MATSUSHITA BISINESS MACHINE CORPORATION OF THE PHILIPPINES v. COMMISSIONER OF INTERNAL REVENUE

REPUBLIC OF THE PHILIPPINES COURT OF TAX APPEALS QUEZON CITY MATSUSHITA BUSINESS MACHINE CORPORATION OF THE PHILIPPINES, Petitioner, -versus- C.T.A. CASE NO. 5706 COMMISSIONER OF INTERNAL Promulgated: REVENUE, MAY zs zoo~~~ Respondent. x-----------------------------------------------------------x DECISION This is a Petition for Review for the refund of the amount of P7,786,324.85 representing alleged unutilized and/or unapplied input value-added tax (VAT) for the period October 1, 1996 to March 3 1, I997. Petitioner is a corporation duly organized and existing under and by virtue of Philippine laws, with principal office at Bo. Mapandan, Ortigas Avenue Extension, Taytay, Rizal, which is engaged in the business of production and export of plain paper copiers, sub-assemblies, parts and components. It is registered with the Bureau of Internal Revenue (BIR) as a VAT taxpayer on October 5, 1995 under Certificate of Registration issued by Revenue District Office No. 46 (Central Taytay). It is likewise, registered with the Board oflnvestments (BOI) under . ., . tJ f (j

DECISION- CTA CASE NO. 5706 PAGE2 Certificate of Registration No. EP9.5-216 issued on October 2, 1995 as a preferred enterprise. For the period October 1, 1996 to March 31, 1997, Petitioner's export sales amounted to US$11 ,839,808.68. Proceeds of the export sales were inwardly remitted in US dollars and were duly accounted for in accordance with the rules and regulations of the Central Bank (Annexes C and C-a, pp. 9-1 0, CTA records). As a VAT registered entity, Petitioner seasonably filed its monthly and quarterly VAT returns. For the period October 1996 to March 1997, Petitioner incurred input VAT on its purchases of goods and services which were attributable to its export sales for the same period in the total amount of P7,786,324.85 as gleaned from its 3rd and 4111 quarterly VAT returns, to wit: PERIOD ZERO-RATED DOMESTIC VAT INPUT INVOLVED TAX SALES PURCHASES Oct. - Dec. 1996 8 Jan. - Mar. 1997 C P 129, I08,365 .33 P41 ,343,213.80 P4, 134,321.38 155,670,285 .81 36.520.034.70 _1.652.003.47 Total P284.778.651. 14 P77.863.248_._5_Q P 7.786.324.85 A circumspect review of the said quarterly VAT returns reveals that Petitioner adopted a fiscal year accounting period (April to March).which covered three (3) quarters of the preceding year and one ( 1) quarter of the succeeding year as compared to a calendar year accounting period. The disparity was explained by Petitioner' s witness, Mr. Danilo Asis, Assistant Manager of Matsushita Business Machine Corporation in his testimony before this Comi dated June 8, 1999, to wit: :-j U / 0 ' ) I "")

DECISION- CTA CASE NO. 5706 PAGE3 Q. Mr. Witness, I just noted that in the return you have identified as your quarterly VAT return for last quarter for fiscal year 1996, there is a notation in the upper left portion, "FY 1996" and opposite to that is the portion checked quarter, there is a cross for the third quarter. Can you please reconcile your previous statement that it is the quarterly VAT return of the company for calendar year 1996 with the period appearing in the return? A. The company follows the fiscal year ending March 31 for the fourth quarter of the calendar year 1996 rather than the third quarter of fiscal year 1996. One period covers December 31, 1996 and this is also the fourth quarter of the calendar year 1996. Q. And this is also true with other quarters? � A. Yes, that is also true with the other quarters, that the company also uses the fiscal year ending March 31 as the period for the succeeding quarters. (TSN, dated June 8, 1999, page 13) Since Petitioner was unable to utilize or apply its accumulated input VAT for the period October 1, 1996 to March 31, 1997, an application for tax credit or refund was filed with the BIRon January 19, 1998, in the total amount of P7,786,324.85. Respondent, however, did not act on the administr:ttive claim, thus, Petitioner filed a Petition for Review with this Court on December 29, 1998 in order to toll the running of the two-year prescriptive period. Respondent, in his Answer, presented the following Special and Affirmative Defenses, to wit: "6. In an action for refund, the taxpayer has the burden to show that the taxes paid were erroneously or illegally collected and failure to do so is fatal to the action;

DECISION- CTA CASE NO. 5706 PAG E 4 7. Claims for tax refund are strictly construed against the taxpayer. Petitioner has no cause of action." The issue to be resolved is whether or not Petitioner is entitled to the refund or tax credit of the amount of P7,786,324.85 consisting of input VAT paid on its purchases of goods and services for the period October I, 1996 to March 31, 1997. We rule in favor of Petitioner. Petitioner basically anchored its claim on the following provisions of the National Internal Revenue Code, viz: SEC. 104. Tax Credits. - x x x (b) Excess output or input tax. - If at the end of any taxable quarter the output tax exceeds the input tax, the excess shall be paid by the VAT-registered person. If the input tax exceeds the output tax, the excess shall be carried over to the succeeding quarters. f ny input tax attributable to the purchase of capital goods or to zero-rated sales by a VAT-registered person may at his option be refunded or credited against other internal revenue taxes, subject to the provisions of Section 106. XXX XXX XXX Section 106. Refunds or tax credits ofcreditable input tax. - (a) 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 attributabl e 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 100(a)(2)(A)(i),(."l) and (b) and Section 102(b)(I) and (2), the acceptable foreign currency exchange proceeds thereof had been duly accounted for in accordance with the 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 t) 8 .i

DECISION- CTA CASE NO. 5706 PAG E 5 taxable or exempt sale of goods or properties or se. vices, 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. XXX XXX XXX Petitioner considered its sales as export sales. Section l 00 of the National Internal Revenue Code defined export sales, to wit: Section 100. Value-added tax on sale ofgoods or properties. - (a) Rate and base oftax. - x x x (2) The following sales by VAT-registered p~rsons shall be subject to 0%: (A) Export sales. - The term 'export sales' means: (i) 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 In order that a claim for refund of input VAT be granted, Petitioner must comply with the following requirements as provided in Section l 06 of the National Internal Revenue Code, to wit: 1. That it is a VAT-registered person; 2. That its sales are zero-rated;

DECISION- CTA CASE NO. 5706 PAGE6 3. That the administrative claim for refund is seasonably filed; 4. That the input taxes claimed were attributable to zero-rated sales and were not applied against output tax liability; and 5. That foreign currency exchange proceeds had been duly accounted for in accordance with the Regulations of the Bangko Sentral ng Pilipinas. Petitioner filed its administrative claim for refund with the BIR for the unutilized accumulated input VAT of P7,786,324.85 on January 19, 1998 and the Petition for Review with this Court on December 29, 1998, both dates are within the two-year prescriptive period and thus, seasonably filed . Under Section I OO(a)(2)(A)(i) of the NIRC, the export sales of a VAT-registered person which are paid for in acceptable foreign currency inwardly remitted to the Philippines and accounted for in accordance with existing rules and regulations of BSP is not subject to the I0% VAT. In other words, evidence a::; to its registration as VAT entity and the actual export such as sales invoices, bank credit memoranda, export declarations and export permit are necessary to be considered zero-rated (NEC Components Philippines, Inc. vs. CIR, CTA Case No. 5653, promulgated April13, 2000). Records of the case disclosed that Petitioner is a VAT-registered person (Annex "A", p. 7, CTA Records). For the period October 1996 to March 1997, it generated zero- rated sales of P284,778,651.14 as can be gleaned from its 3rd and 4111 quarter VAT returns which were filed on January 20, 1997 and April 21, 1997, respectively. The report of Petitioner's independent CPA dated July 31, 2000 stated that only the amount of P282 ,085,927.69 was verified to be duly supported by Export Sales Invoices,

DECISION- CTA CASE NO. 5706 PAGE 7 Airway Bills/Bills of Lading, Export Declarations, Bank Credit Advices and portions of Bank's Passbook (Exhibits N, G-2 to G-150, G-152 to G-278 and G-280 to G-404). Being zero-rated sales, the export sales made by Petitioner for the period October 1996 to March 1997 were not liable for any output tax. Therefore, the input taxes in the amount of P4, 134,321.38 for the period October to December 1996 and P3,652,003.47 for the period January to March 1997 or a total ofP7,786,324.85 remained unutilized. A perusal of the quarterly VAT returns show that Petitioner carried forward the excess input taxes subject of the instant case to the succeeding 151 to the 3rd quarters of fiscal year 1997, however, on the 4111 quarter of the same fiscal year, it deducted the amount ofP7,786,936.58 from the total input taxes. ofP15,105,439.03 which was carried over from the previous quarters (see Exhibit "D-3"). In tine, Petitioner has substantially complied with the requirements set forth for the grant of refund of input VAT, thus, it was able to show that: 1. it is a VAT-registered person; 2. its sales are zero-rated; 3. the administrative claim for refund was seasonably filed; 4. the input taxes claimed were attributable to zero-rated sales and were not applied against output tax liability; and 5. foreign currency proceeds had been duly accounted for 111 accordance with the regulations of the Bangko Sentral ng Pilipinas. The Court hereby grants the relief sought by Petitioner but in a reduced amount due to the disallowance made by the independent CPA in his initial report dated May 17,

DECISION- CTA CASE NO. 5706 PAG E 8 1999 in the amount of P246,030.28 as input taxes smce these were not properly s ub stant ia te d. Mo reove r, further examination made by thi s Court of the photocopied documents submitted by Petitioner found the following additional disallowances: REFERENCE GROSS INPUT VAT SUPPLIER DATE EXHIBIT NO. AMOUNT (a) Input taxes without supporting documents p 96.90 p 8.81 335 .30 BEVAN SUPPLIES 3,688 .30 29,234 .01 EXPRESSLANE BROKERAGE 385 .00 MEPCO 321 ,574.10 SUPERSTAR INDUSTRIES 29,963.12 4,234 .99 Subtotal p 329,594.29 p (b) No TIN MANUEL METAL IND. 10/05/96 H-143 83 p 13,041 .00 p 1, 185.55 MANUEL METAL INDUSTRIES 11/22/96 H-583 27 ,000.00 2 ,454 .55 R. TIPONES 10/02/96 H- 188 86 R. TIPONES 12/17/96 H-260 2 ,363 .72 2 14 .88 R. TIPONES 12/17/96 H-260 5693 4,974 .25 452.20 R. TIPONES 12/17/96 H-260 R. TIPONES SERVICES 01/30/97 J-255 5701 209 .18 19.02 R. TIPONES SERVICES 02/21/97 J-530 9 ,749 .53 886.32 R. TIPONES SERVICES 02/21/97 J-530 5702 10,543 .83 958 .52 R. TIPONES SERVICES 02/21/97 J-530 5,088.49 462 .59 R. TIPONES SERVICES 02/21/97 J-530 5703 5,815.42 528 .67 R. TIPONES SERVICES 04/01/97 J-549 3,746.47 34 0.59 R.B. AGUILA ENTERPRISES 01/14/96 H-595 5782 3 ,054 .73 277. 71 R.B. AGUILA ENTERPRISES 12/10/96 H-827 5,368 .08 488.01 RB AGUILA ENTERPRISE 12/12/96 H-828 5741 750 .00 68.18 5743 2,100.00 190 .9 1 1,050 .00 5790 95 .4 5 94,854.70 p 5791 8,6 23 .15 5810 3393 2026 2029 Subtotal p (c) Non-VAT Invoice SOLAPCO FOTO QUICK 11/27/96 H-793 17248 p 95.00 p 8.64 (d) Official receipts/invoices not in the name of MATSUSHITA BUSINESS MACHINE CORP. OF TH E PHILS . EN CARGO 08/24/96 H-227 166549 p 475 .86 p 43.26 ENCARGO 08/27/96 H-228 166782 301 .13 27.38 EN CARGO 09/16/96 H-229 168052 286.88 26.08

DEC ISION- CTA CA SE NO . 5706 PAG E9 D'BEST PHOTOSUPPLY 01/17/97 J-149 18863 246 .00 22 .36 DIAMOND MOTOR CORP. 08/24/96 J-396 1634 1,340.00 121.82 D-REY PRINTING CORP. 10/09/96 H- 105 300 2,000 .00 181 .82 FITWALK 01/13/97 J-121 8824 FITWALK 02/01197 J-433 34100 109.75 10.00 FOOTSTEP 01/22/97 J-146 3047 120.00 10.91 FOTOWORLD SALES 02/19/97 J-447 16023 125.00 11.36 HK SHOE CITY 02/21/97 J-450 103688 PARVIL SHELL 10/26/96 H-166 12666 67 .25 6 .11 PRO-PH ILS COM'L 09/20/96 H-124 1888 125 .00 11 .36 PRO-PHILS COM'L 09/25/96 H-125 1889 100.00 PRO-PHILS COM'L 09/23/96 H-126 1895 2,160 .00 9.09 PRO-PHILS COM'L 09/27/96 H-127 1916 4,832.00 196.36 PRO-PHILS COM'L 09/30/96 H-128 1920 4,830.00 439.27 RAPID AIRFREIGHT 12/27/96 J-244 93674 2,923 .00 439.09 RB AGUILA ENTERPRISE 11/07/96 H-171 2185 1,530 .00 265.73 RYOKA JAPANESE REST. 03/12/97 J-760 10730 1,082.40 139.09 SENTINEL HARDWARE 10/30/96 H-166 44052 6,780.00 SHOEMART 02/02/97 J-435 857269 2,340 .03 98.40 SORIAMONT STEAMSHIP 12/19/96 J-297 39954 616.36 SPENCER RTW 01/09/97 J-120 7133 26 .20 212 .73 SPENCER RTW 01/09/97 J-120 7132 130.00 ST. JAMES BOOKSTORE 01/17/97 J-148 103.12 2,376 .88 2.38 TROPICAL HUT 01/26/97 J-144 20042 214 .95 11 .82 YERCO PACKAGING IND. 02/19/97 J-422 7930 214 .95 2 16 .08 ZENCO FOOTSTEP 03/10/97 J-648 3553 19.54 52.00 19.54 Subtotal p 318 .50 28,798.32 4.73 118 .00 28.95 2,6 18.03 64,024.10 p 10.73 (e) Not within the period of claim 5,820.38 ACCUPRO 09/26/96 H-116 31 41 ,800 .00 3,800. 00 ACCUPRO 09/ 27 /96 H-1 17 33 18,900 .00 1 ,7 18 .18 AESE SYSTEM INT'L 09/27/96 H-120 54 ASIAN TERMINAL 09/06/97 H-232 476738 6,800 .00 6 18.18 ASIAN TERMINAL 08/31/96 H-233 500348 1,067 .00 97 .00 ASIAN TERMINAL 08/28/96 H-234 510584 3,517 .80 ASPAC INT'L AIRFREIGHT 09/24/96 H-302 78019 1,067 .00 319.80 CARBAT BATIERY & PARTS 09/14/96 H-927 7553 1,012 .00 97. 00 CARBAT BATIERY & PARTS 09/16/96 H-928 7555 1,811 .00 92. 00 CARBAT BATIERY & PARTS 09/16/96 H-929 7558 1,841 .00 D & L INDUSTRIES 09/27/96 H-387 2254 1,796 .01 164. 64 D & L INDUSTRIES 09/28/96 H-388 2255 100,562 .00 167. 36 DESIGN CREST 08/22/96 H-625 12941 66,077 .00 163.27 E-WHA FOAM PHILS 09/02/96 16960 22,000 .00 9,142 .00 E-WHA FOAM PHILS 09/04/96 H-4 16987 3,850 .00 6,007 .00 EXPRESSLANE BROKERAGE 09/25/96 H-5 1404 3,500.00 2, 000.00 FILES SYSTEM 09/11/96 H-265 66809 3,850 .00 FOTOWORLD SALES 09/16/96 H-612 14221 810 .81 318 .18 FOTOWORLD SALES 09/17/96 H-95 14529 3,250.00 FOTOWORLD SALES 09/2 3/96 H-96 14303 73 .71 H-108 340 .00 295.45 1,922 .00 30.91 10.00 174.73 0.90

DECISION- CTA CASE NO. 5706 PAGEIO GEMINI INTEGRATED 09/12/96 H-267 61395 2,869 .24 260.84 GEMINI INTEGRATED 09/12/96 H-269 61397 2,759.68 GEMINI INTEGRATED 09/18/96 H-271 61421 1,949 .09 250 .88 GEMINI INTEGRATED 09/19/96 H-272 61443 1,336.28 177.19 GEMINI INTEGRATED 09/20/96 H-274 61447 1,624 .26 121.48 INTERLINK TRAVEL 09/25/96 H-306 65597 36,138 .00 147.66 INTERLINK TRAVEL 09/26/96 H-307 65608 7,062 .00 3,285.27 INTERLINK TRAVEL 09/30/96 H-308 65665 642 .00 J. AGUILOS ADVERTISING 09/05/96 H-563 30004 500 .00 JANUS ENGINEERING 09/13/96 H-580 10075 26 ,500 .00 45.45 JANUS ENGINEERING 09/14/96 H-581 10076 2 ,409 .09 JARDINE DAVIES 09/30/96 H-318 2,743 .00 LC LEGASPI INC 09/20/96 H-278 43 589 .50 249 .36 LC LEGASPI INC 09/23/96 H-279 19484 53 .59 LC LEGASPI INC 09/19/96 H-281 19491 1,031.39 93.76 LC LEGASPI INC 09/23/96 H-282 19494 344 .03 31 .28 LC LEGASPI INC 09/19/96 H-283 19498 LC LEGASPI INC 09/23/96 H-285 19499 3,550.36 322.76 LC LEGASPI INC 09/30/96 H-286 19501 3,286 .86 298 .81 LONDON SHELL SERVICE 09/16/96 H-817 19527 1,949 .09 177.19 MALAYA SHIPPING SERVICES 06/30/96 H-196 14010 3,585 .23 325 .93 MALAYA SHIPPING SERVICES 07/23/96 H-197 46585 1,624 .15 147.65 MALAYA SHIPPING SERVICES 07/27/96 H-198 46924 1,949 .09 177.19 MALAYA SHIPPING SERVICES 07/27/96 H-199 46983 1,320.00 120.00 MALAYA SHIPPING SERVICES 07/31/96 H-200 46985 3,960 .00 360 .00 MALAYA SHIPPING SERVICES 07/31/96 H-201 47109 2,750 .00 250 .00 MALAYA SHIPPING SERVICES 07/31/96 H-202 47189 2,750 .00 250.00 MALAYA SHIPPING SERVICES 07/31/96 H-203 47191 3 ,080 .00 280.00 MALAYA SHIPPING SERVICES 08/16/96 H-204 47304 2,750 .00 250.00 MALAYA SHIPPING SERVICES 08/19/96 H-205 47489 3 ,080 .00 280 .00 MALAYA SHIPPING SERVICES 08/19/96 H-206 47516 3,080.00 280.00 MALAYA SHIPPING SERVICES 08/22/96 H-207 47517 2,750 .00 250 .00 MALAYA SHIPPING SERVICES 08/24/96 H-208 47643 3,080 .00 280 .00 MALAYA SHIPPING SERVICES 08/30/96 H-209 47667 3,080 .00 280.00 MALAYA SHIPPING SERVICES 08/31/96 H-210 47778 2,750 .00 250 .00 MALAYA SHIPPING SERVICES 08/31/96 H-211 47779 3,080 .00 280.00 MALAYA SHIPPING SERVICES 08/31/96 H-212 47816 6,160 .00 560.00 MALAYA SHIPPING SERVICES 08/31/96 H-213 47821 3,080.00 280.00 MALAYA SHIPPING SERVICES 08/31/96 H-214 47822 3,080 .00 280.00 MALAYA SHIPPING SERVICES 08/31/96 H-215 47834 2,750 .00 250.00 MALAYA SHIPPING SERVICES 08/31/96 H-216 47841 2,750 .00 250.00 MALAYA SHIPPING SERVICES 08/31/96 H-217 47844 3,080 .00 280 .00 MALAYA SHIPPING SERVICES 08/31/96 H-218 48052 2,750 .00 250.00 MALAYA SHIPPING SERVICES 08/31/96 H-219 48054 4,070.00 37 0 .00 MALAYA SHIPPING SERVICES 08/31/96 H-220 48073 3,080 .00 280 .00 MALAYA SHIPPING SERVICES 08/31/96 H-22 1 48083 3,100 .00 281. 82 MALAYA SHIPPING SERVICES 09/18/96 H-222 48084 1,400.00 127 .27 MALAYA SHIPPING SERVICES 09/18/96 H-223 48174 2 ,800 .00 254.55 MALAYA SHIPPING SERVICES 09/2 0/96 H-22 4 48175 2,800 .00 25 4 .55 MALAYA SHIPPING SERVICES 09 /2 0/96 H-22 5 48287 MALAYA SHIPPING SERVICES 09/30/96 J-511 48294 330 .00 30 .00 MANILA EMBROIDERY 09/20/96 H-152 48616 3, 100 .00 28 1.82 9701 3,100.00 28 1.82 2 ,800 .00 254.55 6 ,200 .00 563.64 990 .00 90 .00 13,740 .10 1,249 .10 8> ~ 'I JI

DECISION- 09/30/96 H-303 196 382,800 .00 34,800 .00 CTA CASE NO . 5706 09/12/96 H-104 799 177.00 16.09 PAGE II 09/16/96 H-104 957 125 .00 11 .36 09/06/96 H-104 299169 183 .00 16.64 MEPCO 09/06/96 H-104 299170 133 .50 12.14 NATIONAL BOOKSTORE 08/14/96 H-248 43050 NATIONAL BOOKSTORE 09/24/96 H-249 43263 6,194.60 563 . 14 NATIONAL BOOKSTORE 09/23/96 H-358 4 ,087.35 371 .58 NATIONAL BOOKSTORE 08/24/96 H-38 219358 14,157.60 1,287 .05 NYK FIL-JAPAN 08/24/96 H-39 219359 10,167 .30 924.30 NYK FIL-JAPAN 08/24/96 H-40 219360 NYK FIL-JAPAN 08/24/96 H-41 219362 792 .00 72 .00 PLASTIMER 08/24/96 H-42 219363 4,334.22 394 .02 PLASTIMER 08/24/96 H-43 219364 1,589 .94 144.54 PLASTIMER 08/24/96 H-44 219368 1,633.50 148.50 PLASTIMER 08/24/96 H-45 219370 9,900 .00 900 .00 PLASTIMER 08/24/96 H-46 219371 7 ,976 . 10 725 . 10 PLASTIMER 08/24/96 H-47 219372 6,310 .26 573.66 PLASTIMER 08/24/96 H-48 219377 5,947 .26 540 .66 PLASTIMER 08/24/96 H-49 219379 2,237.40 203.40 PLASTIMER 08/24/96 H-50 219385 18,018.00 1,638.00 PLASTIMER 08/24/96 H-51 219386 3,418 .00 310 .80 PLASTIMER 08/31/96 H-52 219561 3,118 .50 283 .50 PLASTIMER 08/24/96 H-53 219678 4,504.50 409 .50 PLASTIMER 09107196 H-54 219776 7,623 .00 693.00 PLASTIMER 09/07/96 H-55 219777 20 ,790 .00 1 ,890 .00 PLASTIMER 09107196 H-56 219779 19,514 .88 1,774 .08 PLASTIMER 09107196 H-57 219780 23 ,555 .84 2,141.44 PLASTIMER 09109196 H-58 219817 21,436 .80 1,948.80 PLASTIMER 09/10/96 H-59 219820 13 ,896 .96 1,263.36 PLASTIMER 09/09/96 H-60 219821 14 ,553 .00 1,323.00 PLASTIMER 09/09/96 H-61 219822 5,020 .29 456 .39 PLASTIMER 08/24/96 H-431 219365 5,197 .50 472.50 PLASTIMER 08/24/96 H-432 219373 22,471 .68 2,042 .88 PLASTIMER 08/24/96 H-433 219374 2,482 .92 225.72 PLASTIMER 08/24/96 H-434 219375 7,336 .67 666.97 PLASTIMER 08/24/96 H-435 219376 11 ,869 .99 1,07 9.09 PLASTIMER 08/24/96 H-436 219380 12,104 .07 1' 100 .37 PLASTIMER 08/24/96 H-437 219381 8 ,488 .26 77 1.66 PLASTIMER 08/24/96 H-438 219382 1,386 .00 126. 00 PLASTIMER 08/24/96 H-439 219384 1,386.00 126.00 PLASTIMER 08/27/96 H-440 219432 PLASTIMER 08/31/96 H-441 219562 295 .68 26 .88 PLASTIMER 08/31/96 H-442 219582 4,851 .00 441 .00 PLASTIMER 08/31/96 H-443 219583 14 ,015 .76 1,274 .16 PLASTIMER 09/05/96 H-444 219723 2 ,425 .50 2 20 .50 PLASTIMER 09/06/96 H-445 219741 5,742 .00 522. 00 PLASTIMER 09/06/96 H-446 219743 15,613.29 1,419 .39 PLASTIMER 09/09/96 H-447 219823 3,449 .93 313 .63 PLASTIMER 09/09/96 H-448 219824 1,940.40 176.40 PLASTIMER 09/09/96 H-449 219825 9,702 .00 882.00 PLASTIMER 09/09/96 H-450 219834 11,227.50 1,075.20 PLASTIMER 6,800.64 618 .24 PLASTIMER 15,818 .88 1,438 .08 PLASTIMER 6 ,930 .00 630 .00 PLASTIMER 8 ~ ; .

DECI SION- CTA CAS E NO. 5706 PAG E 12 PLASTIMER 09/10/96 H-451 219851 6 ,930 .00 630.00 PLASTIMER 09/10/96 H-452 219852 11 ,227.59 1,020.69 PLASTIMER 09/11/96 H-453 219874 PLASTI MER 09/13/96 H-454 219957 3,603 .60 327 .60 PLASTIMER 09/14/96 H-455 219995 6 ,606 .60 600 .60 PLASTIMER 09/14/96 H-456 220009 9,64 4 .25 876.75 PLASTIMER 09/14/96 H-456 220010 9,147.60 831.60 PLASTIMER 09/14/96 H-457 220012 PLASTIMER 09/16/96 H-458 220028 508 .20 46 .20 PLAST IMER 09/19/96 H-459 220126 6,930 .00 630.00 PLASTIMER 09/19/96 H-460 220127 5,561 .60 505 .60 PLASTIMER 09/21/96 H-561 220182 5,590 .20 508 .20 PLASTIMER 09/21/96 H-462 220183 2,494 .80 226 .80 PLASTIMER 09/21/96 H-463 220184 4 ,518 .80 410 .80 PLAST IM E R 09/25/96 H-464 220307 1,738 .00 158.00 PLASTIMER 09/26/96 H-465 220314 1,894 .20 172.20 PLASTIMER 09/26/96 H-466 220315 1,940.40 176.40 PLASTIMER 09/26/96 H-467 220316 3,102 .00 282 .00 PLASTIMER 09/26/96 H-468 220334 6 ,677 .55 607 .05 PLASTIMER 09/27/96 H-469 220363 7,573 .50 688 .50 PLASTIMER 09/27/96 H470 220364 1,551 .00 141 .00 PLASTIMER 09/28/96 H-471 220372 8,886 .24 807 .84 PLASTIMER 09/28/96 H-472 220373 2,090 .88 190.08 PLASTIMER 09/28/96 H-473 220374 16,558 .08 1.505.28 PLASTIMER 09/28/96 H-474 220375 14,291 .20 1,299 .20 P L A S T IM E R 09/28/96 H-475 220376 3,942 .40 358.40 POLAVONTRANSPORT 09/30/96 H-123 2,772.00 252 .00 RAPID AIRFREIGHT 08/12/96 H-236 1361 9,424 .80 856.80 RAPID AIRFREIGHT 08/12/96 H-237 86723 117,022.40 10 ,638.46 RAPID AIRFREIGHT 08/19/96 H-238 86731 1,978 .36 179.85 RAPID AIRFREIGHT 08/19/96 H-239 8692 7 144,171 .39 13,106.49 RAPID AIRFREIGHT 08/19/96 H-240 86928 2,995 .73 272 .34 RAPID AIRFREIGHT 08/19/96 H-241 86937 5,526 .12 502 .37 RAPID AIRFREIGHT 08/19/96 H-242 86945 30 ,809.74 2,8 00 .89 RAPID AIRFREIGHT 08/19/96 H-243 86959 9 ,538 .70 867. 15 RAPID AIRFREIGHT 08/26/96 H-244 86965 RAPID AIRFRE IGHT 08/26/96 H-245 87551 948 .60 86.24 RAP ID AIRFREIGHT 09/03/96 H-246 87569 1,357 .03 123.37 RAPID AIRFREIGHT 09/26/96 H-299 87887 6 ,139.55 558. 14 RAPID AIRFREIGHT 09/26/96 H-298 89020 5,095 .04 463 .19 RAPID AIRFREIGHT 09/27/96 H-300 88480 366 ,647.08 33,33 1.55 RAPID AIRFREIGHT 08/23/96 H-320 89438 10,451 .73 950.15 RAPID AIRFREIGHT 08/24/96 H-322 87694 1,370 .20 124.56 R. BAUTISTA MACHINE 09/26/96 H- 134 87700 9,874 .98 897.82 STEELITE CONSTRUCTION 08/20/96 H-564 1,252 .00 113.82 SUPERSTAR INDUSTRIES 04/03/97 J-608 873 3,183 .00 289 .86 SUPERSTAR INDUSTRIES 07/30/96 H- 135 318 SUPERSTAR INDUSTRIES 08/10/96 H-136 2244 960 .00 87 .27 SUPERSTAR INDUSTRIES 08/ 15/96 H- 137 1867 60 ,000.00 5 ,4 54 .55 THE PHIL. STAR 09/13/96 H-112 1902 19,558 .00 1,778.00 UN IBOX 04/16/96 H-22 1909 UN IBOX 04/15/96 H-23 410 .00 37.27 93103 1,250.00 113.64 93104 2 ,500 .00 227 .27 12 ,540 .00 1,140.00 21 ,400.00 1,945.45 10,700.00 972 .73

DECISION- CTA CASE NO. 5706 PAG E I3 UN IBOX 04/27/96 H-24 93340 31 ,886.00 2 ,898 .73 UN IBOX 05/08/96 H-25 93748 7,500 .00 681.82 UN IBOX 04/16/96 H-148 93860 YERCO PACKAGING IND. 06/10/96 H-144 7452 32 ,500 .00 2,954.55 YERCO PACKAGING IND. 07/17/96 H-145 7453 22 ,191 .01 2,017 .36 YERCO PACKAGING IND. 08/28/96 H-146 7454 27 ,059 .23 2,459.94 YERCO PACKAGING IND. 08/29/96 H-597 7535 23 ,533.34 2,139 .39 3,855 .00 350.45 Subtotal p 2,429,136.16 p 224,385.79 (f) Supported only by statement of account 1,656 .60 191 .57 EN CARGO 11/29/96 J-196 16,566 .00 J-253 2,107.27 1,848.1 7 EXPRESSLANE BROKERAGE 01/09/97 1758 182.50 Subtotal p 18,673.27 p 71 .66 (g) Official receipts/invoices with erasure of payee's name 2,966 .70 73.91 JOSEPHINE RESTAURANT 10/25/96 H-155 118555 p 2,007.50 p TROPICAL HUT 09/17/96 H-110 18532 788 .30 3,294.77 UN IBOX 10/10/96 H-34 102762 RAPID AIRFREIGHT 11/25/96 J-239 92064 32,633 .70 273,9 44 .02 813 .00 Subtotal p 36,242.50 p Total p 2,972,620.02 p Accordingly, the total allowab le input taxes to be refunded sho uld only be P7 ,266,350.55 , computed as follows: Amount Claimed p 7,786,324.85 Less : Disallowances P246 ,030.28 519 974.30 (a) Per independent CPA ' s 273,944.02 verification (Ex h. M) (b) Per Court' s verification p 7.266,350.55 Amount Refundable �- ~80

DECISION- CTA CASE NO. 5706 PAGEI4 WHEREFORE, in view of all the foregoing, Respondent is hereby ORDERED to REFUND in favor of Petitioner the amount of P7,266,350.55 representing the latter's excess/unutilized VAT input taxes for the period October 1, 1996 to March 31 , 1997. SO ORDERED. I CONCUR: LlQ.o~ ERNESTO D. ACOSTA Presiding Judge CERTIFICATION I hereby certify that the above decision was reached after due consultation with the members of the Court of Tax Appeals in accordance with Section 13 , Article VIII of the Constitution. ERNESTO D. ACOSTA Presiding Judge