA Report85 total zero-rated sales per schedule is only Php25,694,237,545.9486, however, a scrutiny of the records show that the amount should be Php25,694,903,197.59, broken down as follows: DOLE PHILIPPINES, INC. Php5,629,429. 95 Php15,825,300,298.23 Zero-Rated Sales 60,092,330.77 For the Year 2011 3,453,575.92 STANFILCO - Division of Dole Phils. Inc. 246,541,750.66 Coconut Sales (Exhibit "P-25", page 1 of31) 15,509,583,210.93 DHL-Banana Sales (Exhibit "P-25", page 15 of31) Pines Sales (Exhibit "P-25", page 29 of31) Php7,606,121,598.46 9,869,602,899.36 Tropifresh Sales (Exhibit "P-25", page 1 of177) 2,263,481,300.90 Ph 25,694,903,197.59 Banana Sales (Exhibit "P-25", page 78 of177) DOLEFIL - A Division of Dole Phils. Inc. Canned Pines (Exhibit "P-25", page 1 of113) Fresh Pines (Exhibit "P-25", page 74 of113) Total Zero-Rated Sales In claiming tax refunds, it is axiomatic that the applicant must prove not only entitlement to the claim but also compliance with all the documentary and evidentiary requirements therefor.s7 Petitioner claims that majority of its sales were attributed to sales of goods from the Philippines to foreign countries. Under Section 106(A)(2)(a)(1)88 of 81 Records (box), Exhibit "P-9." 82 Id., Exhibit "P-12." 83 Id., Exhibit "P-15." 84 Id., Exhibit "P-18." 85 Records (box), Exhibit "P-36." 86 Id., Exhibit "P-36," p. 9. 87 J.R.A. Philippines, Inc. v. Commissioner of Internal Revenue, GR. No. 171307, August 28, 2013, 704 SCRA94. ss SEC. 106. Value-Added Tax on Sale ofGoods or Properties.- (A) Rate and Base of Tax. - xxxxx (2) 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); XXX XXX XXX

DECISION CTA CASE NO. 8665 Page 15of27 the 1997 NIRC, in order to be subjected to zero-percent (0%) rate, the following conditions89 must be complied with, to wit: 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. In addition to the abovementioned requirements, the VAT invoices and VAT official receipts must also comply with the invoicing requirements provided in Section 11390 of the 1997 NIRC, in relation to Sections 4.113-1(A)(l), B(l) and (B)(2)(c) of RR No. 16-0591, and that such invoices and receipts must have been duly registered with the BIR as prescribed under Section 23792 in relation to Section 23893 of the 1997NIRC. 89 Philex Mining Corporation v. Commissioner ofInternal Revenue, CTA Case No. 8553, March 15, 2015. 90 SEC. 113. Invoicing and Accounting Requirements for VAT-Registered Persons. - (A) Invoicing Requirements. - A VAT-registered person shall, for every sale, issue an invoice or receipt. In addition to the information required under Section 237, the following information shall be indicated in the invoice or receipt: (1) A statement that the seller is a VAT-registered person, followed by his taxpayer's identification number (TIN); and xxxx (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 VAT: Provided, that: 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; xxx 91 Consolidated Value-Added Tax Regulations of 2005, effective November 1, 2005. 92 SEC 237. Issuance of Receipts or Sales or Commercial Invoices. - All persons subject to an internal revenue tax shall, for each sale and transfer of merchandise or for services rendered valued at Twenty-five pesos (P25.00) or more, issue duly registered receipts or sale or commercial invoices, prepared at least in duplicate, showing the date of transaction, quantity, unit cost and description of merchandise or nature of service: xxx. 93 SEC. 238. Printing of Receipts or Sales or Commercial Invoices. - All persons who are engaged in business shall secure from the BIR an authority to print receipts or sales or commercial invoices before a printer can print the same. 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 I 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.

DECISION CTA CASE NO. 8665 Page16 of27 Moreover, any VAT-registered person claiming VAT zero-rated on its direct export sales must present at least three (3) types of documents, to wit: 1. the sales invoice as proof of sale of goods; 2. the export declaration and bill of lading or airway bill as proof of actual shipment of goods from the Philippines to a foreign country; and 3. 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. Hence, only export sales duly supported shall qualify for VAT zero-rating under Section 106(A)(2)(a)(l) of the 1997 NIRC. To support its claim, petitioner submitted Sales Invoices pre- printed/stamped with the words "Zero-rated", Airway Bills/Seaway Bills/Bills of Lading and Bank Inward Remittances and Credit Advises.94 Careful scrutiny of the documents submitted show that zero-rated sales amounting to Php259,959,852.27 should be deducted from Php25,694,903,197.59 broken down as follows: Invoice Buver Amount of Exhibit Reason for Number ASIA Zero-Rated Sales Number Disallowance With alteration, counter signature 45584 568,460.16 P.9.2-AO-ICPA different from authorized signatory 45585 P.9.2-AQ-ICPA With alteration, counter signature 45586 ASIA 1,265,513.22 P.9.2-AR-ICPA different from authorized signatory 45587 P.9.2-AT-ICPA With alteration, counter signature 45588 ASIA 562,803.84 P.9.2-AV-ICPA different from authorized signatory 45589 P.9.2-AX-ICPA With alteration, counter signature ASIA 528,954.30 different from authorized signatory USA 825,440.92 With alteration, counter signature different from authorized signatory USA 8,549,980.19 With alteration, counter signature different from authorized signatory --- -- All persons who print receipt or sales or commercial invoices shall maintain a logbook/ register of taxpayers who availed of their printing services. The logbook/ register shall contain the following information: (1) Names, Taxpayer Identification Numbers of the persons or entities for whom the receipts or sales or commercial invoices were printed; and (2) Number of booklets, number of sets per booklet, number of copies per set and the serial numbers of the receipts or invoices in each booklet. 94 Records (box), Exhibits "P-9.6-A-ICPA" to "P-9.6-KYR" and "P-9.8-A-ICPA" to "P-9.8-LW- / ICPA."

DECISION CTA CASE NO. 8665 Page17of27 45590 USA 11,482,812.15 P.9.2-AZ-ICPA With alteration, counter signature different from authorized signatory 45591 USA 4,284,690.68 P.9.2-BB-ICPA With alteration, counter signature different from authorized signatory 45597 EUROPE 546,548.99 P.9.2-BN-ICPA With alteration, counter signature different from authorized signatory 45598 EUROPE 615,368.73 P.9.2-BP-ICPA With alteration, counter signature different from authorized signatory 45599 EUROPE 612,473.40 P.9.2-BR-ICPA With alteration, counter signature different from authorized s!grlatory 45600 EUROPE 612,473.40 P.9.2-BT-ICPA With alteration, counter signature different from authorized signatory 45601 EUROPE 650,335.39 P.9.2-BV-ICPA With alteration, counter signature different from authorized signatory 45602 EUROPE 612,473.40 P.9.2-BX-ICPA With alteration, counter signature different from authorized signatory 45603 EUROPE 612,473.40 P.9.2-BZ-ICPA With alteration, counter signature different from authorized s!g_natory 45604 EUROPE 612,473.40 P.9.2-CB-ICPA With alteration, counter signature different from authorized signatory 45605 EUROPE 753,342.28 P.9.2-CD-ICPA With alteration, counter signature different from authorized signatory 45606 EUROPE 753,342.28 P.9.2-CF-ICPA With alteration, counter signature different from authorized signatory 45607 EUROPE 803,565.10 P.9.2-CH-ICPA With alteration, counter signature different from authorized signatory 45608 EUROPE 2,401,213.90 P.9.2-CJ-ICPA With alteration, counter signature different from authorized signatory 45609 EUROPE 1,200,606.95 P.9.2-CL-ICPA With alteration, counter signature different from authorized signatory 45610 EUROPE 1,200,606.95 P.9.2-CN-ICPA With alteration, counter signature different from authorized signatory 45611 EUROPE 1,200,606.95 P.9.2-CP-ICPA With alteration, counter signature different from authorized signatory 45612 EUROPE 1,200,606.95 P.9.2-CR-ICPA With alteration, counter signature different from authorized signatory 45613 EUROPE 2,401,213.90 P.9.2-CT-ICPA With alteration, counter signature different from authorized signatory 45614 EUROPE 1,200,606.95 P.9.2-CV-ICPA With alteration, counter signature different from authorized signatory 45615 EUROPE 1,200,606.95 P.9.2-CX-ICPA With alteration, counter signature different from authorized signatory 46005 USA 320,333.31 P-9.2-MV-ICPA Entries in the Invoice are not readable 46075 ASIA 2,377,986.82 P-2-PN-ICPA Entries in the Invoice are not readable 46076 ASIA 569,139.65 P-2-PO-ICPA Entries in the Invoice are not readable 46249 USA 2,598,414.34 P.9.2-UH-ICPA Entries in the Invoice are not readable 46328 ASIA 632,479.68 P-9.2-VK-ICPA Entries in the Invoice are not readable 46331 ASIA 1,766,155.78 P-9.2-VN-ICPA Entries in the Invoice are not readable 46334 ASIA 625,824.77 P-9.2-VQ-ICPA Entries in the Invoice are not readable 46539 ASIA 1,069,558.88 P-2-ABP-ICPA Entries in the Invoice are not readable 46543 ASIA 552,048.29 P-2-ABT-ICPA Entries in the Invoice are not readable 46548 ASIA 596,763.51 P-2-ABY-ICPA Entries in the Invoice are not readable 46552 OTHER EXPORT 556,348.16 P-2-ACC-ICPA Entries in the Invoice are not readable 46553 OTHER EXPORT 410,915.34 P-2-ACD-ICPA Entries in the Invoice are not readable 46554 EUROPE 574,865.36 P-2-ACE-ICPA Entries in the Invoice are not readable 46558 USA 1,141,824.50 P-2-ACI-ICPA Entries in the Invoice are not readable 46562 USA 877,694.36 P-2-ACM-ICPA Entries in the Invoice are not readable 46595 ASIA 1,230,441.34 P-9.2-ADT-ICPA Entries in the Invoice are not readable 46596 ASIA 1,250,691.06 P-9.2-ADV-ICPA Entries in the Invoice are not readable 46598 ASIA 557,856.59 P-9.2-ADW-ICPA Entries in the Invoice are not readable 46602 ASIA 555,862.69 P-9.2-AEA-ICPA Entries in the Invoice are not readable 46603 ASIA 360,149.09 P-9.2-AEB-ICPA Entries in the Invoice are not readable 46606 ASIA 1,604,338.32 P-9.2-AEE-ICPA Entries in the Invoice are not readable 46607 ASIA 1,224,770.45 P-9.2-AEF-ICPA Entries in the Invoice are not readable 46608 ASIA 1,224,770.45 P-9.2-AEG-ICPA Entries in the Invoice are not readable 46609 ASIA 490,736.95 P-9.2-AEH-ICPA Entries in the Invoice are not readable 46610 ASIA 608,224.06 P-9.2-AEI-ICPA Entries in the Invoice are not readable ,.)

DECISION CIA CASE NO. 8665 Page 18 of27 46611 ASIA 535,958.44 P-9.2-AEJ-ICPA Entries in the Invoice are not readable 46612 ASIA 884,768.35 46613 ASIA 2,206,251.27 P-9.2-AEK-ICPA Entries in the Invoice are not readable 46616 ASIA 1,876,036.59 46618 ASIA 1,184,684.53 P-9.2-AEL-ICPA Entries in the Invoice are not readable 46621 ASIA 1,051,257.11 46623 ASIA 884,768.35 P-9.2-AEO-ICPA Entries in the Invoice are not readable 46650 ASIA 489,732.63 46815 ASIA 611,691.70 P-9.2-AEQ-ICPA Entries in the Invoice are not readable 46834 ASIA 260,905.23 46850 OTHER EXPORT 325,236.89 P-9.2-AET-ICPA Entries in the Invoice are not readable 46869 ASIA 3,826,228.65 46870 ASIA 2,475,062.73 P-9.2-AEV-ICPA Entries in the Invoice are not readable 46871 ASIA 551,562.82 46872 ASIA 1,071,916.88 P-9.2-AFW-ICPA Entries in the Invoice are not readable 46873 ASIA 884,768.35 46874 ASIA 840,202.24 P-9.2-AGL-ICPA Entries in the Invoice are not readable 46875 ASIA 613,389.11 46892 USA 4,629,902.77 P-9.2-AHE-ICPA Entries in the Invoice are not readable 46893 USA 1,789,265.83 46894 USA 1,493,980.68 P-9.2-AHU-ICPA Entries in the Invoice are not readable 46895 USA 880,173.72 46896 USA 314,211.53 P-2-AIN-ICPA Entries in the Invoice are not readable 46897 USA 314,211.53 46898 USA 314,211.53 P-2-AIO-ICPA Entries in the Invoice are not readable 46899 USA 314,211.53 46900 USA 553,712.76 P-2-AIP-ICPA Entries in the Invoice are not readable 46901 CANADA 327,830.69 46902 CANADA 1,247,583.18 P-2-AIQ-ICPA Entries in the Invoice are not readable 46903 CANADA 371,037.48 46904 EUROPE 623,207.73 P-2-AIR-ICPA Entries in the Invoice are not readable 46905 EUROPE 1,112,771.74 46906 EUROPE 2,225,543.49 P-2-AIS-ICPA Entries in the Invoice are not readable 46907 EUROPE 536,104.08 46908 ASIA 514,597.78 P-2-AIT-ICPA Entries in the Invoice are not readable 46909 ASIA 601,836.66 46910 ASIA 461,196.12 P-2-AJK-ICPA Entries in the Invoice are not readable 46911 ASIA 491,420.94 46912 ASIA 40,016.57 P-2-AJL-ICPA Entries in the Invoice are not readable 46913 ASIA 1,100,282.17 46914 ASIA 611,691.70 P-2-AJM-ICPA Entries in the Invoice are not readable 46921 ASIA 797,418.49 46946 ASIA 486,856.66 P-2-AJN-ICPA Entries in the Invoice are not readable 46949 ASIA 529,439.28 46950 ASIA 538,574.77 P-2-AJO-ICPA Entries in the Invoice are not readable 46951 ASIA 191,444.94 46952 ASIA 421,873.08 P-2-AJP-ICPA Entries in the Invoice are not readable 46953 ASIA 627,296.08 46954 ASIA 534,841.86 P-2-AJQ-ICPA Entries in the Invoice are not readable 46955 ASIA 566,992.08 46956 ASIA 489,019.60 P-2-AJR-ICPA Entries in the Invoice are not readable 46957 ASIA 884,768.35 47039 ASIA 1,223,383.39 P-2-AJS-ICPA Entries in the Invoice are not readable 47672 ASIA 511,032.07 47673 ASIA 593,759.37 P-2-AJT-ICPA Entries in the Invoice are not readable 47674 USA 1,108,512.05 47675 USA 1,112,864.84 P-2-AJU-ICPA Entries in the Invoice are not readable J 47688 EUROPE 635,508.22 P-2-AJV-ICPA Entries in the Invoice are not readable 47689 EUROPE 635,508.22 P-2-A]W-ICPA Entries in the Invoice are not readable I 47690 EUROPE 583,709.94 47691 EUROPE 598,509.45 P-2-AJX-ICPA Entries in the Invoice are not readable 47692 EUROPE 1,135,229.92 47693 EUROPE 598,509.45 P-2-AJY-ICPA Entries in the Invoice are not readable i 47694 EUROPE 577,553.85 P-2-AJZ-ICPA Entries in the Invoice are not readable 47695 EUROPE 1,197,018.90 47696 THAILAND 3,164,042.23 P-2-AKA-ICPA Entries in the Invoice are not readable P-2-AKB-ICPA Entries in the Invoice are not readable P-2-AKC-ICPA Entries in the Invoice are not readable P-2-AKD-ICPA Entries in the Invoice are not readable P-2-AKE-ICPA Entries in the Invoice are not readable P-2-AKF-ICPA Entries in the Invoice are not readable P-2-AKG-ICPA Entries in the Invoice are not readable P-2-AKN-ICPA Entries in the Invoice are not readable P-2-ALM-ICPA Entries in the Invoice are not readable P-2-ALP-ICPA Entries in the Invoice are not readable P-2-ALQ-ICPA Entries in the Invoice are not readable P-2-ALR-ICPA Entries in the Invoice are not readable P-2-ALS-ICPA Entries in the Invoice are not readable P-2-ALT-ICPA Entries in the Invoice are not readable P-2-ALU-ICPA Entries in the Invoice are not readable P-2-ALV-ICPA Entries in the Invoice are not readable P-2-ALW-ICPA Entries in the Invoice are not readable P-2-ALX-ICPA Entries in the Invoice are not readable P-2-APB-ICPA Entries in the Invoice are not readable P.2-BFS-ICPA Entries in the Invoice are not readable P.2-BFT-ICPA Entries in the Invoice are not readable P.2-BFV-ICPA Entries in the Invoice are not readable P.2-BFV-ICPA Entries in the Invoice are not readable P-9.2-BGI-ICPA Entries in the Invoice are not readable P-9.2-BGJ-ICPA Entries in the Invoice are not readable P-9.2-BGK-ICPA Entries in the Invoice are not readable P-9.2-BGL-ICPA Entries in the Invoice are not readable P-9.2-BGM-ICPA Entries in the Invoice are not readable P-9.2-BGN-ICPA Entries in the Invoice are not readable P-9.2-BGO-ICPA Entries in the Invoice are not readable P-9.2-BGP-ICPA Entries in the Invoice are not readable / P-9.2-BGQ-ICPA Entries in the Invoice are not readable

DECISION CTA CASE NO. 8665 Page19of27 47697 THAILAND 1,265,616.89 P-9.2-BGR-ICPA Entries in the Invoice are not readable 47698 123,448.40 P-9.2-BGS-ICPA 47699 ASIA 709,839.98 P-9.2-BGT-ICPA Entries in the Invoice are not readable 47700 1,831,912.20 P-9.2-BGU-ICPA 47751 ASIA 4,167,441.16 P-9.2-BGV-ICPA Entries in the Invoice are not readable 47752 1,191,766.18 P-9.2-BGW-ICPA 47753 USA 448,821.63 P-9.2-BGX-ICPA Entries in the Invoice are not readable 47754 637,857.34 P-9.2-BGY-ICPA 47755 USA 335,206.75 P-9.2-BGZ-ICPA Entries in the Invoice are not readable 47756 672,040.61 P-9.2-BHA-ICPA 47757 USA 523,485.90 P-9.2-BHB-ICPA Entries in the Invoice are not readable 47758 199,451.33 P-9.2-BHC-ICPA 47759 USA 459,461.80 P-9.2-BHD-ICPA Entries in the Invoice are not readable 47760 1,111,517.55 P-9.2-BHE-ICPA 47761 USA 594,053.02 P-9.2-BHF-ICPA Entries in the Invoice are not readable 47762 881,441.19 P-9.2-BHG-ICPA 47763 CANADA 881,441.19 P-9.2-BHH-ICPA Entries in the Invoice are not readable 47764 837,042.67 P-9.2-BHI-ICPA 47765 CANADA 837,042.67 P-9.2-BHJ-ICPA Entries in the Invoice are not readable 47766 570,009.00 P-9.2-BHK-ICPA 47767 EUROPE 874,393.81 P-9.2-BHL-ICPA Entries in the Invoice are not readable 47768 938,035.31 P-9.2-BHM-ICPA 47769 THAILAND 938,035.31 P-9.2-BHN-ICPA Entries in the Invoice are not readable 47770 938,035.31 P-9.2-BHO-ICPA 47771 ASIA 3,486,914.33 P-9.2-BHP-ICPA Entries in the Invoice are not readable 47772 785,023.30 P-9.2-BHQ-ICPA 47773 ASIA 402,175.03 P-9.2-BHR-ICPA Entries in the Invoice are not readable 47774 260,684.12 P-9.2-BHS-ICPA 47775 ASIA 260,684.12 P-9.2-BHT-ICPA Entries in the Invoice are not readable 47776 260,684.12 P-9.2-BHU-ICPA 47777 ASIA 513,785.38 P-9.2-BHV-ICPA Entries in the Invoice are not readable 47778 624,937.14 P-9.2-BHW-ICPA 47779 ASIA 590,218.41 P-9.2-BHX-ICPA Entries in the Invoice are not readable 47780 123,923.41 P-9.2-BHY-ICPA 47781 ASIA 594,519.39 P-9.2-BHZ-ICPA Entries in the Invoice are not readable 47782 594,519.39 P-9.2-BIA-ICPA 47783 ASIA 624,937.14 P-9.2-BIB-ICPA Entries in the Invoice are not readable 47784 489,572.96 P-9.2-BIC-ICPA 47785 ASIA 489,447.73 P-9.2-BID-ICPA Entries in the Invoice are not readable 47786 604,422.00 P-9.2-BIE-ICPA 47787 USA 609,391.44 P-9.2-BIG-ICPA Entries in the Invoice are not readable 47788 1,061,253.12 P-9.2-BIH-ICPA 47789 USA 1,591,879.68 P-9.2-BII-ICPA Entries in the Invoice are not readable 47790 530,626.56 P-9.2-BIJ-ICPA 47791 USA 610,082.36 P-9.2-BIK-ICPA Entries in the Invoice are not readable 47792 532,768.41 P-9.2-BIK-ICPA 47793 USA 2,440,329.44 P-9.2-BIL-ICPA Entries in the Invoice are not readable 47794 371,024.04 P-9.2-BIM-ICPA 47795 USA 555,758.77 P-9.2-BIN-ICPA Entries in the Invoice are not readable 47796 470,516.52 P-9.2-BIO-ICPA 47797 USA 1,049,386.57 P-9.2-BIP-ICPA Entries in the Invoice are not readable 47798 506,167.99 P-9.2-BIQ-ICPA 47799 OTHER EXPORT 837,042.67 P-9.2-BIR-ICPA Entries in the Invoice are not readable 47800 676,548.86 P-9.2-BIS-ICPA 47801 OTHER EXPORT 563,700.90 P-9.2-BIT-ICPA Entries in the Invoice are not readable 47802 82,532.55 P-9.2-BIU-ICPA 47803 OTHER EXPORT 2,348,336.90 P-9.2-BIV-ICPA Entries in the Invoice are not readable 47804 2,413,107.19 P-9.2-BIW-ICPA 47805 OTHER EXPORT 1,042,280.46 P-9.2-BIX-ICPA Entries in the Invoice are not readable 47806 11,901,062.45 P-9.2-BIY-ICPA 47807 ASIA 283,553.57 P-9.2-BIZ-ICPA Entries in the Invoice are not readable 47808 283,553.57 P-9.2-BJA-ICPA 47809 ASIA 785,244.40 P-9.2-BJB-ICPA Entries in the Invoice are not readable 47810 785,244.40 P-9.2-BJC-ICPA 47811 ASIA 785,244.40 P-9.2-BJD-ICPA Entries in the Invoice are not readable _�812 P-9.2-B JE-ICPA ASIA 1,173~233.98 Entries in the Invoice are not readable - ASIA Entries in the Invoice are not readable ASIA Entries in the Invoice are not readable ASIA Entries in the Invoice are not readable ASIA Entries in the Invoice are not readable ASIA Entries in the Invoice are not readable ASIA Entries in the Invoice are not readable ASIA Entries in the Invoice are not readable ASIA Entries in the Invoice are not readable ASIA Entries in the Invoice are not readable ASIA Entries in the Invoice are not readable ASIA Entries in the Invoice are not readable ASIA Entries in the Invoice are not readable ASIA Entries in the Invoice are not readable ASIA Entries in the Invoice are not readable ASIA Entries in the Invoice are not readable ASIA Entries in the Invoice are not readable ASIA Entries in the Invoice are not readable ASIA Entries in the Invoice are not readable ASIA Entries in the Invoice are not readable ASIA Entries in the Invoice are not readable ASIA Entries in the Invoice are not readable ASIA Entries in the Invoice are not readable USA Entries in the Invoice are not readable USA Entries in the Invoice are not readable USA Entries in the Invoice are not readable USA Entries in the Invoice are not readable CANADA Entries in the Invoice are not readable CANADA Entries in the Invoice are not readable EUROPE Entries in the Invoice are not readable EUROPE Entries in the Invoice are not readable EUROPE Entries in the Invoice are not readable ~ - '--- EU~QPE '--- -Entries in the Invoice are not readable --~

DECISION CTA CASE NO. 8665 Page20of27 47813 EUROPE 961,086.99 P-9.2-BJF-ICPA Entries in the Invoice are not readable 47814 EUROPE 798,012.60 P-9.2-BJG-ICPA Entries in the Invoice are not readable 47815 EUROPE 562,163.60 P-9.2-BJH-ICPA Entries in the Invoice are not readable 47816 EUROPE 598,509.45 P-9.2-BJI-ICPA Entries in the Invoice are not readable 47817 EUROPE 812,822.47 P-9.2-BJJ-ICPA Entries in the Invoice are not readable 47818 EUROPE 598,509.45 P-9.2-BJK-ICPA Entries in the Invoice are not readable 47819 2,181,296.62 P-9.2-BJL-ICPA Entries in the Invoice are not readable 47820 USA 2,275,061.38 P-9.2-BJM-ICPA Entries in the Invoice are not readable 47821 USA 1,914,961.64 P-9.2-BJN-ICPA Entries in the Invoice are not readable 47822 USA 2,711,493.95 P-9.2-BJO-ICPA Entries in the Invoice are not readable 47823 USA 551,630.53 P-9.2-BJP-ICPA Entries in the Invoice are not readable 47824 USA 598,509.45 P-9.2-BJQ-ICPA Entries in the Invoice are not readable 47825 EUROPE 635,508.22 P-9.2-BJR-ICPA Entries in the Invoice are not readable 47826 EUROPE 534,088.07 P-9.2-BJS-ICPA Entries in the Invoice are not readable 47827 EUROPE 598,509.45 P-9.2-BJU-ICPA Entries in the Invoice are not readable 47828 EUROPE 736,166.62 P-9.2-BJV-ICPA Entries in the Invoice are not readable 47829 EUROPE 613,441.96 P-9.2-B]W-ICPA Entries in the Invoice are not readable 47830 ASIA 719,843.64 P-9.2-BJX-ICPA Entries in the Invoice are not readable 47831 ASIA 459,461.80 P-9.2-BJY-ICPA Entries in the Invoice are not readable 47832 ASIA 467,200.10 P-9.2-BJZ-ICPA Entries in the Invoice are not readable 47833 ASIA 487,891.00 P-9.2-BKA-ICPA Entries in the Invoice are not readable 47834 ASIA 939,098.46 P-9.2-BKB-ICPA Entries in the Invoice are not readable 47835 USA 284,382.67 P-9.2-BKC-ICPA Entries in the Invoice are not readable 47836 USA 1,706,296.03 P-9.2-BKD-ICPA Entries in the Invoice are not readable 47837 USA 4,836,624.82 P-9.2-BKE-ICPA Entries in the Invoice are not readable 47838 USA 884,281.73 P-9.2-BKF-ICPA Entries in the Invoice are not readable 47839 USA 1,211,116.26 P-9.2-BKG-ICPA Entries in the Invoice are not readable 47840 ASIA 522,508.25 P-9.2-BKH-ICPA Entries in the Invoice are not readable 47841 ASIA 1,028,296.24 P-9.2-BKI-ICPA Entries in the Invoice are not readable 47842 ASIA 1,481,492.26 P-9.2-BKJ-ICPA Entries in the Invoice are not readable 47843 ASIA 522,508.25 P-9.2-BKK-ICPA Entries in the Invoice are not readable 47844 ASIA 1,220,164.72 P-9.2-BHL-ICPA Entries in the Invoice are not readable 47845 ASIA 1,830,247.08 P-9.2-BKM-ICPA Entries in the Invoice are not readable 47846 ASIA 1,153,836.40 P-9.2-BKN-ICPA Entries in the Invoice are not readable 47847 ASIA 425,131.71 P-9.2-BKO-ICPA Entries in the Invoice are not readable 47848 ASIA 513,008.10 P-9.2-BKP-ICPA Entries in the Invoice are not readable 47849 ASIA 512,072.77 P-9.2-BKQ-ICPA Entries in the Invoice are not readable 47850 ASIA 3,082,712.31 P-9.2-BKR-ICPA Entries in the Invoice are not readable ASIA With alteration, counter signature 48778 DOLE FRESH 5,870,149.20 P-9.2-HZL-ICPA different from authorized signatory FRUIT Int'L LTD. With alteration, counter signature 48780 355,873.31 P-9.2-HZN-ICPA different from authorized signatory DOLE FRESH With alteration, counter signature 48863 FRUIT Int'L LTD. 6,288,003.77 P-9.2-ICT-ICPA different from authorized s!gtlatory With alteration, counter signature 48865 DOLE FRESH 150,561.79 P-9.2-ICV-ICPA different from authorized signatory FRUIT Int'L LTD. With alteration, counter signature 48877 4,909,712.84 P-9.2-IDH-ICPA different from authorized signatory DOLE FRESH With alteration, counter signature 48821 FRUIT Int'L LTD. 528,314.51 P-9.2-IBC-ICPA different from authorized signatory With alteration, counter signature 49465 DOLE FRESH 698,693.86 P-9.2-ITH-ICPA different from authorized signatory FRUIT Int'L LTD. TOTAL 259,959,852.27 DOLE FRESH FRUIT Int'L LTD. DOLE FRESH FRUIT Int'L LTD. In sum, petitioner's substantiated zero-rated sales for the taxable year 2011 is only Php25,434,943,345.32.95 Inasmuch as only a portion of the declared zero-rated sales were properly substantiated, only a portion of substantiated input tax ('-' 95 Difference between Php25,694,903,197.59 and Php259,959,852.27.

DECISION CTA CASE NO. 8665 Page 21 o�27 attributable thereto shall be granted based on the percentage allocation, computed in the following manner: Zero-Rated Sales Per 2011 ITR Amount Allocation Less: Difference in Zero-Rated Sales per ITR and Schedule 26,459,566,147.85 100% Zero-Rated Sales Per Schedule Less: Per This Court's Disallowance 764,662,950.26 2.8899% Substantiated Zero-Rated Sales 25,694,903,197.59 0.9825% 259,959,852.27 96.1276% 25,434,943,345.32 Therefore, since only 96.1276% out of the declared zero-rated sales for taxable year 2011 was found to be valid, only the proportionate share of input taxes allocated to zero-rated or effectively zero-rated sales can be claimed for refund or issuance of a tax credit certificate pursuant to Section 4.112-1 96 ofRR No. 16-2005. Anent the third requisite, Section 4.110-8 of RR 16-2005 provides for the supporting documents that must be presented in order to substantiate the alleged input tax credits for the period of claim, to wit: SEC. 4.110-8. Substantiation ofInput Tax Credits. - (a) Input taxes for the importation of goods or the domestic purchase of goods, properties or services is made in the course of trade or business, whether such input taxes shall be credited against zero-rated sale, non-zero-rated sales, or subjected to the 5% Final Withholding VAT, must be substantiated and supported by the following documents, and must be reported in the information returns required to be submitted to the Bureau: (1) For the importation of goods - import entry or other equivalent document showing actual payment of VAT on the imported goods. 96 SEC 4.112-1. Claims for Refund/Tax Credit Certificate of Input Tax. - (a) Zero-rated and Effectively Zero-rated Sales of Goods, Properties or Services. - A VAT-registered person whose sales of goods, properties or services are zero-rated or effectively zero-rated may apply for the issuance of a tax credit certificate/ refund of input tax attributable to such sales. The input tax that may be subject of the claim shall exclude the portion of input tax that has been applied against the output tax. The application should be filed within two (2) years after the close of the taxable quarter when such sales were made. In case of zero-rated sales under Sees. 106(A)(2)(a)(1) and (2), and Sec. 106(A)(2)(b) and Sec. 108(B)(1) and (2) of the Tax Code, the payments for the sales must have been made in acceptable foreign currency duly accounted for in accordance with the BSP rules and regulations. XXX XXX XXX ~�

DECISION CTA CASE NO. 8665 Page22of27 (2) For the domestic purchase of goods and properties - invoice showing the information required under Sees. 113 and 237 of the Tax Code. (3) For the purchase of real property - public instrument i.e., deed of absolute sale, deed of conditional sale, contract/ agreement to sell, etc., together with VAT invoice issued by the seller. (4) For the purchase of services- official receipt showing the information required under Sees. 113 and 237 of the Tax Code. The aggregate amount being claimed by petitioner for tax refund/ tax credit allegedly representing input VAT on its domestic purchases of goods and services as well as importation of goods for the taxable year 2011 is Php778,786,831.34, broken down as follows: 1st Qrtr97 2nd Qrtr9s 3rd Qrtr99 4th Qrtrloo Total 43,039,890.92 88,300,956.13 61,249,008.44 237,725,771.92 Output Tax 45,135,916.43 51,593,193.21 51,188,089.74 48,731,636.80 47,026,299.24 198,539,218.99 Input Tax Deferred On Capital Goods 51,188,089.74 Exceeding PIMillion from Previous 48,731,636.80 47,026,299.24 44,884,026.16 191,830,051.94 Quarter 405,103.47 2,456,452.94 1,705,337.56 2,142,273.08 6,709,167.05 Less: Input Tax on Purchases of Capital Goods Exceeding PIMillion Deferred for the Succeeding Period Amortization of Input Tax on Capital Goods Exceeding lMillion Current Input Taxes: Input Tax of Goods Exceeding PIMillion 3,922,389.62 2,315,977.48 3,203,621.49 2,696,937.70 12,138,926.29 146,272,147.70 Input Tax on Domestic Purchases of Goods 161,307,494.01 233,514,796.40 190,274,015.61 731,368,453.72 Other Than Capital Goods 65,470,688.31 Input Tax on Importation of Goods Other Than 57,746,932.95 86,462,691.61 56,615,743.32 266,296,056.19 Capital Goods Total Current Input Taxes 215,665,225.63 221,370,404.44 323,181,109.50 249,586,6%.63 1,009,803,436.20 Total Available Input Tax 216,070,329.10 223,826,857.38 324,886,447.06 251,728,969.71 1,016,512,603.25 Total Allowable Input Tax 170,934,412.67 180,786,966.46 236,585,490.93 190,479,961.27 778,786,831.33101 As can be seen from the table above, petitioner is claiming amortization of input tax on capital goods exceeding one million, amounting to Php6,709,167.05 (7th row, 6th column), however, a review of the records and the evidence submitted reveal that it failed to 97 Records (box), Exhibit "P-9." 98 Id., Exhibit "P-12." 99 Id., Exhibit "P-15." 1oo Id., Exhibit "P-18." ( 101 .01 rounding off difference.

DECISION CTA CASE NO. 8665 Page 23of27 provide evidence (i.e. schedule of amortization, etc.) to support its claim, thus, this amount is denied. Petitioner also claims input tax on importation of goods other than capital goods amounting to Php266,296,056.19 (11th row, 6th column), however, records disclose that only input VAT on importation amounting to Php265,836,081.64102 was properly supported with documentary evidence such as, Import Entry Internal Revenue Declaration ("IEIRD"), Bureau of Customs Official Receipts ("BOC OR") and Statement of Settlement of Duties and Taxes (SSDT)J03 Thus, input VAT on importation amounting to Php459,974.55104 is also denied. To determine the accuracy of petitioner's declaration, ICPA Aguirre, examined the voluminous documents of petitioner in support of its claim for refund, with the following findings:los Upon examination of the "Schedule of Purchases" and available supporting documents such as Supplier's Sales Invoices, Official Receipts, Import Declarations, BOC Receipts (Statement of Settlement of Duties and Taxes) and other applicable documents issued to DOLE, the following observations were noted: NO. PARTICULARS NET INPUT VAT ANNEX AMOUNT 1,428,380.56 REFERENCE 3.1 No Authority to Print 11,903,171.33 2,635,668.05 Annex C.1- ICPA 21,963,900.42 3,087,314.43 Annex C.2 - ICPA 3.2 Non-VAT Documents 9,326,374.11 25,727,620.25 2,380,391.46 Annex C.3 - ICPA 3.3 Incorrect Supporting Documents 49,269,501.88 (OR for goods/51 for services) 77,719,784.24 68,127,630.48 Annex C.4 - ICPA 19,836,595.46 Annex C.5 - ICPA 3.4 Out of Period 410,579,182.32 Annex C.6- ICPA 567,730,254.02 3.5 Not a Valid Source of Input VAT 3.6 RE: Annex C.6 - ICPA TOTAL ICPA Aguirre, through his Judicial Affidavitl06, stated that the input tax amounting to Php49,269,501.88 was subjected to further 102 Records (box), Exhibit "P-31" Importation- Dolefil Php 59,713,519.02 Importation - Phil Maktg 4,324,758.00 Importation - Stanfilco 201,797,804.62 Total Php 265,836,081.64 103 Id., Exhibits "P-7.3.1-A-ICPA" to "P-7.3.2-RM-ICPA" and "P-7.4.1-A-ICPA" to "P-7.4.2-JQ- ICPA." 104 Difference between Php266,296,056.19 and Php265,836,081.64. 1os Records (box), Exhibit "P-36," pp. 11-12. / 106 Id., Exhibit "P-46," question no. 43.

DECISION CIA CASE NO. 8665 Page 24of27 investigation since the related documents were not available during the course of the audit, thus, he submitted a supplemental ICPA report107 dated July 17, 2014. Based on the additional supporting documents provided to him, ICPA Aguirre was able to come up with the following findings: Properly Supported by OR/Invoices 19,664,684.02 Annex D-ICPA Supported by Notarized Sworn Statement of DOLE Suppliers 4,405,570.73 Exh. P-17-A to X Subtotal 24,070,254.75 Without Documentary Evidence 24,955,637.09 Annex E-ICPA Non-VAT Documents 91,658.80 Annex F-ICPA Out of Period 151,951.24 Annex G-ICPA Subtotal GRAND TOTAL 25,199,247.13 49,269,501.88 Input taxes supported by documents without authority to print and input taxes supported with documents which are out of period will also be denied. The Court has ruled in a number of cases108 that out of period invoices and official receipts, as well as those without authority to print will be denied in violation of Section 113 and Section 237 in relation to Section 238 of the 1997 NIRC, thus, input taxes amounting to Php10,906,705.91109 will be included as part of the exceptions noted. In sum, total disallowances noted by the ICPA, and which the Court hereby adapts, amount to Php68,557,328.88, broken down as follows: Apportionment related to Exempt Sales 2,635,668.05 24,499,953.44 I Non-VAT Documents 91,658.80 Non-VAT Documents (Supplemental) 2,727,326.85 Annex C.2-ICPA i Incorrect Supporting Documents 9,326,374.11 3,087,314.13 Annex F-ICPA i Not a Valid Source of Input VAT 2,380,391.46 Annex C.3-ICPA Re: Annex C.6-ICPA- Without Documentary 24,955,637.09 Annex C.5-ICPA Evidence 1,428,380.56 No Authority to Print Annex E-ICPA Out of Period Annex C.1-ICPA Annex C.4-ICPA 107 Id., Exhibit "P-36-b." 108 Chevron Holdings, Inc. v. Commissioner or Internal Revenue, CTA Case No. 8436, October 22, 2014; Air Liquide Philippines, Inc., v. Commissioner or Internal Revenue, CTA Case No. 8114, December 10, 2014; Deutsche Knowledge Services, PTE. LTD. v. Commissioner or Internal Revenue, CTA Case No. 8402, September 16,2014. 109 Input taxes Without authority to print Php 1,428,380.56 Annex C.1-ICPA ( Out of period 9,326,374.11 Annex C.4-ICPA 151,951.24 Annex G-ICPA TOTAL Php10,906,705.91

DECISION 151,951.24 9,478,325.35 I Annex G-ICPA CTA CASE NO. 8665 68,557,328.88 Page 25of27 Out of Period Total Disallowances Upon further scrutiny and study of the evidence presented, the Court finds that input VAT amounting to Php52,592,467.00 did not meet the substantiation requirements under Section 4.110-8 of RR No. 16-2005, for the reasons stated below: Invoice indicates "Not a Valid Source of Input Tax" Input VAT Out of Period Claim Php1,239.43 Supported by "TIN V" Invoice 10,957,679.06 Supported by "TIN V" Official Recei}J_t 490,302.56 Supported by NON-VAT Invoice 4,181,150.10 Supported by NON-VAT OR 1,709,952.60 Supported by NV Invoice 812,354.04 Supported by NV OR 33,401.38 Supported by Official Receipt without Supplier's TIN 336,403.42 Supported by OR not in the petitioner's name 53,016.56 Supported by OR without petitioner's TIN and Address 3,387.09 Supported by pre-printed NV Invoice, stamped 366,895.08 194,009.65 VAT but without authorized countersignature Supported by pre-printed NV OR, stamped VAT 71,970.21 but without authorized countersignature 126,779.54 Supported by pre-printed NV OR, stamped VAT registered 4,964.55 but without authorized countersignature 9,954,145.01 Supported by Statement of Account VAT not Separately Indicated 721,286.80 With noted alterations or additions in the supporting Invoice without 6,288,947.54 countersignature of the authorized representative of the supplier With noted alterations or additions in the supporting Official Receipt without 8,926,911.17 countersignature of the authorized representative of the supplier 2,489,324.86 With noted handwritten alterations or additions in the computerized Invoice 2,867,559.60 without countersignature of the authorized representative of the supplier With noted handwritten alterations or additions in the computerized supporting 289,018.30 OR without countersignature of the authorized representative of the supplier 1,711,768.45 With noted supplier's TIN alteration in the supporting Invoice without Php~!�9_2,467.00 countersignature of the authorized representative of the s1!2�lier With noted supplier's TIN alteration in the supporting Official Receipt without countersignature of the authorized representative of the supplier Without Supporting Documents Grand Total From the foregoing, the total input tax credits for the taxable year 2011 amount to Php650,467,893.86. However, as previously discussed, this input tax cannot be claimed in full by the petitioner since only 96.1276% out of the actual zero-rated sales declared per VAT return were found to be valid. Thus, such input tax credits shall be allocated accordingly: Claim Amount Php778,786,831.34 Less: / Amortization of Input Tax on Goods Exceeding 1Million 6,709,167.05

DECISION CTA CASE NO. 8665 Page 26of27 Disallowed Input Tax On Amortization 459,974.55 128,318,937.48 ICPA Exception 68,557,328.88 650,467,893.86 Additional Exception (This Court) 52,592,467.00 Total 96.1276% Zero-Rated Sales Percentage Allocation Php625,279,175.14 Substantiated Input VAT Anent the fourth requisite, petitioner substantially proved that although the claimed input VAT was carried-over by petitioner in its succeeding Quarterly VAT Returns from the first quarter of 2012 to the first quarter of 2013, the same remained unutilized since it was deducted in its Quarterly VAT Return for the first quarter of 2013, as "VAT Refund/fCC claimed" from the total available input tax. Records reveal that the 1st Quarterly VAT Return for 2013 showed a deduction in the amount of Php778,786,861.34 as "VAT Refund/fCC Claimed."110 In fine, petitioner has sufficiently proven its entitlement to a refund or issuance of tax credit certificate in the reduced amount of Php625,279,175.14, representing unutilized excess input taxes attributable to its zero-rated sales for the taxable year 2011. WHEREFORE, premises considered, the Petition for Review is hereby PARTIALLY GRANTED. Accordingly, respondent is hereby ORDERED TO ISSUE A TAX REFUND/fAX CREDIT CERTIFICATE in favor of petitioner in the reduced amount of SIX HUNDRED TWENTY FIVE MILLION TWO HUNDRED SEVENTY NINE THOUSAND ONE HUNDRED SEVENTY FIVE PESOS AND FOURTEEN CENTAVOS (Php625,279,175.14), representing the unutilized input taxes, for taxable year 2011. SO ORDERED. / WE CONCUR: LOVELL R. BAUTISTA Associate Justice '- (ON LEAVE) MA. BELEN M. RINGPIS-LIBAN no Records (box), Exhibit "P-23," line 230. Associate Justice

DECISION CTA CASE NO. 8665 Page 27 o�27 ATTESTATION I attest 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's Division. / LOVELL R. BAUTISTA Associate Justice Chairperson CERTIFICATION Pursuant to Section 13 of Article VIII of the Constitution and the Division Chairperson's Attestation, 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. Presiding Justice