CBK POWER COMPANY LIMITED v. COMMISSIONER OF INTERNAL REVENUE

Republic of the Philippines COURT OF TAX APPEALS Quezon City SPECIAL SECOND DIVISION CBK POWER COMPANY CTA Case Nos. 8043 & 8116 LIMITED, (CTA EB No. 759) Petitioner, Members: CASTANEDA, JR., Chairperson, -versus- CASANOVA, and MINDARO-GRULLA, L.L. COMMISSIONER OF INTERNAL REVENUE, Promulgated: Respondent. OCT 2 8 Z016 / ~ ~~~--~-X x----------------------------------------------------------------7--------'-f-:--3-'--- DECISION CASANOVA,].: Submitted for decision are the consolidated Petitions for Review docketed as CTA Case Nos. 8043 1 and 81162, pursuant to Resolutions dated June 26, 20133 and December 18, 20134 of the Court of Tax Appeals, En Bane (CTA En Bane) in CTA EB Case No. 759, which were later on affirmed by the Supreme Court Second Division in its Notice of Resolutions dated March 26, 2014 in G.R. No. 210529. The consolidated Petitions pray for the issuance of tax credit certificate in the aggregate amount P61,503,335.47, broken down as follows: (1) P14,078,028.686 and (2) P47,425,306.797, allegedly representing unutilized input taxes attributable to zero-rated sales fore:_. 1 Petition for Review, CTA Case No. 8043, Docket (Vol. I), p. 1-14. 2 Petition for Review, CTA Case No. 8116, Docket, pp. 1-17. 3 CTA En Bane Rollo, pp. 203-208. 4 CTA En Bane Rollo, pp. 227-229. 5 CTA Case No. 8043, Docket (Vol. VI), pp. 2867-2868. 6 Petition for Review, CTA Case No. 8043, Docket (Vol. I), p. 11. 7 Petition for Review, CTA Case No. 8116, Docket (Vo. I), p. 14.

DECISION CTA CASE NOS. 8043 & 8116 the periods January 1, 2008 to March 31, 2008 and April 1, 2008 to December 31, 2008, respectively. Petitioner CBK Power Company Limited (CBK) is a partnership duly organized and existing under and by virtue of the laws of the Philippines with principal office at the NPC Compound, Kalayaan, Laguan. It is registered as a VAT entity with TIN/VAT No. 205-760-474- 000.8 Respondent Commissioner of Internal Revenue (CIR) is the duly appointed Commissioner of Internal Revenue vested with authority to act as such, including inter alia, the power to decide, approve and grant refunds or tax credit of erroneously or illegally collected internal revenue taxes as provided by law, with office address at the BIR National Office Building, BIR Road, Diliman, Quezon City. 9 On November 27, 2009, CBK filed with the BIR Revenue District Office (ROO) No. 55 of Laguna, an administrative claim for the issuance of TCC in the amount of P14,078,028.68, allegedly representing its unutilized input taxes on its local purchases and/or importation of goods and services, capital goods and payments for services rendered by non-residents, which were all attributable to its zero-rated sales for the period January 1, 2008 to March 31, 2008, pursuant to Section 112(A) of the National Internal Revenue Code (NIRC) of 1997, as amended.1o Another administrative claim for the issuance of TCC in the amount of P47,425,306.79 was filed by CBK on June 25, 2010, allegedly representing its unutilized input taxes on its local purchases and/or importation of goods other than capital goods, local purchases of services, payments for services rendered by non-residents, local purchases of capital goods not exceeding P1 Million including unutilized amortized input taxes on capital goods exceeding P1 Million, which were all attributable to its zero-rated sales for the period April 1, 2008 to December 31, 2008. Due to CIR's inaction, CBK filed separately two (2) Petitions for Review11 on March 29, 2010 (docketed as CTA Case No. 8043) and June 28, 2010 (docketed as CTA Case No. 8116). CTA Case No. 8043 wa~ 8 Pars. 3 and 5, page 2 of the CTA En Bane's Decision dated December 20, 2012, En Bane Rollo, p. 148. 9 Par. 4, page 2 of the CTA En Bane's Decision dated December 20, 2012, En Bane Rollo, p. 148. 10 Par. 6, Facts Admitted, Joint Stipulation of Facts and Issues (JSFI), CTA Case No, 8043, Docket (Vol. I), p. 137. 11 See Footnote Nos. 1 and 2.

DECISION CTA CASE NOS. 8043 & 8116 raffled to the CTA Special Second Division while CTA Case No. 8116 was raffled to the CTA Special First Division. CTA Case No. 8116 On August 3, 2010, within the extension period granted by the Court12, CIR filed his Answer13, to wit: "SPECIAL AND AFFIRMATIVE DEFENSES XXX XXX XXX 8. Petitioner filed its administrative application for refund on June 25, 2010. Then it filed the instant petition on June 28, 2010. Only 1 working had passed from the filing of the administrative application to the filing of the petition for review. The judicial claim has obviously been filed prematurely. Under Section 112 (D) of the NIRC of 1997, respondent has 120 days within which to process applications for refund of unutilized input tax, then petitioner has 30 days to appeal the full or partial denial of the claim or the inaction of respondent, to wit: 'SEC. 112. Refunds or Tax Credits of Input Tax.- XXX (D) Period Within Which Refund or Tax Credit of Input 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 ot_ 12 Order dated July 20, 2010, CTA Case No. 8116, Docket, p. 95 . 13 CTA Case No. 8116, Docket (Vol I), pp. 96-103.

DECISION CTA CASE NOS. 8043 & 8116 the one hundred twenty-day period, appeal the decision or the unacted claim with the Court of Tax Appeals." Clearly, petitioner was not given enough to evaluate the evidence presented with respondent. It is impossible for administrative proceedings to be commenced as the case has yet to be assigned to a Revenue Officer when the judicial application was filed. It seems the filing of the administrative claim was just a mere formality in the filing of the judicial claim. Such arrogance must not be tolerated. 9. Furthermore, in an action for refund the burden of proof is on the taxpayer to establish its right to refund and failure to sustain the burden is fatal to the claim for refund/credit. This is so because exemptions from taxation are highly disfavored in law and he who claims exemption must be able to justify his claim by the clearest grant of organic or statutory law. An exemption from the common burden cannot be permitted to exist upon vague implications (Asiatic Petroleum Co. vs Llanes, 49 Phil. 466 cited in Collector of Internal Revenue v Manila Jockey Club, Inc., 98 Phil. 670)." On August 5, 2010, the Court issued a Notice of Pre-Trial Conference14 setting the hearing of the same on September 3, 2010 at 1:30 p.m. and requiring the parties to file their respective pre-trial brief. On August 16, 2010, CBK filed a Motion for Consolidation and Postponement of Pre-trial Conference15. In an Order16 dated August 17, 2010, the Court granted the postponement of Pre-Trial Conference and set the hearing of CBK's Motion for Consolidation on August 24, 2010. On September 7, 2010, the CTA Special First Division issued a Resolution17 consolidating the two cases before the Special Second Division where the case bearing the lower case number was raffled, subject to the conformity of the latter Court. Thus, the Pre-Trial Conference previously set on September 3, 2010 was cancelled._ 14 CTA Case No. 8116, Docket, p. 105. 15 CTA Case No. 8116, Docket, pp. 106- 111. 16 CTA Case No. 8116, Docket, p. 112. 17 CTA Case No. 8116, Docket, pp. 116- 117.

DECISION erA CASE NOS. 8043 & 8116 On September 14, 2010, the CTA Special Second Division issued a Resolutionls expressing no objection to the said consolidation and set the initial presentation of evidence on October 18, 2010. On October 8, 2010, the parties filed their Joint Stipulation of Facts and Issues19, which was approved by the CTA Special Second Division in a Resolution2o dated October 12, 2010. In the same Resolution, the Court terminated the Pre-Trial and ordered both parties to proceed with the trial on the merits. On December 20, 2010, CIR filed a Motion to Dismiss21, with CBK's Comment On/Opposition to Respondent's Motion to Dismiss22 filed on January 24, 2011, seeking the dismissal of CTA Case No. 8116 on the ground of lack of jurisdiction, pursuant to the ruling in the case of Commissioner of Internal Revenue vs. Aichi Forging Company of Asia, Inc. 23 (Aichi case). On March 3, 2011, the CTA Special Second Division issued a Resolution24 granting CIR's Motion, thus, CTA Case No. 8116 was thereby dismissed for lack of jurisdiction due to premature filing. In the same Resolution, the Court set the hearing on CBK's Motion for the Adoption of Procedures on the Presentation of Voluminous Documents and the initial presentation of evidence for CTA Case No. 8043 on April11, 2011. Aggrieved, CBK filed a Motion for Reconsideration2s on March 16, 2011, with CIR's Comment26 filed on March 21, 2011. However, the same was denied in a Resolution27 dated April11, 2011. On May 6, 2011, within the extension period granted28, CBK appealed the Resolution dated March 3, 2011 of the CTA Special Second Division dismissing CTA Case No. 8116; and the Resolution dated April 11, 2011, denying its Motion for Reconsideration, by filing with the CTA Court En Bane a Petition for Review29, docketed as CTA EB No. 759.C2.. 18 erA Case No. 8043, Docket (Vol. I), p. 121-122 19 erA Case No. 8043, Docket (Vol. I), pp. 135-141. 20 erA Case No. 8043, Docket (Vol. I), p. 142. 21 erA Case Nos. 8043 and 8116, Docket (Vol. II), pp. 758-763. 22 erA Case Nos. 8043 and 8116, Docket (Vol. II), pp. 767-784. 23 G.R. No. 184823, October 6, 2010. 24 erA Case Nos. 8043 and 8116, Docket (Vol. II), pp. 786-793. 25 erA Case Nos. 8043 and 8116, Docket (Vol. II), pp. 794-814. 26 erA Case Nos. 8043 and 8116, Docket (Vol. II), pp. 815-821. 27 erA Case Nos. 8043 and 8116, Docket (Vol. II), pp. 827-830. 28 Court En Bane's Minute Resolutions dated April 18, 2011 and April 20, 2011, En Bane Rollo, pp . 19 and 28. 29 En Bane Rollo, pp. 29-57.

DECISION CTA CASE NOS. 8043 & 8116 On September 12, 2011, the CTA Court En Bane issued a Resolution3o ordering CIR to file his comment on the subject Petition. CIR complied with the said order on October 5, 2011, by filing his Motion to Admit Attached Comment31. In a Resolution32 dated October 24, 2011, the CTA Court En Bane gave due course to the CBK's Petition and required the parties to submit their memoranda. As directed by the Court, CIR filed a Manifestation33 on November 11, 2011, stating therein that he is adopting the arguments in his Comment filed on October 5, 2011 as his Memorandum, while Petitioner's Memorandum34 was filed on December 1, 2011. Thus, the case was submitted35 for decision on January 11, 2012. On December 20, 2012, the CTA Court En Bane promulgated a Decision36 dismissing CBK's Petition. The dispositive portion thereof states: "WHEREFORE, the instant Petition for Review is hereby DISMISSED for lack of merit. Accordingly, the Assailed Resolutions dated March 3, 2011 and April 11, 2011 in CTA Case No. 8116 entitled 'CBK Power Company Limited vs. Commissioner of Internal Revenue', are hereby AFFIRMED in toto. SO ORDERED" Thus, CBK filed a Motion for Reconsideration37 on February 5, 2013, which was granted by the CTA Court En Bane in a Resolution3s dated June 26, 2013, following the ruling of the Supreme Court in the consolidated cases of Commissioner of Internal Revenue v. San Roque Power Corporation, Taganito Mining Corporation v. Commissioner of Internal Revenue, and Phi/ex Mining Corporation v. Commissioner of Internal Revenue39 (San Roque Case). In the same Resolution, the cases docketed as CTA Case Nos. 8043 and 8116 were remanded to theca.. 30 En Bane Rollo, pp. 73-74. 31 En Bane Rollo, pp. 75-86. 32 En Bane Rollo, pp. 88-89. 33 En Bane Rollo, pp . 90-92. 34 En Bane Rollo, pp. 94-120. 35 Resolution dated January 11, 2012, En Bane Rollo, pp. 144-145. 36 En Bane Rollo, pp. 147-155. 37 En Bane Rollo, pp. 168-183. 38 En Bane Rollo, pp. 203-208. 39 G.R. Nos. 187485, 196113, and 197156, February 12, 2013.

DECISION CTA CASE NOS. 8043 & 8116 Special Second Division for further proceedings. The fallo of the said Resolution reads: "WHEREFORE, the Motion for Reconsideration filed by petitioner is hereby GRANTED. The assailed Decision promulgated on December 20, 2012 is hereby REVERSED and SET ASIDE. The cases docketed as CTA Case Nos. 8043 and 8116 is (sic) REMANDED to the Second Division of the Court for further proceedings. SO ORDERED." On July 23, 2013, CIR filed a Motion for Reconsideration (Re: Resolution Promulgated 26 June 2013) 40, which was denied by the CTA Court En Bane in a Resolution41 dated December 18, 2013. On February 20, 2014, CIR filed his Petition for Review on Certiorari42 with the Supreme Court (SC) docketed as G.R. No. 210529. However, the same was denied by the Second Division of the Supreme Court per Notice of Resolution43 dated March 26, 2014, to wit: "G.R. 210529 (Commissioner of Internal Revenue vs. CBK Power Company Limited).- Considering the allegations, issues and arguments adduced in the petition for review on certiorari assailing the Resolutions dated 26 June 2013 and 18 December 2013 of the Court of Tax Appeals, En Bane in CTA EB Case No. 759 (CTA Case Nos. 8043 and 8116), the Court resolves to DENY the petition for failure to sufficiently show any reversible error in the assailed resolutions to warrant the exercise of this Court's discretionary appellate jurisdiction. x x x" Meanwhile, in a Resolution44 dated March 14, 2014, the CTA Special Second Division ordered the parties in CTA Case No. 8116 to proceed with the presentation of their respective evidence and held in abeyance the issues and matters submitted in CTA Case No. 8043. Accordingly, the consolidated cases shall be resolved concurrently upon the completion of the proceedings in CTA Case No. 8116.e- 40 En Bane Rollo, pp. 209-221. 41 En Bane Rollo, pp. 227-229. 42 CTA Case Nos. 8043-8116, Docket (Vol. IV), pp. 1923-1949. 43 CTA Case Nos. 8043, Docket (Vol. VI), pp. 2867-2868. 44 CTA Case Nos. 8043-8116, Docket (Vol. IV), pp. 2141-2147.

DECISION CTA CASE NOS. 8043 & 8116 On June 3, 2014, CIR filed a Motion for Reconsideration4s praying for the Supreme Court to set aside its Resolution dated March 26, 2014; and, to issue a new decision granting his Petition. On July 18, 2014, the SC Second Division issued a Notice of Resolution46 denying with finality CIR's Motion for Reconsideration of the Resolution dated March 26, 2014, thus: "G.R. No. 210529 (Commissioner of Internal Revenue vs. CBK Power Company Limited).- Acting on the Office of the Solicitor General's motion for reconsideration of the Resolution dated 26 March 2014 which denied the petition for review on certiorari, the Court resolves to DENY the motion with FINALITY, no substantial argument having been adduced to warrant the reconsideration sought. No further pleadings or motions shall be entertained in this case. Let entry of final judgment be made in due course." On August 6, 2014, CBK commenced with the presentation of its evidence in CTA Case No. 8116.47 On the other hand, respondent opted not to present evidence in this case.4s On September 17, 2014, the SC Second Division's Resolution dated March 26, 2014 became final and executory.49 CTA Case No. 8043 Meanwhile, on May 31, 2010, within the extension period granted by the Courtso, CIR filed his Answersl in CTA Case No. 8043, interposing the following Special and Affirmative Defenses: e. 45 CTA Case No. 8043, Docket (Vol. VI), pp. 3235-3256. 46 CTA Case No. 8043, Docket (Vol. VII), p. 3716. 47 Minutes of the Hearing dated August 6, 2014, CTA Case No. 8043, Docket (Vol. VII), p. 3680. 48 Minutes of the Hearing dated November 10, 2014, CTA Case No. 8043, Docket (Vol. VIII), p. 3794. 49 Entry of Judgment dated January 29, 2015, CTA Case No. 8043, Docket (Vol. VIII), p. 4279. 50 Order dated May 25, 2010, CTA Case No. 8043, Docket (Vol. 1), p. 74. 51 CTA Case No. 8043, Docket (Vol. I), pp. 75-81.

DECISION CTA CASE NOS. 8043 & 8116 "SPECIAL AND AFFIRMATIVE DEFENSES 4. Petitioner is not entitled to refund or tax credit in the amount of P14,078,028.68 representing alleged unutilized input tax because it failed to submit all necessary and relevant documents pertaining to the above-mentioned amount with respondent in the administrative claim for refund or tax credit. 5. In an administrative claim for refund or tax credit of input taxes attributable to zero-rated sales, a VAT registered person must submit complete documents to support its application for refund pursuant to Section 112 (D) of the Tax Code of 1997. Otherwise, there will be no sufficient compliance with the filing of an administrative claim for refund, which is a condition sine qua non prior to the filing of judicial claim. 6. To support its claim, it is imperative for petitioner to prove and present the following, viz: a. The registration requirements of a value-added taxpayer in compliance with Section 6(a) and (b) of Revenue Regulations No. 6-97 in relation to Section 4.107-a (a) of Revenue Regulations No. 7-95, and Section 236 of the National Internal Revenue Code of 1997 (NIRC of 1997); b. The invoicing and accounting requirements for VAT-registered persons, as well as the filing and payment of VAT in compliance with the provisions of Section 113 and 114 of the NIRC of 1997; c. Proof of compliance with the prescribed checklist of requirements to be submitted involving claim for VAT refund pursuant to Revenue Memorandum Order No. 53-98. It is worthy of emphasis that Section 112 (D) of the NIRC of 1997 requires the submission of complete documents in support of the application filed with the Bureau of Internal Revenue before the 120-day audit period shall apply, and before the taxpayer could avail of judicial remedies as provided for in the law. Hence, petitioner's failure to submit proof o~

DECISION CTA CASE NOS. 8043 & 8116 compliance with the above-stated requirements warrants immediate dismissal of the petition for review. d. That the input taxes of P14,078,028.68 allegedly paid by petitioner on its domestic purchases of non-capital goods and services, services rendered by non-residents and importation of non-capital goods for the period January 1, 2008 to March 31, 2008 were attributable to its zero-rated sales and such have not been applied against any output tax and were not carried over in the succeeding taxable quarter or quarters; e. That petitioner's administrative claim for tax credit or refund of the unutilized input tax (VAT) was filed within two (2) year after the close of the taxable quarter when the sales were made in accordance with Sections 112 (A) and (D) ofthe NIRC of1997; f. The judicial claim was filed within the period prescribed in Section 112 (D) of the NIRC of 1997; h. That petitioner's domestic purchases of goods and services were made in the course of its trade or business, properly supported by VAT invoices and/or official receipts and other documents, such as subsidiary purchase journal, showing that it actually paid VAT in accordance with Sections 110 (A) (2) and 113 of the NIRC of 1997, and in pursuance to Section 4.104-5 (a) and (b) of Revenue Regulations No. 7-95 (RE: Substantiation of Claims for Input Tax Credit); i. The requirements as enumerated under Section 4.104-2 of Revenue Regulations 7-95 (Re: Persons who can avail of the Input Tax Credits). 7. In Ang Tibay vs. Court of Industrial Relations GR No. L-46496, the Highest Court stated the primary rights which must be respected even in an administrative proceeding: ~

DECISION CTA CASE NOS. 8043 & 8116 1) The first of these rights is the right to a hearing, which includes the right of the party interested or affected to present his own case and submit evidence in support thereof. In the language of Chief Hughes, in Morgan v. U.S., 304 U.S. 1, 58 S. Ct. 773, 999, 82 Law. ed. 1129. 'the liberty and property of the citizen shall be protected by the rudimentary requirements of fair play. 2) Not only must the party be given an opportunity to present his case and to adduce evidence tending to establish the rights which he asserts but the tribunal must consider the evidence presented. (Chief Justice Hughes in Morgan v. U.S. 298 U.S. 468, 56 S. Ct. 906, 80 law. ed. 1288.) In the language of this court in Edwards vs. McCoy, 22 Phil., 598, 'the right to adduce evidence, without the corresponding duty on the part of the board to consider it, is vain. Such right is conspicuously futile if the person or persons to whom the evidence is presented can thrust it aside without notice or consideration.' 3) 'While the duty to deliberate does not impose the obligation to decide right, it does imply a necessity which cannot be disregarded, namely, that of having something to support it is a nullity, a place when directly attached.' (Edwards vs. McCoy, supra.) This principle emanates from the more fundamental is contrary to the vesting of unlimited power anywhere. Law is both a grant and a limitation upon power. 4) Not only must there be some evidence to support a finding or conclusion (City of Manila vs. Agustin, G.R. No. 45844, promulgated November 29, 1937, XXXVI 0. G. 1335), but the evidence must be 'substantial.' (Washington, Virginia and Maryland Coach Co. v. national labor Relations Board, 301 U.S. 142, 147, 57 S. Ct. 648, 650, 81 Law. ed. 965.) It means such relevant evidence as a reasonable mind accept as adequate to support a conclusion.' (Appalachian Electric Power v. National Labor Relations Board, 4 Cir., 93 F. 2d 985, 989; National Labor Relations Board v. Thompson Products, 6 Cir., 97 F. 2d 13, 15; Ballston-Stillwater Knitting Co. v. National Labor Relations Board, 2 Cir., 98 F. 2d 758, 760.) ... The statute provides that 'the rules of evidence prevailing in courts of law and equity shall not be_,

DECISION CTA CASE NOS. 8043 & 8116 controlling.' The obvious purpose of this and similar provisions is to free administrative boards from the compulsion of technical rules so that the mere admission of matter which would be deemed incompetent in judicial proceedings would not invalidate the administrative order. (Interstate Commerce Commission v. Baird, 194 U.S. 25, 44, 24 S. Ct. 563, 568, 48 Law. ed. 860; Interstate Commerce Commission v. Louisville and Nashville R. Co., 227 U.S. 88, 93, 33 S. Ct. 185, 187, 57 Law. ed. 431; United States v. Abilene and Southern Ry. Co. S. Ct. 220, 225, 74 Law. ed. 624.) But this assurance of a desirable flexibility in administrative procedure does not go far as to justify orders without a basis in evidence having rational probative force. Mere uncorroborated hearsay or rumor does not constitute substantial evidence. (Consolidated Edison Co. v. National Labor Relations Board, 59 S. Ct. 206, 83 Law. ed. No. 4, Adv. Op., p. 131.)" 5) The decision must be rendered on the evidence presented at the hearing, or at least contained in the record and disclosed to the parties affected. (Interstate Commerce Commission vs. L. & N. R. Co., 227 U.S. 88, 33 S. Ct. 185, 57 Law. ed. 431.) Only by confining the administrative tribunal to the evidence disclosed to the parties, can the latter be protected in their right to know and meet the case against them. It should not, however, detract from their duty actively to see that the law is enforced, and for that purpose, to use the authorized legal methods of securing evidence and informing itself of facts material and relevant to the controversy. Boards of inquiry may be appointed for the purpose on investigating and determining the facts in any given case, but their report and decision are only advisory. (Section 9, Commonwealth Act No. 103.) The Court of Industrial Relations may refer any industrial or agricultural dispute or any matter under its consideration or advisement to a local board of inquiry, a provincial fiscal. a justice of the peace or any public official in any part of the Philippines for investigation, report and recommendation, and may delegate to such board or public official such powers and functions as the said Court of Industrial Relations may deem,.

DECISION CTA CASE NOS. 8043 & 8116 necessary, but such delegation shall not affect the exercise of the Court itself of any of its powers. (Section 10, ibid.) 6) The Court of Industrial Relations or any of its judges, therefore, must act on its or his own independent consideration of the law and facts of the controversy, and not simply accept the views of a subordinate in arriving at a decision. It may be that the volume of work is such that it is literally Relations personally to decide all controversies coming before them. In the United States the difficulty is solved with the enactment of statutory authority authorizing examiners or other subordinates to render final decision, with the right to appeal to board or commission, but in our case there is no such statutory authority. 7) The Court of Industrial Relations should, in all controversial questions, render its decision in such a manner that the parties to the proceeding can know the various issues involved, and the reasons for the decision rendered. The performance of this duty is inseparable from the authority conferred upon it. (Emphasis supplied) Petitioner is mandated to present evidence to support its administrative and such evidence will be used as basis for the decision of the quasi-judicial body. If there is lack of evidence, then the decision will probably be contrary to petitioner. Only the evidence presented will be reviewed by the quasi-judicial body. An administrative claim is meant to expedite the proceedings where all the relevant evidence is presented. Petitioner, however, instead chose not to submit any evidence to support its claim. 8. Furthermore, in an action for refund the burden of proof is on the taxpayer to establish its right to refund and failure to sustain the burden is fatal to the claim for refund/credit. This is so because exemptions from taxation are highly disfavored in law and he who claims exemption must be able to justify his claim by the clearest grant of organic or statutory law. An exemption from the common burden cannot be permitted to exists upon vague implications (Asiatic Petroleum Co. vs. Ilanes, 49 Phil. 466 cited in Collector of Internal Revenue v. Manila Jockey Club, Inc., 98 Phil. 670).'~

DECISION CTA CASE NOS. 8043 & 8116 On June 1, 2010, the Court issued a Notice of Pre-Trial Conferences z setting the pre-trial conference on July 8, 2010 at 1:30 p.m. and requiring the parties to file their respective pre-trial brief. In compliance therewith, CBK filed its Pre-Trial Brief53 on June 17, 2010, while CIR's Pre-Trial Brief54 was filed on July 1, 2010. On November 23, 2010, CBK filed a Motion for the Adoption of Procedures on the Presentation of Voluminous Documents Pursuant to Rules 12 and 13 of the Revised Rules of the Court of Tax Appeals.ss In a Resolution56 dated March 3, 2011, the Court set the hearing on the said Motion and the initial presentation of evidence for CBK on April 11, 2011. After presentation of its testimonial and documentary evidence, CBK filed its Formal Offer of Evidence-First Part57 and Formal Offer of Evidence-Second Partss on July 13, 2011 and December 1, 2011, respectively. In a Resolutions9 dated January 6, 2012, the Court resolved the foregoing documentary evidence submitted by CBK and set the initial presentation of the evidence for CIR on February 8, 2012. In the hearing6� held on February 8, 2012, CIR's counsel manifested that he is not ready for the CIR's initial presentation of evidence. On the other hand, CBK's counsel requested to file a Supplemental Motion for Reconsideration on CBK's denied exhibits, which the Court granted. By such reasons, the initial presentation of evidence for CIR was held in abeyance. On March 8, 2012, CBK filed a Supplemental Motion for Partial Reconsideration61, praying for the Court to admit the denied exhibits in a Resolution dated January 6, 2012; and to allow CBK to recall the Court Commissioned Independent Certified Public Accountant, Ms. Myra Celeste 0. Dabalos, to identify and testify on the re-marked exhibits. The recall of the said witness was granted by the Court in a Resolution62e.... 52 CTA Case No. 8043, Docket (Vol. I), p. 82. 53 CTA Case No. 8043, Docket (Vol. I), pp. 83-101. 54 CTA Case No. 8043, Docket (Vol . I), pp. 102-106. 55 CTA Case Nos. 8043 and 8116, Docket (Vol. II), pp. 742-746. 56 CTA Case Nos. 8043 and 8116, Docket (Vol. II), pp. 786-793. 57 CTA Case Nos. 8043 and 8116, Docket (Vol. II), pp. 927-959. 58 CTA Case Nos. 8043 and 8116, Docket (Vol. II), pp. 1211-1242. 59 CTA Case Nos. 8043 and 8116, Docket (Vol. II), pp. 1268-1272. 60 Minutes of the Hearing dated February 8, 2012, CTA Case Nos. 8043 and 8116, Docket (Vol. II), p. 1287. 61 CTA Case Nos. 8043 and 8116, Docket (Vol. III), pp. 1290-1300. 62 CTA Case Nos. 8043 and 8116, Docket (Vol. III), pp. 1303-1304.

DECISION CTA CASE NOS. 8043 & 8116 dated April 11, 2012. On June 11, 2012, CBK filed a Supplemental Formal Offer of Evidence.63 After an evaluation of CBK's arguments in its Motion for Reconsideration and Supplemental Motion for Partial Reconsideration, and the filing of its Supplemental Formal Offer of Evidence, the Court partially granted64 the said Motions and admitted most of the exhibits therein, except for Exhibits "BB-3-0006", "BB-6-0009", "BB-70009", "BB- 120006" and "BB-120007" for CBK's failure to submit the same to the Court. On July 9, 2012, CBK formally rested its case.6s In the hearing66 held on January 21, 2013, CIR's counsel manifested that he will no longer present any evidence and that he is submitting the instant case for decision. The Court gave parties a period of thirty days to file their Memoranda. On March 22, 2013, CTA Case No. 8043 was submitted67 for decision, taking into consideration the Memorandum for the Petitioner6s filed on March 13, 2013, sans CIR's Memorandum per Records Verification69 dated March 14, 2013. However, in a Resolution7o promulgated on March 14, 2014, the CTA Special Second Division held in abeyance the resolution of the issues and matters raised in CTA Case No. 8043, in view of the recent developments in CTA EB No. 759, to wit: "Notwithstanding the fact that CTA Case No. 8043 has been submitted for Decision and that this Honorable Court is in the process of promulgating its ruling on the same, prudence dictates that in view of the recent developments in CTA EB No. 759, the resolution of the former case be held in abeyance while the proceedings in CTA Case No. 8116 is continued in the CTA Second Division. The consolidated~ 63 CTA Case Nos. 8043 and 8116, Docket (Vol. III), pp. 1569-1594. 64 Resolution dated July 9, 2012, CTA Case Nos. 8043 and 8116, Docket (Vol. IV), pp. 1835-1839. 65 Ibid . 66 Minutes of the Hearing dated January 21, 2013, CTA Case Nos. 8043 and 8116, Docket (Vol. IV), pp. 1886. 67 Resolution dated March 22, 2013, CTA Case Nos. 8043 and 8116, Docket (Vol. IV), p. 1918. 68 CTA Case Nos. 8043 and 8116, Docket (Vol. IV), pp. 1893-1916. 69 CTA Case Nos. 8043 and 8116, Docket (Vol. IV), p. 1892. 70 CTA Case Nos. 8043 and 8116, Docket (Vol. IV), pp. 2141-2147.

DECISION erA CASE NOS. 8043 & 8116 cases shall be decided upon the conclusion of the proceedings in CTA Case No. 8116." On May 12, 2014, CBK commenced with the presentation of its evidence for CTA Case No. 811671, in compliance with the Resolution72 dated March 14, 2014. On December 9, 2014, CBK filed its Formal Offer of Evidence73 offering Exhibits "P-1 " to "P-110", inclusive of submarkings. In a Resolution74 dated March 2, 2015, the Court partially admitted the documentary evidence offered by CBK. Thus, CBK filed a Manifestation and Motion for Partial Reconsideration7s on March 23, 2015, seeking partial reconsideration of the Court's Resolution promulgated on March 2, 2015, which denied CBK's voluminous exhibits; and requesting that it be allowed to present the ICPA before a Commissioner's Hearing to clearly stamp the exhibit numbers and to correct the markings of the denied exhibits. It further requested that it be allowed to recall the ICPA to identify and testify on the denied exhibits. In a Resolution76 promulgated on June 22, 2015, the Court denied CBK's motion to recall the ICPA to identify and testify in open court. It, however, allowed CBK to present the ICPA before the Commissioner's Hearing on July 27, 2015. In the Resolution77 dated September 15, 2015, the Court admitted most of the exhibits, except the following: Exhibits "P-100-D-010248", "P-100-D-010642", "P-100-D-010584"I "P-100-D-010585"I "P-100-D- 020069" to "P-100-D-020071", "P-100-D-020146", "P-100-D-020147", "P-100-D-020285", "P-100-D-020286", "P-100-D-060352 to P-100-D- 060356", "P-100-D-070387", "P-100-D-070389", "P-100-D-090495", "P- 100-D-090496", "P-100-D-090497", "P-100-D-090498", "P-100-D- 090617", "P-100-D-090618", "P-100-D-100474", "P-100-D-100475", "P- 100-D-120085 to P-100-D-120088", "P-100-D-120113", "P-100-D-< 71 Minutes of the Hearing dated May 12, 2014, erA Case Nos. 8043 and 8116, Docket (Vol. VI), p. 2866. 72 See footnote no. 43. 73 erA Case No. 8043, Docket (Vol. VIII), pp. 3795-3884. 74 erA Case No. 8043, Docket (Vol . VIII), pp. 4240-4252. 75 erA Case No. 8043, Docket (Vol. VIII), pp. 4255-4274. 76 erA Case No. 8043, Docket (Vol. VIII), pp. 4286-4287. 77 erA Case No. 8043, Docket, Vol. VIII, pp. 4315-4319.

DECISION CTA CASE NOS. 8043 & 8116 120114", "P-100-D-120252 to P-100-D-120254", "P-100-G-1", "P-100-G- 35", "P-100-G-36", "P-100-G-41", "P-100-G-43", and "P-100-G-111". The Court also ordered the parties therein to submit their respective memoranda. On November 9, 2015, the consolidated cases were submitted78 for decision, taking into consideration the Memorandum for the Petitioner79 filed on October 8, 2015, sans CIR's Memorandum per Records Verification80 dated November 3, 2015. Hence, this Decision. The parties submittedB1 the following issues for this Court's resolution: 1. Whether or not CBK's alleged sale of services to the National Power Corporation (NPC) for the period January 1, 2008 to March 31, 2008 and April 1, 2008 to December 31, 2008, qualify as zero rated sales; 2. Whether or not CBK's alleged unutilized input taxes of P14,078,028.68 on its local purchases and/or importation of goods and services for the period January 1, 2008 to March 31, 2008, were all attributable to CBK's alleged zero- rated sales for the period January 1, 2008 to March 31, 2008, and CBK's alleged unutilized input taxes of P47,425,306.79, representing unutilized input taxes on its local purchases and importations of goods other than capital goods, local purchases of services, payments for services rendered by non-residents, local purchases of capital goods not exceeding P1 Million including unutilized amortized input taxes on capital goods exceeding P1 Million, for the period April 1, 2008 to December 31, 2008, were all attributable to alleged zero-rated sales for the period April 1, 2008 to December 31, 2008, pursuant to Section 112(A) of the Tax Code of 1997, as amended; 3. Whether or not CBK has duly substantiated its claim for the issuance of tax credit certificates for P14,078,028.68 for its alleged unutilized input taxes on its local purchases andjor importation of goods and services, capital goods and~ 78 Resolution dated November 9, 2015, CTA Case No. 8043, Id., p. 4347. 79 CTA Case No. 8043, CTA Case No. 8043, Docket (Vol. VIII), pp. 4320-4345. 80 CTA Case No. 8043, CTA Case No. 8043, Docket (Vol. VIII), p. 4347. 81 JSFI, CTA Case No. 8043, Docket (Vol. 1), pp. 138-141.

DECISION CTA CASE NOS. 8043 & 8116 payments for services rendered by non-residents, which were all allegedly attributable to CBK's zero-rated sales for the period January 1, 2008 to March 31, 2008, and for P47,425,306.79, representing alleged unutilized input taxes on its local purchases and importations of goods other than capital goods, local purchases of services, payments for services rendered by non-residents, local purchases of capital goods not exceeding P1 Million including unutilized amortized input taxes on capital goods exceeding P1 Million, for the period April 1, 2008 to December 31, 2008, which were all allegedly attributable to zero-rated sales for the period April 1, 2008 to December 31, 2008, respectively, pursuant to Section 112(A) of the Tax Code of 1997, as amended; 4. Whether or not CBK's alleged unutilized input taxes of P14,078,028.68 on its local purchases andjor importation of goods and services, capital goods and payments for services rendered by non-residents for the period January 1, 2008 to March 31, 2008, which were all attributable to CBK's alleged zero-rated sales for the period January 1, 2008 to March 31, 2008, and CBK's alleged unutilized input taxes of P47,425,306.79, representing unutilized input taxes on its local purchases and importations of goods other than capital goods, local purchases of services, payments for services rendered by non-residents, local purchases of capital goods not exceeding P1 Million including unutilized amortized input taxes on capital goods exceeding P1 Million, for the period April 1, 2008 to December 31, 2008, all attributable to alleged zero-rated sales for the period April 1, 2008 to December 31, 2008, pursuant to Section 112(A) of the Tax Code of 1997, as amended, have not been applied and/or utilized against any output tax; 5. Whether or not CBK had timely and duly filed its administrative and judicial claims for the issuance of tax credit certificates for P14,078,028.68 for its alleged unutilized input taxes on its local purchases and/or importation of goods and services, capital goods and payments for services rendered by non-residents for the period January 1, 2008 to March 31, 2008, which were all attributable to CBK's alleged zero-rated sales for the period January 1, 2008 to March 31, 2008, and for P47,425,306.79, representing unutilized input taxes on its local purchases and importations of goods other than capital goods, local purchases of services, payments for services rendered by non-residents, local purchases of capital goods not,

DECISION CTA CASE NOS. 8043 & 8116 exceeding P1 Million including unutilized amortized input taxes on capital goods exceeding P1 Million, for the period April 1, 2008 to December 31, 2008, all allegedly attributable to zero-rated sales for the period April 1, 2008 to December 31, 2008, pursuant to Section 112(A) of the Tax Code of 1997, as amended; and 6. Whether or not CBK is entitled to the issuance of tax credit certificates amounting to P14,078,028.68 for its alleged unutilized input taxes on its local purchases and/or importation of goods and services, capital goods and payments for services rendered by non-residents for the period January 1, 2008 to March 31, 2008, which were all attributable to CBK's alleged zero-rated sales for the period January 1, 2008 to March 31, 2008, and amounting to P47,425,306.79, representing alleged unutilized input taxes on its local purchases and importations of goods other than capital goods, local purchases of services, payments for services rendered by non-residents, local purchases of capital goods not exceeding P1 Million including unutilized amortized input taxes on capital goods exceeding P1 Million, for the period April 1, 2008 to December 31, 2008, all allegedly attributable to zero-rated sales for the period April 1, 2008 to December 31, 2008, pursuant to Section 112(A) of the Tax Code of 1997, as amended. In sum, the sole issue for the resolution of this Court is whether CBK is entitled to its claim for issuance of TCC in the aggregate amount of P61,503,335.47, allegedly representing unutilized input taxes attributable to zero-rated sales for the periods January 1, 2008 to March 31, 2008 and Aprill, 2008 to December 31, 2008. CBK filed two (2) administrative claimssz for the issuance of TCC of its unutilized input taxes in the amounts of P14,078,028.68 and P47,425,306.79, allegedly all attributable to zero-rated sales for the respective periods of January 1, 2008 to March 31, 2008 and April 1, 2008 to December 31, 2008 or in the aggregate of P61,503,335.47, as shown below: 1st Quarter 2nd to 4th Qtrs 200883 Input Taxes on 200884 Total Purchases of capital p 109,402.56 p 17,556.00 p 126,958.56 ... 82 Exhibits "P-1" and "P-2". 83 Petition for Review, Annex "E", p. 7, CTA Case No. 8043, Docket ( Vol. I), p. 55. 84 Exhibit "P-1" .

DECISION ' CTA CASE NOS. 8043 & 8116 Page 20 of 45 4,420,247 .85 12,135,966.77 16,556,214.62 867,749 .00 goods not exceeding P1 2,972,290.00 3,840,039.00 Million 7,936,828.44 30,335,291.26 38,272,119.70 Domestic purchases of 254,763 .95 goods other than capital 450 ,799.25 705 ,563 .20 goods 489,036.88 Importations of goods 1,463,183.85 1,952,220.73 other than capital goods - Purchases of services 50,219.66 50 ,219 .66 Services rendered by non- P 14, 078 ,028 .68 residents P47,425,306.79 P61 ,503,335.47 Amortized input taxes on capital goods exceeding P1 Million from prior period purchases Amortized input taxes on capital goods exceeding P1 Million from 2ndquarter of 2008 purchases Total Sections 112(A) and (C) of the NIRC of 1997, as amended, allow the refund or tax credit of unutilized input taxes attributable to zero- rated or effectively zero-rated sales, 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. Provided, finally, that for a6-"

DECISION CTA CASE NOS. 8043 & 8116 person making sales that are zero-rated under Section 108 (B) (6), the input taxes shall be allocated ratably between his zero-rated and non-zero rated sales. XXX XXX XXX (C) Period within which Refund or Tax Credit of Input 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) 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." Pursuant to the above-quoted provisions and, as laid down by the Supreme Court in a number of casesss, a taxpayer engaged in zero-rated or effectively zero-rated transactions may claim a refund/TCC for input taxes attributable to such sales upon compliance with the following requisites: (1) the claimant must be a VAT-registered person; (2) there must be zero-rated or effectively zero-rated sales; (3) input taxes were incurred or paid; (4) such input taxes are attributable to zero-rated or effectively zero-rated sales; (5) said input taxes were not applied against any output VAT liability; and (6) the administrative and judicial claims for refund were seasonably filed.coz: 85 Luzon Hydro Corporation vs. Commissioner of Internal Revenue, G.R. No. 188260, November 13, 2013; Southern Phil. Power Corp. vs . CIR, G.R. No. 179632, October 19, 2011; Silicon Philippines, Inc. (Formerly Intel Philippines Manufacturing, Inc.) vs. Commissioner of Internal Revenue, G.R. No. 172378, January 17, 2011; AT&T Communication Services Phil., Inc. vs. CIR, G.R. No. 182364, August 3, 2010; San Roque Power Corporation vs. CIR, G.R. No. 180345, November 25, 2009; Intel Technology Philippines, Inc. vs. CIR, G.R. No. 166732, April 27, 2007.

DECISION CTA CASE NOS. 8043 & 8116 CBK complied with the 6th Requisite. Its administrative and judicial claims were seasonably filed. Before delving on the first five (5) requisites, the Court finds it appropriate to determine first CBK's compliance with the last requisite, which is the timeliness of the filing of the instant claim, considering that claims filed beyond the reglementary period will not prosper. Section 112(A) states that the application for tax credit certificate/refund of unutilized excess input VAT must be filed within two years after the close of the taxable quarter when the zero-rated or effectively zero-rated sales were made. The present claim covers the four (4) quarters of the taxable year 2008, or from January 1, 2008 to December 31, 2008. Counting two years from the end of each quarter, CBK had until March 31, 2010, June 30, 2010, September 30, 2010 and December 31, 2010, respectively, within which to file its administrative claim for TCC/refund. Guided by these dates, the administrative claims filed by CBK on November 27, 200986 (for the first quarter) and on June 25, 201087 (for the second to fourth quarters), are well within the two-year prescriptive period. With regard to the timeliness of the filing of judicial claim, Section 112 (A) and (C) of the NIRC of 1997, as amended, provides that the CIR has 120 days from the date of the submission of the complete documents in support of the application for tax refund/credit within which to grant or deny the claim. In case of full or partial denial by the CIR, the taxpayer's recourse is to file an appeal before the CTA within 30 days from receipt of the decision of the CIR. However, if after the 120- day period the CIR fails to act on the application for tax refund/credit, the remedy of the taxpayer is to appeal the inaction of the CIR to this Court within 30 days. The CTA Court En Bane, citing the ruling of the Supreme Court in Commissioner of Internal Revenue v. San Roque Power CorporationBB (San Roque Case), exhaustively explained in its Resolution89 dated June 26, 2013, that the compliance with the aforementioned 120-30 day perio~ 86 Petition for Review, Annexes "E" and "F", CTA Case No. 8043, Docket (Vol. I), pp. 49-57. 87 Exhibits "P-1" and "P-2" . 88 G.R Nos. 187485, 196113, and 197156, February 12, 2013. 89 See footnote no. 26.

DECISION CTA CASE NOS. 8043 & 8116 under Section 112 (A) and (C) of the NIRC of 1997, as amended, is mandatory and jurisdictional, save for those VAT refund cases that were prematurely filed (i.e., before the lapse of the 120-day period) with the CTA between December 10, 2003 and October 6, 2010 (when the BIR Ruling No. DA-489-03 was issued). In this case, upon filing of its administrative claims on November 27, 2009 and June 25, 2010, CBK simultaneously submitted the documents in support thereof. This is evident from the letters filed with the BIR on the said dates.9o And, since the records do not show that a written notice was sent by the BIR informing CBK that the documents it submitted were incomplete nor requiring it to submit additional documents, the 120-day period started and continued to run from November 27, 2009 and June 25, 2010, the dates when CBK filed its administrative claims together with the supporting documents. For easy reference, the pertinent dates to CBK's claim for the issuance of TCC are as follows: CTA Period Covered Date of Filing End of 120 Days End of 30 Days Date of Filing of Case of for the from the Judicial Claim No. 1st Qtr. 2008 2nd to 4th Qtrs. Administrative Commissioner to Expiration of 3/29/2010 8043 Claim Decide on the 120 Days 2008 Claim 8116 11/27/2009 3/27/2010 4/26/2010 6/25/2010 10/23/2010 11/22/2010 6/28/2010 Applying the foregoing jurisprudential pronouncement, it is evident that CBK's judicial claim covering the first quarter of 2008 (CTA Case No. 8043) was timely filed within the 120-30 day period. Anent the claim for the second to fourth quarters of 2008 (CTA Case No. 8116), the same was filed on June 28, 2010, or only three (3) days after CBK filed its administrative claim with the Commissioner on June 25, 2010. Clearly, CBK failed to comply with the 120-day waiting period, the time expressly given by law to the Commissioner to decide whether to grant or deny CBK's application for the issuance of TCC. Nonetheless, since CBK filed its judicial claim within the window created in San Roque Case, its Petition for Review in CTA Case No. 8116 is exempted from the strict application of the 120-day mandatory period. As such, it "can claim the benefit of being shielded from the vice of prematurity.';,.... 90 Exhibits "P-1" and "P-2".

DECISION CTA CASE NOS. 8043 & 8116 Based therefrom, CBK timely filed both its administrative and judicial claims. We shall now discuss the other requisites. CBK complied with the 1st Requisite; it is a VAT-registered entity. CBK is registered as a value-added tax (VAT) entity with TIN/VAT No. 205-760-474-000 in accordance with the NIRC of 1997, as amended. It was issued BIR Certificate of Registration OCN 1RC0000050243 dated April10, 2000 by the BIR Revenue District Office No. 55 (San Pablo City, Laguna), which was updated on May 11, 2005, and as a consequence, it was issued BIR Certificate of Registration OCN 1RC0000195405.91 CBK complied with the znd Requisite; it has zero-rated sales. Section 108(8)(7) of the NIRC of 1997, as amended, provides that sale of power generated through renewable sources of energy is among the transactions subject to zero percent (Oo/o) VAT, as follows: 11 (8) Transactions Subject to Zero Percent (0%) Rate. - The following services performed in the Philippines by VAT-registered persons shall be subject to zero percent (Oo/o) rate: XXX XXX XXX (7) Sale of power or fuel generated through renewable sources of energy such as, but not limited to, biomass, solar, wind, hydropower, geothermal, ocean energy, and other emerging energy sources using technologies such as fuel cells and hydrogen fuels." Further, Section 4.108-5(b)(7) of Revenue Regulations (RR) No. 16-05, which implements the foregoing provision, qualifies the applicability of such zero-rating as follows: 6 91 Par. 4, Facts Admitted, JSFI, CTA Case No. 8043, Docket (Vol. I), p. 137.

DECISION CTA CASE NOS. 8043 & 8116 "(b) Transactions Subject to Zero Percent (0�/o) VAT Rate. - The following services performed in the Philippines by a VAT-registered person shall be subject to zero percent (0�/o) VAT rate: XXX XXX XXX (7) Sale of power or fuel generated through renewable sources of energy such as, but not limited to, biomass, solar, wind, hydropower, geothermal and steam, ocean energy, and other emerging sources using technologies such as fuel cells and hydrogen fuels; Provided, however, That zero-rating shall apply strictly to the sale of power or fuel generated through renewable sources of energy, and shall not extend to the sale of services related to the maintenance or operation of plants generating said power." 0 Corollary, Section 4.108-3(f) of the same RR provides: "SEC. 4.108-3. Definitions and Specific Rules on Selected Services. - XXX XXX XXX '(f) Sale of electricity by generation, transmission, and distribution companies shall be subject to 10�/o VAT on their gross receipts; Provided, That sale of power or fuel generated through renewable sources of energy such as, but not limited to, biomass, solar, wind, hydropower, geothermal, ocean energy, and other emerging energy sources using technologies such as fuel cells and hydrogen fuels shall be subject to Oo/o VAT. 'Generation companies' refers to persons or entities authorized by the Energy Regulatory Commission (ERC) to operate facilities used in the generation of electricity. For this purpose, generation of electricity refers to the production of electricity by a generation company or a co- generation facility pursuant to the provisions of RA No. 9136 (EPIRA). They shall include all Independent Power Producers (IPPs) and NPC/Power Sector Assets and Liabilities Management Corporation (PSALM)-owned generation facilities.'6:L

DECISION CTA CASE NOS. 8043 & 8116 Clearly, from the foregoing, to qualify for VAT zero-rating, CBK must prove by sufficient evidence that it is engaged in the sale of power or fuel generated through renewable sources of energy. CBK is a special purpose entity, the sole purpose of which is to engage in all aspects of (a) the design, financing, construction, testing, commissioning, operation, maintenance, management and ownership of Kalayaan II pumped-storage hydroelectric power plant, the new Caliraya Spillway, and other assets located in the Province of Laguna, and (b) the rehabilitation, upgrade, expansion, testing, commissioning, operation, maintenance and management of the Caliraya, Botocan and Kalayaan I hydroelectric power plants and their related facilities located in the Province of Laguna, as shown by its SEC Registration and Amended Articles of Partnership.92 CBK entered into a Second Accession Undertaking93 with the National Power Corporation (NPC), Industrias Metalurgicas Pescarmona, S.A. (IMPSA), and CBK Power Corporation on September 20, 2000, wherein it became a party to the Build-Rehabilitate-Operate- Transfer (BROT) Agreement94 dated November 6, 1998. Under the BROT Agreement and by virtue of the Second Accession Undertaking, it shall cause and be responsible for the rehabilitation, construction, operation and maintenance of the Caliraya, Botocan, and Kalayaan hydroelectric power plants and other civil structures for the purpose of generating electricity for the NPC. In consideration thereof, NPC shall pay CBK Capital Recovery Fees and Operation and Maintenance Fees and other fees in accordance with the BROT Agreement. In performing its obligations under the BROT Agreement and the Accession Undertaking, CBK entered into an Agreement with IMPSA Construction Corporation designated as Turnkey Contract95 on August 18, 2000, by virtue of which IMPSA, as Contractor, undertook the design, engineering, procurement, supply of all plant and materials, rehabilitation, construction, commissioning, testing, completion and handover of such power plants, together with the civil structures, access roads and other works as specified in the BROT Agreement. CBK generates electricity through its Caliraya, Botocan, Kalayaan I and Kalayaan II hydroelectric power plants. The plants generate electricity by drawing water from an upstream reservoir, passing the water through a penstock and in the process utilizing the force of ~ 92 Par. 3, Facts Admitted, JSFI, CTA Case No. 8043, Docket (Vol. I), p. 136. 93 Exhibit " P-4". 94 Exhibit "P-3". 95 Exhibit "P-5" .

DECISION CTA CASE NOS. 8043 & 8116 gravity to rotate the turbines. The turbines in turn rotate the generators, thereby generating electricity.96 CBK's Caliraya, Botocan, Kalayaan I and Kalayaan II power plants were found by the Energy Regulatory Commission (ERC) to be compliant with the pertinent rules and regulations, as evidenced by the Certificates of Compliance (COCs) 97 issued by the ERC to CBK. Examination of the various sales invoices98 and official receipts99 issued by CBK to NPC, Comparison of Sales per General Ledger against Sales per VAT Returns and Annual Income Tax Return1oo, Comparison of Amounts per Invoices against the CBK's Schedule of Sales1o1, Comparison of Sales per General Ledger Against Gross Revenues per Audited Financial Statements1D2, Summary of CBK's Collections with Respect to Sales to NPC in 2008103 showed that for the four quarters of 2008, it had derived revenues from sales of electricity to NPC in the amount of PS,682,815,033.23 which was reflected in its Quarterly VAT Returns, as follows: Exhibit Taxable Zero-Rated Sales/Receipts P-100-B-1 Year2008 p 1,295,785,232.09 P-100-B-2 1st Quarter P-100-B-3 2nd Quarter 1,385,116,8o9.o5 P-100-B-4 3rd Quarter 4th Quarter 1,461,026,179�74 1,540,886,812.35 p 5,682,815,033�23 Such sales of electricity generated through a renewable source of energy, particularly, hydropower, qualify for VAT zero-rating under Section 108(B)(7) ofthe NIRC of1997, as amended. CBK complied with the 3rd Requisite; it incurred or paid input taxes. To prove that it incurred/paid the excess input VAT totaling to P61,503,335.47, CBK submitted various suppliers' invoices, official.._ 96 Exhibit " P-15", Q&A No. 30, CTA Case No. 8043, Docket (Vol. VI), p. 2892. 97 Exhibits "P-6" to " P-9" and "P-17" to "P-19". 98 Exhibits "P-100-I-1" to "P-100-I-253" . 99 Exhibits "P- 100-M-1" to " P-100-M-226". 100 Exhibit " P-100-H". 101 Exhibit "P-100-K" . 102 Exhibit " P-100-L". 103 Exhibit " P-100-N".

DECISION CTA CASE NOS. 8043 & 8116 receipts (OR), Bureau of Customs (BOC) Import Entries and Internal Revenue Declarations (IEIRDs), BOC and bank official receipts1o4, which were all examined by the Court-commissioned Independent CPA (ICPA), Myra Celeste 0. Dabalos. Upon scrutiny of the ICPA report1os and the related supporting documents, the Court finds that the input taxes, except that on purchases of capital goods which will be discussed later, in the amount of P2,944,028.33 should be disallowed for non-compliance with the substantiation requirements under Sections 110(A) and 113(A) and (B) of the NIRC of 1997, as amended, in relation to Sections 4.110-2, 4.110- 3, 4.110-8 and 4.113-1 of RR No. 16-2005. Below is the detailed breakdown ofthe disallowed input VAT ofP5,650,377.89: Schedule 1 Exhibit Description Input VAT Claimed Input tax on domestic purchase of goods supported by documents 101 ,014.67 P-100-E-8 other than a VAT invoice p 111,424.72 Input tax on domestic purchase of goods supported by a VAT 3,900.00 15,193.96 P-100-E-10 invoice but not an original co~y 48,416.76 Input tax on domestic purchase of goods supported by a VAT 404 ,160.70 2,209 .52 P-100-E-11 invoice not issued in the name of the partnershi2_ 5,096 .73 Input tax on domestic purchase of goods supported by a VAT 3,348.20 P-100-E-12 Invoice issued in the name of CBK only 139.45 808,384 .31 Input tax on domestic purchase of goods supported by TIN sales s: P-100-E-13 invoice, and TIN-V sales invoice Input tax on domestic purchase of goods supported by a VAT P-100-E-14, invoice issued in the partnership's name but without the P-100-E-14a, partnership's TIN and/or address but also: 1. Supported by VAT OR P-100-E-14b with TIN and address Input tax on domestic purchase of goods supported by a VAT P-100-E-15 invoice but not dated within the VAT-taxable year Input tax on domestic purchase of goods supported by a VAT invoice with correction on the invoice amount without counter P-100-E-17 signature Input tax on domestic purchase of goods supported by VAT REG P-100-E-19 TIN TEMPORARY CREDIT SALES INVOICE Input tax on domestic purchase of goods supported by a VAT P-100-E-18 invoice with alterations in the invoice date without counter signature P-100-E-20, Input tax on domestic purchase of services supported by documents P-1 OO-E-20a, other than a VAT OR 104 Exhibits "P-100-D-010001" to "P-100-D-010679", "P-100-D-020001" to "P-100-D-020476", "P- 100-D-030001" to "P-100-D-030508", "P-100-D-040001" to "P-100-D-040393", "P-100-D-050001" to "P-100-D-050366", "P-100-D-060001" to "P-100-D-060672", "P-100-D-070001" to "P-100-D- 070464", "P-100-D-080001" to "P-100-D-080477", "P-100-D-090001" to "P-100-D-090780", "P- 100-D-100001 " to "P-100-D-100521", "P-100-D-110001" to "P-100-D-110464", "P-100-D-120001" to "P-100-D-120656", and "P-100-G-1" to "P-100-G-131". 105 Exhibit "P-110".

DECISION CTA CASE NOS. 8043 & 8116 P-1 OO-E-20b Input tax on domestic purchase of service supported by a VAT OR P-100-E-22 but not an original copy 108,612.27 3,299 .28 Input tax on domestic purchases of services supported by a VAT OR 21 ,937.95 P-100-E-23 not issued in the name of the partnership 103 ,786 .01 Input tax on domestic purchase of services supported by a VAT OR 580 ,062.02 7,457 .10 issued in the name of CBK only, CBK- NEW SPILLWAY, CBK-NEW 3,750.00 108.58 P-100-E-24 SPILLWAY EAST TALAONGAN and CBK- TRAINING CENTER 2,876 ,946.89 Input tax on domestic purchases of services supported by Non VAT 1,272 .30 4,971.43 P-100-E-25 Reg TIN OR with stamped "VAT registered" 3,600.30 74 ,029 .54 Input tax on domestic purchase of services supported by TIN OR 9,476 .26 only, OR only; OR with stamped TIN VAT but also : 38.92 P-1 00-E-26, 1. Supported by VAT INVOICE with statement "This serves as an 71,439.42 18,823.57 P-1 OO-E-26a, official receipt" and other supporting documents"; 257,477 .03 5,650,377.89 P-1OO-E-26b 2. Supported by Statement of Accounts Input tax on domestic purchase of services supported by a tape P-100-E-27 receipt without the partnership's name and/or TIN Input tax on domestic purchase of services supported by pre-printed P-100-E-28 TIN-V OR printed after July 31 , 1991 but before January 1, 1996 Input tax on domestic purchase of services supported with VAT OR P-100-E-29 but with incomplete OR date Input tax on domestic purchase of services supported by a VAT OR issued in the partnership's name but without the partnership"s TIN P-1 00-E-30, and/or address but also: 1. Supported by VAT invoice with TIN and P-1 OO-E-30a, address or 2. Supported by VAT invoice or any other document P-1OO-E-30b without TIN and/or address Input tax on domestic purchase of services supported by a VAT OR P-100-E-31 not dated within the VAT -taxable year Input tax on domestic purchases of services supported by TIN NON P-100-E-32 VAT OR Input tax on domestic purchases of services supported by a VAT OR P-100-E-33 but is not SIR-registered P-100-E-37 Double claiming of input tax on domestic purchase of services Input tax on domestic purchase of services supported by VAT OR. However, the sentence "This is not a source of input tax." is printed P-100-E-38 in the VAT OR. Input tax on domestic purchases of services supported by a TIN Non P-100-E-39 VAT Acknowledgement Receipt Input tax on domestic purchase of goods/services and importation of P-100-E-41 goods without supporting documents Overclaimed input tax on domestic purchases of goods/services due P-100-E-42 to erroneous computation {i.e. , arithmetical error) Overclaimed portion of input tax arising from forex rate used on P-100-E-44 foreign currency denominated purchases of goods and services Total ~ Also, the Court noted that among the findings of the ICPA were the following: Item Exhibit Description Input VAT 1 ' -- P-100-E-2 Input tax on domestic purchase of goods supported by a VAT invoice with correction on the invoice amount with ~ 27,791.80 counter signature "@/

DECISION CfA CASE NOS. 8043 & 8116 Input tax on domestic purchase of goods supported by a VAT invoice with correction on the invoice date with counter 2 P-1 00-E-3 signature 133,553.34 140,987.63 Input tax on domestic purchase of services supported by a 505 ,081.99 36,553.93 VAT OR with corrections in the OR amount with counter 256,920 .22 3 P-100-E-4 signature Input tax on domestic purchase of services supported by a VAT OR with corrections in the OR date with counter 4 P-100-E-5 signature Input tax on domestic purchase of services supported by a VAT OR with alterations in the Partnership's name with 5 P-100-E-34 counter signature Input tax on domestic purchase of goods supported by VAT invoice but is not BIR Registered. For Toyota Makati, from which petitioner claimed input tax of P240,214.29, there is permit to use computerized accounting system or 6 P-100-E-16 components theregf_ p Items 1 to 5 - Said findings included input VAT amounting to P219,189.05 wherein the countersignature on the corrections made in the supporting VAT invoice/OR is not similar to the signature of the authorized signatory in the VAT invoice/OR or it cannot be ascertained whether the person who countersigned the corrections is duly authorized by the CBK's supplier. Hence, CBK's claim shall be further reduced by P219,189.05, broken down as follows: Schedule 2 Input VAT Item Exhibit Description Claimed Input tax on domestic purchase of goods supported by a VAT invoice with correction on the invoice amount with 1 P-100-E-2 counter signature p 27,791 .80 Input tax on domestic purchase of goods supported by a VAT invoice with correction on the invoice date with 2 P-100-E-3 counter signature 133,553.34 Input tax on domestic purchase of services supported by a VAT OR with corrections in the OR amount with counter 3 P-100-E-4 signature Exhibit P-1 00-0 Input VAT submarking Vendor Name Claimed Tricorn 040333-040334 Dynamics, Inc. 469.29 World best Logistics Phils., 080182-080183 Inc. 1,232 .62 1,701 .91 Input tax on domestic purchase of services supported by a VAT OR with corrections in the OR date with counter 4 P-1 00-E-5 signature Exhibit P-1 00-0 Input VAT - submarking Vendor Name Claimed

DECISION CTA CASE NOS. 8043 & 8116 Tantoco Villanueva De Guzman & 040331-040332 Llamas 1,200 .00 First Philippine Skills &Eqpt 090767-090768 Testing Corp. 36,192 .00 37 ,392 .00 Input tax on domestic purchase of services supported by a 18,750 .00 219,189.05 VAT OR with alterations in the Partnership's name with 5 P-100-E-34 counter signature Exhibit P-1 00-D Input VAT submarking Vendor Name Claimed Harty Incorporated 090032;090332 Philippines 18,750.00 Total p Item 6 - Said finding included input tax on purchase of vehicle from Toyota Makati, Inc., amounting to P240,214.29 supported by VAT invoice wherein no BIR permit was indicated. However, as correctly noted by the ICPA, Toyota Makati, Inc. was granted a permit to use e- Invoicing System (Permit No. 1005-052-00013-001) 106, which took effect on October 16, 2006. Thus, the input tax of P240,214.29 shall be allowed, and only that ofP16,705.93 shall be disallowed. In addition, input VAT in the amount of Pl,747,342.00, as detailed below, shall be disallowed for non-compliance with the substantiation requirements under the VAT law and regulations: Schedule3 Exhibit Invoice/OR No. Supplier Input VAT Input tax on purchase of services supported by VAT OR but the VAT was not separately indicated 021867 COPY QUEST CORPORATION ,., 8,949.89 P-100-D-01 0006 P-1 00-D-01 0011 476 C. S. BRACAMONTE 961.80 P-100-D-01 0014 SXL-033402 DIGITAL TEL. PHILS. ,INC. 61 .89 P-1 00-D-01 0018 SXL-033404 DIGITAL TEL. PHILS.,INC. 475 .56 P-1 00-D-01 0020 SXL-034235 DIGITAL TEL. PHILS., INC. 61 .89 P-100-D-01 0024 SXL-034237 DIGITAL TEL. PHILS., INC. 230 .05 EASTERN ALUMINUM GLASS P-100-D-01 0032 0319 SUPPLY 1J 125.00 P-1 00-D-01 0036 3015 EXPERTLINE VENTURES CORP. 2,520 .00 FIRST ANALYTICAL SERV. & P-100-D-01 0038 0941 TECH .COOP. 10,627 .20 P-100-D-01 0190 65013 FUJI XEROX PHILIPPINES, INC. 211 .92 P-100-D-01 0191 64496 FUJI XEROX PHILIPPINES, INC. 522 .60 ~~ lOG Exhibit " P- 100-D-040368".

DECISION CTA CASE NOS. 8043 & 8116 Exhibit Invoice/OR No. Supplier In put VAT P-1 00-D-01 0192 66810 FUJI XEROX PHILIPPINES, INC. 36.00 P-1 00-D-01 0253 3050 JEFCOR LABORATORIES, INC. 478 .80 P-1 00-D-01 0287 12434 MICHIGAN ENTERPRISES CORP. 112.50 P-1 00-D-01 0289 51302 MICROBASE INCOR PORATED P-1 00-D-01 0305 6043 NU-PRINT PHILIPPINES, INC. 1,149.64 P-1 00-D-01 0305 6043 NU-PRINT PHILIPPINES, INC. 86 .00 P-100-D-010310 PHIL. LONG DISTANCE TEL. CO. P-1 00-D-01 0312 000037906 PHIL. LONG DISTANCE TEL. CO . 7,500.00 P-100-D-01 0314 000037907 PHIL. LONG DISTANCE TEL. CO. 135.13 P-1 00-D-01 0316 000037908 PHIL. LONG DISTANCE TEL. CO. 368.59 P-1 00-D-01 0318 000037909 PHIL. LONG DISTANCE TEL. CO. 358 .90 P-1 00-D-01 0320 000037910 PHIL. LONG DISTANCE TEL. CO. 294 .62 P-1 00-D-01 0322 000037911 PHIL. LONG DISTANCE TEL . CO . 508.49 P-1 00-D-01 0324 000037912 PHIL. LONG DISTANCE TEL. CO. 137.46 P-1 00-D-01 0326 000037913 PHIL. LONG DISTANCE TEL. CO. 122.71 P-1 00-D-01 0328 000037914 PHIL. LONG DISTANCE TEL. CO. 393 .16 P-1 00-D-01 0330 000037915 PHIL. LONG DISTANCE TEL. CO. 376 .21 P-1 00-D-01 0332 000037916 PHIL. LONG DISTANCE TEL. CO . P-100-D-01 0334 000034917 PHIL. LONG DISTANCE TEL. CO. 2,122.13 P-1 00-D-01 0336 000037918 PHIL. LONG DISTANCE TEL . CO . 163.47 P-1 00-D-01 0338 000037919 PHIL. LONG DISTANCE TEL. CO. 355.05 P-100-D-01 0340 000037920 PHIL. LONG DISTANCE TEL. CO. 841 .10 P-1 00-D-010342 000037921 PHIL. LONG DISTANCE TEL. CO. 230.88 P-1 00-D-01 0344 000039970 PHIL. LONG DISTANCE TEL. CO. 151.97 P-1 00-D-01 0346 000039971 PHIL. LONG DISTANCE TEL. CO. P-1 00-D-01 0348 000039972 PHIL. LONG DISTANCE TEL. CO. 7,736 .23 P-1 00-D-01 0350 000039973 PHIL. LONG DISTANCE TEL. CO . 158.33 P-100-D-01 0352 000039974 PHIL. LONG DISTANCE TEL. CO . 347.28 p-1 00-D-010354 000039975 PHIL. LONG DISTANCE TEL. CO. 394.29 P-1 00-D-01 0356 000039976 PHIL. LONG DISTANCE TEL. CO. 219 .23 P-1 00-D-010358 000039977 PHIL. LONG DISTANCE TEL. CO. 311.72 P-1 00-D-01 0360 000039978 PHIL. LONG DISTANCE TEL. CO . 122.71 P-1 00-D-01 0362 000039979 PHIL. LONG DISTANCE TEL. CO. 122.71 P-100-D-01 0364 000039980 PHIL. LONG DISTANCE TEL. CO. 336 .12 P-100-D-01 0366 000039981 PHIL. LONG DISTANCE TEL. CO. 279.91 P-1 00-D-01 0368 000039982 PHIL. LONG DISTANCE TEL. CO. P-1 00-D-01 0370 000039983 PHIL. LONG DISTANCE TEL. CO . 1,624.66 P-100-D-01 0372 000039984 PHIL. LONG DISTANCE TEL. CO. 215 .89 000039985 R. C.TOLLO SURVEYING 325.57 P-1 00-D-01 0374 SERVICES 722 .34 P-1 00-D-01 0376 0116 RC VENTURES 197.84 P-1 00-D-01 0407 0552 TOYOTA BATANGAS CITY, INC. 142.21 P-1 00-D-01 0407 145002 TOYOTA BATANGAS CITY, INC. P-100-D-01 0407 145002 TOYOTA BATANGAS CITY, INC. 8,683 .97 P-1 00-D-01 0411 145002 TOYOTA BATANGAS CITY, INC. P-100-D-01 0411 145242 TOYOTA BATANGAS CITY, INC. 9,600 .00 P-1 00-D-01 0414 145242 TOYOTA BATANGAS CITY, INC. 23,995.35 P-1 00-D-01 0414 145243 TOYOTA BATANGAS CITY, INC. 145243 TRANS MODAL 66 .00 P-1 00-D-01 0419 INTERNATIONAL,INC . 114.00 P-1 00-D-01 0421 49167 TRICOM DYNAMICS, INC. 159.00 P-100-D-01 0421 155793 TRICOM DYNAMICS, INC. 48.00 P-1 00-D-01 0421 155793 TRICOM DYNAMICS, INC. 66 .00 155793 54.00 114.00 631 .13 158.54 889.06 355.48 ~~

DECISION CTA CASE NOS. 8043 & 8116 Exhi bit Invoice/OR No. Supplier Input VAT 732.79 P-1 00-D-01 0421 155793 TRICOM DYNAMICS, INC. 618.91 705 .26 P-1 00-D-01 0421 155793 TRICOM DYNAMICS, INC. 4,285.71 P-1 00-D-01 0421 155793 TRICOM DYNAMICS, INC. 13,397 .06 TRIGON MGT. & 5,357 .14 1,853.25 P-1 00-D-01 0428 09892 IND.CORPORATION 209 .65 TWIN V TECH SYSTEMS & 220 .34 136,080.00 P-1 00-D-01 0432 0220 SERVICES 19 ,800 .00 P-1 00-D-01 0430 0261 TRIMEC ASIA, INC. 13,200.00 P-1 00-D-010441 0259 WELLCROSS FREIGHT CORP. 25,445 .96 P-1 00-D-01 0454 165036 AIRFREIGHT 2100, INC. 1,898 .89 P-1 00-D-01 0460 158850 AIRFREIGHT 2100, INC. 151.08 P-1 00-D-01 0496 0028 JOREYNO HOLDINGS INC. 237.68 MANABAT DELGADO AMPER & 151 .08 P-1 00-D-01 0500 9827 CO . 206 .23 MANABAT DELGADO AMPER & 1,983 .99 P-1 00-D-01 0502 9826 CO . 151.08 MICRO LYNX SYSTEMS 231 .28 P-1 00-D-01 0509 00057 ENTERPRISES 151 .08 PKPOR000153 226 .98 P-1 00-D-01 0513 967 PHIL. LONG DISTANCE TEL. CO. 5,216.78 PKPOR000153 2,961 .23 1,649.47 P-1 00-D-01 0513 967 PHIL. LONG DISTANCE TEL. CO. 9,600 .00 2,440 .18 PKPOR000153 1,537 .50 P-1 00-D-01 0513 967 PHIL. LONG DISTANCE TEL. CO. 2,784 .92 PKPOR000153 13,680.00 P-1 00-D-01 0513 967 PHIL . LONG DISTANCE TEL. CO . 151.78 465 .16 PKPOR000153 339.13 P-1 00-D-01 0513 967 PHIL. LONG DISTANCE TEL. CO. 2,544 .64 PKPOR000144 ~ P-1 00-D-01 0561 017 PHIL. LONG DISTANCE TEL. CO. PKPOR000144 P-100-D-01 0561 017 PHIL. LONG DISTANCE TEL. CO. PKPOR000144 P-1 00-D-01 0561 017 PHIL. LONG DISTANCE TEL . CO . PKPOR000144 P-1 00-D-01 0561 017 PHIL. LONG DISTANCE TEL. CO. PKPOR000144 P-100-D-01 0561 017 PHIL. LONG DISTANCE TEL . CO . MFT INTERNATIONAL P-1 00-D-01 0590 4001 CORPORATION P-100-D-01 0631 5669 EBDI PHILIPPINES, INC. P-1 00-D-020002 722 C. S. BRACAMONTE P-100-D-020006 3014 EXPERTLINE VENTURES CORP. P-1 00-D-020075 1718 JNJKONS ENTERPRISE LEVERAGE P-100-D-020080 2956 INT.(CONSULTANTS) ,INC. LINO BON ARTIAGA CUSTOMS P-100-D-020082 0079 BROKERAGE P-100-D-0201 06 15500 NEVILLE-CLARKE P-1 00-D-020116 000043596 PHIL. LONG DISTANCE TEL. CO . P-100-D-020118 000043595 PHIL. LONG DISTANCE TEL. CO. P-1 00-D-020120 000043594 PHIL. LONG DISTANCE TEL. CO. TEAM HYDROTEC PHILS. INT'L. P-1 00-D-020142 2466 INC .

DECISION CTA CASE NOS. 8043 & 8116 Exhibit Invoice/OR No. Supplier Input VAT TRIGON MGT. & P-100-D-020159 10011 IND.CORPORATION 9,214 .29 P-1 00-D-020165 0425 WATER-LITE ENGINEERING 1,821 .43 P-100-D-020167 0148 WIRELESS 1 INTERACTIVE, INC. 2,142.86 MANABAT DELGADO AMPER & P-1 00-D-020291 9620 CO . 27 ,720 .00 PKPOR000163 P-100-D-020307 PHIL. LONG DISTANCE TEL. CO. 2,893 .80 851 P-1 00-D-020307 PKPOR000163 PHIL. LONG DISTANCE TEL. CO. 185.20 P-100-D-020307 851 PHIL. LONG DISTANCE TEL. CO. 361 .25 PKPOR000163 P-1 00-D-020307 PHIL. LONG DISTANCE TEL. CO. 185.20 851 P-1 00-D-020307 PKPOR000163 PHIL. LONG DISTANCE TEL. CO. 298 .22 P-100-D-030002 DIGITAL TELS . PHILS ., INC. 61.89 P-1 00-D-030006 851 DIGITAL TELS. PHILS ., INC. 440.31 P-100-D-030071 PKPOR000163 PHIL. LONG DISTANCE TEL. CO. 157.09 P-1 00-D-030073 PHIL. LONG DISTANCE TEL. CO. 296 .13 P-1 00-D-030075 851 PHIL. LONG DISTANCE TEL. CO. 143.73 P-1 00-D-030077 SXL-035719 PHIL. LONG DISTANCE TEL. CO. 281 .96 P-1 00-D-030079 SXL-035721 PHIL. LONG DISTANCE TEL . CO. 198.65 P-1 00-D-030081 PHIL. LONG DISTANCE TEL. CO. 315.12 P-1 00-D-030083 44605 PHIL. LONG DISTANCE TEL. CO. 126.96 P-100-D-030085 44606 PHIL. LONG DISTANCE TEL . CO . 122.71 P-1 00-D-030087 44607 PHIL. LONG DISTANCE TEL. CO. 450 .53 P-1 00-D-030089 44610 PHIL. LONG DISTANCE TEL. CO. 301.20 P-1 00-D-030091 44939 PHIL. LONG DISTANCE TEL. CO. 3,256.54 P-1 00-D-030093 44940 PHIL. LONG DISTANCE TEL. CO. 145.21 P-1 00-D-030095 44941 PHIL. LONG DISTANCE TEL. CO. 275 .82 P-1 00-D-030097 44942 PHIL. LONG DISTANCE TEL . CO . 463.21 P-1 00-D-030099 44943 PHIL. LONG DISTANCE TEL. CO. 225.66 P-1 00-D-0301 01 44944 PHIL. LONG DISTANCE TEL. CO. 145.08 P-1 00-D-0301 03 44945 PHIL. LONG DISTANCE TEL. CO . 11 ,187.20 P-100-D-0301 05 44946 PHIL. LONG DISTANCE TEL. CO. 193.05 P-1 00-D-0301 07 44947 PHIL. LONG DISTANCE TEL. CO. 294.29 P-1 00-D-0301 09 44948 PHIL. LONG DISTANCE TEL. CO. 122.71 P-1 00-D-030111 44949 PHIL. LONG DISTANCE TEL. CO . 122.71 P-1 00-D-030113 44950 PHIL. LONG DISTANCE TEL. CO. 685 .14 P-1 00-D-030115 44951 PHIL. LONG DISTANCE TEL. CO. 515 .91 P-1 00-D-030117 45473 PHIL. LONG DISTANCE TEL. CO. 2,047 .26 P-1 00-D-030119 45474 PHIL. LONG DISTANCE TEL. CO. 143.45 P-1 00-D-030121 45475 PHIL. LONG DISTANCE TEL. CO. 359.58 P-1 00-D-030123 45476 PHIL. LONG DISTANCE TEL. CO. 668.93 P-100-D-030125 45477 PHIL. LONG DISTANCE TEL . CO . 218.17 P-1 00-D-030127 45478 PHIL . LONG DISTANCE TEL. CO. 140.71 P-1 00-D-030129 45479 PHIL. LONG DISTANCE TEL. CO. 10,159.87 P-1 00-D-030131 45480 PHIL. LONG DISTANCE TEL. CO. 1,079.65 45481 REJOICE TYRE GALLERY &AUTO P-100-D-030133 45482 CENTER 160.71 45483 REJOICE TYRE GALLERY &AUTO P-100-D-030133 45484 CENTER 160.72 45485 45672 ~ 0138 0138

DECISION CTA CASE NOS. 8043 & 8116 Exhibit Invoice/OR No. Supplier Input VAT WORLDBEST LOGISTICS P-100-D-030169 0186 PHILS. ,INC. 2,212.11 SYCIP SALAZAR HERNANDEZ & P-100-D-030205 5027563 GATMAITAN LAW OFFICES 3,012.31 PERSONAL SECURITY P-100-D-030209 7462 SYSTEMS, INC. 86.75 P-1 00-D-030211 615 C. S. BRACAMONTE 2,652.03 P-100-D-030215 158849 AIRFREIGHT 2100, INC. P-1 00-D-030215 158849 AIRFREIGHT 2100, INC. 10.52 P-1 00-D-030215 158849 AIRFREIGHT 2100, INC. 7.36 P-1 00-D-030215 158849 AIRFREIGHT 2100, INC. 42 .12 P-1 00-D-030215 158849 AIRFREIGHT 2100, INC. 56.16 P-1 00-D-040005 SXL-036730 DIGITEL TELS . PHILS., INC. 458 .90 P-1 00-D-040009 SXL-036732 DIGITEL TELS . PHILS., INC. 61 .89 P-1 00-D-040132 10189 NU-PRINT PHILIPPINES, INC. 489.60 P-1 00-D-040132 10189 NU-PRINT PHILIPPINES, INC. 351.00 P-1 00-D-040139 000047454 PHIL. LONG DISTANCE TEL . CO . 437 .00 P-1 00-D-040141 000047455 PHIL. LONG DISTANCE TEL. CO. 138.40 P-1 00-D-040143 000047456 PHIL. LONG DISTANCE TEL. CO. 432 .52 P-1 00-D-040145 000047459 PHIL.LONG DISTANCE TEL.CO. 123.81 P-1 00-D-04014 7 000048253 PHIL. LONG DISTANCE TEL . CO . 205.70 P-1 00-D-040149 000048255 PHIL. LONG DISTANCE TEL. CO. 642.84 P-1 00-D-040150 000048256 PHIL. LONG DISTANCE TEL . CO . 189.50 P-1 00-D-040152 000048257 PHIL. LONG DISTANCE TEL. CO. 450.06 P-1 00-D-040154 000048258 PHIL. LONG DISTANCE TEL. CO. 121 .06 P-1 00-D-040156 000048259 PHIL. LONG DISTANCE TEL. CO . 121 .06 P-100-D-040158 000048260 PHIL. LONG DISTANCE TEL. CO. 295.26 P-1 00-D-040160 000048261 PHIL. LONG DISTANCE TEL. CO. 144.79 P-100-D-040162 000048262 PHIL. LONG DISTANCE TEL. CO. 402 .50 P-1 00-D-040164 000048263 PHIL. LONG DISTANCE TEL. CO. 393 .07 P-1 00-D-040166 000048264 PHIL. LONG DISTANCE TEL. CO. 217 .29 P-100-D-040191 150359 TOYOTA BATANGAS CITY, INC. 146.16 P-1 00-D-040191 150359 TOYOTA BATANGAS CITY, INC. 66 .00 P-100-D-040233 176574 AIRFREIGHT 2100, INC. 54 .00 P-1 00-D-040233 176574 AIRFREIGHT 2100, INC. 74 .90 P-1 00-D-040236 176573 AIRFREIGHT 2100, INC. 47 .84 P-1 00-D-040309 000184399 PHIL. LONG DISTANCE TEL. CO. 64 .36 P-1 00-D-040309 000184399 PHIL. LONG DISTANCE TEL. CO . 2,042.96 P-100-D-040309 000184399 PHIL. LONG DISTANCE TEL. CO. 151 .08 P-1 00-D-040309 000184399 PHIL. LONG DISTANCE TEL . CO . 212.72 P-1 00-D-040309 000184399 PHIL. LONG DISTANCE TEL. CO. 164.58 P-1 00-D-040333 157321 TRICOM DYNAMICS, INC. 207.32 CONSULTANTS UNLIMITED 469 .29 P-1 00-D-050009 011 RESOURCES INC. P-100-D-05001 0 SXL-037719 DIGITAL TELS. PHILS., INC. 214 .29 P-100-D-050014 SXL-037722 DIGITAL TELS. PHILS., INC. 61.89 P-1 00-D-050092 000050360 PHIL. LONG DISTANCE TEL. CO. 232.41 P-100-D-050094 000050361 PHIL. LONG DISTANCE TEL. CO. 145.23 P-1 00-D-050096 000050364 PHIL. LONG DISTANCE TEL. CO. 372.16 P-100-D-050215 AIRFREIGHT 2100, INC. 245.41 P-1 00-D-050215 178632 AIRFREIGHT 2100, INC. 96.49 P-100-D-050235 178632 50.40 P-100-D-050266 42789 FUJITSU PHILIPPINES, INC. 45 ,288 .23 190606 PHIL. LONG DISTANCE TEL. CO. 2,175.45 r;;v

DECISION CTA CASE NOS. 8043 & 8116 Exhibit Invoice/OR No. Supplier Input VAT 151 .08 P-1 00-D-050266 190606 PHIL. LONG DISTANCE TEL. CO. 261 .96 153.27 P-1 00-D-050266 190606 PHIL. LONG DISTANCE TEL. CO. 215.51 61.89 P-1 00-D-050266 190606 PHIL. LONG DISTANCE TEL. CO. 210.47 P-1 00-D-050266 190606 PHIL. LONG DISTANCE TEL. CO. 1,322 .84 133.63 P-1 00-D-060006 SXL-038844 DIGITAL TELS. PHILS., INC. 315 .93 P-1 00-D-06001 0 SXL-038846 DIGITAL TELS. PHILS. , INC. 1,490.44 252 .99 FIRSTLY &FOREMOST RESORT 231.24 149.63 P-1 00-D-060016 0529 CORP . 149.63 384.90 P-100-D-060085 000053099 PHIL. LONG DISTANCE TEL. CO. 387.44 822.76 P-100-D-060087 000053100 PHIL. LONG DISTANCE TEL. CO. 166.46 445.61 P-1 00-D-060091 000053098 PHIL. LONG DISTANCE TEL. CO . 289.15 166.46 P-1 00-D-060093 000053086 PHIL. LONG DISTANCE TEL. CO . 9,842.65 P-1 00-D-060095 000053085 PHIL. LONG DISTANCE TEL . CO . 22,459 .67 P-1 00-D-060097 000053087 PHIL . LONG DISTANCE TEL. CO . 3,750.00 P-100-D-060099 000053088 PHIL. LONG DISTANCE TEL. CO. 3,750 .00 P-1 00-D-0601 01 000053089 PHIL. LONG DISTANCE TEL. CO. 3,750 .00 P-100-D-0601 03 000053090 PHIL. LONG DISTANCE TEL. CO. 3,744 .00 190.30 P-1 00-D-0601 05 000053091 PHIL. LONG DISTANCE TEL . CO . 1,638.83 P-1 00-D-0601 07 000053092 PHIL . LONG DISTANCE TEL. CO. 6,000.00 P-1 00-D-0601 09 000053093 PHIL. LONG DISTANCE TEL. CO . 1,828.50 P-1 00-D-060113 000053095 PHIL. LONG DISTANCE TEL. CO. 2,056 .18 P-1 00-D-060115 000053096 PHIL. LONG DISTANCE TEL . CO . 151.08 P-1 00-D-060117 000053097 PHIL. LONG DISTANCE TEL. CO . 286 .50 P-1 00-D-060152 15323 RAMP INSURANCE SERVICES 167.86 UNITED VALIANT GROUP 207.32 61 .89 P-1 00-D-060199 14414 SECURITY SERVICES,INC. 108.90 380.46 UNITED VALIANT GROUP 12.00 152.19 P-1 00-D-060199 14415 SECURITY SERVICES,INC. 433.36 UNITED VALIANT GROUP {fly P-100-D-060199 14416 SECURITY SERVICES,INC. SAYAN TELECOMMUNICATIONS P-1 00-D-060418 187224 INC. P-100-D-060089 000053101 PHIL. LONG DISTANCE TEL. CO. P-1 00-D-060550 723 C. S. BRACAMONTE P-1 00-D-060558 42641 FUJITSU PHILIPPINES, INC. WELLCROSS FREIGHT P-1 00-D-060596 0223 CORPORATION PKPOR000173 P-100-D-060626 222 PHIL. LONG DISTANCE TEL. CO. PKPOR000173 P-1 00-D-060626 222 PHIL. LONG DISTANCE TEL. CO. PKPOR000173 P-1 00-D-060626 222 PHIL. LONG DISTANCE TEL. CO. PKPOR000173 P-1 00-D-060626 222 PHIL. LONG DISTANCE TEL. CO . PKPOR000173 P-1 00-D-060626 222 PHIL. LONG DISTANCE TEL. CO. P-100-D-070009 SXL-039985 DIGITAL TELS . PHILS., INC. P-1 00-D-070013 SXL-039987 DIGITAL TELS. PHILS. , INC. P-1 00-D-070052 21083 GENCARS-SAN PABLO,INC. P-100-D-070052 21083 GENCARS-SAN PABLO,INC. P-1 00-D-070153 000056211 PHIL. LONG DISTANCE TEL. CO . P-1 00-D-070155 000056212 PHIL. LONG DISTANCE TEL. CO . ---

DECISION CTA CASE NOS. 8043 & 8116 Exhibit Invoice/OR No. Suppl ier Input VAT 3,146.68 P-1 00-D-070157 000056213 PHIL. LONG DISTANCE TEL. CO . 393 .08 222.36 P-1 00-D-070159 000056214 PHIL. LONG DISTANCE TEL. CO. 122.73 121 .63 P-100-D-070161 000056215 PHIL. LONG DISTANCE TEL. CO. 345.75 300 .34 P-1 00-D-070163 000056216 PHIL. LONG DISTANCE TEL. CO. 1,269.30 139.63 P-100-D-070165 000056217 PHIL. LONG DISTANCE TEL. CO. 261 .80 637 .05 P-1 00-D-070167 000056218 PHIL. LONG DISTANCE TEL. CO . 263 .89 139.63 P-1 00-D-070169 000056219 PHIL . LONG DISTANCE TEL. CO . 7,369 .68 209 .89 P-1 00-D-070171 000056220 PHIL. LONG DISTANCE TEL. CO . 910 .69 321.43 P-1 00-D-070173 000056221 PHIL. LONG DISTANCE TEL . CO . 2,352 .00 1,980.66 P-1 00-D-070175 000056222 PHIL. LONG DISTANCE TEL. CO . 151 .08 186.96 P-1 00-D-070177 000056223 PHIL. LONG DISTANCE TEL. CO . 151.08 201 .86 P-1 00-D-070179 000056224 PHIL . LONG DISTANCE TEL. CO. 774 .00 95.68 P-1 00-D-070181 000056225 PHIL. LONG DISTANCE TEL. CO . 95 .68 P-1 00-D-070183 000056226 PHIL. LONG DISTANCE TEL . CO . 61 .89 P-1 00-D-070185 000056227 PHIL . LONG DISTANCE TEL. CO. 108.90 P-100-D-070187 000056207 PHIL. LONG DISTANCE TEL. CO. 2,343.01 6,428 .57 P-1 00-D-070191 9503 PROQUEST PUBLISHING INC. 133.63 P-1 00-D-070232 0725 TRAIN INGWORKS CORPORATION 380.78 P-1 00-D-070329 000208074 PHIL. LONG DISTANCE TEL. CO . 144.40 P-1 00-D-070329 000208074 PHIL. LONG DISTANCE TEL. CO . 221.48 P-1 00-D-070329 000208074 PHIL. LONG DISTANCE TEL. CO . 213 .86 P-1 00-D-070329 000208074 PHIL . LONG DISTANCE TEL. CO. 310.02 P-100-D-070329 000208074 PHIL. LONG DISTANCE TEL. CO. 121.63 P-1 00-D-070363 416636 UNIVERSAL HOLIDAYS, INC. 121.63 P-1 00-D-070365 419092 UNIVERSAL HOLIDAYS, INC. 153.63 P-1 00-D-070367 419093 UNIVERSAL HOLIDAYS, INC. 359 .56 SXL-1- 6:;.:; P-1 00-D-080005 000041340 DIGITAL TELS. PHILS., INC. SXL-1- P-1 00-D-080009 000041342 DIGITAL TELS. PHILS ., INC. FIRSTLY &FOREMOST RESORT P-1 00-D-080023 0555 CORP . P-1 00-D-0801 00 0833 PEME CONSULTANCY, INC. PCXOR000058 P-1 00-D-0801 02 885 PHIL. LONG DISTANCE TEL. CO. PCXOR000058 P-1 00-D-0801 04 886 PHIL. LONG DISTANCE TEL. CO. PCXOR000058 P-1 00-D-0801 06 887 PHIL. LONG DISTANCE TEL . CO . PCXOR000058 P-100-D-0801 08 888 PHIL. LONG DISTANCE TEL. CO. PCXOR000059 P-1 00-D-08011 0 562 PHIL. LONG DISTANCE TEL. CO. PCXOR000059 P-1 00-D-080112 561 PHIL. LONG DISTANCE TEL. CO. PCXOR000059 P-1 00-D-080114 560 PHIL. LONG DISTANCE TEL . CO . PCXOR000059 P-1 00-D-080116 559 PHIL. LONG DISTANCE TEL. CO. PCXOR000059 P-100-D-080118 558 PHIL. LONG DISTANCE TEL. CO . PCXOR000059 P-100-D-080120 557 PHIL. LONG DISTANCE TEL . CO .

DECISION CTA CASE NOS. 8043 & 8116 Exhibit Invoice/OR No. Suppl ier Input VAT PCXOR000059 190.11 P-1 00-D-080122 556 PHIL. LONG DISTANCE TEL. CO . 139.63 PCXOR000059 125.72 P-1 00-D-080124 555 PHIL. LONG DISTANCE TEL. CO. 121 .63 PCXOR000059 121 .63 P-1 00-D-080126 554 PHIL. LONG DISTANCE TEL. CO. 139.63 PCXOR000059 13,234.12 P-1 00-D-080128 553 PHIL. LONG DISTANCE TEL. CO. 910.69 PCXOR000059 64.29 P-1 00-D-080130 552 PHIL. LONG DISTANCE TEL . CO . 192.86 1,624.76 PCXOR000059 1,985.24 P-1 00-D-080132 551 PHIL. LONG DISTANCE TEL. CO. 151.08 PCXOR000059 197.58 P-1 00-D-080134 550 PHIL. LONG DISTANCE TEL. CO. 151 .08 PCXOR000059 212.23 P-1 00-D-080136 595 PHIL. LONG DISTANCE TEL. CO. 70.96 17 ,239 .29 REJOICE TYRE GALLERY &AUTO 33 .94 P-1 00-D-080138 0172 CENTER 59 .72 REJOICE TYRE GALLERY &AUTO 133.63 537 .14 P-1 00-D-080138 0172 CENTER 328.37 214.29 P-1 00-D-080188 6108 EBDI PHILIPPINES, INC. 160.72 PKPOR000214 2,160 .00 P-1 00-D-080234 305 PHIL. LONG DISTANCE TEL. CO. 2,017.39 PKPOR000214 151 .08 P-100-D-080234 305 PHIL. LONG DISTANCE TEL. CO. 183.27 PKPOR000214 226 .98 P-1 00-D-080234 305 PHIL. LONG DISTANCE TEL. CO. 151 .08 PKPOR000214 J.-- P-100-D-080234 305 PHIL. LONG DISTANCE TEL. CO. PKPOR000214 P-1 00-D-080234 305 PHIL. LONG DISTANCE TEL. CO. P-1 00-D-080255 413654 UNIVERSAL HOLIDAYS, INC. P-1 00-D-080417 10615 SANVIL INDUSTRIAL SUPPLY SXL-1- P-1 00-D-090005 000042358 DIGITAL TELS. PHILS ., INC. SXL-1- P-1 00-D-090009 000042360 DIGITAL TELS. PHILS. , INC. P-1 00-D-090052 60952 PHIL. LONG DISTANCE TEL . CO . P-1 00-D-090054 60953 PHIL. LONG DISTANCE TEL. CO. P-1 00-D-090056 60954 PHIL. LONG DISTANCE TEL. CO. P-1 00-D-090058 60955 PHIL. LONG DISTANCE TEL. CO. REJOICE TYRE GALLERY &AUTO P-1 00-D-090060 0177 CENTER SYNERQUEST MGT. P-100-D-090065 0397 CONSULTANGY SERVICES PKPOR000198 P-1 00-D-090145 127 PHIL. LONG DISTANCE TEL. CO . PKPOR000198 P-1 00-D-090145 127 PHIL. LONG DISTANCE TEL. CO . PKPOR000198 P-1 00-D-090145 127 PHIL. LONG DISTANCE TEL. CO. PKPOR000198 P-1 00-D-090145 127 PHIL. LONG DISTANCE TEL. CO. P-1 00-D-090145 PKPOR000198 PHIL. LONG DISTANCE TEL. CO .

DECISION CTA CASE NOS. 8043 & 8116 Exhibit Invoice/OR No. Supplier In put VAT 127 95.68 16.07 P-1 00-D-090161 413656 UNIVERSAL HOLIDAYS, INC. 16.08 32.14 P-1 00-D-0904 78 3177 HIGH GRIP AUTO CENTER 321.43 P-1 00-D-0904 78 3177 HIGH GRIP AUTO CENTER 96.43 90 .86 P-1 00-D-090478 3177 HIGH GRIP AUTO CENTER 311.00 P-1 00-D-0904 78 3177 HIGH GRIP AUTO CENTER 2,704 .16 REJOICE TYRE GALLERY &AUTO 2,401 .09 P-100-D-090489 0190 CENTER 184.64 P-100-D-090509 413655 UNIVERSAL HOLIDAYS 239.94 P-1 00-D-090525 7764 NU-PRINT PHILIPPINES, INC. 123.27 PCXOR000053 121 .63 P-100-D-090527 997 PHIL. LONG DISTANCE TEL. CO. 442.20 PCXOR000053 315 .09 P-1 00-D-090529 998 PHIL. LONG DISTANCE TEL. CO. 1,430.60 PCXOR000053 139.63 P-1 00-D-090531 999 PHIL. LONG DISTANCE TEL. CO. 533 .77 PCXOR000054 695 .58 P-1 00-D-090533 000 PHIL. LONG DISTANCE TEL. CO. 276 .95 PCXOR000054 141 .27 P-1 00-D-090535 001 PHIL. LONG DISTANCE TEL. CO. 9,460.84 PCXOR000054 910 .69 5,525 .68 P-1 00-D-090537 002 PHIL . LONG DISTANCE TEL. CO. 668 .88 PCXOR000054 4,235 .34 1,459 .08 P-1 00-D-090539 003 PHIL. LONG DISTANCE TEL. CO. 112.32 PCXOR000054 1,115.12 P-1 00-D-090541 004 PHIL. LONG DISTANCE TEL. CO. 102.22 61 .89 PCXOR000054 108.90 176.03 P-100-D-090543 005 PHIL. LONG DISTANCE TEL. CO. 121 .63 PCXOR000054 ty P-1 00-D-090545 006 PHIL. LONG DISTANCE TEL. CO. PCXOR000054 P-1 00-D-09054 7 007 PHIL. LONG DISTANCE TEL. CO. PCXOR000054 P-1 00-D-090549 008 PHIL. LONG DISTANCE TEL. CO . PCXOR000054 P-1 00-D-090551 009 PHIL. LONG DISTANCE TEL. CO. PCXOR000054 P-1 00-D-090553 010 PHIL. LONG DISTANCE TEL. CO . PCXOR000054 P-1 00-D-090555 011 PHIL. LONG DISTANCE TEL. CO. PCXOR000053 P-100-D-090557 972 PHIL. LONG DISTANCE TEL. CO. P-1 00-D-090559 0556 RC VENTURES P-1 00-D-090601 28909 ACESTAR INT. SERVICES CORP. P-1 00-D-090603 83401 8R FLANDERS CFS, INC. P-100-D-090605 3140 DSV AIR &SEA INC. P-1 00-D-090607 130704 KUEHNE + NAGEL, INC. OCEAN-LINK CONTAINER P-1 00-D-090609 74315 TERMINALS CENTER, INC. P-1 00-D-100004 43179 BEST TRAVEL P-1 00-D-1 00022 SXL-1-0003901 DIGITAL TELS . PHILS., INC. P-1 00-D-1 00026 SXL-1 -0003903 DIGITAL TELS. PHILS. , INC. P-1 00-D-1 00055 21751 GENCARS- SAN PABLO, INC. P-100-D-1 00141 000064737 PHIL. LONG DISTANCE TEL. CO.

DECISION CTA CASE NOS. 8043 & 8116 Exhibit Invoice/OR No. Supplier Input VAT 197.27 P-1 00-D-100143 000064738 PHIL. LONG DISTANCE TEL. CO. 121.63 121 .63 P-100-D-1 00145 000064739 PHIL. LONG DISTANCE TEL. CO. 311 .17 315 .93 P-100-D-1 00147 000064740 PHIL. LONG DISTANCE TEL. CO. 613 .36 139.63 P-1 00-D-1 00149 000064741 PHIL. LONG DISTANCE TEL. CO . 121.63 463.77 P-1 00-D-1 00151 000064742 PHIL . LONG DISTANCE TEL. CO . 121 .63 139.63 P-1 00-D-1 00153 000064743 PHIL. LONG DISTANCE TEL. CO . 8,337.61 P-100-D-1 00155 000064744 PHIL. LONG DISTANCE TEL. CO. 910 .69 910.69 ! P-1 00-D-1 00157 000064745 PHIL. LONG DISTANCE TEL. CO. 356.85 389.60 P-100-D-1 00159 000064746 PHIL. LONG DISTANCE TEL. CO. 121 .63 219.41 P-100-D-1 00161 000064747 PHIL. LONG DISTANCE TEL. CO. 121 .63 121 .63 P-1 00-D-1 00163 000064748 PHIL. LONG DISTANCE TEL. CO . 406 .04 357 .56 P-100-D-1 00165 000064749 PHIL. LONG DISTANCE TEL. CO. 946.48 139.63 P-1 00-D-100167 000064733 PHIL. LONG DISTANCE TEL. CO. 122.72 402.02 P-1 00-D-1 00169 000064734 PHIL. LONG DISTANCE TEL . CO . 121 .63 139.63 P-100-D-100171 000064966 PHIL. LONG DISTANCE TEL. CO. 12,473.32 P-1 00-D-1 00173 000064967 PHI L. LONG DISTANCE TEL. CO. 182.64 P-100-D-1 00175 000064968 PHIL. LONG DISTANCE TEL. CO. 1,920 .00 2,808 .00 P-100-D-1 00177 000064969 PHIL. LONG DISTANCE TEL. CO. 1,681 .80 P-1 00-D-1 00179 000064970 PHIL. LONG DISTANCE TEL. CO . 2,484 .28 P-100-D-100181 000064971 PHIL. LONG DISTANCE TEL . CO . 1,889 .18 P-100-D-1 00183 000064972 PHIL. LONG DISTANCE TEL. CO. 98 .15 98 .15 P-1 00-D-1 00185 000064973 PHIL . LONG DISTANCE TEL. CO. 75 .83 75 .83 P-1 00-D-1 00187 000064974 PHIL. LONG DISTANCE TEL. CO. 6,750 .00 P-100-D-1 00189 000064975 PHIL. LONG DISTANCE TEL. CO. 2,301 .32 P-1 00-D-1 00191 000064976 PHIL . LONG DISTANCE TEL. CO. 151 .08 P-1 00-D-1 00193 000064977 PHIL. LONG DISTANCE TEL. CO . 155.45 P-100-D-100195 000064978 PHIL. LONG DISTANCE TEL. CO. 151 .08 P-1 00-D-1 00197 000064979 PHIL. LONG DISTANCE TEL. CO . 202 .41 P-100-D-100199 000064980 PHIL. LONG DISTANCE TEL. CO. ~ P-1 00-D-1 00201 000064981 PHIL. LONG DISTANCE TEL. CO. P-100-D-100203 0059 QCONSULT INC. P-100-D-1 00238 165774 TOYOTA BATANGAS CITY, INC. WELLCROSS FREIGHT P-1 00-D-100258 0922 CORPORATION WELLCROSS FREIGHT P-1 00-D-1 00260 0923 CORPORATION WORLDBEST LOGISTICS P-100-D-100270 0350 PHILS., INC. P-100-D-1 00272 1223351 AIRFREIGHT 2100, INC. P-100-D-1 00272 1223351 AIRFREIGHT 2100, INC. P-1 00-D-1 00275 1223377 AIRFREIGHT 2100, INC. P-100-D-1 00275 1223377 AIRFREIGHT 2100, INC. P-1 00-D-100291 2279 DATA ACCESS ENTERPRISES PKPOR000235 P-100-D-100339 113 PHIL. LONG DISTANCE TEL. CO . PKPOR000235 P-100-D-1 00339 113 PHIL. LONG DISTANCE TEL. CO. PKPOR000235 P-100-D-1 00339 113 PHIL. LONG DISTANCE TEL. CO. PKPOR000235 P-100-D-100339 113 PHIL. LONG DISTANCE TEL. CO. PKPOR000235 P-100-D-1 00339 113 PHIL. LONG DISTANCE TEL . CO .

DECISION CTA CASE NOS. 8043 & 8116 Exhibit Invoice/OR No. Suppl ier Input VAT FIRSTLY & FOREMOST RESORT P-1 00-D-11 0013 0573 CORP. 2,599.44 P-1 00-D-11 0080 9076 NU-PRINT PHILIPPINES, INC. 750.00 P-1 00-D-11 0080 9076 NU-PRINT PHILIPPINES, INC. 621.00 P-1 00-D-11 0083 1081 PEME CONSULTANCY, INC. P-1 00-D-11 0085 67083 PHIL. LONG DISTANCE TEL. CO. 13,200.00 P-1 00-D-11 0087 67084 PHIL. LONG DISTANCE TEL. CO. 133.63 P-1 00-D-11 0089 67085 PHIL. LONG DISTANCE TEL . CO. 536.20 P-1 00-D-11 0091 67086 PHIL. LONG DISTANCE TEL. CO. 415.10 P-100-D-11 0093 67087 PHIL. LONG DISTANCE TEL . CO . 121 .63 P-1 00-D-11 0095 67088 PHIL. LONG DISTANCE TEL. CO. 254 .41 P-1 00-D-11 0097 67089 PHIL. LONG DISTANCE TEL. CO. 123.13 P-1 00-D-11 0099 67090 PHIL. LONG DISTANCE TEL. CO. 423.36 P-1 00-D-11 0101 67091 PHIL. LONG DISTANCE TEL. CO. 200 .27 P-1 00-D-11 0103 67092 PHIL. LONG DISTANCE TEL. CO. 920.75 P-1 00-D-11 0105 67093 PHIL. LONG DISTANCE TEL. CO. 139.63 P-100-D-110107 67094 PHIL. LONG DISTANCE TEL . CO . 121 .63 P-100-D-110109 67095 PHIL. LONG DISTANCE TEL. CO. 416.01 P-100-D-110111 67096 PHIL. LONG DISTANCE TEL. CO. 121 .63 P-100-D-110113 67097 PHIL. LONG DISTANCE TEL. CO. 139.63 P-1 00-D-11 0115 67098 PHIL.LONG DISTANCE TEL.CO. P-100-D-110117 67031 PHIL. LONG DISTANCE TEL. CO. 11,289.11 P-100-D-110153 167311 TOYOTA BATANGAS CITY, INC. 203 .62 P-100-D-110156 168128 TOYOTA BATANGAS CITY, INC. 910 .69 P-1 00-D-11 0233 242573 PHIL. LONG DISTANCE TEL. CO . 114.00 P-1 00-D-11 0233 242573 PHIL. LONG DISTANCE TEL. CO. 267 .00 P-100-D-11 0233 242573 PHIL. LONG DISTANCE TEL . CO . P-1 00-D-11 0233 242573 PHIL. LONG DISTANCE TEL. CO. 1,996.36 P-1 00-D-11 0233 242573 PHIL. LONG DISTANCE TEL. CO. 171 .67 P-1 00-D-11 0284 055332 VIKING CARS, INCORPORATED 151 .08 P-1 00-D-11 0428 10594 SANVIL INDUSTRIAL SUPPLY 151.08 P-1 00-D-120015 2408 DATA ACCESS ENTERPRISES 166.92 P-1 00-D-120488 184277 AIRFREIGHT 2100, INC. 771.43 PHILIPPINE LONG DISTANCE P-1 00-D-120517 224507 TELEPHONE 11 ,850.00 PHILIPPINE LONG DISTANCE 19,832.14 P-100-D-120517 224507 TELEPHONE PHILIPPINE LONG DISTANCE 285.37 P-1 00-D-120517 224507 TELEPHONE PHILIPPINE LONG DISTANCE 1,995.72 P-1 00-D-120517 224507 TELEPHONE PHILIPPINE LONG DISTANCE 151 .08 P-100-D-120517 224507 TELEPHONE SXL- 153.67 P-1 00-D-120552 000042875 DIGITAL TELS. PHILS. , INC. SXL- 151.08 P-1 00-D-120556 000042877 DIGITAL TELS. PHILS., INC. REJOICE TYRE GALLERY & AUTO 212 .23 P-1 00-D-120607 0189 CENTER P-1 00-D-120650 21352 LAGOS DEL SOL RESORT 61 .89 P-1 00-D-120652 21351 LAGOS DEL SOL RESORT 108.90 Subtotal 1,028 .58 1'110.00 1,159.20 p 823,199.62

DECISION CfA CASE NOS. 8043 & 8116 Exhibit Invoice/OR No. Supplier Input VAT Input tax on purchase of goods supported by VAT invoice but the VAT was not separately indicated TELEFLORA FUNFLOWERS P-1 00-D-030344 0103 SERVICE PHILIPPINES, INC. p 482.12 TELEFLORA FUNFLOWERS P-1 00-D-030345 0104 SERVICE PHILIPPINES, INC. 428 .57 P-100-D-090372 91332 OFFICE BASICS CORPORATION 1,602.00 Subtotal p 2,512.69 Input tax on purchase of services without supporting OR R.V.GORDOVEZ CONST.& 0986 SUPPLIES p 6,832.29 2,366 .00 8313 NU-PRINT PHILIPPINES, INC. 18,998 .37 959 MOLINA GENERAL BUILDERS 44 ,055 .00 ROLPSON TRADING AND 52,875.43 0541 CONSTRUCTION 20,927 .53 16.07 ROLPSON TRADING AND p 146,070.69 0541 CONSTRUCTION p 775,559.00 ROLPSON TRADING AND p 775,559.00 0541 CONSTRUCTION P1,747,342.00 3191 HIGH GRIP AUTO CENTER Subtotal Input tax on importation without supporting OR 0182126 BUREAU OF CUSTOMS Subtotal Total Moreover, CBK failed to properly substantiate the amortized input taxes on capital goods exceeding Pl Million amounting to P1,914,266.48. As such, the following shall be disallowed from the subject claim. Schedule4 Exhibit Amortized Input VAT in 2008 P-100-J-2 Supplier Q1 Q2 to Q4 Total P-100-J-3 Input tax on domestic purchase of capital goods supported by undated p 11 ,303.58 p 33,910.74 p 45,214 .32 VAT invoice issued in the petitioner's name but supported by VAT OR dated 25 ,846.53 113,571.72 103 ,386 .12 within the taxable quarter (36,032.13) Input tax on domestic purchase of ..-- capital goods supported by a VAT invoice issued in the petitioner's name but without the petitioner's TIN and/or address; supported by VAT OR with TIN and address Less: Amount not claimed per

DECISION CTA CASE NOS. 8043 & 8116 Exhibit Amortized Input VAT in 2008 Supplier Q1 Q2 to Q4 Total Exh . P-100-D-040361 Input Tax on domestic purchase of capital goods supported by a VAT P-1 00-J-4 invoice issued in the petitioner's name 71 ,050.92 212,474.94 283 ,525 .86 but without the petitioner's TIN and/or address; supported by VAT OR without TIN and/or address Input tax on domestic purchases of services pertaining to capital goods supported by a VAT OR issued in the P-100-J-5 petitioner's name but without the 33,483 .25 100,449.75 133,933 .00 petitioner's TIN and/or address but supported by VAT invoice with TIN and address Input tax on domestic purchases of services pertaining to capital goods supported by a VAT OR issued in the P-100-J-6 petitioner's name but without the 204 ,197 .10 611,118 .17 815 ,315 .27 petitioner's TIN and/or address but supported by VAT invoice or any other document Input tax on domestic purchase of P-100-J-7 capital goods supported by a non-VAT 612 .03 1,836.09 2,448 .12 OR Input tax on domestic purchase of P-1 00-J-8 services pertaining to capital goods 62,243.22 186,729.66 248 ,972 .88 supported by documents other than a VAT OR Input tax on domestic purchases of P-100-J-9 capital goods supported by a VAT 8,647 .92 25,943.76 34,591.68 invoice but not an original copy Input tax on domestic purchase of capital goods and services pertaining P-1 OO-J1 0 to capital goods with missing 61 ,719.81 185,159.42 246,879 .23 supporting VAT ORs and VAT invoices p 479,104.36 P1 ,435,162.12 P1 ,914,266.48 Proceeding therefrom, out of CBK's input VAT claim of P61,503,335.47, only that portion of P51,955,454.12, as computed below, is duly substantiated: Excess Input VAT Claim ~ 61 ,503,335.47 Less: Disallowances p 5,650,377.89 Per !CPA's findings Schedule 1 of this report 219,189.05 Schedule 2 of this report Schedule 4 of this report 1,914,266.48 Included in Exhibit P-1 00-E-16 16,705.93 Per this Court's further verification (Schedule 3 of this report) 1,747,342.00 ;...o

DECISION p 9,547,881 .35 CTA CASE NOS. 8043 & 8116 Page 44 of 45 p 51 ,955,454.12 Total Disallowances Properly Substantiated Excess Input VAT CBK complied with the 4th and 5th Requisites; CBK's claimed input taxes were unutilized and attributable to its zero-rated sales. Considering that CBK's reported sales for the first and second quarters of 2009 were all zero-rated, the substantiated input VAT in the amount of P51,955,454.12 is entirely attributable thereto and was not applied against any output tax. Additionally, CBK's reported unutilized input taxes for the first and second to fourth quarters of 2008 were deducted as "VAT Refund j TCC claimed"107 in the Quarterly VAT Returns filed for the same taxable quarters preventing the carry-over or application of such input taxes in the next taxable quarterjs. WHEREFORE, premises considered, the Petitions for Review filed on March 29, 2010 and June 28, 2010, are PARTIALLY GRANTED. Accordingly, let a Tax Credit Certificate be issued in favor of CBK in the reduced amount of P51,955,454.12, representing its unutilized excess input VAT incurred in relation to its zero-rated sales of electricity to the NPC for the first to fourth quarters of 2008. SO ORDERED. fl- CAESARA. CASANOVA Associate Justice WE CONCUR: !J? Sh~~ cQ,;;Jt-~~/ )11ANITO C. CASTANEDA, JR. Associate Justice r. �.o ~ ~. M~~~ G~ ~0 N. MINDARO-GRULLA Associate Justice 107 Exhibits " P- 100-B- 1-2-e" and " P-100-B-41d ".

DECISION CTA CASE NOS. 8043 & 8116 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. ~~c. ~e.r;..I'J- . ruANITO C. CASTANEDA, JR. Associate Justice Chairperson, Second Division CERTIFICATION Pursuant to Article VIII, Section 13 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