MAXIMA MACHINERIES, INC. v. COMMISSIONER OF INTERNAL REVENUE

REPUBLIC OF THE PHILIPPINES COURT OF TAX APPEALS QUEZON CITY First Division MAXIMA MACHINERIES, INC., CTA CASE NO. 9838 Petitioner, Members: -versus- DEL ROSARIO, P.J. , Chairperson , and MANAHAN , JJ. COMMISSIONER OF INTERNAL REVENUE, Promulgated : Respondent. X- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - DECISION DEL ROSARIO, P.J.: This is a Petition for Review filed by petitioner Maxima Machineries, Inc. on May 18, 2018 praying that the Court render judgment ordering respondent to refund or issue a tax credit certificate in favor of petitioner in the amount of Thirty Two Million One Hundred Thirty Nine Thousand Seven Hundred Seventy Six Pesos and 94/100 (P32,139,776.94), representing its excess and unutilized input value added tax (VAT) allegedly attributable to its zero-rated transactions as declared in its quarterly VAT Returns for the 3rd and 4th quarters of fiscal year (FY) ending March 31 , 2016. THE PARTIES Petitioner Maxima Machineries, Inc. is a domestic corporation duly organized under and by virtue of the laws of the Philippines with principal business address at No. 908 Quezon Avenue corner Dr. Garcia Paligsahan, Quezon City. 1 It is registered with the Bureau of Internal Revenue (BIR) as a VAT taxpayer with Tax Identification No. (TIN) 006-618-023-000.2 1 Par. 8, Statement of Facts and Antecedent Proceedings, Petition for Review, CTA Docket, Vol. I, p. 12. 2 Par. 11 , Statement of Facts and Antecedent Proceedings, Petition for Review, CTA Docket, Vol. I, p. 13; Exhibit "P-3", CTA Docket, Vol. II, pp. 725-726.~

DECISION Maxima Machineries, Inc. vs. Commissioner of Internal Revenue CTA Case No. 9838 Page 2 of73 Pursuant to petitioner's Amended Articles of Incorporation, the purposes for which it was formed are to buy, sell, barter, trade, lease out, manufacture, import, export or otherwise acquire, dispose of, and deal with any kind of goods, wares, and merchandise such as spare parts or replacement parts and/or complete assemblies of agricultural, industrial, or commercial machineries, automobiles, buses, trucks, tractors or other motor vehicles and/or related machineries and equipment of every kind and description and to carry on such business as manufacturers, wholesalers, retailers, importers and exporters except the manufacture of food, drugs and cosmetics.3 Respondent Commissioner of Internal Revenue (CIR) is empowered to perform the duties of his office, as well as the power to approve claims for refund or tax credit certificates as provided by laws and their implementing regulations. His office is located at BIR National Office Bldg., BIR Road, Diliman, Quezon City.4 THE FACTS On December 29, 2017, petitioner filed with the BIR its quarterly VAT Returns for the periods covering October 1, 2016 to December 31, 2016 (3'd quarter of FY ending March 31, 2017)5 and January 1, 2017 to March 31, 2017 (4th quarter of FY ending March 31, 2017).6 On December 31, 2017, petitioner filed with the BIR its administrative claims for the issuance of a tax credit certificate (TCC) of P13,838,236.48 for the 3'd quarter of FY ending March 31, 2017 and P18,301 ,540.46 for the 4th quarter of FY ending March 31, 2017, or in the total amount of P32, 139,776.94. On April 20, 2018, petitioner received the denial of its administrative claims for refund issued by the BIR's OIC-Assistant Commissioner for Large Taxpayers Service, Teresita M. Dizon.7 3 Par. 11, Statement of Facts and Antecedent Proceedings, Petition for Review, CTA Docket, Vol. I, pp. 12-13; Exhibit "P-2", Amended Articles of Incorporation of Maxima Machineries, CTA Docket, Vol. II, pp. 713-724. 4 Par. (A) (1), Joint Stipulation of Facts and Issues (JSFI), CTA Docket, p. 591; par. (A)(1), Admitted Fact, Pre-Trial Order, CTA Docket, Vol. II, p. 663. 5 Exhibit "P-19", petitioner filed an Amended Return for the 3'd Quarter of fiscal year ending March 31, 2016, CTA Docket, Vol. II, pp. 749-751. 6 Exhibit "P-21", petitioner filed an Amended Return for the 4th Quarter of fiscal year ending March 31, 2016, CTA Docket, Vol. II, pp. 754-755. 7 Par. 39, Statement of Facts and Antecedent Proceedings, Petition for Review, rf1 CTA Docket, Vol. I, p. 19; Admitted in par. 2 of respondent's Answer, CTA Docket, Vol. I, p. 219.

DECISION Maxima Machineries, Inc. vs. Commissioner of lntemal Revenue CTA Case No. 9838 Page 3 of73 On account of respondent's denial of petitioner's administrative claims for refund or issuance of TCC, the present Petition for Review was filed on May 18, 2018. On August 23, 2018, respondent filed his Answer, 8 with the following Special and Affirmative Defenses: 1. The present judicial claim should be denied for petitioner's failure to substantiate the claim for refund at the administrative level; 11. The CIR is correct in denying petitioner's claims for refund as petitioner failed to comply with the requirements provided under the laws and implementing rules and regulations that pertain to zero-rated transactions and input VAT from importation; iii. Petitioner has the burden of proving that it was able to substantiate its claims to be entitled to the refund being prayed for; 1v. Petitioner must prove that it has submitted complete documents to substantiate its administrative claims for refund; v. The claimant has the burden of proof to establish the factual basis of the claim for tax credit or refund; and, vi. Partaking of the nature of exemptions, claims for refund are strictly construed against the claimant and cannot be allowed unless granted in the most explicit and categorical language. On November 29, 2018, petitioner and respondent filed their respective Pre-Trial Briefs. 9 The Pre-Trial Conference was held on December 6, 2018. 10 The parties filed their Joint Stipulation of Facts and Issues 11 on December 19, 2018. The Pre-Trial Order12 was issued on March 4, 2019. The Court also terminated the Pre-Trial in the same Order. a CTA Docket, pp. 94-113. 9 Petitioner's Pre-Trial Brief, CTA Docket, Vol. I, pp. 552-568; Respondent's Pre- Trial Brief, CTA Docket, Vol. I, pp. 578-581. 10 Order issued on December 6, 2018; CTA Docket, Vol. 1., pp. 583-585. 11 CTA Docket, Vol. I, pp. 591-603. 12 CTA Docket, Vol. II, pp. 662-670.('11

DECISION Maxima Machineries, Inc. vs. Commissioner of lntemal Revenue CTA Case No. 9838 Page 4 of73 During trial, petitioner presented testimonial and documentary evidence. Petitioner's formally offered exhibits, as contained in its Formal Offer of Evidence, 13 were admitted in the Resolution dated June 11, 2019, 14 except for Exhibits "P-6", "P-7", "P-8", "P-9", "P-10", "P-11", and "P-12" for failure to present the original documents for comparison. Respondent, on his part, also presented documentary and testimonial evidence. Respondent's formally offered exhibits, as contained in his Formal Offer of Evidence on June 20, 2019, 15 were admitted by the Court in the October 2, 2019 Resolution. 16 Considering the filing of the petitioner's Memorandum 17 on November 19, 2019 and respondent's Memorandum18 on November 15, 2019, the case was submitted for decision on December 4, 2019. 19 THE ISSUES20 The issues for consideration of the Court, as stipulated by the parties, are as follows: A. Whether or not petitioner is entitled to tax refund of its excess unutilized input VAT allocable and directly attributable to its VAT zero-rated sales for the period from 01 October 2015 to 31 March 2016 amounting to Thirty- Two Million One Hundred Thirty-Nine Thousand Seven Hundred Seventy Six Pesos and 94/100 (Php32, 139, 776.94); and, B. Whether the decision of the CIR denying the claims for refund is correct based on the documents submitted at the administrative level. 13 CTA Docket, Vol. II, pp. 692-709. 14 CTA Docket, Vol. II, pp. 798-801. 15 CTA Docket, Vol. II, pp. 810-813. 16 CTA Docket, Vol. II, pp. 872-875. 17 CTA Docket, Vol. II, pp. 885-925. 18 CTA Docket, Vol. II, pp. 876-884. 19 CTA Docket, Vol. II, p. 927. fJI\ 20 Par. B, JSFI, CTA Docket, pp. 591-592; Issues, Pre-Trial Order, CTA Docket, Vol. II, p. 663.

DECISION Maxima Machineries, Inc. vs. Commissioner of Internal Revenue CTA Case No. 9838 Page 5 of73 THE COURT'S RULING Petitioner cites Section 112 (A) and (C) of the National Internal Revenue Code (NIRC) of 1997, as amended, as its basis in claiming for the refund or issuance of TCC of its excess and unutilized input VAT which are attributable to its zero-rated sales, viz.: "SEC. 112. Refunds or Tax Credits of Input 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(8)(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 a person making sales that are zero-rated under Section 108(8)(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 Subsection (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."cfl

DECISION Maxima Machineries, Inc. vs. Commissioner of Internal Revenue CTA Case No. 9838 Page 6 of73 Pursuant thereto, in order to be entitled to a refund or tax credit of unutilized input VAT attributable to zero-rated or effectively zero- rated sales, it is imperative upon the claimant to prove the following: 1. that the taxpayer is VAT-registered; 2. that the claim for refund was filed within the prescriptive period both in the administrative and judicial levels; 3. that there must be zero-rated or effectively zero-rated sales; 4. that input VAT were incurred or paid; 5. that the input VAT due or paid were attributable to zero-rated sales or effectively zero-rated sales; and, 6. that the input VAT were not applied against any output VAT liability. First Requisite: Petitioner is a VAT-registered entity. Petitioner has proven its compliance with the first requisite through its BIR Certificate of Registration21 which shows that it is a VAT-registered taxpayer with TIN No. 006-618-023-000. Second Requisite: Petitioner timely filed its administrative and judicial claims. As mandated under Section 112(A) of the NIRC of 1997, as amended, the administrative claim for refund or the issuance of a TCC of input VAT must be filed with the BIR within two (2) years after the close of the taxable quarter when the zero-rated or effectively zero-rated sales were made. Petitioner's claims involve the application for refund or issuance of TCC of input VAT attributable to zero-rated sales for the periods of October to December 2015, and January to March 2016. Thus, the end of the two-year period to file the administrative claims are as follows: 21 Exhibit "P-3", CTA Docket, Vol. II, pp. 725-726. ~

DECISION Maxima Machineries, Inc. vs. Commissioner of Internal Revenue CTA Case No. 9838 Page 7 of73 Quarter Close of the Last day to file Date when Taxable Quarter Administrative Administrative 3"' (October to when Sales were Claims were filed December 201 ~ Claim 4th (January to March Made December 31, 2017 December 29, 2017 201~ December 31, 2015 March 31,2018 March 31, 2016 Based on the foregoing, petitioner's filing of its administrative claims on December 29, 2017 was well within the two {2)-year prescriptive period under Section 112 (A) of the NIRC of 1997, as amended. As for the timeliness of petitioner's judicial claim, the relevant dates are illustrated below: Quarter Date of Filing of Last day of Receipt of Last day to Date when Administrative 120 days SIR's file Judicial Petition for 3'� (October Review was to December Claim April 28, 2018 Decision Claim filed 2015) December 29, 2017 April 20, 2018 41" (January May 20, 2018 May 18, 2018 to March 2016) Based on the above table, counting one-hundred twenty (120) days from December 29, 2017, respondent had until April 28, 2018 within which to act on petitioner's administrative claims for refund or issuance of TCC. In the present case, respondent issued a decision denying petitioner's administrative claims for refund or issuance of TCC which was received by petitioner on April 20, 2018. Counting thirty (30) days therefrom, petitioner had until May 20, 2018 within which to elevate to this Court the CIR's denial of its administrative claims. The filing of the Petition for Review on May 18, 2018 was well within the reglementary period provided by Section 112(A) of the NIRC of 1997, as amended. ~

DECISION Maxima Machineries, Inc. vs. Commissioner of Internal Revenue CTA Case No. 9838 Third Requisite: Petitioner 1s engaged in zero-rated or effectively zero-rated sales Sale of Goods and Services to Entities Registered with PEZA. SMBA. CDA. CEZA. CDC. and BOI Petitioner posits that its sales of goods and services to entities registered with the Philippine Economic Zone Authority (PEZA), Subic Bay Metropolitan Authority (SBMA), Clark Development Authority (CDA), Cagayan Economic Zone Authority (CEZA), Clark Development Corporation (CDC) and Board of Investments (BOI) during the period covering April 1, 2013 to June 30, 2013 are subject to zero percent (0%) VAT, pursuant to Sections 106(A)(2)(a){3), {5) and {c) and 108{B)(3) of the NIRC of 1997, as amended. The pertinent provisions of Sections 106(A)(2)(a)(3), (5) and (c) and 108{B)(3) of the NIRC of 1997, as amended, state: "SEC. 106. Value-Added Tax on Sale of Goods or Properties. - (A) Rate and Base of Tax- xxx XXX XXX XXX (2) The following sales by VAT-registered persons shall be subject to zero percent (0%) rate: (a) Export Sales.- The term 'export sales' means: XXX XXX XXX (1) Sale of raw materials or packaging materials to export oriented enterprise whose export sales exceed seventy percent (70%) of total annual production; XXX XXX XXX (5) Those considered export sales under Executive Order No. 226, otherwise known as the Omnibus Investment Code of 1987, and other special laws. XXX XXX XXX ~

DECISION Maxima Machineries, Inc. vs. Commissioner of Internal Revenue CTA Case No. 9838 (c) Sales to persons or entities whose exemption under special laws or international agreements to which the Philippines is a signatory effectively subjects such sales to zero rate." "SEC. 108. Value-added Tax on Sale of Services and Use or Lease of Properties. - (A) Rate and Base of Tax. - XXX XXX XXX (B) Transactions Subject to Zero Percent (0%) Rate. - The following services performed in the Philippines by VAT-registered persons shall be subject to zero percent (0%) rate: XXX XXX XXX 3) Services rendered to persons or entities whose exemption under special laws or international agreements to which the Philippines is a signatory effectively subjects the supply of such services to zero percent (0%) rate;" Relative thereto, Sections 4.106-5 and 4.108-5 of Revenue Regulations (RR) No. 16-2005, as amended by RR No. 04-07, also provide: "SEC. 4.106-5. Zero-Rated Sales of Goods or Properties. -XXX The following sales by VAT-registered persons shall be subject to zero percent (0%) rate: (a) Export sales.- 'Export Sales' shall mean: XXX XXX XXX (5) Transactions considered export sales under Executive Order No. 226, otherwise known as the Omnibus Investments Code of 1987, and other special laws. 'Considered export sales under Executive Order No. 226' shall mean the Philippine port F.O.B. value determined from invoices, bills of lading, inward letters of credit, landing certificates, and other commercial documents, of export products exported directly by a registered export producer, or the net selling price of export products sold by a registered export producer to another export producer, or to an export trader that subsequently exports the same; Provided, That sales of export products to another producer or to an export trader shall only be deemed export sales when actually exported by the latter, as evidenced by landing certificates or similar commercial documents; Provided, further,~

DECISION Maxima Machineries, Inc. vs. Commissioner of Internal Revenue CTA Case No. 9838 Page 10 of73 That pursuant to EO 226 and other special laws, even without actual exportation, the following shall be considered constructively exported: (1) sales to bonded manufacturing warehouses of export- oriented manufacturers; (2) sales to export processing zones pursuant to Republic Act IRA) Nos. 7916, as amended. 7903. 7922 and other similar export processing zones: (3) sale to enterprises duly registered and accredited with the Subic Bay Metropolitan Authority pursuant to RA 7227: (4) sales to registered export traders operating bonded trading warehouses supplying raw materials in the manufacture of export products under guidelines to be set by the Board in consultation with the Bureau of Internal Revenue (BIR) and the Bureau of Customs (BOG); @ sales to diplomatic missions and other agencies and/or instrumentalities granted tax immunities, of locally manufactured, assembled or repacked products whether paid for in foreign currency or not. For purposes of zero-rating, the export sales of registered export traders shall include commission income. The exportation of goods on consignment shall not be deemed export sales until the export products consigned are in fact sold by the consignee: and Provided, finally, that sales of goods, properties or services made by a VAT-registered supplier to a SOl-registered manufacturer I producer whose products are 100�/0 exported are considered export sales. A certification to this effect must be issued by the Board of Investment (801) which shall be good for one year unless subsequently re-issued by the 801. XXX XXX XXX (c) Sales to Persons or Entities Deemed Tax-exempt under Special Law or International Agreement. - Sales of goods or property to persons or entities who are tax-exempt under special laws, e.g. sales to enterprises duly registered and accredited with the Subic Bay Metropolitan Authority (SBMA) pursuant to R.A. No. 7227, sales to enterprises duly registered and accredited with the Philippine Economic Zone Authority (PEZA) or international agreements to which the Philippines is signatory, such as, Asian Development Bank (ADB), International Rice Research Institute (IRRI}, etc., shall be effectively subject to VAT at zero-rate." "SEC. 4.108-5. Zero-Rated Sale of Services. - XXX XXX XXX (b) Transactions Subject to Zero Percent (0%) VAT Rate.- The following services performed in the Philippines by a VAT-registered person shall be subject to zero percent (0%) VAT rate: XXX XXX XXX (3) Services rendered to persons or entities whose exemption under special laws or international agreements to which the Philippines is a signatory effectively subjects the supply of such services to zero percent (0%) rate;"01

DECISION Maxima Machineries, Inc. vs. Commissioner of Internal Revenue CTA Case No. 9838 Page 11 of73 Further, the special laws applicable to this case are Republic Act (RA) No. 7227, as amended by RA No. 9400, otherwise known as "Bases Conversion and Development Act of 1992", RA No. 7916, as amended, otherwise known as ''The Special Economic Zone Act of 1995", and RA No. 7922, otherwise known as "Cagayan Special Economic Zone Act of 1995". The relevant portions of said laws are quoted hereunder: "REPUBLIC ACT NO. 9400 AN ACT AMENDING REPUBLIC ACT NO. 7227, AS AMENDED, OTHERWISE KNOWN AS THE BASES CONVERSION AND DEVELOPMENT ACT OF 1992, AND FOR OTHER PURPOSES SECTION 1. Section 12 of Republic Act No. 7227, as amended, otherwise known as the Bases Conversion and Development Act of 1992, is hereby amended to read as follows: 'SEC. 12. Subic Special Economic Zone.- xxx XXX XXX XXX (b) The Subic Special Economic Zone shall be operated and managed as a separate customs territory ensuring free flow or movement of goods and capital within, into and exported out of the Subic Special Economic Zone, as well as provide incentives such as tax and duty-free importations of raw materials, capital and equipment. xxx (c) The provision of existing laws, rules and regulations to the contrary notwithstanding, no national and local taxes shall be imposed within the Subic Special Economic Zone. xxx' XXX XXX XXX SEC. 2. Section 15 of the Republic Act No. 7227, as amended, is hereby amended to read as follows: 'SEC. 15. Clark Special Economic Zone (CSEZ) and Clark Freeport Zone (CFZ). - xxx. The CFZ shall be operated and managed as a separate customs territory ensuring free flow or movement of goods and capital equipment within, into and exported out of the CFZ, as well as provide incentives such as tax and duty-free importation of raw materials and capital equipment. xxx The provisions of existing laws, rules and regulations to the contrary notwithstanding, no national and local taxes shall be imposed on registered business Xxxt�iJ enterprises within the CFZ.

DECISION Maxima Machineries, Inc. vs. Commissioner oflnternal Revenue CTA Case No. 9838 XXX XXX XXX Duly registered business enterprises that will operate in the Special Economic Zones to be created shall be entitled to the same tax and duty incentives as provided for under Republic Act No. 7916, as amended: Provided, That for the purpose of administering these incentives, the PEZA shall register, regulate, and supervise all registered enterprises within the Special Economic Zones." "REPUBLIC ACT NO. 7916 (as amended by Republic Act No. 8748) AN ACT PROVIDING FOR THE LEGAL FRAMEWORK AND MECHANISMS FOR THE CREATION, OPERATION, ADMINISTRATION, AND COORDINATION OF SPECIAL ECONOMIC ZONES IN THE PHILIPPINES, CREATING FOR THIS PURPOSE, THE PHILIPPINE ECONOMIC ZONE AUTHORITY (PEZA) AND FOR OTHER PURPOSES. XXX XXX XXX SECTION 8. ECOZONE to be Operated and Managed as Separate Customs Territory.- The ECOZONE shall be managed and operated by the PEZA as separate customs territory. The PEZA is hereby vested with the authority to issue certificates of origin for products manufactured or processed in each ECOZONE in accordance with the prevailing rules of origin, and the pertinent regulations of the Department of Trade and Industry and/or the Department of Finance. XXX XXX XXX SECTION 24. Exemption form National and Local Taxes. - Except for real property taxes on land owned by developers, no taxes, local and national, shall be imposed on business establishments operating within the ECOZONE. xxx" "REPUBLIC ACT NO. 7922 AN ACT ESTABLISHING A SPECIAL ECONOMIC ZONE AND FREE PORT IN THE MUNICIPALITY OF SANTA ANA AND THE NEIGHBORING ISLANDS IN THE MUNICIPALITY OF APARRI, PROVINCE OF CAGAYAN, PROVIDING FUNDS THEREFOR, AND FOR OTHER PURPOSES SECTION 1. Short Title. - This Act shall be known as the 'Cagayan Special Economic Zone Act of 1995'. XXX XXX XXX tJrl

DECISION Maxima Machineries, Inc. vs. Commissioner of Internal Revenue CTA Case No. 9838 Page 13 of73 SEC. 4. Governing Principles.- The Cagayan Special Economic Zone shall be managed and operated under the following principles: XXX XXX XXX (b) Business establishments operating within the Zone shall be entitled to the existing fiscal incentives as provided for under Presidential Decree No. 66, the law creating the Export Processing Zone Authority (EPZA), or those provided under Book VI of Executive Order No. 226, otherwise known as the Omnibus Investment Code of 1987; c) Any provision of existing law, rules or regulations to the contrary notwithstanding, no taxes, local and national, shall be imposed on business establishments operating within the Zone. xxx" Since an Ecozone is treated as a foreign territory by legal fiction, sales of goods and services made by a VAT-registered person in the Philippine customs territory to an entity registered and operating within an Ecozone are considered exports to a foreign country subject to 0% VAT. This was elucidated by the Supreme Court in the case of Commissioner of Internal Revenue vs. Toshiba Information Equipment (Phils.), lnc., 22 to wit: "This Court agrees, however, that PEZA-registered enterprises, which would necessarily be located within ECOZONES, are VAT-exempt entities, not because of Section 24 of Rep. Act No. 7916, as amended, which imposes the five percent (5%) preferential tax rate on gross income of PEZA-registered enterprises, in lieu of all taxes; but, rather, because of Section 8 of the same statute which establishes the fiction that ECOZONES are foreign territory. xxx An ECOZONE or a Special Economic Zone has been described as- ... [S]elected areas with highly developed or which have the potential to be developed into agroindustrial, industrial, tourist, recreational, commercial, banking, investment and financial centers whose metes and bounds are fixed or delimited by Presidential Proclamations. An ECOZONE may contain any or all of the following: industrial estates (IEs), export processing zones (EPZs), free trade zones and tourisUrecreational centers. The national territory of the Philippines outside of the proclaimed borders of the ECOZONE shall be referred to as the Customs Territory. Section 8 of Rep. Act No. 7916, as amended, mandates that the PEZA shall manage and operate the ECOZONES as a 22 G.R No. 150154, August 9, 2005. {.JI�1

DECISION Maxima Machineries, Inc. vs. Commissioner of Internal Revenue CTA Case No. 9838 Page 14 of73 separate customs territory; thus, creating the fiction that the ECOZONE is a foreign territory. As a result, sales made by a supplier in the Customs Territory to a purchaser in the ECOZONE shall be treated as an exportation from the Customs Territory. Conversely, sales made by a supplier from the ECOZONE to a purchaser in the Customs Territory shall be considered as an importation into the Customs Territory. Given the preceding discussion, what would be the VAT implication of sales made by a supplier from the Customs Territory to an ECOZONE enterprise? The Philippine VAT system adheres to the Cross Border Doctrine, according to which, no VAT shall be imposed to form part of the cost of goods destined for consumption outside of the territorial border of the taxing authority. Hence, actual export of goods and services from the Philippines to a foreign country must be free of VAT; while, those destined for use or consumption within the Philippines shall be imposed with ten percent (10%) VAT." Sales of goods and services by a VAT-registered taxpayer, such as petitioner, to entities located in the Ecozones, as well as, to SOl-registered entities whose products are 100% exported are considered "export sales" subject to 0% VAT rate pursuant to Sections 106(A)(2)(a)(3), (5) and (c) and 108(8)(3) of the NIRC of 1997, as amended, and as implemented by Sections 4.106-5 and 4.108-5 of RR No. 16-05, as amended. To prove that its clients are duly registered with PEZA, SBMA, CDC, CEZA and BOI, petitioner submitted various Certifications issued by said agencies. Petitioner also presented the Letter23 dated April 3, 2018 issued by PEZA Director General, Charita B. Plaza, stating that PEZA has issued VAT-zero rating certifications to the enterprises listed by petitioner as its clients, and that they are qualified enterprises for the purpose of VAT zero-rating of their transactions with its local suppliers of goods, properties, and services. Meanwhile, Section 3(3) of Revenue Memorandum Order No. 9-2000, dated February 2, 2000, requires a BOI certification attesting that the products of the SOl-registered manufacturer/producer are 100% exported to be able to avail of automatic zero-rating. Hence, in order for sales to BOI registered manufacturer/producer whose products are 100% exported to be considered as export sales, a certification to this effect must be issued by the BOI which shall be good for one (1) year unless subsequently re-issued by the BOI. 23 Exhibit "P-4", CTA Docket, Vol. I, p. 313-318. ~

DECISION Maxima Machineries, Inc. vs. Commissioner of Internal Revenue CTA Case No. 9838 Page 15 of73 In the present case, petitioner offered in evidence a Certification dated April 27, 2018 signed by the 801 OIC-Executive Director, Atty. Marjorie 0. Ramos-Samaniego, on June 7, 2016, 24 confirming the 801's issuance of VAT zero-rating certifications to certain clients of petitioner and attesting that they are qualified for VAT zero-rated transactions. Upon review of the evidence offered by both petitioner and respondent, the Court finds that the following clients of petitioner are registered with PEZA, S8MA, CDC, and CEZA, including the Freeport Area of 8ataan (FA8}, 25 and with the 801 as manufacturer/producer whose products are 100% exported, viz.: Clients Certifying Proof of VAT Exhibit Certification Body Zero-rating Period AD NAMA BOI Confirmation letter from P-5; BIR 5/7/15-12/31/15 MINING BOI BOI dated April 27, 2018; Records pp. 3/14/16- 12/31/16 RESOURCES SBMA Certificate No. 2015-113; BOI Certificate No. 2016-020 383-384, 2/5/15-12/31/15 BERONG BOI 322-323 1/1/16- 12/31/16 NICKEL BOI Confirmation letter from P-5; BIR CORPORATION BOI BOI dated April 27, 2018; Records pp. Certificate No. 2015-083; 380-381, BIG LIFT PEZA Certificate No. 2016-013 319-320 PROPERTIES & BOI DEVELOPMENT Certificate of Tax P-97-y 3/31/15-3/30/16 CORPORATION Exemption CAGDIANAO Confirmation letter from P-5; BIR 1/1/15-12/31/15 MINING BOI dated April27, 2018; Records pp. 1/1/16- 12/31/16 Certificate No. 2015-014; CORPORATION Certificate No. 2016-003 376-377, 1/1/15- 12/31/15 Confirmation letter from 316-317 1/1/16- 12/31/16 CARMEN BOI dated April 27, 2018; P-5; BIR COPPER Certificate No. 2015-049; Records pp. 2/11/16- 12/31/16 CORPORATION Certificate No. 2016 008 373-374, Confirmation letter from 314-313 4/11/16- 12/31/16 CENTURY PEAK BOI dated April 27, 2018; P-5; BIR CORPORATION Certificate No. 2015-088 Records pp. 371-372 CITINICKEL Confirmation letter from MINES AND BOI dated April 27, 2018; P-5; BIR DEVELOPMENT Certificate No. 2016-022 Records pp. CORPORATION Confirmation letter from 307-308 CORAL BAY PEZA dated April 3, NICKEL 2018; P-4; BIR 2015,2016 I Certificate No. 2015- Records pp. CORPORATION 1214; (CBNC) 370, 306 Certificate No. 2016-0856 CTP Confirmation letter from P-5; BIR ~ CONSTRUCTIO BOI dated April27, 2018; Records pp. 3/11/15-12/31/15 NAND MINING Certificate No. 2015-103 _367 -368 '--- - - 24 Exhibit "P-5", CTA Docket, Vol. II, p. 733. 25 Section 4(e) of RA No. 9728, or the "Freeport Area of Bataan (FAB) Act of 2009" provides that the "FAB shall be managed and operated as a separate customs territory ensuring free flow or movement of goods and capital within, into and out of its territory" similar to ECOZONEs()i1

DECISION Maxima Machineries, Inc. vs. Commissioner of Internal Revenue CTA Case No. 9838 Page 16 of73 EAGLE SKY CDC Certificate of Registration P-97-ai 3/15/13-3/14/16 TECHNOLOGY and Tax Exemption AMUSEMENT FAB AND GAMING, PEZA Certification P-97-ak 2016 INC., (Formerly: 801 PEZA Confirmation letter from P-4; BIR 2015, 2016 EAGLESKY 801 PEZA dated April 3, Records p. 1/1/15- 12/31/15 TECHNOLOGY PEZA 2018; 1/1/16-12/31/16 SBMA 365 CO., INC.) Certificate No. 2015-2304 2015,2016 EARTH & SBMA Confirmation letter from P-5; BIR 1/1/15- 12/31/15 SHORE BOI dated April 27, 2018; Records pp. 1/1/16-12/31/16 TOURISM PEZA Certificate No. 2015-016; LANDHOLDINGS SBMA Certificate No. 2016-011 362-363, 2015, 2016 Confirmation letter from 301-302 CORP. BOI PEZA dated April 3, 7/15/15-7/14/16 CDC 2018; P-4; BIR FASTECH PEZA Records p. PROPERTIES, Certificate No. 2015-1661 Confirmation letter from 361 INC. (FPI) BOI dated April 27, 2018; Certificate No. 2015-039; P-5; BIR FCF MINERALS Certificate No. 2016-002 Records pp. CORPORATION Confirmation letter from 358-359, GSEASTASIA PEZA dated April 3, 299-300 MANILA INC. 2018; P-4; BIR (GEAMI) Certificate No. 2015- Records pp. 0115; HINATUAN 357, 298 MINING Certificate No. 2016-0469 P-97-aa CORPORATION Certificate of Registration and Tax Exemption HOUSE TECHNOLOGY Certificate of Tax P-97-ab; P- 11/27/14- INDUSTRIES Exemption 97-ac 11/26/15 and PTE., LTD. 11/27/15- (HTIPL) 11/26/16 HYS-YACHT i PHILS. LTD. CO. Confirmation letter from P-4; BIR I INC. PEZA dated April 3, Records p. JAMJLE 2018; 2015,2016 PROPERTIES 352 (SUBIC) AND Certificate No. 2015-0130 J DEVELOPMENT P-97-ad; P- CORPORATION Certificate ofTax 97-ae 12/10/14- (formerly: Jamjle Exemption 12/09/15 and Equipments and P-5; BIR Confirmation letter from Records pp. 12/10/15- Gen. BOI dated April27, 2018; I Merchandise Certificate No. 2016-018 358-359 12/09/16 Inc.) 2/16/16- 12/31/16 MAJESTIC LANDSCAPE Certificate of Registration P-97-aj 3/15/16-3/14/19 CORPORATION and Tax Exemption P-4; BIR 2015,2016 (MLC) Confirmation letter from Records p. PEZA dated April 3, ~ MAPAN-IKWA TRADING, INC. MARCVENTURE S MINING AND DEVELOPMENT CORP. METRO CLARK WASTE MANAGEMENT CORPORATION PHIL. BATTERIES

DECISION Maxima Machineries, Inc. vs. Commissioner of Internal Revenue CTA Case No. 9838 INCORPORATE PEZA 2018; 345 2015, 2016 D (PBI) 801 Certificate No. 2015- 801 P-4; BIR 1/1/15-12/31/15 PHILIPPINE 801 1125; Records pp. 1/1/16- 12/31/16 ASSOCIATED PEZA Confirmation letter from 2/6/15- 12/31/15 SMELTING & PEZA 349,290 2/9/16-12/31/16 SBMA PEZA dated April 3, 1/1/15- 12/31/15 REFINING PEZA 2018; P-5; BIR 1/1/16- 12-31/16 CORP. 801 Records pp. PEZA Certificate No. 2015- 2015,2016 PHILIPPINE PEZA 0331; 347-346, GOLD PEZA 287-288 2015,2016 Certificate No. 2016-0153 P-5; BIR 1/04/15-1/03/16 PROCESSSING PEZA Records pp. AND REFINING Confirmation letter from 342-344, 2015,2016 BOI dated April27, 2018; 285-286 CORP. Certificate No. 2015-034; P-5; BIR 1/1/15- 12/31/15 PLATINUM Certificate No. 2016-009 Records pp. 1/1/15- 12/31/16 338-339, GROUP Confirmation letter from 282-283 2016 METALS BOI dated April 27, 2018; 2015, 2016 CORPORATION Certificate No. 2015-085; P-4; BIR RIO TUBA Certificate No. 2016-011 Records pp. 2015, 2016 NICKEL AND Confirmation letter from MINING BOI dated April27, 2018; 337,281 ' CORPORATION Certificate No. 2015-035; Certificate No. 2016-007 P-4; BIR 2015,2016 SCAD Confirmation letter from Records p. SERVICES (S) ' PEZA dated April 3, 336 ' PTE., LTD. 2018; (PHIL. BRANCH) P-97-ag ell Certificate No. 2015- (SSPL) 0070; P-4; BIR Records pp. SHINDENGEN Certificate No. 2016-0054 PHILIPPINES Confirmation letter from 333,276 CORPORATION PEZA dated April 3, 2018; P-5; BIR (SPC) Records pp. SUBIC Certificate No. 2015-0106 CONSOLIDATED 330-331' PROJECTS, INC. Certificate of Tax 273-274 Exemption TAGANITO P-97-t HPAL NICKEL Confirmation letter from CORPORATION PEZA dated April 3, P-4; BIR 2018; Records p. (THPAL) Certificate No. 2015- 0414; 329 TAGANITO MINING Certificate No. 2016-0534 P-4; BIR Confirmation letter from Records pp. CORPORATION BOI dated April27, 2018; Certificate No. 2015-009- 328,271 TECHNOCLEAN PHILIPPINES, A� P-4; BIR INC.lTPll Certificate No. 2015-110 Records pp. TRANSCOM WORDLWIDE PEZA Certificate No. 327, 270 (PHILIPPINES), 2016-1425 INC. Confirmation letter from UNICHAMP PEZA dated April 3, MINERAL 2018; PHILIPPINES, INC. (UMPI) Certificate No. 2015-1855 Confirmation letter from VI SAVAS SLAKED LIME PEZA dated April 3, CORPORATION 2018; (VSLC) Certificate No. 2015- 0137; Certificate No. 2016-0951 Confirmation letter from PEZA dated April 3, 2018; Certificate No. 2015- 1583; Certificate No. 2016-1519

DECISION Maxima Machineries, Inc. vs. Commissioner of Internal Revenue CTA Case No. 9838 WU KONG PEZA Confirmation letter from P-4; BIR 2015, 2016 SINGAPORE PEZA dated April 3, Records pp. 2018; PTE.LTD Certificate No. 2015- 326, 268 0079; Certificate No. 2016-0058 Sale of Services to Non-resident Foreign Corporations (NRFCsl Petitioner alleges that out of its zero-rated sales aggregating in the amount of t-742,641,360.36 for the 3rd and 41h quarters of FY ending March 31, 2016, fit114,403,793.16 pertains to sale of services to NRFCs. Under an "indent arrangement", three (3) NRFCs had designated petitioner to be their agent in the Philippines to deal with former's local customers. Petitioner then arranged for the placing of orders of the local customers to these NRFC suppliers. For acting as an agent, petitioner earned indent commissions on all orders placed with the NRFC suppliers26 More particularly, petitioner earned a total peso equivalent of P114,403,793.16 from the following clients: Customers 3"' Quarter 4'" Quarter Total Marubeni Corporation ~ 66,920,636.01 p 40,768,097.86 ~ 107,688,733.87 868,773.11 868,773.11 Hvundai Corporation - - 5,846,286.18 Daewoo International 5,846 286.18 ~ 114,403,793.16 ~ 72,766,922.19 ~ 41,636,870.97 Corporation Total Section 108(8)(2) of the NIRC of 1997, as amended, provides: "SEC. 108. Value-added Tax on Sale of Services and Use or Lease of Properties.- {A) XXX (B) Transactions Subject to Zero Percent (0%) Rate. - The following services performed in the Philippines by VAT- registered persons shall be subject to zero percent (0%) rate: (1) Processing, manufacturing or repacking goods for other persons doing business outside the Philippines which goods are subsequently exported, where the services are paid for in acceptable foreign currency and accounted for in accordance with the rules and regulations of the Bangko Sentral ng Pilipinas (BSP); 26 Petition for Review, CTA Docket, Vol. I, p. 15. (11

DECISION Maxima Machineries, Inc. vs. Commissioner of Internal Revenue CTA Case No. 9838 Page 19 of73 (2) Services other than those mentioned in the preceding paragraph rendered to a person engaged in business conducted outside the Philippines or to a non-resident person not engaged in business who is outside the Philippines when the services are performed, the consideration for which is paid for in acceptable foreign currency and accounted for in accordance with the rules and regulations of the Bangko Sentral ng Pilipinas (BSP);" (Boldfacing supplied) Based on the foregoing provision, certain essential elements must be present for a sale or supply of services to be subject to the VAT rate of zero percent (0%) under Section 108(8)(2) of the NIRC of 1997, as amended, to wit: 1. The recipient of the services is a foreign corporation, and the said corporation is doing business outside the Philippines, or is a non-resident person not engaged in business who is outside the Philippines when the services were performed;27 2. The payment for such services were made in acceptable foreign currency accounted for in accordance with the BSP rules; 28 3. The services fall under any of the categories under Section 108(8)(2)29, or simply, the services rendered should be other than "processing, manufacturing or repacking goods";30 and, 4. The services must be performed in the Philippines by a VAT- registered person. To be considered as a non-resident foreign corporation doing business outside the Philippines, each entity must be supported at the very least by both: (1) SEC Certification of Non-Registration of Corporation/Partnership; AND (2) Proof of Certificate/Articles of Foreign Incorporation/Association or printed screenshots of the US 27 Site/ Philippines Corporation (Formerly Clientlogic Phils., Inc.) vs. Commissioner of Internal Revenue, G.R. No. 201326, February 8, 2017. 28 Commissioner of Internal Revenue vs. Burmeister and Wain Scandinavian Contractor Mindanao, Inc., G.R. No. 153205, January 22, 2007; Commissioner of Internal Revenue vs. American Express International, Inc. (Philippine Branch), G.R. No. 152609, June 29, 2005. 29 Commissioner of Internal Revenue vs. American Express International, Inc. �(Philippine Branch), supra. 3 Commissioner of Internal Revenue vs. Burmeister and Wain Scandinavian Contractor Mindanao, Inc., supra. ~

DECISION Maxima Machineries, Inc. vs. Commissioner of Internal Revenue CTA Case No. 9838 Page 20 of73 Securities and Exchange Commission (SEC) Website showing the state/province/country where the entity was organized. 31 For its alleged sale to Marubeni Corporation, petitioner submitted a SEC Certification of Non-Registration of Company32 and the duly-authenticated Articles of Incorporation of Marubeni Corporation. 33 In its Petition for Review, 34 petitioner indicated the corporate name "Marubeni Corporation - Japan" as one of those alleged NRFCs it rendered services to. Perusal of supporting documents such as official receipts, 35 bank certificates of inward remittance, 36 and even the duly-authenticated Articles of Incorporation, however, reveals that petitioner had transacted with "Marubeni Corporation" and not "Marubeni Corporation - Japan." As stated in the SEC Certification of Non-Registration of Company submitted in evidence by petitioner, there exists a company name "Marubeni Corporation" registered with the SEC. Thus, it cannot be said that Marubeni Corporation is an NRFC. Accordingly, petitioner's sales to Marubeni Corporation shall not be considered as zero-rated sales. With respect to the export sale to Oaewoo International Corporation, petitioner submitted an SEC Certification of Non- Registration of Company. 37 Petitioner, however, did not offer in evidence any proof of incorporation/registration in a foreign country, such as Certificate/Articles of Foreign Incorporation/Association or printed screenshots of the US SEC Website. Thus, as correctly disallowed by the Court-commissioned Independent Certified Public Accountant (ICPA), the sales to Oaewoo International Corporation cannot be considered as zero-rated sales.38 As for the alleged export sale of service to Hyundai Corporation, petitioner was able to present both the SEC Certification of Non-Registration of Company39 and the duly authenticated Articles of Incorporation of Hyundai Corporation. 40 Petitioner likewise submitted a Certification dated December 28, 2017 showing the inward remittances made by Hyundai Corporation in favor of 31 Commissioner of Internal Revenue vs. CITCO International Support Services Limited-Philippine ROHQ, CTA EB No. 2015, November 29, 2019. 32 Exhibit "P-13", CTA Docket, Vol. I, p. 331. 33 Exhibit "P-14", CTA Docket, Vol. I, pp. 332-356. 34 Petition for Review, CTA Docket, Vol. I, p. 15. 35 Exhibit "P-88-a" to "P-88-c" and "P-88-f' to "P-88-j". 36 Exhibit "P-98-a" to "P-98-d". 37 Exhibit "P-17", CTA Docket, Vol. I, p. 401. 38 Exhibit "P-89". 39 Exhibit "P-99-b". 40 Exhibit "P-1 00-b". C1

DECISION Maxima Machineries, Inc. vs. Commissioner of Internal Revenue CTA Case No. 9838 Page 21 of73 petitioner.41 Petitioner, however, failed to offer any evidence to prove the kind of services it rendered to Hyundai Corporation that would qualify as zero-rated sales under Section 108(8)(2) of the NIRC of 1997, as amended. Other than the allegation that it rendered services for which it received indent commissions, no proof of any contract or service agreement was adduced by petitioner. Hence, the Court is unable to verify whether any service other than "processing, manufacturing or repacking of goods" was rendered by petitioner. In view of the foregoing, the Court adopts the findings of the ICPA that the VAT zero-rated sales to Daewoo International Corporation in the amount of t-5,846,286.16 should be disallowed; and in addition thereto, the sales of service to Marubeni Corporation and Hyundai Corporation in the total amount of P1 08,557,506.98 should also be disallowed, as follows: Customers 3"' Quarter 4'" Quarter Total Marubeni Corporation "' - "' 66,920,636.01 40,768,097.86 I" 107,688,733.87 Hyundai Corporation 868,773.11 868,773.11 Total I" 66,920,636.01 I" 41 ,636,870.97 I" 108,557,506.98 Disallowed Zero-rated Sales In its 3rd and 4th quarterly VAT Returns42 for FY ending March 31, 2016, petitioner reported total sales of P2,740, 186,115.69 which included zero-rated sales in the amount of ~742,641,360.36, broken down as follows: Sales Reported per 3rd Quarter 4th Quarter Total Quarterly VAT Returns VATable Sales "' 971 '182, 118.47 I" 1,016,822,856.25 p 1,988,004,974.72 2,491,611.11 7, 048, 169.50 9,539,780.61 Sales to Government 396,978,672.96 345,662,687.40 742,641,360.36 Zero-rated Sales Total Reported Sales per I" 1,370,652,402.54 I" 1,369,533,713.15 I" 2,740,186,115.69 Quarterly VAT Returns The Court shall examine whether the zero-rated sales of petitioner complied with the invoicing requirements under Sections 113(A)(1) and {2), {8)(1), (2}{c) and (3) of the NIRC of 1997, as amended, viz: 41 Exhibit "P-98-b" 42 Exhibits "P-19" and "P-21", CTA Docket, Vol. II, p. 749 and 754. (")

DECISION Maxima Machineries, Inc. vs. Commissioner of Internal Revenue CTA Case No. 9838 Page 22 of73 "SEC. 113. Invoicing and Accounting Requirements for VAT- Registered Persons. - (A) Invoicing Requirements. -A VAT-registered person shall issue: (1) A VAT invoice for every sale, barter or exchange of goods or properties; and (2) A VAT official receipt for every lease of goods or properties, and for every sale, barter or exchange of services. (B) Information Contained in the VAT Invoice or VAT Official Receipt - The following information shall be indicated in the VAT invoice or VAT official receipt: (1) A statement that the seller is a VAT-registered person, followed by his Taxpayer's Identification Number (TIN); (2) The total amount which the purchaser pays or is obligated to pay to the seller with the indication that such amount includes the value-added tax: Provided, That: XXX XXX XXX (c) If the sale is subject to zero percent (0%) value- added tax, the term 'zero-rated sale' shall be written or printed prominently on the invoice or receipt; XXX XXX XXX (3) The date of transaction, quantity, unit cost and description of the goods or properties or nature of the service; and" The same requirements are provided for under Sections 4.113- 1(A)(1) and (2), (8)(1) and (2)(c) of RR No. 16-2005, as follows: "SEC. 4.113-1. Invoicing Requirements.- (A) A VAT-registered person shall issue:- (1) A VAT invoice for every sale, barter or exchange of goods or properties; and (2) A VAT official receipt for every lease of goods or properties, and for every sale, barter or exchange of services. 1)1{'1

DECISION Maxima Machineries, Inc. vs. Commissioner of Internal Revenue CTA Case No. 9838 Page 23 of73 Only VAT-registered persons are required to print their TIN followed by the word 'VAT in their invoice or official receipts. Said documents shall be considered as a 'VAT Invoice' or VAT official receipt. All purchases covered by invoices/receipts other than VAT lnvoiceNAT Official Receipt shall not give rise to any input tax. VAT invoice/official receipt shall be prepared at least in duplicate, the original to be given to the buyer and the duplicate to be retained by the seller as part of his accounting records. (B) Information contained in VAT invoice or VAT official receipt. - The following information shall be indicated in VAT invoice or VAT official receipt: (1) A statement that the seller is a VAT-registered person, followed by his TIN; (2) The total amount which the purchaser pays or is obligated to pay to the seller with the indication that such amount includes the VAT; Provided, That: XXX XXX XXX (c) If the sale is subject to zero percent (0%) VAT, the term 'zero-rated sale' shall be written or printed prominently on the invoice or receipt;" Zero-rated sales for the 3rd and 41h quarters ending March 31, 2016 in the amount of t-143,066,770.58 were noted with exceptions by the ICPA, as follows: 43 Exhibit Exceptions 3rd Quarter 4th Quarter No. P-89 Export sale of services which are ~ 5, 846,286. 16 ~ - P-90 properly supported by VAT zero-rated 7,258,991.86 ORs issued to companies with 11,285,964.50 foreign address and with certificates of non-registration with SEC and certificates of bank inward remittance but with no consularized articles of incorporation provided Zero-rated sale of goods which are properly supported by VAT zero-rated invoices/zero-rated sale of services which are properly supported by VAT zero-rated ORs not dated within the rfl 43 Exhibit "P-49", ICPA Report Binder, Part 1 of 4, pp. 9-11.

DECISION Maxima Machineries, Inc. vs. Commissioner of Internal Revenue CTA Case No. 9838 Page 24 of73 P-91 quarter but falling within the same 218,602.59 - P-92 taxable year and not reported in VAT 6,244,430.55 returns of other quarters 5,410,018.04 Zero-rated sale of goods which are properly supported by VAT zero-rated invoices/zero-rated sale of services which are properly supported by VAT zero-rated ORs not dated within the quarter and not falling within the same taxable year Zero-rated sale of services supported by documents other than VAT zero- rated ORs P-93 Zero-rated sale of goods which are - 27,967,678.41 P-94 properly supported by VAT zero-rated invoices but without valid VAT zero- - 15,817,753.15 ratina incentive certificates provided Zero-rated sale of goods which are properly supported by VAT zero-rated invoices but without VAT zero-rating stamp P-95 VATable sales incorrectly tagged as 76,612.00 - P-96 zero-rated sales Without supporting documents 56,622,162.88 6,318,270.44 presented p 76,267,086.04 p 66,799,684.54 Subtotal '" 143,066,770.58 Total Zero-rated Sales Disallowed by ICPA The Court finds the observations of the ICPA to be in order and adopts the above findings insofar as the denial of VAT zero-rating in the amount of t-143,066,770.58 is concerned. Upon further evaluation, the Court additionally finds that the reported zero-rated sales in the amount of P41,377,407.15 should also be denied VAT zero-rating for petitioner's failure to comply with the invoicing requirements under the NIRC of 1997, as amended, and RR No. 16-2005, as follows: Date Exhibit No. Invoice No. Clients Amount Reason for Disallowance 1) Sale of oods supported by VAT Invoices but with unreadable details 3"' Quarter Unreadable PHIL GOLD date, payor PROCESSING & details and REFINING CORP. p 10/1/15 P-85-p MLA No. 15080 43,271.57 amounts 10/5/15 P-85-af MLA No. 15260 208,528.00 MLA No. 15083 BERONG NICKEL Unreadable MLA No. 15084 48,514.08 CORPORATION 35,337.06 amounts PHIL GOLD Unreadable PROCESSING & date and 10/5/15 P-85-am REFINING CORP. amounts PHIL GOLD Unreadable PROCESSING & date and 10/5/15 P-85-an REFINING CORP. amounts (JJ

DECISION Maxima Machineries, Inc. vs. Commissioner of Internal Revenue CTA Case No. 9838 Page 25 of73 Unreadable BERONG NICKEL date and CORPORATION 10/6/15 P-85-as MLA No. 15269 CARMEN 395,800.00 amounts 10/6/15 P-85-aw CEBU No. 16702 COPPER CORP. 285,550.00 Unreadable 10/6/15 P-85-be 12,756.01 10/6/15 P-85-bn 8,192.00 date P-85-br 10/6/15 P-85-bt 85,560.00 Unreadable 10/6/15 P-85-bz 10/7/15 P-85-cb PHIL GOLD 256,416.00 date, payor 10/7/15 P-85-ce 366,896.00 10/7/15 P-85-ch PROCESSING & 214,704.00 details and 10/7/15 368,240.00 P-85-cr MLA No. 15085 REFINING CORP. 536,256.00 amounts 10/8/15 P-85-cs BTN No. 07895 10/8/15 P-85-cv TAGANITO 20,320.00 Unreadable 10/8/15 268,928.00 P-85-cy_ MINING CORP. date 10/8/15 Unreadable TAGANITO date and MINING CORP. BTN No. 0821 0 amounts Unreadable TAGANITO date and MINING CORP. BTN No. 08212 CARMEN amounts CEBU No. 16717 COPPER CORP. CEBU No. 16719 CARMEN Unreadable CEBU No. 16722 COPPER CORP. CEBU No. 16725 CARMEN date COPPER CORP. CARMEN Unreadable COPPER CORP. date Unreadable date Unreadable date Unreadable BERONG NICKEL date and CORPORATION MLA No. 15154 BERONG NICKEL amounts MLA No. 15162 CORPORATION BTN No. 08197-98 CAGDIANAO Unreadable BTN No. 08143 MINING CORPORATION amounts PLATINUM GROUP METALS Unreadable CORP. 358,984.00 date Unreadable 15,424.00 ATP details 640,760.00 Unreadable 7,056.00 date, payor 19,840.00 BTN No. 08217- TAGANITO 16,512.00 details and 08221 MINING CORP. 10/8/15 P-85-cz TAGANITO 99,168.00 amounts 10/8/15 P-85-da BTN No. 08222 MINING CORP. 10/8/15 P-85-dd TAGANITO 97,193.58 Unreadable 10/8/15 P-85-de BTN No. 08226 MINING CORP. 192.00 TAGANITO date BTN No. 08227 MINING CORP. 12,440.00 8,848.00 Unreadable 1,441,239.3_6 date Unreadable date Unreadable date, payor BTN No. 08228- TAGANITO details and 08229 MINING CORP. 10/8/15 P-85-df amounts Unreadable date, payor FCF MINERALS details and CORPORATION 10/9/15 P-85-di MLA No. 15169 amounts BTN No. 08182 TAGANITO BTN No. 08199 MINING CORP. Unreadable BTN No. 8200 TAGANITO MLA No. 15186 MINING CORP. date and 10/9/15 P-85-dl TAGANITO amounts 10/9/15 P-85-dm MINING CORP. Unreadable BERONG NICKEL CORPORATION amounts Unreadable date and 10/9/15 P-85-dn amounts Unreadable date and 10/12/15 P-85-do amounts _ , (yJ I

DECISION Maxima Machineries, Inc. vs. Commissioner of Internal Revenue CTA Case No. 9838 Page 26 of73 Unreadable HINATUAN date, payor MINING details and 10112115 P-85-du BTN No. 8230 CORPORATION 7,048.00 amounts BTN No. 08266 BTN No. 08267 MARCVENTURES 16,040.00 Unreadable MINING AND 45,184.00 date, payor DEVELOPMENT 493,600.00 details and 26,248.00 10113/15 P-85-ee CORPORATION 6,144.00 amounts 31,384.00 MARCVENTURES 37,712.00 Unreadable 61,385.00 MINING AND date, payor 781,583.08 DEVELOPMENT details and 10113115 P-85-ef CORPORATION amounts Unreadable RIO TUBA date, payor NICKEL MINING details and 10113115 P-85-eg MLA No. 15152 CORP. amounts 10113115 P-85-el BTN No. 08236 10114115 P-85-ep CEBU No. 16740 TAGANITO Unreadable 10/16115 P-85-fb CEBU No. 16743 10116115 P-85-fc CEBU No. 16746 MINING CORP. date 10116115 P-85-fs MLA No. 15187 CARMEN Unreadable COPPER CORP. date CARMEN Unreadable COPPER CORP. date CARMEN Unreadable COPPER CORP. date FCF MINERALS Unreadable CORPORATION date Unreadable BERONG NICKEL date and 10119115 P-85-gg MLA No. 15201-02 CORPORATION amounts MLA No. 15294 BTN No. 08375 PHIL GOLD PROCESSING & Unreadable 41,510.69 date 10/19/15 P-85-gm REFINING CORP. MARCVENTURES MINING AND DEVELOPMENT Unreadable amounts 10/20/15 P-85-hb CORPORATION 5,384.00 Unreadable 10,672.00 date, payor 10/21/15 P-85-ij BTN No. 8383 PLATINUM details and GROUP METALS 1,584.00 amounts CORP. Unreadable date, payor CAGDIANAO details and amounts MINING 10/22/15 P-85-it BTN No. 8324 CORPORATION MLA No. 15228- PHIL GOLD 15229 PROCESSING & Unreadable MLA No. 15230 199,298.89 amounts 10/22/15 P-85-iz MLA No. 15233 REFINING CORP. PHIL GOLD PROCESSING & Unreadable amounts 10/22/15 P-85-ja REFINING CORP. 101,141.08 Unreadable 10/23/15 P-85-id 26,172.12 date FCF MINERALS Unreadable 25,744.00 date, payor CORPORATION 10,830.00 details and amounts 10/26/15 P-85-jh BTN No. 08328 TAGANITO Unreadable 10/27/15 P-85-ka MLA No. 15656 MINING CORP. date BTN No. 08332 FCF MINERALS CORPORATION BTN No. 08335 10/28/15 P-85-kh MLA No. 15662 CAGDIANAO Unreadable MINING 69,808.00 date CORPORATION 10/29/15 P-85-ks HINATUAN Unreadable 10/29/15 P-85-kv MINING 67,824.00 _l)ayor details CORPORATION 86,880.00 Unreadable RIO TUBA Cf!

DECISION Maxima Machineries, Inc. vs. Commissioner of Internal Revenue CTA Case No. 9838 Page 27 of73 NICKEL MINING date CORP. Unreadable TAGANITO MINING CORP. date and 10/30/15 P-85-lh BTN No. 08065 10,320.00 amounts 10/30/15 P-85-lm BTN No. 08345 TAGANITO 27,624.00 Unreadable MINING CORP. date, payor 14,208.00 details and 4,136.00 amounts 9,048.00 10/30/15 P-85-ls BTN No. 08051 TAGANITO 7,424.00 Unreadable BTN No. 08052 MINING CORP. 816.00 date, payor BTN No. 08053 5,168.00 details and BTN No. 08054 TAGANITO 3,552.00 amounts BTN No. 08055 MINING CORP. BTN No. 08056 36,064.00 Unreadable BTN No. 08057 TAGANITO 1,024.00 payor details BTN No. 08058 MINING CORP. 8,192.00 10/30/15 P-85-lt BTN No. 08059 2,584.00 and amounts BTN No. 08060 TAGANITO 10/30/15 P-85-lu BTN No. 08061 MINING CORP. 13,296.00 Unreadable BTN No. 08062 4,424.00 payor details BTN No. 08063 TAGANITO 14,208.00 and amounts BTN No. 08064 MINING CORP. 10/30/15 P-85-lv 263,904.00 Unreadable TAGANITO payor details MINING CORP. 285,550.00 and amounts 10/30/15 P-85-lw TAGANITO 120,736.00 Unreadable MINING CORP. 340,713.60 payor details and amounts TAGANITO MINING CORP. Unreadable payor details TAGANITO 10/30/15 P-85-lx MINING CORP. and amounts TAGANITO Unreadable MINING CORP. payor details 10/30/15 P-85-lv TAGANITO and amounts MINING CORP. 10/30/15 P-85-lz Unreadable TAGANITO payor details MINING CORP. and amounts 10/30/15 P-85-ma TAGANITO Unreadable MINING CORP. payor details and amounts TAGANITO MINING CORP. Unreadable payor details 10/30/15 P-85-mb and amounts 10/30/15 P-85-mc Unreadable payor details and amounts 10/30/15 P-85-md Unreadable payor details and amounts 10/30/15 P-85-me Unreadable payor details and amounts 10/30/15 P-85-mf Unreadable payor details and amounts CARMEN Unreadable COPPER CORP. date, payor details and 11/2/15 P-85-na CEBU No. 17349 amounts 11/2/15 P-85-nb CEBU No. 17350 CARMEN Unreadable COPPER CORP. date, payor details and I amounts Unreadable I 11/2/15 P-85-nc CEBU No. 17351 CARMEN date, payor I 11/2/15 P-85-nd CEBU No. 17352 COPPER CORP. details and CARMEN COPPER CORP. amounts Unreadable "" date, payor t1J

DECISION Maxima Machineries, Inc. vs. Commissioner of Internal Revenue CTA Case No. 9838 Page 28 of73 11/2/15 P-85-ne CEBU No. 17353 CARMEN 35,936.00 details and COPPER CORP. 36,224.00 amounts Unreadable CARMEN date, payor details and 11/2/15 P-85-nf CEBU No. 17354 COPPER CORP. amounts BTN No. 08411 Unreadable MLA No. 15637 date, payor BTN No. 08066 details and BTN No. 08414 amounts PLATINUM GROUP METALS Unreadable 11/2/15 P-85-ng CORP. 66,704.00 date 230,528.00 RIO TUBA 692,568.00 Unreadable NICKEL MINING date and 11/2/15 P-85-nh CORP. amounts Unreadable TAGANITO date and MINING CORP. 11/2/15 P-85-ni ADNAMA MINING amounts RESOURCES 11/3/15 P-85-ni INC. 2,312.00 Unreadable 45,376.00 date 11/3/15 P-85-nk CEBU No. 17355 CARMEN 32,912.00 Unreadable COPPER CORP. 32,912.00 date, payor 32,912.00 details and 11/3/15 P-85-nl CEBU No. 17356 CARMEN 32,912.00 amounts COPPER CORP. 45,376.00 Unreadable 45,376.00 date, payor 11/3/15 P-85-nm CEBU No. 17357 CARMEN 45,376.00 details and COPPER CORP. 45,376.00 amounts 45,376.00 Unreadable 11/3/15 P-85-nn CEBU No. 17358 CARMEN 95,216.00 date, payor COPPER CORP. details and amounts 11/3/15 P-85-no CEBU No. 17359 CARMEN Unreadable COPPER CORP. date, payor details and 11/3/15 P-85-np CEBU No. 17360 CARMEN amounts COPPER CORP. Unreadable date, payor 11/3/15 P-85-nq CEBU No. 17361 CARMEN details and COPPER CORP. amounts Unreadable 11/3/15 P-85-nr CEBU No. 17362 CARMEN date, payor COPPER CORP. details and amounts 11/3/15 P-85-ns CEBU No. 17363 CARMEN Unreadable COPPER CORP. date, payor details and 11/3/15 P-85-nt CEBU No. 17364 CARMEN amounts COPPER CORP. Unreadable date, payor 11/3/15 P-85-nu CEBU No. 17365 CARMEN details and COPPER CORP. amounts Unreadable date, payor details and amounts Unreadable date, payor details and amounts Unreadable date, payor details and amounts (J1

DECISION Maxima Machineries, Inc. vs. Commissioner of Internal Revenue CTA Case No. 9838 Page 29 of73 Unreadable date, payor CARMEN details and COPPER CORP. 11/3/15 P-85-nv CEBU No. 17366 95,216.00 amounts Unreadable date, payor CARMEN details and COPPER CORP. 11/3/15 P-85-nw CEBU No. 17367 95,216.00 amounts Unreadable date, payor CARMEN details and COPPER CORP. 11/3/15 P-85-nx CEBU No. 17368 95,216.00 amounts Unreadable date, payor CARMEN details and COPPER CORP. 11/3/15 P-85-ny CEBU No. 17369 11,233.60 amounts Unreadable date, payor CARMEN details and COPPER CORP. 11/3/15 P-85-nz CEBU No. 17370 95,216.00 amounts Unreadable date, payor CARMEN details and COPPER CORP. 11/3/15 P-85-oa CEBU No. 17371 95,216.00 amounts Unreadable date, payor CARMEN details and COPPER CORP. 11/3/15 P-85-ob CEBU No. 17372 89,912.00 amounts Unreadable date, payor CARMEN details and COPPER CORP. 11/3/15 P-85-oc CEBU No. 17373 41,136.00 amounts Unreadable date, payor CARMEN details and COPPER CORP. 11/3/15 P-85-od CEBU No. 17374 2,801.60 amounts BTN No. 08067 TAGANITO BTN No. 08068 MINING CORP. Unreadable CEBU No. 17375 CEBU No. 17376 TAGANITO payor details CEBU No. 17377 MINING CORP. 11/3/15 P-85-oi CEBU No. 17378 5,512.00 and amounts CEBU No. 17380 CARMEN COPPER CORP. Unreadable CARMEN date and COPPER CORP. 11/3/15 P-85-ok 38,296.00 amounts CARMEN COPPER CORP. Unreadable CARMEN COPPER CORP payor details 11/4/15 P-85-ol CARMEN 153,384.00 and amounts COPPER CORP. Unreadable payor details 11/4/15 P-85-om 16,416.00 and amounts Unreadable payor details 11/4/15 P-85-on 9,120.00 and amounts 11/4/15 P-85-oo Unreadable 9,120.00 date Unreadable date and 11/4/15 P-85-oq 9,120.00 _llayor details Unreadable date, payor CARMEN details and COPPER CORP. 11/4/15 P-85-or CEBU No. 17381 191,161.60 amounts I Unreadable date, payor CARMEN details and COPPER CORP. 11/4/15 P-85-os CEBU No. 17382 CARMEN 168,192.00 amounts _1_!t4t1L CEBU No. 17383 __c:oPPER CORP. Unreadable P-85-ot _-- 490,912.00 date, payor (Y1

DECISION Maxima Machineries, Inc. vs. Commissioner of Internal Revenue CTA Case No. 9838 Page 30 of73 details and amounts Unreadable date, payor CARMEN details and COPPER CORP. 11/4/15 P-85-ov CEBU No. 17385 CARMEN 9,120.00 amounts 11/4/15 P-85-pd CEBU No. 17393 COPPER CORP. 10,208.00 11/4/15 P-85-pm BTN No. 08418 CENTURY PEAK Unreadable 11/4/15 P-85-Q_n BTN No. 08419 CORPORATION 9,936.00 11/4/15 P-85-pw BTN No. 08070 CENTURY PEAK 6,384.00 date 11/4/15 P-85-px BTN No. 08071 CORPORATION 13,704.00 BTN No. 08074- TAGANITO 9,360.00 Unreadable MINING CORP. 08477 TAGANITO 322,200.00 date MINING CORP. BTN No. 08079 84,512.00 Unreadable TAGANITO BTN No. 08429 MINING CORP. date CEBU No. 17414 TAGANITO Unreadable CEBU No. 17419 MINING CORP. ADNAMA MINING amounts CEBU No. 17430 RESOURCES INC. Unreadable BTN No. 08069 CARMEN COPPER CORP. amounts BTN No. 08085 CARMEN Unreadable BTN No.08083 COPPER CORP. BTN No. 08084 date and CARMEN 11/5/15 P-85-qq BTN No. 08086 COPPER CORP. payor details HINATUAN BTN No. 08087 MINING Unreadable CORPORATION BTN No. 08089 CAGDIANAO date and MLA No. 15705 MINING 11/5/15 P-85-qr CORPORATION amounts TAGANITO Unreadable MINING CORP. 11/6/15 P-85-qs TAGANITO 26,224.00 date 11/6/15 P-85-Qu MINING CORP. 397,776.00 430,233.60 Unreadable TAGANITO MINING CORP. 14,600.00 date TAGANITO Unreadable MINING CORP. date and TAGANITO 11/6/15 P-85-qy MINING CORP. payor details FCF MINERALS CORPORATION Unreadable date and 11/6/15 P-85-qz payor details 11/6/15 P-85-ri Unreadable 30,320.00 payor details Unreadable 11/9/15 P-85-rn 53,936.00 payor details 3,552.00 2,584.00 Unreadable 113,920.00 date and 2,976.00 11/9/15 P-85-rq payor details 11/9/15 P-85-rr 92,872.00 125,372.51 Unreadable 9,296.00 date 7,424.00 Unreadable 2,048.00 date and 11/10/15 P-85-ru payor details Unreadable date and 11/10/15 P-85-rv payor details Unreadable date and 11/10/15 P-85-rw amounts 11/11/15 P-85-sd Unreadable date Unreadable date, payor TAGANITO details and MINING CORP. 11/11/15 P-85-sh BTN No. 08090 amounts Unreadable date, payor TAGANITO details and MINING CORP. 11/12/15 P-85-sj BTN No. 08078 TAGANITO amounts 11/12/15 P-85-sk BTN No. 08092 MINING CORP. Unreadable date, payor (!]

DECISION Maxima Machineries, Inc. vs. Commissioner of Internal Revenue CTA Case No. 9838 Page 31 of73 details and amounts Unreadable date, payor TAGANITO details and MINING CORP. 11/12/15 P-85-sl BTN No. 08093 16,128.00 amounts 11/13/15 P-85-sr CARMEN CEBU No. 17469 COPPER CORP. 9,120.00 Unreadable BTN No. 08095 HINATUAN 24,544.00 date and MINING BTN No. 08094 CORPORATION 12,640.00 payor details BTN No. 08096 TAGANITO 21,216.00 Unreadable BTN No. 08502 MINING CORP. 3,728.00 BTN No. 08099 date, payor BTN No. 08503 TAGANITO 19,136.00 BTN No. 08552 MINING CORP. 19,616.00 details and BTN No. 08553 TAGANITO 11/13/15 P-85-su BTN No. 08554 MINING CORP. 3,000.00 amounts TAGANITO 1,568.00 MINING CORP. 130,080.00 Unreadable TAGANITO MINING CORP. 287,824.00 date and TAGANITO 45,376.00 11/13/15 P-85-sv MINING CORP. 28,056.00 amounts TAGANITO MINING CORP. 29,824.00 Unreadable TAGANITO 76,160.00 MINING CORP. date and 11/13/15 P-85-sw amounts 11/14/15 P-85-sx 11/16/15 P-85-tm Unreadable 11/16/15 P-85-tn 11/17/15 P-85-tv date 11/17/15 P-85-tw 11/18/15 P-85-uc Unreadable amounts Unreadable date Unreadable amounts Unreadable amounts Unreadable date Unreadable date, payor TAGANITO details and MINING CORP. 11/18/15 P-85-ud BTN No. 08555 CARMEN amounts 11/20/15 P-85-ui CEBU No. 17494 COPPER CORP. 11/24/15 P-85-vl BTN No. 08482 CENTURY PEAK Unreadable CORPORATION BTN No. 08483 date MLA No. 10459 Unreadable MLA No. 16020 amounts BTN 08073 BTN No. 08562 Unreadable BTN No. 08486 CENTURY PEAK date and MLA No. 16066 11/24/15 P-85-vm CORPORATION amounts 11/25/15 P-85-vn BTN No. 08489 BTN No. 08490- FCF MINERALS Unreadable 08491 CORPORATION date PHIL. GOLD PROCESSING & Unreadable 5,274.12 amounts 11/25/15 P-85-vs REFINING CORP. TAGANITO MINING Unreadable date 11/25/15 P-85-vx CORPORATION 108,000.00 Unreadable 11/25/15 P-85-vy 192.00 date TAGANITO MINING CORP. MARCVENTURES MINING AND Unreadable DEVELOPMENT date and 11/26/15 P-85-ws CORPORATION 24,784.00 amounts 12/2/15 P-85-xv 37,480.00 FCF MINERALS Unreadable CORPORATION date MARCVENTURES MINING AND Unreadable DEVELOPMENT date and 12/3/15 P-85-yn CORPORATION 51,696.00 amounts 1,142,815.08 MARCVENTURES Unreadable MINING AND date and 12/4/15 P-85-zf DEVELOPMENT amounts - arJ

DECISION Maxima Machineries, Inc. vs. Commissioner of Internal Revenue CTA Case No. 9838 Page 32 of73 12/7/15 P-85-zp BTN No. 08567 CORPORATION 859,928.00 Unreadable date TAGANITO 20,080.00 Unreadable MINING CORP. 134,768.00 date, payor details and 12/9/15 P-85-aae MLA No. 16088 FCF MINERALS 39,888.00 amounts 12/9/15 P-85-aaj BTN No. 08572 CORPORATION 1,312.00 Unreadable 12/9/15 P-85-aak BTN No. 08574 TAGANITO date 12/9/15 P-85-aal BTN No. 08575 MINING CORP Unreadable BTN No. 08581 TAGANITO date BTN No. 08582 MINING CORP. Unreadable BTN No. 08583 TAGANITO date BTN No. 08586 MINING CORP. BTN No. 08587 CAGDIANAO Unreadable BTN No. 08589 MINING 12/10/15 P-85-aar CEBU No. 17883 CORPORATION 42,816.00 amounts 12/10/15 P-85-abf CEBU No. 17903 TAGANITO 8,784.00 BTN No. 08594 MINING CORP. Unreadable BTN No. 08595 44,545.60 TAGANITO 1,896.00 amounts CEBU No. 17576 MINING CORP. 4,264.00 CEBU No. 17904 TAGANITO 4,008.00 Unreadable CEBU No. 17907 MINING CORP. CEBU No. 17908 TAGANITO 88,488.00 date and MINING CORP. 273,744.00 12/10/15 P-85-abQ BTN No. 08634 TAGANITO 256,032.00 amounts 12/10/15 P-85-abi MINING CORP. 12/10/15 P-85-abj BTN No. 08635 CARMEN 2,824.00 Unreadable 12/11/15 P-85-abr COPPER CORP. 12/14/15 P-85-abw BTN No. 08636 CARMEN 14,917.00 date 12/15/15 P-85-acs COPPER CORP. 10,208.00 12/15/15 P-85-act BTN No. 08637 TAGANITO 43,920.00 Unreadable 12/15/15 P-85-acu MINING CORP. 27,720.00 BTN No. 08638 TAGANITO date MINING CORP. 8,368.00 Unreadable ADNAMA MINING 158,592.00 RESOURCES date INC. 9,520.00 CARMEN Unreadable COPPER CORP. 19,040.00 CARMEN date COPPER CORP. 19,040.00 CARMEN Unreadable COPPER CORP. date PLATINUM GROUP METALS Unreadable CORP. date PLATINUM GROUP METALS Unreadable CORP. date PLATINUM GROUP METALS Unreadable CORP. date, payor PLATINUM GROUP METALS details and CORP. 12/16/15 P-85-acy amounts 12/16/15 P-85-acz PLATINUM 12/16/15 P-85-adc GROUP METALS Unreadable 12/16/15 P-85-add CORP. date Unreadable date Unreadable date Unreadable date, payor details and 12/16/15 P-85-adf amounts Unreadable date, payor details and 12/16/15 P-85-adg amounts Unreadable date, payor details and 12/16/15 P-85-adh amounts Unreadable date, payor details and 12/16/15 P-85-adi amounts Unreadable date, payor details and 12/16/15 P-85-adj amounts ()41

DECISION Maxima Machineries, Inc. vs. Commissioner of Internal Revenue CTA Case No. 9838 Page 33 of73 Unreadable ADNAMA MINING date, payor RESOURCES INC. details and CARMEN 12/17/15 P-85-adk BTN No. 08640 COPPER CORP. 168,864.00 amounts 12/17/15 P-85-adl CEBU No. 17909 CARMEN 12,032.00 12/17/15 P-85-adt CEBU No. 17972 COPPER CORP. 60,480.00 Unreadable BTN No. 08599 HINATUAN MINING 129,536.00 date BTN No. 08654 CORPORATION 20,280.00 Unreadable BTN No. 08655 19,472.00 date BTN No. 08656 BTN No. 08657 11,056.00 Unreadable CEBU No. 17944 17,200.00 CEBU No. 17959 1,168,190.00 date and CEBU No. 17961 204,678.40 12/17/15 P-85-adw 320,028.80 amounts MLA No. 16433 CEBU No. 17971 76,440.90 Unreadable 72,852.80 CEBU 17134 CAGDIANAO 187,899.10 date, payor MLA No. 16172 MINING 20,411.00 BTN No. 08494 CORPORATION 441,888.00 details and MLA No. 16226 12/21/15 P-85-aea BTN No. 08642 2,521.00 amounts 15,560.00 MLA-15006 Unreadable BTN-8255 11,688.00 BTN-8372 CAGDIANAO 656.00 date, payor MINING CORPORATION 2,240.00 details and ~ 21,410,374.83 12/21/15 P-85-aeb amounts Unreadable CAGDIANAO date, payor MINING CORPORATION details and CAGDIANAO 12/21/15 P-85-aec MINING amounts CORPORATION CARMEN Unreadable COPPER CORP. CARMEN date and COPPER CORP. 12/21/15 P-85-aed CARMEN payor details 12/22/15 P-85-aeh COPPER CORP. 12/22/15 P-85-aew Unreadable 12/22/15 P-85-aey date Unreadable date Unreadable date Unreadable PHIL. GOLD date, payor PROCESSING & details and 12/22/15 P-85-afl REFINING CORP. amounts 12/23/15 P-85-afp CARMEN Unreadable COPPER CORP. date PHIL. ASS. SMELTING & Unreadable amounts 10/23/15 P-86-aq REF.CORP wu KONG SINGAPORE Unreadable date 12/9/15 P-86-cz PTE. LTD TAGANITO HPAL NICKEL Unreadable amounts 12/10/15 P-86-dd CORPORATION wu KONG SINGAPORE Unreadable date 12/11/15 P-86-dy PTE. LTD VISAYAS SLAKED LIME Unreadable amounts 12/21/15 P-86-eb CORP. JAMJLE PROPERTIES (SUBIC) AND DEVELOPMENT Unreadable date 10/2/15 P-87-a CORPORATION Unreadable SUBIC date CONSOLIDATED Unreadable date 10/8/15 P-87-f PROJECTS, INC. tf/ SUBIC CONSOLIDATED 10/20/15 P-87-n PROJECTS, INC. Subtotal- 3"' Quarter

DECISION Maxima Machineries, Inc. vs. Commissioner of Internal Revenue CTA Case No. 9838 Page 34 of73 4'" Quarter TAGANITO Unreadable date, payor 1/4/16 P-85-agv BTN No. 08658 MINING CORP. details and 1/4/16 P-85-agz BTN No. 08662 p 25,024.00 amounts 1/4/16 P-85-aha BTN No. 08663 TAGANITO Unreadable 1/4/16 P-85-ahc BTN No. 08666 4,224.00 date 1/4/16 P-85-ahd BTN No. 08667 MINING CORP. 1/4/16 P-85-ahe BTN No. 08668 Unreadable 1/4/16 P-85-ahf BTN No. 08669 TAGANITO 155,104.00 date 1/4/16 P-85-ahg BTN No. 08670 MINING CORP. Unreadable MLA No. 16378 83,512.00 date TAGANITO MLA No. 16383 Unreadable MINING CORP. 165,840.00 date MLA No. 16384 TAGANITO Unreadable MLA No. 16444 152,880.00 date CEBU 18022 MINING CORP. CEBU 18027 Unreadable CEBU 18028 TAGANITO 345,072.00 date CEBU 18029 CEBU 18030 MINING CORP. Unreadable CEBU 18032 3,176.00 date CEBU 18033 TAGANITO CEBU 18038 CEBU 18039 MINING CORP. CEBU 18040 CEBU 18066 TAGANITO CEBU No. 18009 MINING CORP. MLA No. 16387 PHIL GOLD MLA No. 16445-46 PROCESSING & Unreadable MLA No. 16447 9,660.02 amounts 1/5/16 P-85-ahl REFINING CORP. PHIL. GOLD PROCESSING & Unreadable 1,377.11 date 1/5/16 P-85-ahq REFINING CORP. PHIL. GOLD PROCESSING & Unreadable 766.58 date 1/5/16 P-85-ahr REFINING CORP. RIO TUBA NICKEL MINING Unreadable date 1/5/16 P-85-aht CORP. 204,384.00 Unreadable 1/6/16 P-85-aia 117,425.60 date 1/6/16 P-85-aif CARMEN Unreadable 1/6/16 P-85-aig 11 '136.00 date 1/6/16 P-85-aih COPPER CORP. 169,384.00 Unreadable 1/6/16 P-85-aii date 1/6/16 P-85-aik CARMEN 85,568.00 Unreadable 1/6/16 P-85-ail 17,064.00 date 1/6/16 P-85-aiq COPPER CORP. 90,872.00 Unreadable 1/6/16 P-85-air 90,872.00 date 1/6/16 P-85-ais CARMEN 31,264.00 Unreadable 1/6/16 P-85-aiu 285,550.00 date 1/6/16 P-85-aiv COPPER CORP. 33,296.00 Unreadable 483,840.00 date CARMEN 411,246.00 Unreadable date COPPER CORP. Unreadable date CARMEN Unreadable date COPPER CORP. Unreadable date CARMEN Unreadable date COPPER CORP. CARMEN COPPER CORP. CARMEN COPPER CORP. CARMEN COPPER CORP. CARMEN COPPER CORP. CARMEN COPPER CORP. CARMEN COPPER CORP. RIO TUBA NICKEL MINING Unreadable date 1/6/16 P-85-aiz CORP. 134,232.00 Unreadable date, payor 1/6/16 P-85-aja RIO TUBA 331,496.00 details and 1/6/16 P-85-ajb NICKEL MINING 870,35_2.00 amounts CORP. RIO TUBA - Unreadable NICKEL MINING (j_ate, _,[layor VW1

DECISION Maxima Machineries, Inc. vs. Commissioner of Internal Revenue CTA Case No. 9838 Page 35 of73 CORP. details and amounts Unreadable RIO TUBA date, payor NICKEL MINING details and 1/6/16 P-85-ajc MLA No. 16448-49 CORP. 456,792.00 amounts 316,728.00 Unreadable 66,840.00 RIO TUBA date, payor 105,968.00 NICKEL MINING details and 17,085.00 1/6/16 P-85-ajd MLA No. 16450 CORP. 84,822.40 amounts 1/6/16 P-85-ajg BTN No. 08675 85,568.00 1/7/16 P-85-ajm CEBU 18045 TAGANITO 48,018.93 Unreadable MINING CORP. 2,648.93 date 540.00 CARMEN Unreadable 25,904.00 COPPER CORP. date 167,864.00 Unreadable 14,073.71 ADNAMA MINING 32,800.00 date, payor RESOURCES INC. details and CARMEN 1/8/2016 P-85-akb CEBU No. 17631 COPPER CORP. amounts 1/8/16 P-85-akd CEBU 18053 CARMEN 1/12/16 P-85-aks CEBU 18075 COPPER CORP. Unreadable date Unreadable date Unreadable FCF MINERALS date and CORPORATION 1/12/16 P-85-ald MLA No. 16396 amounts Unreadable FCF MINERALS date and CORPORATION 1/12/16 P-85-ale MLA No. 16397 amounts Unreadable FCF MINERALS date and CORPORATION 1/12/16 P-85-alf MLA No. 16398 CARMEN amounts 1/13/16 P-85-alp_ CEBU 18093 COPPER CORP. Unreadable date Unreadable date, payor TAGANITO details and MINING CORP. 1/13/16 P-85-alz BTN No. 08679 amounts MLA No. 16400 Unreadable CEBU 18106 PHIL GOLD date, payor BTN No. 08695 PROCESSING & details and BTN 08758 1/14/16 P-85-amc CEBU 18127 REFINING CORP. amounts 1/15/16 P-85-ame CEBU 18128 BTN No. 08696 CARMEN Unreadable BTN No. 08697 CEBU 18176 COPPER CORP. date CEBU 18177 CEBU 18200 HINATUAN BTN No. 08699 MINING Unreadable 18,864.00 date 1/15/16 P-85-amx CORPORATION ADNAMA MINING RESOURCES Unreadable ' 1/18/2016 P-85-anb INC. 4,272.00 1/18/16 P-85-ane 32,800.00 date 1/18/16 P-85-anf 310,576.00 1/20/16 P-85-ann CARMEN Unreadable 1/21/16 P-85-anu 1,888.00 1/22/16 P-85-aoh COPPER CORP. 131,904.00 date 1/22/16 P-85-aoi 285,550.00 1/26/16 P-85-ape CARMEN 382,690.00 Unreadable 1/26/16 P-85-apr COPPER CORP. 85,568.00 date I 10,051,772.00 TAGANITO Unreadable MINING CORP. amounts I TAGANITO Unreadable MINING CORP. amounts CARMEN Unreadable COPPER CORP. date CARMEN Unreadable COPPER CORP. date CARMEN Unreadable COPPER CORP. date TAGANITO Unreadable MINING CORP. date, payor 01

DECISION Maxima Machineries, Inc. vs. Commissioner of Internal Revenue CTA Case No. 9838 Page 36 of73 1/27/16 P-85-apt CEBU 18225 CARMEN 218,752.00 details and 1/28/16 P-85-aqp CEBU No. 18254 COPPER CORP. 931.20 amounts 1/28/16 P-85-aqq CEBU No. 18256 CARMEN 931.20 Unreadable 1/29/16 P-85-arm CEBU No. 18267 COPPER CORP. date 2/2/16 P-85-asp_ CARMEN 251,840.00 Unreadable 2/4/16 P-85-atk BTN 08865 COPPER CORP. 6,984.00 date 2/5/16 P-85-atl BTN 08873 CARMEN Unreadable 2/9/16 P-85-aug CEBU No. 18316 COPPER CORP. 10,352.00 date 2/9/16 P-85-aul CEBU-18339 TAGANITO 10,955.20 Unreadable 2/12/16 P-85-awr CEBU-18345 MINING CORP. 492,208.00 date 2/12/16 P-85-axa CEBU-18378 TAGANITO 32,240.00 Unreadable CEBU-18387 MINING CORP. 100,032.00 date CARMEN 32,912.00 Unreadable BTN 08902 COPPER CORP. date CEBU-18427 CARMEN Unreadable CEBU-18428 COPPER CORP. date CEBU-18430 CARMEN Unreadable CEBU-18431 COPPER CORP. date CEBU 18484 CARMEN Unreadable CEBU 18485 COPPER CORP. date CEBU 18486 CARMEN Unreadable CEBU 18487 COPPER CORP. date CEBU 18488 PLATINUM Unreadable CEBU 18490 GROUP METALS date CEBU 18491 CORP. 2/16/2016 P-85-axu CEBU 18492 CARMEN 477,008.00 Unreadable CEBU 18493 COPPER CORP. 29,000.00 date 2/18/16 P-85-ayj CEBU 18494 CARMEN 85,568.00 Unreadable CEBU 18495 COPPER CORP. 85,568.00 date 2/18/16 P-85-ayk CEBU 18496 CARMEN 64,424.00 Unreadable CEBU 18497 COPPER CORP. 32,912.00 date 2/18/16 P-85-aym CEBU 18498 CARMEN 32,912.00 Unreadable CEBU 18499 COPPER CORP. 2,064.00 date 2/18/16 P-85-ayn CARMEN 32,912.00 Unreadable COPPER CORP. 32,912.00 date 2/20/16 P-85-baa CARMEN 32,912.00 Unreadable COPPER CORP. 32,912.00 date 2/20/16 P-85-bab CARMEN 32,912.00 Unreadable COPPER CORP. 32,912.00 date 2/20/16 P-85-bac CARMEN 32,912.00 Unreadable COPPER CORP. 32,912.00 date 2/20/16 P-85-bad CARMEN 32,912.00 Unreadable COPPER CORP. 32,912.00 date 2/20/16 P-85-bae CARMEN 32,912.00 Unreadable COPPER CORP. 32,912.00 date 2/20/16 P-85-bag CARMEN Unreadable COPPER CORP. date 2/20/16 P-85-bah CARMEN Unreadable COPPER CORP. date 2/20/16 P-85-bai CARMEN Unreadable COPPER CORP. date 2/20/16 P-85-bai CARMEN Unreadable COPPER CORP. date 2/20/16 P-85-bak CARMEN Unreadable COPPER CORP date 2/20/16 P-85-bal CARMEN Unreadable COPPER CORP. date 2/20/16 P-85-bam CARMEN Unreadable COPPER CORP. date 2/20/16 P-85-ban CARMEN Unreadable COPPER CORP. date 2/20/16 P-85-bao CARMEN Unreadable COPPER CORP. date 2/20/16 P-85-bap Unreadable date, payor (j]

DECISION Maxima Machineries, Inc. vs. Commissioner of Internal Revenue CTA Case No. 9838 Page 37 of73 CARMEN details and amounts 2/20/16 P-85-baq CEBU 18500 COPPER CORP. 32,912.00 Unreadable 3/3/16 P-85-bdp BTN No. 08825 168.00 date 3/7/16 P-85-bdx CEBU No. 18833 TAGANITO Unreadable 3/8/16 P-85-bee 65,816.00 amounts BTN 08997 MINING CORP. 4,768.00 Unreadable MLA 0017463 date CEBU No. 19001 CARMEN 25,592.00 Unreadable CEBU No. 19015 1,440.00 date COPPER CORP. DV04418 30,736.00 TAGANITO DV04419 8,976.00 MINING CORP. DV04420 11,056.00 DVO 4426 RIO TUBA 152,064.44 NICKEL MINING 1,296.00 Unreadable date 3/10/16 P-85-bfz CORP. 33,432.00 Unreadable 3/16/16 P-85-bgs ,. 19,776,948.32 date 3/18/16 P-85-bhi CARMEN ,. 41,187,323.15 Unreadable date COPPER CORP. CARMEN COPPER CORP. MARCVENTURES MINING AND Unreadable DEVELOPMENT date and 3/18/16 P-85-bhm CORPORATION payor details MARCVENTURES MINING AND Unreadable DEVELOPMENT date and 3/18/16 P-85-bhn CORPORATION payor details MARCVENTURES Unreadable MINING AND date, payor DEVELOPMENT details and 3/18/16 P-85-bho CORPORATION amounts 3/21/16 P-85-bhy PLATINUM GROUP METALS Unreadable amounts CORP. Unreadable date, payor TAGANITO details and amounts 3/23/16 P-85-bir DVO 04435 MINING CORP. Subtotal- 41� Quarter Total - Sale of goods supported by VAT Invoices but with unreadable details 2) Sale of oods supported by incomplete documents 3"' Quarter TAGANITO ,p,.. Incomplete supporting 10/2/15 P-85-ad BTN No. 08183-85 MINING CORP. 165,532.00 documents Subtotal- 3"' Quarter 165,532.00 165,532.00 Total- Sale of goods supported by incomplete documents 3) Sale of oods to enti y without 801 certification 4'h Quarter Buyer of ,,,... goods without BTN No. CARRAS CAL NICKEL BOI 1/7/16 P-85-ajy_ 08742 CORP. - 24,552.00 certification 24,552.00 Subtotal- 41� Quarter 24,552.00 Total - Sale of goods to entity without BOI certification Total Zero-rated Sales Disall()wed by the Court ,. 41,377~07.15 - �- - Thus, the total disallowances in petitioner's reported total zero- rated sales as per the Court's verification are as follows: ~

DECISION Maxima Machineries, Inc. vs. Commissioner of lntemal Revenue CTA Case No. 9838 Page 38 of73 Disallowances per Court's 3rd Quarter 4th Quarter Total further verification Sale of services to non-resident I" 66,920,636.01 I" 41,636,870.97 I" 108,557,506.98 client not qualified for VAT zero- rating under Sec. 108(8)(2) of 21,410,374.83 19,776,948.32 41,187,323.15 the NIRC of 1997, as amended 165,532.00 165,532.00 - 24,552.00 Sale of goods supported by - VAT invoices but with 24,552.00 ~ 149,934,914.13 unreadable details (date, payor ~ 88,496,542.84 ~ 61 ,438,371.29 details, or amount) Sale of goods supported by incomplete documents Sale of goods to entity without BOI certification Total disallowances per Court's verification In sum, out of the reported zero-rated sales of t-742,641,360.36, only the amount of t-449,639,675.65 shall be considered as valid zero-rated sales for the 3'd and 4th quarters of FY ending March 31, 2016, detailed below: 3rd Quarter 4th Quarter Total Total Reported Zero-rated Sales p 396,978,672.96 I" 345,662,687.40 I" 742,641,360.36 Less: Sales denied of VAT zero- 76,267,086.04 66,799,684.54 ratina .. 88,496,542.84 . 61,438,371.29 Per ICPA Report 232,215,044.08 217,424,631.57 143,066,770.58 Per Court's further verification . 149,934,914.13 Valid Zero-rated Sales 449,63~,675.~ Petitioner incurred/paid taxes attributable to zero-rated sales Having found that petitioner had valid VAT zero-rated sales in the total amount of P449,639,675.65 for the 3'd and 4th quarters of FY ending March 31, 2016, the Court shall proceed to determine whether petitioner complied with the requisites pertaining to the input VAT being claimed for refund or issuance of a tax credit certificate. For the 3'd and 4th quarters of FY ending March 31, 2016, petitioner reflected a total amount ofP172,726,014.12 allowable input VAT arising from its amortization of input VAT on purchases of capital goods exceeding P1 million, domestic purchases and importation of goods other than capital goods, and domestic purchases of services, (/1/ detailed as follows:

DECISION Maxima Machineries, Inc. vs. Commissioner of Internal Revenue CTA Case No. 9838 Page 39 of73 Input tax as per Amended 3"' Quarter 4'" Quarter Consolidated Quarterly VAT Returns Less: Input Tax on Purchases of Capital Goods exceeding 1M deferred for succeeding period (Line p Input tax as per subject 3rd Quarter 4th Quarter Total claim44 172,726,014.12 Total current input tax for the ~ 65,308,243.64 p 107,417,770.48 p current quarter 45,034,894.23 Less: 9,407,909.06 35,626,985.17 66,082.65 Input tax directly 8,230.31 57,852.34 55,542,460.86 attributable to VATable 2,788,162.91 sale of machineries from 23,719,153.52 31,823,307.34 current purchases 69,294,413.47 Input tax directly 975,489.41 1,812,673.50 attributable to 31197,461.34 38,096,952.13 government sales from current purchases Input tax directly attributable on current purchases not sold within the quarter Input tax directly attributable to zero-rated sales of machineries from current purchases Current input tax available for allocation Total input tax allocable to 8,917,818.84 9,615,458.75 18,533,277.59 zero-rated sales 975,489.41 1,812,673.50 2, 788,162.91 Add: Input tax directly attributable to zero-rated sales of machineries from current ~urchases C1'( 44 Application for Refund/TCC, Exhibit "P-34", CTA Docket, Vol. I, p. 52-88. '

DECISION Maxima Machineries, Inc. vs. Commissioner of Internal Revenue CTA Case No. 9838 Page 40 of73 Input tax directly attributable to zero-rated sales of machineries and spare parts which were imported in prior years but sold during the quarter .. .. 3,944,928.22 6,873,408.21 10,818,336.43 32,139,776.93 Total input tax claimed for 13,838,236.47 .. 18,301,540.46 refund/ issuance of TCC In support of its total reported input VAT of ~172,726,014.12, petitioner offered in evidence various sales invoices, ORs, Import Entry and Internal Revenue Declarations {IEIRDs), Statement of Settlement of Duties and Taxes (SSDTs}, Bureau of Customs (BOC) ORs and other related documents, 45 which were examined by the ICPA. Summarized below are petitioner's input VAT for the 3rd and 4th quarters of FY ending March 31, 2016, in the total amount of P172, 726,014.13: Particulars 3rd Quarter 4th Quarter Total 1) Input tax on current quarter's importation .. directly related to VATable . 9,407,909.06 . 35,626,985.17 45,034,894.23 sale of machineries in the 975,489.42 1,812,673.50 2,788,162.92 same quarter 23,719,153.52 31,823,307.34 55,542,460.86 2) Input tax on the 24,890,562.00 27,045,652.00 51,936,214.00 importations in the current 6,119,914.04 10,913,937.16 17,033,851.20 195,215.60 quarter directly related to 195,215.32 ' 31,205,691.64 38,154,804.48 zero-rated sale of 390,430.92 ' machineries in the same I quarter 69,360,496.12 3) Input tax on current purchase of machineries not sold within the quarter 4) Common input tax allocable between VATAble and zero-rated sales a) Input tax on current quarter's importations b) Input tax on current quarter's domestic purchases c) Input tax on capital goods exceeding P1 Million amortized for the period Subtotal - Common input tax allocable between VA Table sales 45 Exhibits "P-58" to "P-68" for current period importation of machineries; Exhibits "P-69" to "P-81" for domestic purchase of goods other than capital goods and domestic purchase of services; Exhibits "P-82" to "P-84" for prior period importation of machineries but sold during the taxable quarter. ~

DECISION Maxima Machineries, Inc. vs. Commissioner of Internal Revenue CTA Case No. 9838 Page 41 of73 and zero-rated sales Total Input Taxes for the Period _ _ _ _ _ _ _ L_~_ 65,308,243.64 ~ _1_07,417,I70.49 ~ 1]2,726,014.13 Out of the input VAT amounting to P172,726,014.12, input taxes in the total amount of P69,360,496.12 are considered allocable between VATable sales and zero-rated sales. Upon examination of the said documents, the ICPA noted exceptions in the total amount of P64, 132,726.65, as summarized below, which shall be disallowed for failure to meet the substantiation and invoicing requirements under Sections 11 O(A), 113(A) and (8), and 237 of the NIRC of 1997, as amended, in relation to Sections 4.110-1, 4.110-2, 4.110-8, and 4.113-1 of RR No. 16-05, as amended: Exhibit Exceptions 3rd Quarter 4th Quarter Total No. 1) Input tax on current quarter's importation of spare parts not directly attributable to VATable sales and VAT zero-rated sales Supported by IEIRDsiSADs and SSDTs and traced to E2M schedule [but with no Certification from authorized agent bank (AAB) as to payment of P-63 taxes) ~22,141,311.00 ~ 22,933,838.00 ~ 45,075,149.00 Supported by IEIRDs/SADs and traced to E2M schedule [but with no SSDT and P-64 Certification from AAB] 6,471.00 - 6,471.00 Supported by SSDTs and traced to E2M schedule [with no IEIRDsiSAD - 18,531.00 18,531.00 P-65 submitted] Not supported by IEIRDs/SAD and SSDTs and not traced to E2M P-66 schedule - 26,276.00 26,276.00 Supported by IEIRDs/SAD, and SSDT and traced to E2M but dated in the prior quarters falling in the same P-67 taxable year 2,742,780.00 2,501,314.00 5,244,094.00 Supported by IEIRDs/SAD ' and traced to E2M but dated in the prior quarters not I falling in the same taxable - 1,565,693.00 1,565,693.00 I P-68 year Total - Input tax on current quarter's importation of spare parts not directly I attributable to VA Table sales and VAT zero-rated sale ~ 24,890,562.00 ~ 27,045,652.00 ~ 51,936,214.00 2) Input tax on domestic purchases of goods other than capital goods and domestic purchase of services o'l \

DECISION Maxima Machineries, Inc. vs. Commissioner of Internal Revenue CTA Case No. 9838 Page 42 of73 Domestic purchase of goods properly supported by VAT Invoice/purchase of services properly supported by VAT OR, that are issued in the name of the Petitioner with the Petitioner's complete TIN, address, business style, and with valid ATP but are dated in the prior quarter falling in the same taxable P-70 year I" 51,614.76 I" 40,478.93 I" 92,093.69 P-71 Domestic purchase of goods P-72 P-73 properly supported by VAT P-74 P-75 Invoice/purchase of services P-76 P-77 properly supported by VAT P-78 OR, that are issued in the name of the Petitioner with the Petitioner's complete TIN, address, and with valid ATP but without business style 820,151.67 1,389,727.51 2,209,879.18 Domestic purchase of goods not properly supported by VAT Invoice/purchase of services not properly supported by VAT OR 1,024,517.35 298,065.08 1,322,582.43 Domestic purchase of goods supported by VAT Invoice/purchase of services supported by VAT OR but not dated within the same taxable year or dated in the subsequent quarter 226,719.76 380,806.74 607,526.50 Domestic purchase of goods supported by VAT Invoice/purchase of services supported by VAT OR but without date 6,374.46 1,360.06 7,734.52 Domestic purchase of goods supported by VAT Invoice/purchase of services supported by VAT OR without valid Authority to Print (ATP) 18,994.73 52,761.41 71,756.14 Domestic purchase of goods supported by VAT Invoice/purchase of services supported by VAT OR with missing and/or incorrect Company name 54,035.06 87,843.69 141,878.75 Domestic purchase of goods supported by VAT Invoice/purchase of services supported by VAT OR with missing and/or incorrect TIN 332,054.14 381,989.07 714,043.21 Domestic purchase of goods supported by VAT Invoice/purchase of services supported by VAT OR with missing and/or incorrect registered address 43,977.58 62,192.40 106,169.98 ()(!

DECISION Maxima Machineries, Inc. vs. Commissioner of Internal Revenue CTA Case No. 9838 Page 43 of73 Domestic purchase of goods supported by VAT Invoice/purchase of services supported by 'JAT OR with a note "This document is not valid for claiming input P-79 taxes" 34,159.80 87,480.04 121,639.84 I 558.42 40.57 598.991 Domestic purchase of 1,606,152.17 5,194,457.25 6,800,609.421 services with claimed input P-80 VAT on exempt transactions Domestic purchases without supporting lnvoices/ORs P-81 presented Total - Input tax on domestic purchases of goods other than capital goods and domestic purchase of I setVices '" 4,219,309.90 '" 7,977,202.75 '" 12,196,512.65 '"29, 109,871.90 Total common i11put taxes '" 35,022,854.75 '" 64,132,726.65 disallowed per ICPA findings Moreover, upon further verification, the Court disallows the following input VAT on domestic purchase of goods and purchase of capital goods exceeding P1 Million in the total amount of P2, 146,736.49 for failure to comply with invoicing requirements, as follows: Date Exhibit No. Supplier Input VAT 3rd Quarter 4th Quarter 1) Input VAT on domestic purchase of goods/services supported by VAT Invoice/OR wherein the VAT amount is not separately/properly indicated ONG, SALVE L. (MAPULANG LUPA HARDWARE & CONSTRUCTION 10/15/15 P-69-ae SUPPLIES) '" 11.25 10/20/15 P-69-aj INVISION MARKETING 122.14 WIDE WIDE WORLD EXPRESS 10/12/15 P-69-eu CORPORATION 369.60 MATATAG CARGO 10/22/15 P-69-ga LOGISTICS CORP 62,481.30 QUEEN DIESEL 10/22/15 P-69-gd TRONICS INC. 6,071.26 DY TEBAN HARDWARE AUTO SUPPLY(DY TEBAN TRADING 10/26/15 P-69-gm INCORPORATED) 325.71 SYNERGY GLOBAL LOGISTICS SOLUTION 10/29/15 INC 2,411.61 SYNERGY GLOBAL LOGISTICS SOLUTION 10/29/15 INC 65.28 SYNERGY GLOBAL LOGISTICS SOLUTION 10/29/15 INC 1,263.04 SYNERGY GLOBAL LOGISTICS SOLUTION 10/29/15 INC 2,042.80 SYNERGY GLOBAL 10/29/15_ - P-69-hn _'-LOGISTIC�_ SOLUT!Qt!_- 2,310.71 Cll

DECISION Maxima Machineries, Inc. vs. Commissioner of Internal Revenue CTA Case No. 9838 Page 44 of73 INC 10/29/15 SYNERGY GLOBAL 2,314.14 10/29/15 LOGISTICS SOLUTION 2,313.30 10/29/15 INC 2,309.69 10/29/15 SYNERGY GLOBAL 3,795.33 10/29/15 LOGISTICS SOLUTION 1,372.40 INC SYNERGY GLOBAL LOGISTICS SOLUTION INC SYNERGY GLOBAL LOGISTICS SOLUTION INC SYNERGY GLOBAL LOGISTICS SOLUTION INC 10/29/15 P-69-ho TOYOTA BUTUAN CITY 885.95 10/29/15 P-69-hq U BIX CORPORATION 2,291.64 10/29/15 P-69-hu 1,052.49 11/5/15 WIDE WIDE WORLD 11/5/15 P-69-ik 645.12 11/5/15 P-69-il EXPRESS 360.00 11/5/15 P-69-io 564.00 . 11/5/15 P-69-iq CORPORATION 11/5/15 6o.oo I 11/5/15 P-69-ix AIRTROPOLIS 564.oo I 11/5/15 P-69-kw 11/5/15 P-69-lz CONSOLIDATOR PHILS I 11/5/15 P-69-mt 11/5/15 INC 2,460.00 96.75 11/16/15 AIRTROPOLIS 11/24/15 28,484.43 11/26/15 CONSOLIDATOR PHILS 708.00 11/26/15 653.37 INC 420.00 AIRTROPOLIS 95.20 4,664.60 CONSOLIDATOR PHILS 385.71 INC 564.00 AIRTROPOLIS CONSOLIDATOR PHILS INC AIRTROPOLIS CONSOLIDATOR PHILS INC AIRTROPOLIS CONSOLIDATOR PHILS INC FEDERAL EXPRESS PACIFIC INC FIVESTAR CARGO SERVICES INC SEA WORTH INTERNATIONAL FREIGHT INC SEA WORTH INTERNATIONAL FREIGHT INC SEA WORTH INTERNATIONAL FREIGHT INC GONDA, VICTORIA D. (VILLA VICTORIA HOTEL VICTORIA CUCCINA AND CATERING) EDSA SHANGRI-LA MANILA ALLEGIANCE CARGO ADVANTAGE INC SEA WORTH INTERNATIONAL FREIGHT INC 11/26/15 P-69-nk SEA WORTH - - 708.QQ_ (11

DECISION Maxima Machineries, Inc. vs. Commissioner of Internal Revenue CTA Case No. 9838 Page 45 of73 INTERNATIONAL FREIGHT INC SEA WORTH INTERNATIONAL 11/26/15 FREIGHT INC 420.00 11/26/15 SEA WORTH 644.44 11/26/15 INTERNATIONAL 420.00 11/26/15 FREIGHT INC 708.00 11/27/15 SEA WORTH 535.71 12/3/15 INTERNATIONAL 1,038.38 12/7/15 139.29 12/9/15 FREIGHT INC 31.43 12/9/15 64.18 12/9/15 SEA WORTH 266.98 INTERNATIONAL FREIGHT INC MANILA TOLL EXPRESSWAY P-69-nr SYSTEMS INC P-69-or WIDE WIDE WORLD P-69-pa P-69.:Jll EXPRESS P-69.:E_k P-69-pl CORPORATION LANE S TRIPLE AND J FLOWCOR INC GLOBE TELECOM INC GLOBE TELECOM INC GLOBE TELECOM INC 12/9/15 P-69-om GLOBE TELECOM INC 192.75 12/10/15 P-69-pu 5,892.86 12/17/15 GBB TECH ELECTRO 12/17/15 P-69-qw 646.96 12/17/15 P-69-uc MECHANICAL AND DEV 708.00 12/17/15 P-69-ui 420.00 12/17/15 P-69-ui INC 480.00 12/17/15 P-69-um 708.00 2/2/16 P-69-ur SEA WORTH 420.00 2/5/16 P-69-xt 2/6/16 P-69-yq INTERNATIONAL ~ 2/9/16 2/10/16 FREIGHT INC 3/14/16 1/4/16 SEA WORTH INTERNATIONAL FREIGHT INC SEA WORTH INTERNATIONAL FREIGHT INC SEA WORTH INTERNATIONAL FREIGHT INC SEA WORTH INTERNATIONAL FREIGHT INC SEA WORTH INTERNATIONAL FREIGHT INC ONG, JESTER JUDE A. (LADRIANO ENTERPRISES) 3,294.64 9.11 STRONGHOLD 150 00 HARDWARE 102.83 INDU FLEX MARKETING 81.96 AND AUTO SUPPLY 187.50 GAISANO SUPERSTORE ()1 (BUTUAN CITY BRANCH) VERACRUZ AUTOPARTS AND HARDWARE ONG, FREDERICK (NEW EXTENSIVE AUTO SUPPLY) LA PLANTA HOTEL AND

DECISION Maxima Machineries, Inc. vs. Commissioner of Internal Revenue CTA Case No. 9838 Page 46 of73 RESTAURANT INC 332.14 CAPARROSO, SIMEON 101.79 1,875.00 C. (BASIC ROOMS 525.62 1/7/16 P-69-zg HOTEL) 19.93 1/14/16 P-69-aar UNITY PRINTING 6,365.83 146.83 PHILIPPINES INC 657.60 1/15/16 P-69-aaw GLOBE TELECOM INC 2,507.14 1/15/16 P-69-abb 12,590.36 1/26/16 P-69-acf MAAYO SHIPPING, 1/27/16 P-69-aco 60.00 P-69-acr INCORPORATED 156.00 1/28/16 P-69-acx 60.00 1/28/16 P-69-adf MARl LAG BUSINESS 641.88 1/28/16 1,224.06 2/4/16 P-69-aeb AND INDUSTRIAL 6,047.74 2/4/16 P-69-aei 636.00 2/4/16 P-69-aem SERVICES INC 60.00 2/4/16 P-69-aeo 564.00 2/4/16 PHILTRANCO SERVICE 60.00 2/4/16 1,309.62 2/4/16 ENTERPRISES INC 8,205.90 2/4/16 72,673.24 2/4/16 CENTER FOR 2,609.35 2/4/16 2/4/16 RELIABILTY (Jfi 2/4/16 2/4/16 EXCELLENCE I 2/4/16 2/4/16 LABORATORIES CO I NAV PHILIPPINES CORP TDS AIRCONDITIONING INDUSTRIES INC AIRTROPOLIS CONSOLIDATOR PHILS INC AIRTROPOLIS CONSOLIDATOR PHILS INC AIRTROPOLIS CONSOLIDATOR PHILS INC AIRTROPOLIS CONSOLIDATOR PHILS INC AIRTROPOLIS CONSOLIDATOR PHILS INC AIRTROPOLIS CONSOLIDATOR PHILS INC AIRTROPOLIS CONSOLIDATOR PHILS INC AIRTROPOLIS CONSOLIDATOR PHILS INC AIRTROPOLIS CONSOLIDATOR PHILS INC AIRTROPOLIS CONSOLIDATOR PHILS INC AIRTROPOLIS CONSOLIDATOR PHILS INC AIRTROPOLIS CONSOLIDATOR PHILS INC MATATAG CARGO LOGISTICS CORP WIDE WIDE WORLD EXPRESS CORPORATION WIDE WIDE WORLD

DECISION Maxima Machineries, Inc. vs. Commissioner of Internal Revenue CTA Case No. 9838 EXPRESS 630.52 CORPORATION 2/18/16 P-69-aQv GLOBE TELECOM INC 212.65 2/29/16 P-69-aiq GLOBE TELECOM INC 53.46 3/3/16 113.57 3/3/16 P-69-ajd F2 GLOBAL LOGISTICS 876.00 3/3/16 223.46 3/3/16 P-69-aje INC 2,139.68 3/3/16 P-69-ajk 112.86 3/3/16 P-69-alf F2 GLOBAL LOGISTICS 960.00 3/3/16 P-69-alh 1.803.95 3/3/16 P-69-alk INC 1,057.68 3/3/16 P-69-alm 2.139.68 3/3/16 P-69-amb F2 GLOBAL LOGISTICS 430.20 3/10/16 P-69-ami 1.420. 78 3/10/16 P-69-aml INC 959.42 3/10/16 F2 GLOBAL LOGISTICS 7,985.04 3/10/16 INC 1,560.00 3/15/16 225.00 F2 GLOBAL LOGISTICS 3/17/16 15,803.57 INC 3/17/16 17,132.14 F2 GLOBAL LOGISTICS INC F2 GLOBAL LOGISTICS INC F2 GLOBAL LOGISTICS INC F2 GLOBAL LOGISTICS INC MATATAG CARGO LOGISTICS CORP LBC EXPRESS INC LBC EXPRESS INC MARl LAG BUSINESS AND INDUSTRIAL SERVICES INC OLIVARES, RODEL H. (RHOTECH PEST MANAGEMENT) QUEEN MARGARETTE HOTEL INC CACQUINO, MARIE JERZEN D. (CANDOUR TRANSPORT SERVICES) CORE SOLUTIONS AND NETWORK INFRASTRUCTURE INC 3/22/16 P-69-anm LBC EXPRESS, INC. 162.32 3/23/16 P-69-anw SYNERGY GLOBAL 6,802.84 3/23/16 P-69-anx 321.43 3/28/16 P-69-aod LOGISTICS SOLUTION 6,321.43 INC TOYOTA DAVAO CITY INC MATATAG CARGO LOGISTICS CORP 3/31/16 P-69-aom JITS CORPORATION 396.00 193,099.75 Total - Input VAT on domestic purchase of . . 148,979.80 goods/services supported by VAT Invoice/OR wherein the VAT amount is not separatelv!propertv indicated 2) Input VAT on domestic purchase of goods/services supported by VAT Invoice/OR wherein indicated TIN is incorrect, incomplete or unreadable GOLDEN BAT FAR EAST 10/9/15 P-69-q INC p 3,610.71 u FREIGHT 12/1/15 P-69-ob PHILIPPINES INC 164.64 u FREIGHT 12/1/15 P-69-oc PHILIPPINES INC 164.64 ()'1

DECISION Maxima Machineries, Inc. vs. Commissioner of Internal Revenue CTA Case No. 9838 Page 48 of73 1/14/16 P-69-sj STRONGHOLD I" 77.68 HARDWARE 1/28/16 P-69-acq BAY S INN 139.29 LIFTING AND HEAVY EQUIPMENT SAFETY 3/17/16 P-69-amq SPECIALIST 4,285.71 Total - Input VAT on domestic purchase of goods/services supported by VAT Invoice/OR wherein indicated TIN is incorrect. incomplete or unreadable I" 3,939.99 P 4,502.68 3) Input VAT on domestic purchase of goods/services supported by VAT Invoice/OR with unreadable details (date, payor details and amounts) DY, DICKY C. (NEW 1/21/16 P-69-sz MILLENNIUM TRADING) P 500.36 BCM PHOENIX FUELS 2/3/16 P-69-ud LIFE GAS STATION 8.04 IGNACIO LUCAS AND 2/3/16 P-69-ue SONS INC 107.14 2/23/16 P-69-wd ACE HARDWARE PHILS 7.47 1/6/16 P-69-yv 519.34 1/14/16 P-69-aap PHILIPPINE PORT 186.98 AUTHORITY PHILIPPINE PORTS AUTHORITY 2/5/16 P-69-aep BETHEL GUEST HOUSE 450.00 2/11/16 P-69-afm AIRTROPOLIS 725.92 2/11/16 CONSOLIDATOR PHILS 720.00 2/11/16 INC 735.53 2/11/16 AIRTROPOLIS 7,066.12 2/11/16 CONSOLIDATOR PHILS 60.00 2/11/16 INC 2/11/16 AIRTROPOLIS 636.00 2/11/16 CONSOLIDATOR PHILS 178.99 2/11/16 INC 1,162.37' 2/11/16 AIRTROPOLIS 4,480.16 1 2/11/16 CONSOLIDATOR PHILS INC I AIRTROPOLIS CONSOLIDATOR PHILS 716.97 INC AIRTROPOLIS I CONSOLIDATOR PHILS INC 4,283.06 J AIRTROPOLIS CONSOLIDATOR PHILS INC AIRTROPOLIS CONSOLIDATOR PHILS INC AIRTROPOLIS CONSOLIDATOR PHILS INC AIRTROPOLIS CONSOLIDATOR PHILS INC AIRTROPOLIS CONSOLIDATOR PHILS INC 2/11/16 P-69-afn CWCOLE INC. 21.43 I 2/11/16 P-69-afp F2 GLOBAL LOGISTICS 828.27 2/11/16 INC F2 GLOBAL LOGISTICS 251.84 INC ~

DECISION Maxima Machineries, Inc. vs. Commissioner of Internal Revenue CTA Case No. 9838 Page 49 of73 F2 GLOBAL LOGISTICS 2/11/16 INC 222.18 F2 GLOBAL LOGISTICS 2/11/16 INC 1,900.72 ANA MARGARITA LUSTRE MALl JAN 2/25/16 P-69-aig (HOLIDAY SUITES) 265.18 Total - Input VAT on domestic purchase of goods/services supported by VAT Invoice/OR with - '" unreadable details (date, payor details and amounts) 26,034.07 4) Input VAT on domestic purchase of goods/services supported by VAT Invoice/OR where either there is no indicated business style or the indicated business style is incorrect or incomplete ONG, JESTER JUDE A. (LADRIANO 10/6/15 P-69-k ENTERPRISES) p 321.43 GOTRAVEL 11/5/15 P-69-is PHILIPPINES INC 171.43 11/5/15 P-69-iu LBC EXPRESS INC 1,915.07 11/6/15 P-69-iy GLOBE TELECOM INC 290.43 11/6/15 P-69-ia GLOBE TELECOM INC 64.18 11/10/15 P-69-jn DUN AND BRADSTREET 180.00 11/12/15 P-69-js PHILS INC 3,405.86 CARPIO BELLO LAW OFFICES 11/12/15 P-69-jt CASALE' ANNE 2,464.29 11/12/15 P-69-ju ENGAUGEMENTINC 10,000.00 11/12/15 P-69-iv 18,642.86 11/12/15 GIGANTIC DOODLES 11/12/15 P-69-kd 344.34 P-69-ke AND SKETCHES INC 302.30 11/12/15 P-69-kf P-69-kn TRANSCONTAINER TCL 1,171.56 11/12/15 P-69-ko 11/13/15 P-69-kp PHILIPPINES INC 3,785.04 11/13/15 P-69-kq 6,841.68 11/13/15 P-69-li TRANSCONTAINER TCL 11/13/15 P-69-lj 222.53 P-69-lq PHILIPPINES INC 4,339.20 11/20/15 P-69-lr 3,059.76 WIDE WIDE WORLD 11/20/15 1,559.65 11/20/15 EXPRESS 72,321.43 11/20/15 CORPORATION 42.86 WIDE WIDE WORLD 1,350.00 EXPRESS CORPORATION IN NOVE COMMUNICATIONS INC IN NOVE COMMUNICATIONS INC IN NOVE COMMUNICATIONS INC IN NOVE COMMUNICATIONS INC CHARTER PING AN INSURANCE CORPORATION CONTAINER JOCKEY TRANSPORTER TRUCKING COMPANY GOTRAVEL PHILIPPINES INC HIGH POWER ENGINEERING SERVICES 11/25/15 P-69-mi GLOBE TELECOM INC 835.61 11/25/15 P-69-mj GLOBE TELECOM INC 192.75 11/25/15 P-69-mk GLOBE TELECOM INC &' 1 '

DECISION Maxima Machineries, Inc. vs. Commissioner of Internal Revenue CTA Case No. 9838 Page 50 of73 11/25/15 P-69-mn IN NOVE 53.46 P-69-mw COMMUNICATIONS INC 3,667.92 11/26/15 P-69-no CHARTER PING AN 11/26/15 P-69-og INSURANCE 720.47 12/3/15 P-69-ok CORPORATION 2,280.00 12/3/15 P-69-ot 12/4/15 P-69-ps U BIX CORPORATION 9.60 12/10/15 P-69-pt 1,607.14 12/10/15 P-69-pv 2GO EXPRESS INC 12/10/15 P-69-pw 37.80 12/10/15 P-69-qh CARPIO BELLO LAW 5,059.52 12/15/15 P-69-qy 10,000.00 12/18/15 P-69-rc OFFICES P-69-rd 235.71 12/21/15 P-69-rf DHL EXPRESS 85.71 12/21/15 P-69-ri PHILIPPINES CORP 385.50 12/22/15 P-69-rj 385.50 P-69-rk ENGAUGEMENT INC 12/28/15 P-69-rl 3,107.14 ENGAUGEMENT INC 12/28/15 GOTRAVEL 6,589.29 PHILIPPINES INC 3,667.92 12/28/15 GOTRAVEL PHILIPPINES INC 432.00 12/28/15 GLOBE TELECOM INC 60.00 12/28/15 GLOBE TELECOM INC 564.00 12/28/15 PRIMAVERA, NANETH 189.10 12/28/15 (PRIMAVERA 636.00 12/28/15 12/28/15 ENTERPRISES) 60.00 12/28/15 12/28/15 PRIMAVERA, NANETH 636.00 (PRIMAVERA 417.42 512.40 ENTERPRISES) 21.43 IN NOVE 85.72 COMMUNICATIONS INC AIRTROPOLIS CONSOLIDATOR PHILS INC AIRTROPOLIS CONSOLIDATOR PHILS INC AIRTROPOLIS CONSOLIDATOR PHILS INC AIRTROPOLIS CONSOLIDATOR PHILS INC AIRTROPOLIS CONSOLIDATOR PHILS INC AIRTROPOLIS CONSOLIDATOR PHILS INC AIRTROPOLIS CONSOLIDATOR PHILS INC AIRTROPOLIS CONSOLIDATOR PHILS INC ASIAN ENGINE REBUILDERS INC GOTRAVEL PHILIPPINES INC GOTRAVEL PHILIPPINES INC C1'\

DECISION Maxima Machineries, Inc. vs. Commissioner of Internal Revenue CTA Case No. 9838 Page 51 of73 12/29/15 P-69-rr GLOBE TELECOM INC 276.17 1/14/16 P-69-sh ONG, JESTER JUDE A. 1/28/16 P-69-tq 1/29/16 P-69-tu (LADRIANO 2/18/16 P-69-vr 2/19/16 P-69-vx ENTERPRISES) p 1,553.57 2/22/16 P-69-wb 1/7/16 P-69-zi SEE LEE ALFONSO 1/7/16 P-69-zi 1/7/16 P-69-zk (KIMSAN TRADING) 952.07 1/7/16 P-69-zl 1/7/16 P-69-zn YU NELSON L. (NEY 1/7/16 P-69-zo 1/8/16 P-69-zu SHELL STATION) 214.28 1/11/16 P-69-aab 1/14/16 P-69-aak LEGARDA HARDWARE 1/15/16 P-69-aau 1/15/16 P-69-aav INC 112.50 1/15/16 P-69-aax 1/20/16 P-69-abi DYNZTER BUSINESS 1/20/16 P-69-abj 1/20/16 P-69-abk CENTER INC 827.68 1/21/16 P-69-abq CD R KING 1/21/16 P-69-abt 1/25/16 P-69-aca GENMERCHANDISE 13.93 1/27/16 P-69-acn 1/28/16 P-69-acv GOTRAVEL 1/28/16 P-69-acw PHILIPPINES INC 64.29 1/28/16 P-69-acv GOTRAVEL 1/28/16 P-69-acz PHILIPPINES INC 85.72 GOTRAVEL PHILIPPINES INC 214.29 IN NOVE COMMUNICATIONS INC 3,102.66 IN NOVE COMMUNICATIONS INC 6,841.68 IN NOVE COMMUNICATIONS INC 225.65 PHILIPPINE PORTS AUTHORITY 667.21 PHILIPPINE PORTS AUTHORITY 810.19 ENGAUGEMENT INC 10,000.00 GLOBE TELECOM INC 193.82 GLOBE TELECOM INC 64.18 GLOBE TELECOM INC 192.75 GLOBE TELECOM INC 192.75 GLOBE TELECOM INC 674.31 IN NOVE COMMUNICATIONS INC 3,667.92 BSM HEAVY EQUIPMENT TECHNICAL SERVICES INC 2,400.00 21.43 GOTRAVEL 3,117.18 PHILIPPINES INC 49,175.66 IN NOVE ! COMMUNICATIONS INC 192.86 IN NOVE 1,907.14 1 COMMUNICATIONS INC ! GOTRAVEL 1,285.71 PHILIPPINES INC 6,280.621 GTS TRAVEL AND c1) TOURS TRANSPORT INC MAPLE LEAF MOVERS INC MARl LAG BUSINESS AND INDUSTRIAL SERVICES INC

DECISION Maxima Machineries, Inc. vs. Commissioner of Internal Revenue CTA Case No. 9838 Page 52 of73 MOL LOGISTICS 1/28/16 P-69-ada PHILIPPINES INC 3,362.24 192.75 2/2/16 P-69-adr GLOBE TELECOM INC 53.46 128.58 2/2/16 P-69-ads GLOBE TELECOM INC 2/4/16 P-69-aef GOTRAVEL 507.91 PHILIPPINES INC 10,000.00 2/5/16 P-69-aet WIDE WIDE WORLD EXPRESS 342.86 CORPORATION 128.58 2/11/16 P-69-afo ENGAUGEMENT INC 64.18 2/11/16 P-69-afs GOTRAVEL 209.34 2/11/16 P-69-aft PHILIPPINES INC GOTRAVEL 636.00 PHILIPPINES INC 60.00 2/16/16 P-69-agh GLOBE TELECOM INC 564.00 2/16/16 P-69-agi GLOBE TELECOM INC 2/18/16 P-69-ago AIRTROPOLIS 746.67 2/18/16 CONSOLIDATOR PHILS 2/18/16 INC 2,810.43 2/18/16 AIRTROPOLIS 2/18/16 CONSOLIDATOR PHILS I 2/18/16 INC 2/18/16 AIRTROPOLIS 240.00 2/18/16 CONSOLIDATOR PHILS 2/18/16 INC 69.99 2/18/16 AIRTROPOLIS 2/18/16 CONSOLIDATOR PHILS 751.74 2/18/16 INC 2/18/16 AIRTROPOLIS 4,149.45 2/18/16 CONSOLIDATOR PHILS 2/18/16 INC 803.63 AIRTROPOLIS CONSOLIDATOR PHILS 2,867.43 INC AIRTROPOLIS 780.08 CONSOLIDATOR PHILS INC 4,825.26 AIRTROPOLIS CONSOLIDATOR PHILS 108.00 INC 802.82 AIRTROPOLIS CONSOLIDATOR PHILS C'l INC AIRTROPOLIS CONSOLIDATOR PHILS INC AIRTROPOLIS CONSOLIDATOR PHILS INC AIRTROPOLIS CONSOLIDATOR PHILS INC AIRTROPOLIS CONSOLIDATOR PHILS INC AIRTROPOLIS CONSOLIDATOR PHILS INC AIRTROPOLIS CONSOLIDATOR PHILS

DECISION Maxima Machineries, Inc. vs. Commissioner of Internal Revenue CTA Case No. 9838 Page 53 of73 2/18/16 INC 2,615.87 192.75 AIRTROPOLIS 192.75 CONSOLIDATOR PHILS 321.43 INC 321.43 208.81 2/18/16 P-69-agw GLOBE TELECOM INC 331.46 792.94 2/18/16 P-69-agx GLOBE TELECOM INC 870.02 2/18/16 P-69-aov GLOBE TELECOM INC 3,188.79 350.46 2/18/16 P-69-agz GLOBE TELECOM INC 432.00 98.15 2/18/16 P-69-aha GLOBE TELECOM INC 60.00 643.26 2/24/16 P-69-ahx GLOBE TELECOM INC 829.08 2/26/16 P-69-aih AIRTROPOLIS 564.00 2/26/16 CONSOLIDATOR PHILS 60.00 2/26/16 INC 240.00 2/26/16 AIRTROPOLIS 60.00 2/26/16 CONSOLIDATOR PHILS 2/26/16 INC 1,293.33 2/26/16 AIRTROPOLIS 8,132.06 2/26/16 CONSOLIDATOR PHILS 2/26/16 INC "636.00 2/26/16 AIRTROPOLIS 2/26/16 CONSOLIDATOR PHILS lJ'1 2/26/16 INC 2/26/16 AIRTROPOLIS 2/26/16 CONSOLIDATOR PHILS 2/26/16 INC 2/26/16 AIRTROPOLIS 2/26/16 CONSOLIDAlOR PHILS INC AIRTROPOLIS CONSOLIDATOR PHILS INC AIRTROPOLIS CONSOLIDATOR PHILS INC AIRTROPOLIS CONSOLIDATOR PHILS INC AIRTROPOLIS CONSOLIDATOR PHILS INC AIRTROPOLIS CONSOLIDATOR PHILS INC AIRTROPOLIS CONSOLIDATOR PHILS INC AIRTROPOLIS CONSOLIDATOR PHILS INC AIRTROPOLIS CONSOLIDATOR PHILS INC AIRTROPOLIS CONSOLIDATOR PHILS INC AIRTROPOLIS CONSOLIDATOR PHILS INC AIRTROPOLIS

DECISION Maxima Machineries, Inc. vs. Commissioner of Internal Revenue CTA Case No. 9838 Page 54 of73 2/26/16 P-69-air CONSOLIDATOR PHILS 1,235.22 2/26/16 P-69-ais INC 2/26/16 P-69-ait AIRTROPOLIS 2,898.00 2/26/16 P-69-aiu CONSOLIDATOR PHILS 742.02 2/26/16 INC 984.18 2/26/16 P-69-aiz AIRTROPOLIS 2/26/16 CONSOLIDATOR PHILS 1,272.57 2/26/16 INC 3,870.30 2/26/16 AIRTROPOLIS 2/26/16 CONSOLIDATOR PHILS 779.39 2/26/16 INC 2,742.57 2/26/16 AIRTROPOLIS 2/29/16 CONSOLIDATOR PHILS 741.96 2/29/16 INC 3,431.43 2/29/16 AIRTROPOLIS 2/29/16 CONSOLIDATOR PHILS I 3/3/16 INC 3/3/16 AIRTROPOLIS 240.00 3/3/16 CONSOLIDATOR PHILS 60.00 3/3/16 INC I 3/3/16 AIRTROPOLIS 677.32 3/3/16 CONSOLIDATOR PHILS 4,339.20 3/3/16 INC 6,841.68 AIRTROPOLIS 3,135.66 CONSOLIDATOR PHILS 6,536.28 INC AIRTROPOLIS 636.00 CONSOLIDATOR PHILS 60.00 INC AIRTROPOLIS 1,055.85 CONSOLIDATOR PHILS 7,703.46 INC AIRTROPOLIS 802.17 CONSOLIDATOR PHILS 5,766.65 INC AIRTROPOLIS 011 CONSOLIDATOR PHILS INC IN NOVE COMMUNICATIONS INC IN NOVE COMMUNICATIONS INC IN NOVE COMMUNICATIONS INC IN NOVE COMMUNICATIONS INC AIRTROPOLIS CONSOLIDATOR PHILS INC AIRTROPOLIS CONSOLIDATOR PHILS INC AIRTROPOLIS CONSOLIDATOR PHILS INC AIRTROPOLIS CONSOLIDATOR PHILS INC AIRTROPOLIS CONSOLIDATOR PHILS INC AIRTROPOLIS CONSOLIDATOR PHILS INC AIRTROPOLIS

DECISION Maxima Machineries, Inc. vs. Commissioner of Internal Revenue CTA Case No. 9838 Page 55 of73 3/3/16 CONSOLIDATOR PHILS 844.48 INC PHILS 3/3/16 AIRTROPOLIS PHILS 2,201.18 CONSOLIDATOR PHILS 432.00 3/3/16 INC PHILS 60.00 AIRTROPOLIS PHILS 3/3/16 CONSOLIDATOR 1,152.78 P-69-ajf INC 2,898.00 3/3/16 P-69-ajQ AIRTROPOLIS 3/3/16 P-69-ajh CONSOLIDATOR 42.86 3/3/16 P-69-aji INC 85.72 3/3/16 AIRTROPOLIS 107.14 3/3/16 CONSOLIDATOR 85.71 INC AIRTROPOLIS CONSOLIDATOR INC GOTRAVEL PHILIPPINES INC GOTRAVEL PHILIPPINES INC GOTRAVEL PHILIPPINES INC GOTRAVEL PHILIPPINES INC 3/4/16 P-69-ajy GLOBE TELECOM INC 64.18 3/10/16 P-69-akw GLOBE TELECOM INC 337.48 3/10/16 P-69-akx GLOBE TELECOM INC 235.02 3/10/16 P-69-akv GOTRAVEL 85.71 3/10/16 P-69-akz PHILIPPINES INC 21.43 GOTRAVEL 3/17/16 P-69-amj PHILIPPINES INC 68,571.43 CONTAINER JOCKEY TRANSPORTER TRUCKING COMPANY 3/18/16 P-69-amz GLOBE TELECOM INC 192.86 3/18/16 P-69-ana GLOBE TELECOM INC 321.43 3/18/16 P-69-anb GLOBE TELECOM INC 195.43 3/18/16 P-69-anc GLOBE TELECOM INC 192.75 3/18/16 P-69-and GLOBE TELECOM INC 208.27 3/18/16 P-69-ane GLOBE TELECOM INC 208.27 3/23/16 P-69-ant GOTRAVEL 128.58 PHILIPPINES INC 3/31/16 P-69-aok GOTRAVEL 85.72 PHILIPPINES INC 175,607.18 tt 288,002.38 - Total Input VAT on domestic purchase of goods/services supported by VAT Invoice/OR where either there is no indicated business style or the indicated business style is incorrect or incomplete tt 5) Input VAT on domestic purchase of goods/services supported by VAT Invoice/OR where the business address is incorrect, incomplete, or unreadable CHAN, GONZALO JR. MAGNO (PAWA 11110115 P-69-bu ENTERPRISES) p 1,746.43 ONG, JESTER JUDE A. 11117115 P-69-cr (LADRIANO _ -- - - ~8.1_1_ rr �--� '

DECISION Maxima Machineries, Inc. vs. Commissioner of lntemal Revenue CTA Case No. 9838 Page 56 of73 ENTERPRISES) ECLIPSE SOUND 11/20/15 P-69-cu INNOVATION 128.60 11/24/15 P-69-da 610.71 11/27/15 P-69-di ART IN BLOOM HOUSE 1,907.14 10/15/15 P-69-fb 10/15/15 P-69-fg OF DECOR COMPANY L 42.86 10/15/15 P-69-fh 53.64 CHAN, GONZALO JR 35,334.96 MAGNO (PAWA ENTERPRISES) GOTRAVEL PHILIPPINES INC PGA SOMPO INSURANCE CORPORATION WIDE WIDE WORLD EXPRESS CORPORATION 10/22/15 P-69-fs 2GO EXPRESS INC 985.40 10/24/15 P-69-Qk PGA SOMPO I 10/28/15 P-69-gr 10/29/15 P-69-hc INSURANCE 10,548.59 10/29/15 P-69-hf 192.86 10/29/15 P-69-hg CORPORATION 9.60 I 10/29/15 P-69-hh 107.15 I 11/5/15 P-69-ip BAYS INN 64.29 85.72 FEDERAL EXPRESS 20,066.74 PACIFIC INC GOTRAVEL PHILIPPINES INC GOTRAVEL PHILIPPINES INC GOTRAVEL PHILIPPINES INC FIVESTAR CARGO SERVICES INC 11/6/15 P-69-iz GLOBE TELECOM INC 17.23 11/20/15 P-69-im 8,121.53 P-69-ls FIVESTAR CARGO 11/20/15 P-69-mq 2,142.86 P-69-mv SERVICES INC 11/26/15 P-69-my 300.60 P-69-mz LIFTING AND HEAVY 11/26/15 P-69-nc 27,642.86 11/26/15 P-69-nd EQUIPMENT SAFETY 306.75 11/26/15 107.14 11/26/15 P-69-nl SPECIALIST 11/26/15 17,526.25 AIRTROPOLIS 62,750.76 11/26/15 CONSOLIDATOR PHILS 2,388.30 11/26/15 INC 1,479.76 11/26/15 11/26/15 CACQUINO, MARIE 3,303.13 2,671.39 JERZEN D. (CANDOUR TRANSPORT SERVICESl FEDERAL EXPRESS PACiFIC INC GOTRAVEL PHILIPPINES INC MATATAG CARGO LOGISTICS CORP MATATAG CARGO LOGISTICS CORP SYNERGY GLOBAL LOGISTICS SOLUTION INC SYNERGY GLOBAL LOGISTICS SOLUTION INC SYNERGY GLOBAL LOGISTICS SOLUTION INC SYNERGY GLOBAL LOGISTICS SOLUTION en

DECISION Maxima Machineries, Inc. vs. Commissioner of Internal Revenue CTA Case No. 9838 Page 57 of73 INC 11/27/15 P-69-nt STARWOOD HOTEL 364.28 11/27/15 P-69-nv TOYOTA DAVAO CITY 4,851.74 12/1/15 P-69-nw INC 12/3/15 257.14 P-69-oo DOD HABITAT INC 8,742.70 12/3/15 1,211.54 12/9/15 P-69-op MARl lAG BUSINESS 5,061.13 12/9/15 P-69-ph 1,669.45 AND INDUSTRIAL 12/15/15 P-69-pq 649.88 SERVICES INC 430.06 12/16/15 P-69-qi 1,153.28 SYNERGY GLOBAL 12/17/15 P-69-qk p LOGISTICS SOLUTION 1/14/16 P-69-qu 1/19/16 INC 1/21/16 P-69-si 1/25/16 P-69-sr BAUAN INTERNATIONAL 1/26/16 1/26/16 P-69-ta PORT INC 1/27/16 P-69-tf P-69-ti WIDE WIDE WORLD P-69-tj P-69-tl EXPRESS CORPORATION PEOPLES AIR CARGO AND WAREHOUSING CO INC PEOPLES AIR CARGO AND WAREHOUSING CO INC PEOPLES AIR CARGO AND WAREHOUSING CO INC SANTIAGO, MA. CORAZON D. (CORS ENTERPRISES) 2,346.43 327.54 DY, DICKY C. (NEW 48.21 MILLENNIUM TRADING) 1,111.29 GAUDIA, OLIVIA V. 767.14 675.00 (DINLYS INDUSTRIAL 1,015.80 SALES) 93.75 DY, DICKY C. (NEW 62.14 MILLENNIUM TRADING) 3,535.71 47.73 DY, DICKY C. (NEW 4,934.41 MILLENNIUM TRADING) 4,891.66 MESINA, SUSAN F. (SKM 5,357.14 INDUSTRIAL SALES) 289.29 225.00 DY, DICKY C. (NEW Owl MILLENNIUM TRADING) 2/7/16 P-69-uk RT TAN ENTERPRISES 2/10/16 P-69-uo 2/11/16 P-69-us CHONA S. JOSE 2/16/16 P-69-vi (PINTURAMA PAINT DEPOT) ADVANCE MICROSYSTEMS CORPORATION DY, DICKY C. (NEW MILLENNIUM TRADING) 2/17/16 P-69-vn ITS SCIENCE PHILS INC 2/17/16 P-69-vq WORLD BEST 2/23/16 P-69-we INDUSTRIAL SALES INC 2/24/16 P-69-wh 2/27/16 P-69-wn DELOS REYES, 3/2/16 P-69-wu ANTHONY B. (ADR GENSET TRADING) ONG, JESTER JUDE A. (LADRIANO ENTERPRISES) KEN TOOL HARDWARE CORPORATION CALOOCAN STANDARD

DECISION 12,632.14 Maxima Machineries, Inc. vs. Commissioner of Internal Revenue 857.14 CTA Case No. 9838 Page 58 of73 3,535.71 184.11 INC 11,250.00 3/3/16 P-69-wx JT OIL PHILS INC 321.43 3/4/16 P-69-wz ADVANCE 3/4/16 P-69-xc MICROSYSTEMS 1,523.04 3/9/16 P-69-xj CORPORATION 1,522.96 3/9/16 P-69-xk DY, DICKY C. (NEW 2,484.23 3/14/16 P-69-xv MILLENNIUM TRADING) 3/15/16 P-69-xy ONG, JESTER JUDE A. 241.07 3/15/16 P-69-xz (LADRIANO 246.43 3/16/16 P-69-yc ENTERPRISES) 3,535.71 3/16/16 P-69-Je ONG, JESTER JUDE A. 31,379.20 3/17/16 P-69-yl (LADRIANO 37,304.72 1/6/16 P-69-yr ENTERPRISES) 226.61 1/14/16 P-69-aan TDS AIRCONDITIONING 37,486.80 1/14/16 P-69-aao INDUSTRIES INC 139.29 1/14/16 P-69-aas 1/28/16 P-69-acp FLEETSERV INC 91.07 233.57 2/3/16 P-69-adx FLEETSERV INC 15,096.26 2/10/16 P-69-afk 305.87 2/11/16 P-69-aty DY, DICKY C. (NEW 10,171.96 2/11/16 P-69-afz 131.25 2/11/16 P-69-aga MILLENNIUM TRADING) 4,987.12 2/11/16 P-69-agc 8,222.07 2/18/16 P-69-ahh KESCO INDUSTRIAL 2/24/16 P-69-ahz ~ 2/24/16 P-69-aia SALES CORP ONG, JESTER JUDE A. (LADRIANO ENTERPRISES) BAUAN INTERNATIONAL PORT INC PGA SOMPO INSURANCE CORPORATION PGA SOMPO INSURANCE CORPORATION WIDE WIDE WORLD EXPRESS CORPORATION BAYS INN GONDA, VICTORIA D. (VILLA VICTORIA HOTEL VICTORIA CUCCINA AND CATERING) RICELAND INN I AND REAL ESTATE LESSOR PGA SOMPO INSURANCE CORPORATION PGA SOMPO INSURANCE CORPORATION PGA SOMPO INSURANCE CORPORATION RAMIREZ, ROILAN F. s (RLR TRAVELER HOTEL) WHITEKNIGHT SECURITY AGENCY CORPORATION PGA SOMPO INSURANCE CORPORATION PGA SOMPO

DECISION Maxima Machineries, Inc. vs. Commissioner of Internal Revenue CTA Case No. 9838 Page 59 of73 INSURANCE 7,079.66 CORPORATION 202.96 430.47 MOL LOGISTICS 199.33 144.61 2/26/16 PHILIPPINES INC 149.76 2/26/16 2/26/16 MOL LOGISTICS 95.00 2/26/16 2/26/16 PHILIPPINES INC 1,067.14 3/3/16 MOL LOGISTICS 3/3/16 PHILIPPINES INC MOL LOGISTICS PHILIPPINES INC MOL LOGISTICS P-69-ail PHILIPPINES INC P-69-aim P-69-ajv PGA SOMPO INSURANCE CORPORATION UNIVERSAL CITY SAFETY RESOURCES CORP 3/17/16 P-69-amm ENGAUGEMENT INC 10,000.00 3/17/16 MOL LOGISTICS PHILIPPINES INC 438.51 3/17/16 MOL LOGISTICS PHILIPPINES INC 208.74 3/17/16 MOL LOGISTICS PHILIPPINES INC 205.53 3/17/16 MOL LOGISTICS PHILIPPINES INC 126.06 MOL LOGISTICS 3/17/16 PHILIPPINES INC 242.37 MOL LOGISTICS 3/17/16 P-69-amr PHILIPPINES INC 283.85 WHITEKNIGHT SECURITY AGENCY 3/17/16 P-69-amx CORPORATION 4,390.83 BAY AN TELECOMMUNICATIONS 3/21/16 P-69-ank INC 1,392.72 CHARTER PING AN INSURANCE 3/23/16 P-69-&np CORPORATION 3,868.80 CHARTER PING AN INSURANCE 3/23/16 P-69-<mq CORPORATION 94.25 MANILA GOLF AND 3/29/16 P-69-aof COUNTRY CLUB INC 2,034.64 CHARTER PING AN INSURANCE 3/31/16 P-69-aoi CORPORATION 615.88 PGA SOMPO INSURANCE 3/31/16 P-69-aoo CORPORATION 6,365.54 Total - Input VAT on domestic purchase of goods/services supported by VAT Invoice/OR where the '" '" business address is incorrect, incomplete, or unreadable 249,474.65 225,232.66 6) Input VAT on domestic purchase of goods/services supported by VAT Invoice/OR where ATP details are not indicated and/or unreadable AEROPHONE 2/11/16 P-69-ut ENTERPRISES AND CO p 107.14 Total - Input VAT on domestic purchase of goods/services supported by VAT Invoice/OR where - '" A TP details are not indicated 107.14 7) Input VAT on domestic purchase of goods/services with no valid VAT Invoice/OR l _U._ 11/27/15 1 P-69-nu - STARWOOD HOTE_L_ 128.57 ~-

DECISION Maxima Machineries, Inc. vs. Commissioner of Internal Revenue CTA Case No. 9838 Page 60 of73 PRIMAVERA, NANETH 3/10/16 P-69-alo (PRIMAVERA ENTERPRISES) p 12,214.29 Total - Input VAT on domestic purchase of goods/services with no supporting documents p 128.57 p 12,214.29 8) Input VAT on domestic purchase of goods/services supported by a document with "NOT VALID FOR CLAIMING INPUT TAXES" remark DONALYN L. BUSTAMANTE (JASDEL 10/26/15 P-69-ao AUTO SUPPLY) p 148.93 Total - Input VAT on domestic purchase of goods/services supported by a document with "NOT p - VALID FOR CLAIMING INPUT TAXES" remark 148.93 9}1nput VAT on domestic purchase of service supported by VAT Invoice 11/11/15 P-69-ca UNICORN SAFETY p 375.00 GLASS Total - Input VAT on domestic purchase of service p 375.00 - supported by VAT Invoice 10) Input VAT on domestic purchase of goods/services supported by VAT Invoice/OR where name of supplier is not indicated PGA SOMPO INSURANCE p 17,924.38 3/17/16 P-69-amu CORPORATION Total - Input VAT on domestk; purchase of goods/services supported by VAT Invoice/OR where I name of sutJRiier is not indicated - p 17,924.38 11) Input VAT on domestic purchase of goods/services supported by VAT Invoice/OR where amount of VATable sale is not presented ONG, JESTER JUDE A. 11/11/15 P-69-bz (LADRIANO p 535.71 ENTERPRISES) ONG, JESTER JUDE A. (LADRIANO 11/16/15 P-69-cm ENTERPRISES) 4,821.43 ONG, JESTER JUDE A. (LADRIANO 12/7/15 P-69-dv ENTERPRISES) 5,675.57 WIDE WIDE WORLD EXPRESS 10/5/15 P-69-ea CORPORATION 477.60 WIDE WIDE WORLD 10/5/15 P-69-eb EXPRESS CORPORATION 1,669.15 10/8/15 P-69-ek PHILIPPINE PORTS AUTHORITY 211.10 PHILIPPINE PORTS 10/8/15 P-69-el AUTHORITY 238.98 ISABELA ZEN HOTEL 10/15/15 P-69-fc AND RETAU RANT CORP 385.71 10/15/15 P-69-fe MINVETS SECURITY INC 472.90 10/16/15 P-69-fk 257.14 LA ELLIANA HOTEL AND 10/22/15 P-69-fz 8,636.93 RESTAURANT INC MARl LAG BUSINESS AND INDUSTRIAL SERVICES INC 10/22/15 P-69-gb MINVETS SECURITY INC 472.90 10/22/15 P-69-QC 259.48 10/28/15 P-69-gw PHILIPPINE PORTS 131.95 10/28/15 P-69-gx 223.58 AUTHORITY PHILIPPINE PORTS AUTHORITY PHILIPPINE PORTS AUTHORITY 10/29/15 P-69-hd FIVESTAR CARGO ~

DECISION Maxima Machineries, Inc. vs. Commissioner of Internal Revenue CTA Case No. 9838 Page 61 of73 SERVICES INC PORTS 25,051.60 62.32 11/4/15 P-69-ih PHILIPPINE AUTHORITY 11/6/15 P-69-jc MINVETS SECURITY INC 346.56 11/6/15 P-69-jd 1'162.12 11/6/15 P-69-je PHILIPPINE PORTS 11/6/15 P-69-jf 216.29 AUTHORITY 872.51 11/10/15 P-69-jq PHILIPPINE PORTS 316.07 AUTHORITY PHILIPPINE PORTS AUTHORITY THE MARGARETTE BUSINESS HOTEL (ERLINDA D. CURAN) 11/12/15 P-69-ir BAYS INN 192.86 11/12/15 P-69-jz MARl LAG BUSINESS 8,315.44 11/16/15 P-69-kx 472.90 11/20/15 P-69-ln AND INDUSTRIAL 11/25/15 P-69-mf 16,298.30 SERVICES INC 192.75 MINVETS SECURITY INC FIVESTAR CARGO SERVICES INC GLOBE TELECOM INC 11/25/15 P-69-mQ GLOBE TELECOM INC 192.75 11/25/15 P-69-mh GLOBE TELECOM INC 321.43 11/26/15 P-69-nf MINVETS SECURITY INC 472.90 UNIVERSAL CITY SAFETY RESOURCES 11/26/15 P-69-np CORP 1,067.14 THE MARGARETTE BUSINESS HOTEL 12/1/15 P-69-~z (ERLINDA D. CURAN) 316.07 AIRTROPOLIS CONSOLIDATOR PHILS 12/3/15 INC 636.00 AIRTROPOLIS CONSOLIDATOR PHILS 12/3/15 INC 60.00 AIRTROPOLIS 12/3/15 CONSOLIDATOR PHILS ' INC 884.48 AIRTROPOLIS CONSOLIDATOR PHILS 12/3/15 INC 4,593.23 I AIRTROPOLIS CONSOLIDATOR PHILS 12/3/15 INC 680.59 AIRTROPOLIS I CONSOLIDATOR PHILS 12/3/15 INC 1,534.35 AIRTROPOLIS CONSOLIDATOR PHILS 12/3/15 INC 636.781 AIRTROPOLIS CONSOLIDATOR PHILS 12/3/15 INC 60.00 I AIRTROPOLIS I CONSOLIDATOR PHILS 12/3/15 INC 1,376.65 AIRTROPOLIS 12/3/15 P-69-oh CONSOLIDATOR _pHILS_ 2,898.00 I - ~

DECISION Maxima Machineries, Inc. vs. Commissioner of Internal Revenue CTA Case No. 9838 Page 62 of73 INC 12/3/15 P-69-oi CARGOHAUS INC 910.06 WIDE WIDE WORLD EXPRESS 12/3/15 P-69-oq CORPORATION 2,977.27 MAAYO SHIPPING, 12/4/15 P-69-ov INCORPORATED 8.00 PHILIPPINE PORTS 12/4/15 P-69-ow AUTHORITY 302.01 PHILIPPINE PORTS 12/4/15 P-69-':lx AUTHORITY 145.15 PHILIPPINE PORTS 12/4/15 P-69-oy AUTHORITY 65.24 LA ELLIANA HOTEL AND 12/7/15 P-69-oz RESTAURANT INC 160.71 TOYOTA DAVAO CITY 12/7/15 P-69-pd INC 2,005.44 PHILIPPINE PORT 12/9/15 P-69-on AUTHORITY 649.19 PHILIPPINE PORT 12/9/15 P-69-po AUTHORITY 194.98 AIRTROPOLIS CONSOLIDATOR PHILS 12/10/15 INC 564.00 AIRTROPOLIS CONSOLIDATOR PHILS 12/10/15 INC 60.00 AIRTROPOLIS CONSOLIDATOR PHILS 12/10/15 INC 742.89 AIRTROPOLIS CONSOLIDATOR PHILS 12/10/15 INC 1,796.24 AIRTROPOLIS CONSOLIDATOR PHILS 12/10/15 INC 713.67 AIRTROPOLIS CONSOLIDATOR PHILS 12/10/15 INC 373.47 AIRTROPOLIS CONSOLIDATOR PHILS 12/10/15 INC 678.64 AIRTROPOLIS CONSOLIDATOR PHILS 12/10/15 INC 862.64 AIRTROPOLIS CONSOLIDATOR PHILS 12/10/15 INC 788.75 AIRTROPOLIS CONSOLIDATOR PHILS 12/10/15 INC 566.44J AIRTROPOLIS CONSOLIDATOR PHILS ! 12/10/15 INC 2,616.44 AIRTROPOLIS CONSOLIDATOR PHILS 12/10/15 P-69-pr INC 637.97 CONTAINER JOCKEY TRANSPORTER 12/17/15 P-69-qp TRUCKING COMPANY 22,725.92 FIVESTAR CARGO 12/17/15 P-69-qq SERVICES INC 23,566.06 MARl LAG BUSINESS 12/17/15 P-69-qs AND INDUSTRIAL 7,891.01 �~

DECISION Maxima Machineries, Inc. vs. Commissioner of Internal Revenue CTA Case No. 9838 Page 63 of73 12/18/15 P-69-qz SERVICES INC 346.56 MINVETS SECURITY INC 12/22/15 P-69-re GLOBE TELECOM INC ,. 194.89 3/17/16 P-69-yi 1/6/16 P-69-yw EEB AIRE MARKETING 1,017.86 1/6/16 P-69-yx 265.37 1/6/16 P-69-yy PHILIPPINE PORTS 1/6/16 P-69-yz 1,052.14 1/6/16 P-69-zc AUTHORITY 263.89 1/8/16 P-69-zs 227.96 1/8/16 P-69-zt PHILIPPINE PORTS 195.73 1/8/16 P-69-zv 381.26 1/8/16 P-69-zw AUTHORITY 667.21 1/8/16 P-69-zx 179.63 1/12/16 P-69-aag PHILIPPINE PORTS 3.67 1/12/16 P-69-aah 487.58 AUTHORITY 417.14 1/14/16 P-69-aam 276.34 1/18/16 P-69-abg PHILIPPINE PORTS 1/28/16 P-69-acu 160.71 AUTHORITY 171.52 20,280.78 PHILIPPINE PORTS 346.56 AUTHORITY 535.71 PHILIPPINE PORTS 2,587.10 AUTHORITY 245.00 7,054.49 PHILIPPINE PORTS 10,607.14 AUTHORITY 1,583.99 7,054.49 PHILIPPINE PORTS 346.56 2,472.63 AUTHORITY 535.71 PHILIPPINE PORTS ~ AUTHORITY ' PHILIPPINE PORTS AUTHORITY PHILIPPINE PORTS AUTHORITY PHILIPPINE PORTS AUTHORITY ONG, JESTER JUDE A. (LADRIANO ENTERPRISES) PHILIPPINE PORTS AUTHORITY FIVESTAR CARGO SERVICES INC 2/1/16 P-69-adn MINVETS SECURITY INC 2/4/16 P-69-aek 2/4/16 P-69-aen ONG, JESTER JUDE A. 2/10/16 P-69-afj 2/11/16 P-69-afr (LADRIANO 2/11/16 P-69-agb 2/18/16 P-69-agt ENTERPRISES) 2/18/16 P-69-agu WIDE WIDE WORLD EXPRESS CORPORATION PIONEER DETECTIVE CREDIT SECURITY AGENCY INC FIVESTAR CARGO SERVICES INC PRIMAVERA, NANETH (PRIMAVERA ENTERPRISES) FIVESTAR CARGO SERVICES INC FIVESTAR CARGO SERVICES INC 2/26/16 P-69-aik MINVETS SECURITY INC 3/1/16 P-69-aiy TOYOTA DAVAO CITY INC 3/3/16 P-69-ajl ONG, JESTER JUDE A. 3/7/16 P-69-akh (LADRIANO ENTERPRISES) PRIMAVERA. NANETH

DECISION Maxima Machineries, Inc. vs. Commissioner of Internal Revenue CTA Case No. 9838 Page 64 of73 (PRIMAVERA 3,750.00 ENTERPRISES) 3/10/16 P-69-alg LBC EXPRESS INC 995.98 3/17/16 AIRTROPOLIS 396.00 3/17/16 P-69-amg CONSOLIDATOR PHILS 3/17/16 P-69-amk INC 60.00 3/17/16 AIRTROPOLIS 1,071.48 3/17/16 CONSOLIDATOR PHILS 7,158.00 3/17/16 INC 2,240.40 3/17/16 AIRTROPOLIS 3/17/16 CONSOLIDATOR PHILS 186.97 3/17/16 INC 6.43 3/17/16 AIRTROPOLIS 3/17/16 CONSOLIDATOR PHILS 564.00 3/17/16 INC 259.88 3/17/16 AIRTROPOLIS 432.00 3/17/16 CONSOLIDATOR PHILS 289.83 3/17/16 INC 766.00 3/17/16 AIRTROPOLIS 1,551.79 3/17/16 CONSOLIDATOR PHILS 678.94 INC 445.32 AIRTROPOLIS 680.33 CONSOLIDATOR PHILS 15,000.00 INC AIRTROPOLIS CONSOLIDATOR PHILS INC AIRTROPOLIS CONSOLIDATOR PHILS INC AIRTROPOLIS CONSOLIDATOR PHILS INC AIRTROPOLIS CONSOLIDATOR PHILS INC AIRTROPOLIS CONSOLIDATOR PHILS INC AIRTROPOLIS CONSOLIDATOR PHILS INC AIRTROPOLIS CONSOLIDATOR PHILS INC AIRTROPOLIS CONSOLIDATOR PHILS INC AIRTROPOLIS CONSOLIDATOR PHILS INC CONTAINER JOCKEY TRANSPORTER TRUCKING COMPANY 3/18/16 P-69-anf MINVETS SECURITY INC 346.56 - Total 96,298.08 Input VAT on domestic purchase of . .. 166,243.86 goods/services supported by VAT Invoice/OR where amount of VA Table sale is not presented 12) Input VAT on domestic purchase of goods/services supported by VAT Invoice/OR .. where amount ofVATable sale incorrectly presented as VAT-exempt/zero-rated sale 10/17/15 P-69-fm LBC EXPRESS INC 134.46 RIO TUBA NICKEL 11/26/15 P-69-nj MINING CORP 2,163.60 (11

DECISION Maxima Machineries, Inc. vs. Commissioner of Internal Revenue CTA Case No. 9838 Page 65 of73 1/26/16 P-69-acd 2GO EXPRESS INC ,. 32.14 DAVAO PRIMA ELENA 1/29/16 P-69-adg HOTEL (HOTEL ELENA) 290.57 LAGUNA INTERNATIONAL INDUSTRIAL PARK 2/9/16 P-69-afa ASSOINC 26.79 MAAYO SHIPPING, 2/9/16 P-69-afb INCORPORATED 129.00 MANILA TOLL EXPRESSWAY 2/9/16 P-69-afc SYSTEMS INC 267.86 MAE WESS COMPANY, 2/11/16 P-69-afv INCORPORATED 21.43 Total - Input VAT on domestic purchase of goods/services supported by VAT Invoice/OR where amount of VA Table sale incorrectly presented as VAT- exempt/zero-rated sale p 2,298.06 p 767.79 13) Input VAT on domestic purchase of goods/services supported by VAT Invoice/OR where alterations were made without authorized countersignature NIKKIE POLLUTION 10/6/15 P-69-ef TEST CO 32.14 RICELAND INN I AND 10/7/15 P-69-ei REAL ESTATE LESSOR 467.14 EVERGREEN TAVERN DEVELOPMENT & MANAGEMENT 10/15/15 P-69-ez CORPORATION 471.43 10/21/15 P-69-fr MINVETS SECURITY INC 346.56 10/22/15 P-69~ge ROBBINSDALE 482.14 10/29/15 DEVELOPMENT 158.68 10/29/15 P-69-hk CORPORATION P-69-hl PHILTRANCO SERVICE 49.30 ENTERPRISES INC PHILTRANCO SERVICE ENTERPRISES INC 11/2/15 P-69-hw MINVETS SECURITY INC 346.56 11/5/15 P-69-im ARCHIPELAGO 197.79 PHILIPPINE FERRIES CORPORA 11/5/15 P-69-iv LBC EXPRESS INC 1,586.25 11/7/15 P-69-jj 267.86 11/12/15 P-69-jy MANILA TOLL 267.86 11/20/15 P-69-lk 37.80 11/26/15 P-69-nq EXPRESSWAY 325.28 12/1/15 P-69-od 12/2/15 P-69-of SYSTEMS INC 2,400.00 12/7/15 P-69-pb 267.86 12/9/15 P-69-pi MANILA TOLL 306.64 535.71 EXPRESSWAY SYSTEMS INC DHL EXPRESS PHILIPPINES CORP YUIPCO SECURITY AND WATCHMAN AGENCY INC WTEI REALTY AND DEVELOPMENT CORPORATION MANILA TOLL EXPRESSWAY SYSTEMS INC MONTENEGRO SHIPPING LINES INC DHEAVYLINE PROPERTY DEVELOPMENT ~ i

DECISION Maxima Machineries, Inc. vs. Commissioner of Internal Revenue CTA Case No. 9838 Page 66 of73 CONSTR KARILAGAN INT L 12/10/15 P-69-px TRAVEL TOURS CORP 36.00 12/10/15 P-69-pz 12/17/15 P-69-qt ROBBINSDALE 1/19/16 P-69-st 2/11/16 P-69-uv DEVELOPMENT P-69-zm 1/7/16 P-69-zr CORPORATION 803.57 1/8/16 P-69-aaf 1/12/16 P-69-aai MARILAG BUSINESS 1/12/16 AND INDUSTRIAL SERVICES INC 8,256.26 ONG, JESTER JUDE A. (LADRIANO ENTERPRISES) P 803.57 ONG, JESTER JUDE A. (LADRIANO ENTERPRISES) 1,071.42 4,339.20 IN NOVE COMMUNICATIONS INC MANILA TOLL EXPRESSWAY SYSTEMS INC 535.71 MANILA TOLL EXPRESSWAY SYSTEMS INC 267.86 PRIMAVERA, NANETH (PRIMAVERA ENTERPRISES) 26,057.14 1/15/16 P-69-aba LBC EXPRESS, INC. 182.69 1/29/16 P-69-adi 321.17 2/11/16 P-69-afq DAVAO PRIMA ELENA 7,489.32 2/20/16 P-69-ahm HOTEL (HOTEL ELENA) 267.86 FIVESTAR CARGO SERVICES INC MANILA TOLL EXPRESSWAY SYSTEMS INC 2/24/16 P-69-ahu 2GO EXPRESS INC 45.25 2/24/16 P-69-ahy 535.71 3/1/16 P-69-aiw MANILA TOLL 337.50 3/3/16 P-69-ajb 305.36 3/4/16 P-69-aka EXPRESSWAY 535.71 SYSTEMS INC QUEEN MARGARETTE HOTEL INC CLYBROS MERCHANDISING INC. (PARKWAY) MANILA TOLL EXPRESSWAY SYSTEMS INC 3/10/16 P-69-ale LBC EXPRESS INC 1,507.39 3/17/16 P-69-amf 2GO EXPRESS INC 26.25 Total - Input VAT on domestic purchase of goods/services supported by VAT Invoice/OR where ~- alterations were made without authorized countersignature P' 17,642.83 P' 44,629.11 14) Input VAT on domestic purchase of goods/services supported by VAT Invoice/OR where it cannot be ascertained whether amount paid includes VAT amount since . Expended Withholding Tax EWT) amount is not indicated MOREDONE VENTURES 10/15/15 P-69-ff INC P 412.50 AM CLEOFE PRINTS, 10122/15 P-69-fu INC 2,517.86 10/22/15 P-69-fv AUTO CITY INC 296.25 ~

DECISION Maxima Machineries, Inc. vs. Commissioner of Internal Revenue CTA Case No. 9838 Page 67 of73 10/22/15 P-69-fw AUTO CITY INC 1,150.18 10/22/15 P-69-fx 5,838.75 AUTO CITY INC 10/22/15 P-69-gg 636.00 P-69-gi SEA WORTH 10/22/15 P-69-hp 708.00 P-69-jb INTERNATIONAL 10/22/15 P-69-kg 420.00 P-69-kh FREIGHT INC 10/22/15 P-69-ki 661.87 P-69-ne SEA WORTH 10/22/15 P-69-nn 708.00 P-69-os INTERNATIONAL 10/22/15 P-69-ou 420.00 P-69-wp FREIGHT INC 10/22/15 P-69-abv 564.00 P-69-acs SEA WORTH 10/22/15 P-69-adp 708.00 P-69-aez INTERNATIONAL 10/22/15 P-69-agf 420.00 10/23/15 FREIGHT INC 1,980.00 10/29/15 10/29/15 SEA WORTH 95.20 95.20 11/6/15 INTERNATIONAL 1,198.21 11/12/15 FREIGHT INC 2,400.00 11/12/15 SEA WORTH 2,400.00 11/12/15 INTERNATIONAL 11/26/15 2,400.00 11/26/15 FREIGHT INC 2,365.00 12/3/15 12/4/15 SEA WORTH 302.40 2/28/16 10,225.71 1/21116 INTERNATIONAL 1,414.07 1/28/16 FREIGHT INC 2/1/16 ~ 2/9/16 SEA WORTH 2/12116 INTERNATIONAL FREIGHT INC SEA WORTH INTERNATIONAL FREIGHT INC SEA WORTH INTERNATIONAL FREIGHT INC BIWATER PHILIPPINES INC. TOYOTA BUTUAN CITY TOYOTA BUTUAN CITY MENDEZ SYSTEM MAINTENANCE AND MANPOWER SERVICES WTEI REALTY AND DEVELOPMENT CORPORATION WTEI REALTY AND DEVELOPMENT CORPORATION WTEI REALTY AND DEVELOPMENT CORPORATION MATATAG CARGO LOGISTICS CORP U BIX CORPORATION ZF PHILIPPINES INC ' FIERA DE MANILA INC 239.25 267.86 SM HYPERMARKET INC 349.29 MATATAG CARGO 160.71 1,031.69 LOGISTICS CORP (yl CLYBROS MERCHANDISING INC. (PARKWAY) RAKDELL INN ALLEGIANCE CARGO ADVANTAGE INC MENDEZ SYSTEM

DECISION Maxima Machineries, Inc. vs. Commissioner of Internal Revenue CTA Case No. 9838 Page 68 of73 MAINTENANCE AND 1,198.21 6,000.00 MANPOWER SERVICES 660.00 ASIA GLASS PALACE, 1,198.21 24,321.43 2/18/16 P-69-aQp INCORPORATED 2/18/16 P-69-ahd 938.34 2/26/16 P-69-aij PAMBID, RAE M. 992.33 3/3/16 P-69-aic 3/4/16 P-69-akc (SHINRA SOFTWARE 3/4/16 P-69-akd SOLUTIONS) MENDEZ SYSTEM MAINTENANCE AND MANPOWER SERVICES CONTAINER JOCKEY TRANSPORTER TRUCKING COMPANY WIDE WIDE WORLD EXPRESS CORPORATION WIDE WIDE WORLD EXPRESS CORPORATION 3/31/16 P-69-aol JITS CORPORATION 492.00 PRIMAVERA, NANETH (PRIMAVERA 3/31/16 P-69-aop ENTERPRISES) 4,285.71 TDS INDUSTRIAL 3/31/16 P-69-aou CORPORATION 182.14 Total - Input VAT on domestic purchase of goods/services supported by VAT Invoice/OR where it cannot be ascertained whether amount paid includes VAT amount since EWT amount is no/indicated ,. 40,337.20 ,. 42,317.17 15) Input VAT on capital goods exceeding P1 Million amortized for the period without any supporting documents N/A N/A N/A 195,215.60 195,215.32 Total- Input VAT on capital goods exceeding P1 Million amortized for the period without any supporting documents ,. 195,215.60 ,. 195,215.32 976,149.68 ,. 1,170,586.81 Total Input VAT by the Court upon verification for not being properly substantiated ,. In addition, the Court finds that the following amounts of input VAT claimed by petitioner were higher than the amounts reflected in the VAT Invoices/Official Receipts, thus, the difference of fit10,211.16 should likewise be disallowed: Date Exhibit Supplier Input VAT Input VAT Excess No. per per Input VAT Claimed Schedule Invoice/OR 3'� Quarter U FREIGHT . .. .. 168.00 10/29/15 P-69-hr PHILIPPINES INC 164.64 3.36 11/2/15 P-69-hz U FREIGHT 11/5/15 P-69-in PHILIPPINES INC 168.00 164.64 3.36 11/6/15 P-69-iQ BUTUAN BRAKE 11/23/15 P-69-lx CENTER TRADING 126.43 125.29 1.14 11/23/15 P-69-ly U FREIGHT PHILIPPINES INC 168.00 164.64 3.36 MANILA NORTH TOLLWAYS CORP 40.07 6.00 34.07 MANILA NORTH TOLLWAYS CORP 90.92 8.00 82.92 ~

DECISION Maxima Machineries, Inc. vs. Commissioner of lntemal Revenue CTA Case No. 9838 Page 69 of73 11/24/15 P-69-md RIO TUBA NICKEL 2,259.60 2,219.25 40.35 12/17/15 MINING CORP 498.68 AIRTROPOLIS 956.04 10,966.12 CONSOLIDATOR ~ 667.24 12/17/15 PHILS INC 6,198.00 p 0.10 AIRTROPOLIS 12/17/15 CONSOLIDATOR 641.47 39.93 PHILS INC 6.16 12/17/15 AIRTROPOLIS 60.00 CONSOLIDATOR 9,348.34 12/17/15 PHILS INC 240.00 AIRTROPOLIS I 12/17/15 CONSOLIDATOR 38.93 PHILS INC ~ 12/17/15 AIRTROPOLIS 674.25 CONSOLIDATOR 12/17/15 PHILS INC 1,625.04 AIRTROPOLIS 12/17/15 CONSOLIDATOR 639.93 PHILS INC 12/17/15 P-69-om AIRTROPOLIS 391.14 CONSOLIDATOR ~ 14,485.82 ~ 13,818.58 Subtotal- 3"' Quarter PHILS INC AIRTROPOLIS 4'" Quarter CONSOLIDATOR PHILS INC AIRTROPOLIS CONSOLIDATOR PHILS INC AIRTROPOLIS CONSOLIDATOR PHILS INC (GRETCHEN GWEN G. SARSABA)FLOR AL 1/15/16 P-69-aat MANSION p 36.10 p 36.00 2/4/16 P-69-ael 2/22/16 P-69-aha u FREIGHT PHILIPPINES INC 2,235.84 2,195.91 TOYOTA DAVAO CITY INC 345.39 339.23 SYNERGY GLOBAL LOGISTICS SOLUTION 2/24/16 INC 96.68 12,010.42 SYNERGY GLOBAL LOGISTICS SOLUTION 2/24/16 INC 1,342.80 SYNERGY GLOBAL LOGISTICS 2/24/16 SOLUTION INC 483.00 SYNERGY GLOBAL LOGISTICS 2/24/16 SOLUTION INC 101.01 SYNERGY GLOBAL LOGISTICS 2/24/16 SOLUTION INC 1,647.06 SYNERGY GLOBAL LOGISTICS 2/24/16 SOLUTION INC 5,990.40 SYNERGY GLOBAL LOGISTICS 2/24/16 SOLUTION INC 4,875.82 I SYNERGY GLOBAL 2/24/16 LOGISTICS P-69-aib SOLUTION INC 4,845.82

DECISION Maxima Machineries, Inc. vs. Commissioner of Internal Revenue CTA Case No. 9838 Page 70 of73 SYNERGY GLOBAL LOGISTICS 2/24/16 SOLUTION INC 920.17 1,056.00 SYNERGY GLOBAL 2,785.71 LOGISTICS 660.00 300.00 2/24/16 SOLUTION INC 636.00 144.00 PRIMAVERA, NANETH 85.71 (PRIMAVERA 3/3/16 P-69-a!a ENTERPRISES) 2,735.97 49.74 1,522.07 SEA WORTH I 141.43 INTERNATIONAL 62.57 73.93 3/3/16 FREIGHT INC 2.57 23.14 SEA WORTH P9,543.92 INTERNATIONAL ~10,211.16 3/3/16 FREIGHT INC SEA WORTH INTERNATIONAL 3/3/16 P-69-ais FREIGHT INC KARl LAGAN INT L 3/10/16 P-69-alc TRAVEL TOURS CORP MAAYO SHIPPING, 3/14/16 P-69-alx INCORPORATED Subtotal- 41" Quarter p 28,587.51 p 19,043.60 Total Excess Input VAT Claimed Thus, the total disallowances per the Court's painstaking verification of petitioner's input VAT is P2, 153,947.65, computed as follows: 3rd Quarter 4th Quarter Total p 2,146,736.49 Disallowances for failure p 976,149.68 p 1,170,586.81 to comply with invoicing 9,543.92 10,211.16 requirements 667.24 ~ 2,156,947.65 Variance in Input VAT .. 1,180,130.73 Claimed . 976,816.92 Total Disallowances per Court's further verification In view of the foregoing disallowances, the total valid input VAT of petitioner subject for allocation is P3,070,821.82, as shown below: 3rd Quarter 4th Quarter Total 69,360,496.12 Total Common Input ~ 31 ,205,691.64 ~ 38,154,804.48 ~ Tax for Allocation 64,132,726.65 Less: 2,156,947.65 Disallowances per 3,070,821.82 ICPA Exceptions 29,109,871.90 35,022,854.75 (y1 Disallowances per 976,816.92 1,180,130.73 Court's further . 1,119,002.82 . 1,951 ,819.00 verification Input. Total Valid CommonTaxfor Allocation

DECISION Maxima Machineries, Inc. vs. Commissioner of Internal Revenue CTA Case No. 9838 Page 71 of73 Considering that petitioner is engaged in taxable sales subject to 0% and 12% VAT, and its input VAT cannot be directly or entirely attributed to any of the transactions, the valid common input VAT of P3,070,821.82 shall be proportionately allocated on the basis of the volume of its sales, thus: Total VATable Sales per VAT Return p 1,988,004,974.72 Divided by the Total Declared Sales per Quarterly VAT Returns 2, 740,186,115.69 Multiplied by the Total Valid Input VAT Input VAT Allocated to Total VATable Sales 3,070,821.82 ~ 2,227,881.17 Total Zero-rated Sales per VAT Return Divided by the Total Declared Sales per Quarterly VAT Returns ,. 742,641,360.36 2,740, 186,115.69 Multiplied by the Total Valid Input VAT 3,070,821.82 Input VAT Allocated to Zero-rated Sales p 832,249.78 Petitioner has no excess input VAT available for refund Having determined that petitioner had valid input VAT attributable to its zero-rated sales in the amount of P832,249. 78, the Court shall proceed to determine whether the same was not applied against its output VAT liability. After deducting the input VAT attributable to VATable sales in the amount of P2,227,881.17 from its output VAT liability of P238,560,596.97 from the said sales, petitioner still has a net output VAT payable of?D236,332,715.80, as computed below: Period Output VAT per Returns 3rd Quarter ~ 116,541,854.22 4th Quarter 122,018,742.75 Total ~ 238,560,596.97 Output VAT Per Returns p 238,560,596.97 Input VAT Allocated to VATable Sales Net Output VAT Payable 2,227,881.17 ~ 236,332,715.80 Since petitioner's input VAT attributable to VATable sales is not enough to cover its output VAT liability, the valid input VAT attributable to zero-rated sales shall be utilized against the remaining output VAT liability ofP236,332,715.80. The input VAT attributable to~

DECISION Maxima Machineries, Inc. vs. Commissioner of Internal Revenue CTA Case No. 9838 Page 72 of73 zero-rated sales of P832,249. 78, however, is lower than the net output VAT payable of P236,332, 701.29. Consequently, petitioner still has net output VAT due of ft235,500,466.02, computed as follows: Net Output VAT Payable '" 236,332,715.80 Less: Input VAT Allocated to Zero-rated Sales 832,249.78 Net Output VAT Still Due '" 235,500,466.02 Petitioner claims that there is enough input VAT credit from previous periods to cover any output tax liability for the 3'd and 41h quarters of FY ending March 31, 2014 and that the amount being claimed for refund was not utilized or applied to the current VAT liability. A careful review of the evidence and the records of the case reveals that petitioner failed to fully substantiate with official receipts, service invoices, or other pertinent documents, its input VAT credit from previous periods albeit its quarterly VAT Return for the 3'd quarter of FY ending March 31, 2014 reflected the amount of P435,817,931.49 as "Input Tax Carried Over from Previous Period". Therefore, the input VAT carry-over of P435,817,931.49 cannot be validly applied against petitioner's output VAT liability pursuant to Section 110(A) in relation to Section 110(8) of the NIRC of 1997, as amended. Verily, in claiming excess or unutilized input VAT from zero- rated transactions, it is the excess over the output VAT which should be refunded to the taxpayer or credited against other internal revenue taxes. It is impmtant for the taxpayer to prove that it has enough prior year's excess input VAT credits to cover its output VAT liability for the current taxable year. There being no excess input VAT which may be the subject of a claim for refund or issuance of TCC, petitioner's claim must be denied. Finally, it bears stressing that a claimant has the burden of proof to establish the factual basis of his or her claim for tax credit or refund. 46 Tax refunds are in the nature of tax exemptions. As such, they are regarded as in derogation of sovereign authority and to be construed strictissimi juris against the person or entity claiming the refund. 47 The pieces of evidence presented entitling a taxpayer to an exemption are also strictissimi scrutinized and must be duly proven.48 46 Citibank N.A. vs. Court of Appeals and Commissioner of Internal Revenue, G.R. No. 107434, October 10, 1997. 47 Commissioner o.f Internal Revenue vs. S.C. Johnson and Son, Inc., eta/., G.R. No. 127105, June 25, 1999. 48 Kepco Philippines Corporation vs. Commissioner of Internal Revenue, G.R. No. 179961, January 31, 2011. ~

DECISION Maxima Machineries, Inc. vs. Commissioner of Internal Revenue CTA Case No. 9838 Page 73 of73 Hence, an applicant for a claim of tax refund or tax credit must not only prove entitlement to the claim but also compliance with all the documentary and evidentiary requirements 49 WHEREFORE, in light of the foregoing, the Petition for Review filed on May 18, 2018 is hereby DENIED for lack of merit. SO ORDERED. Presiding Justice I CONCUR: ~�~---~ CATHERINE T. MANAHAN Associate Justice CERTIFICA T/ON Pursuant to Article VIII, Section 13 of the Constitution, it is hereby certified that the conclusions in the above Decision were reached in consultation before the case was assigned to the writer of the opinion of the Court. Presiding Justice 49 Eastern Telecommunications Philippines, Inc. vs. Commissioner of Internal Revenue, G.R. No. 183531, March 25, 2015.