PANAY POWER CORPORATION v. COMMISSIONER OF INTERNAL REVENUE

REPUBLIC OF THE PHILIPPINES COURT OF TAX APPEALS QUEZON CITY SPECIAL FIRST DIVISION ******************* PANAY POWER CORPORATION, C.T.A. CASE NO. 7468 Petitioner, Members: -versus- ACOSTA, Chairperson BAUTISTA, and CASANOVA, JJ. COMMISSIONER OF INTERNAL Promulgated: REVENUE, Respondent. MAR 1 6 2010; 7:3-o a·,... X- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - ~- - - - - - DECISION BAUTISTA, J.: This case involves a claim for refund or issuance of tax credit certificate in the amount of P28, 121,495.21, allegedly representing unutilized excess input VAT from domestic purchases of taxable goods and services for the four quarters of taxable year 2004, attributable to zero-rated sales of electricity pursuant to Republic Act No. 9136. Panay Power Corporation (petitioner) is a corporation duly organized and existing under Philippine laws, with principal office at 2nd Floor Benpres Building, Meralco Avenue, Pasig City. 1 Petitioner is registered with the Bu reau of Internal Revenue (BIR) as a value-added tax (VAT) taxpayer as of October 11, 1996, with I 1 Exhibit "A" 467

DECISION C.T.A. CASE NO. 7468 Tax Identification No. (TIN) 004-964-861-000, as evidenced by its Certificate of Registration No. OCN 3RC0000271281. 2 Respondent, on the other hand, is the duly appointed Commissioner of the Bureau of Internal Revenue empowered to perform the duties of said office including, among others, the power to decide, approve and grant refunds or tax credits of erroneously or excessively paid taxes. He holds office at the BIR National Office Building, BIR Road, Diliman, Quezon City. Petitioner is principally engaged in the business of generating power for lighting and power purposes and the wholesale of electric power to the National Power Corporation, private electric utilities, and electric cooperatives, and for the carrying on of all businesses incident thereto, including but not limited to the sale of the by-products of power generation. 3 As such, it is likewise registered with and authorized by the Energy Regulatory Commission (ERC) to operate facilities used in the generation of electricity. It was issued a Certificate of Compliance No. 03-06-GXT8-0008 by the ERC on June 4, 2003. 4 Petitioner filed with the SIR its Original and Amended Quarterly VAT Returns for the four quarters of 2004 on the following dates: Period Origina l Return Amended Return Covered Filed On Exhibit Filed On Exhi bit First Quarter April 26, 2004 E July 28, 2004 F Second Quarter July 26, 2004 G to G-2 Third Quarter October 25, 2004 H to H-2 Fourth Quarter January 24, 2005 I to 1-2 April 25, 2005 J to J-2 2 Exhibit "C" 3 Exhibits " A-1" to "A-9" 4 Exhibit "B"

DECISION C.T.A. CAS E NO. 7468 On December 21, 2005, petitioner filed with the BIR a written claim for refund corresponding to its alleged unutilized excess input VAT in the total amount of P28,121,495,21. 5 Due to respondent's inaction on the said administrative claim for refund, petitioner filed this instant Petition for Review on April 24, 2006, praying for the refund or issuance of ta x credit certificate in the amount of P28,121,495.21, for its alleged unutilized input VAT for ta xable year 2004. In his Answer 6 filed on June 1, 2006, respondent raised the following Special and Affirmative Defenses: "4. Petitioner's alleged claim for refund is subject to administrative investigation by the Bureau; 5. Petitioner must prove that it paid for the input VAT so alleged; 6. Petitioner must prove that the same input VAT was not utilized against any output VAT liability; 7. Petitioner must prove that its sales are VAT zero-rated as contemplated under Section 112 (A) of the Ta x Code of 1997; 8. Petitioner must prove that the claim was filed within the two (2) year period prescribed in Section 229 of the Ta x Code; 9. In an action for refund, the burden of proof is on the ta xpayer to establish its right to refund, and ·failure to sustain the burden is fatal to the claim for refund; 10. Claims for refund are construed strictly against the claimant for the same partake of the nature of exemption from ta xation." During trial, petitioner presented documentary and testimonial evidence. Respondent, on the other hand, waived his right to present evidence and submitted th e case for decision. 7 5 6 7 Exhibit "D" Docket, pp . 93-95 Docket, pp. 374 and 376 I 469

DECISION C.T.A. CASE NO. 7468 On March 23, 2009, the case was submitted for decision, considering petitioner's Memorandum filed on February 12, 2009 and respondent's Memorandum filed on March 16, 2009. The following are parties' jointly stipulated issues8 submitted for this Court's resolution: "1. Whether or not petitioner's power generation services for CY 2004 are subject to zero percent (0%) VAT pursuant to the EPIRA, its implementing rules and regulations and the Tax Code of 1997. 2. Whether or not petitioner has unutilized input VAT for the four quarters of CY 2004 in the total amount of Php28,121,495.21 arising from its domestic purchases of taxable goods and services and importation of goods. 3. Whether or not the unutilized input VAT are attributable to its zero-rated sales of power generation services. 4. Whether or not the claim for refund was seasonably filed, under Section 112 of the Tax Code of 1997. 5. Whether or not the unutilized creditable input taxes for the four quarters of CY 2004 are properly substantiated by invoices and official receipts. 6. Whether or not the unutilized creditable input VAT for CY 2004 were carried over to the succeeding taxable quarter(s) and applied against any of the output VAT liability of the petitioner. 7. Whether or not petitioner is entitled to a refund and/or issuance of tax credit certificate for the unutilized input VAT payments in the amount of Php28,121,495.21." The issues boil down into one major issue, viz., "whether or not petitioner is entitled to a refund or issuance of tax credit certificate for its alleged unutilized input VAT payments amounting to P28,121,495.21, attributable to zero-rated sales for taxable year 2004." 8 Docket, pp. 154-155 I 47 )

DECISION C.T.A. CASE NO. 7468 Section 112(A) of the National Internal Revenue Code (NIRC) of 1997 lays down the requisites for issuance of tax credit certificate or refund of input tax due or paid, attributable to zero-rated or effectively zero-rated sales, which reads as follows: "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 or 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. " From the foregoing, petitioner must comply with the following requisites to be entitled to a refund: 1. that there must be zero-rated or effectively zero-rated sales; 2. that input taxes were incurred or paid; 3. that such input taxes are attributable to zero-rated sales or effectively zero-rated sales; 4. that the input taxes were not applied against any output VAT liability; and 5. that the claim for refund was filed within the two-year prescriptive period . Petitioner maintains that its sales of electricity as a power generation company, qualify for VAT zero-rating in accordance with Section 108(8)(7) of the 47 1

DECISION C.T.A. CASE NO. 7468 NIRC of 1997, as amended by Republic Act (R.A.) No. 9337, and paragraph 5, Section 6 of R.A. No. 9136 9 , which are quoted hereunder, to wit: "SEC. 108. Value-added Tax on Sale of Services and Use or Lease of Properties. - 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 (7) Sale of power or fuel generated through renewable sources of energy such as, but not limited to, biomass, solar, wind, hydropower, geothermal, ocean energy, and other emerging energy sources using technologies such as fuel cells and hydrogen fuels." "SECTION. 6. Generation Sector - Generation of electric power, a business affected with public interest, shall be competitive and open. Upon the effectivity of this Act, any new generation company shall, before it operates, secure from the Energy Regulatory Commission (ERC) a certificate of compliance pursuant to the standards set forth in this Act, as well as health, safety and environmental clearances from the appropriate government agencies under existing laws. Any law to the contrary notwithstanding, power generation shall not be considered a public utility operation. For this purpose, any person or entity engaged or which shall engage in power generation and supply of electricity shall not be required to secure a national franchise. Upon the implementation of retail competition and open access, the prices charged by a generation company for the supply of electricity shall not be subject to regulation by the ERC except as otherwise provided in this Act. Pursuant to the objective of lowering electricity rates to end-users, sales of generated power by generation companies shall be value added tax zero-rated. 9 Electric Power Industry Reform Act of 2001 472

DECISION C.T.A. CASE NO. 7468 The ERC shall, in determining the existence of market power abuse or anti -competitive behavior, require from generation companies the submission of their financial statements." (Emphasis supplied) This Court agrees with petitioner. In the case of CE Luzon Geothermal Power Company, Inc. vs. Commissioner of Internal Revenue 10 , this Court ruled in this wise: " With the enactment of R.A. 9136, related provisions of the National Internal Revenue Code of 1997 were deemed amended by modifying the VAT rate applicable to sales of generated power by generation companies from ten (10%) percent to zero (0%) percent. " Based on the foregoing, in order to qualify for VAT zero-rating under R.A. No. 9136, petition er must be able to establish that (1) it is a power generation company, and (2) it derived sales from power generation services. It is undi sputed that petitioner is registered with and authorized by the Energy Regul atory Comm ission to operate facilities used in the generation of electricity and as such, it was issued by the ERC with a Certificate of Compliance No. 03-06-GXTS-0008. 11 Similarly, petitioner generated sales from power generation services for the four quarters of ta xable year 2004 in the amount of P957,512,701.53, which was declared in its Qua rte rly VAT Returns 12 for the same period. Upon verification, the Court-Comm issioned Independent Certified Public Accountant 13 (CPA) segregated petitioner's zero-rated sales as follows: 14 10 CTA Case Nos. 6792 and 6837, November 25, 2008 11 Exhibit "B" 12 Exhibits " F", "G" to "G-2", " H" to " H-2", and "J" to "J-2" 13 Mr. Emmanuel Y. Mendoza of Mendoza Querida & Co. 14 Exhibit "II", page 12 4. 7 ,) ')

DECISION C.T.A. CASE NO . 7468 Supported by VAT ORs and invoices p 735 466 498.58 Supported by VAT ORs 222,046,202.95 Total p 957,512,701.53 Mr. Mendoza then compared the amount of zero-rated sales per books of petitioner with Schedule of Zero-rated Sales 15 and found a difference of •' P89,149,171.47 . According to the Independent CPA, this is mainly attributable to the accrual basis of accounting used in reporting zero-rated sales. 16 Petitioner's official receipts 17 showed however a total of P900,262,414.58 only. The breakdown is as follows: Exh. OR No. OR Date Customer Amount FF-1 0530 1/5/2004 PECO p 73 925 182.61 FF-2 0531 2/5/2004 Panay Power Corp. 70 382 851.92 FF-3 0532 3/5/2004 PECO 72 173 225.75 FF-4 0533 4/6/2004 PECO 65 335 130.55 FF-5 0534 5/6/2004 PECO 78 216,099.91 FF-6 0536 6/7/2004 PECO 75 786 368.26 FF-7 0537 7/5/2004 PECO 79 555 819.69 FF-8 0538 8/5/2004 PECO 68 885 928.54 FF-9 0539 9/6/2004 PECO 81 524 885.95 FF-10 0540 10/5/2004 PECO 80 904 102.61 FF-11 0541 11/5/2004 PECO 75 234 156.09 FF-12 0542 12/6/2004 PECO 78,338 662.70 TOTAL p 900,262,414.58 Upon a careful scrutiny by this Court, the documents presented disclosed that there is a difference in the total amount of P57,250,286.95, between the total zero-rated sales per schedule and per total official receipts. It was also noted that several invoices were not presented in the total amount of P222,046,202. 95. 18 Absent petitioner's explanation or justification of the difference, this Court would have to rely on the official receipts submitted to determine the valid zero- I 15 Exhibit " EE" 16 Exhibit " II", page 13 17 Exhibits " FF- 1" to " FF- 12" 18 Details are shown in Annex "A" 47 4

DECISION C.T.A. CASE NO. 7468 rated sales. Thus, petitioner's declared zero-rated sales are only 94.02% substantiated, computed as follows: Substantiated zero-rated sales p 900J_262,414.58 Divided by declared zero-rated sales p 957,512,701.53 Percentage of substantiated zero-rated sales 94.02% The Independent CPA verified the voluminous documents presented to support petitioner's claim. In his amended Report dated July 10, 2007, he found that out of the total claim, only P17,233,508.29 is properly substantiated. The 19 disallowance of Pl1,047,034.58 is broken down as follows: Findings Input VAT 2.1 Input VAT on domestic purchases of services supported by documents other than VAT ORs p 1 578 979.94 2.2 Input VAT on domestic purchases of goods supported by documents other than VAT invoices 26 182.34 2.3 Input VAT on domestic purchases of services supported by ORs dated before the taxable year of claim 17 125.17 2.4 Input VAT on domestic purchases of goods supported by invoices dated before the taxable year of claim 4 599.88 2.5 Input VAT on domestic purchases of services supported by ORs dated after the taxable year of claim 2 484.04 2.6 Input VAT on domestic purchases of services supported by ORs with handwritten TIN 6 539.78 2.7 Input VAT on domestic purchases of goods supported b}:' invoices with handwritten TIN 1 283.36 2.8 Input VAT on domestic purchases of services supported by ORs with preprinted Zero-rated TIN 11 435.05 2.9 Input VAT on Domestic purchases of goods supported by invoices with no BIR permit number on authority to print 5 449 662.40 2.10 Input VAT on domestic purchases of goods supported b}:' invoices with preprinted ''TIN" and "Non VAT/NV" 1 345.50 2.11 Input VAT on domestic purchases of goods supported by invoices with P!eprinted TIN only 7 599.95 2.12 Input VAT on domestic purchases of goods supported by invoices with stamped TIN VAT 259.09 2.13 Input VAT on domestic purchases of services supported by photocopied ORs 642 266.21 2.14 Input VAT on domestic purchases of goods supported by photocopied invoices 641 379.65 19 Exhibit "II", pages 5 to 9

DECISION C.T.A. CASE NO. 7468 2.15 Input VAT on importation of goods supported by photocopied BOC Import Entry & Internal Revenue Declaration and ORs issued by banks 91,415.00 2.16 Input VAT on importation of goods supported by photocopied BOC Import Entry & Internal Revenue Declaration and ORs issued by BOC 13 099.00 2.17 Input VAT on importation of goods supported by photocopied ORs issued by BOC 4 071.00 2.18 Input VAT on importation of goods supported by photocopied ORs issued by banks 78 881.00 2.19 Input VAT on domestic purchases of services supported by ORs of which the amount does not tally with the amount indicated in the Schedule 2 401.10 2.20 Input VAT on domestic purchases of goods supported by invoices of which the amount does not tally with the---amount ··-- indicated in the Schedule 1 281.73 2.21 Input VAT on domestic purchases of goods and services with no available supporting documents 2 051 280.39 2.22 Input VAT on importation of goods with no available SU [2QOrt:j!:_1_g documents 413 463.00 TOTAL P 111 047 034.58 After a jud icious review, this Court finds the Independent CPA Report to be in order. Th e foregoing should be disallowed for the reasons above-stated. Nevertheless, further verification revealed that the claimed input VAT should be further decrea sed by P1,624,111.16, as summarized below: 20 - 1. Supporteq by.ORs/ invoices printed with TIN or TIN-V only p 143 789.86 2. Supported t~y_.ORs/ invoices with no year indicated in the date 21 388.73 3. Supported by undated ORs/invoices 5 792.96 4. Supported by ORs/ invoices issued not in the name of petitioner -·--· 12 980.98 5. Supported gy_ORs/invoices dated outside the period of claim 1160 642.00 6. Supported by ORs/invoices which are not duly registered with the BIR 89 894.73 7. Input VAT .on transaction whose nature cannot be ascertained 20 625.00 8. Input VAT on purchase of vehicle with engine displacement of more than 2 000 cc 81 090.91 9. Input VAT on importation supported by IEIRD which is not machine validated 29 134.00 10. Overclaim~d ~ put VAT on importation 58 772.00 TOTAL p 1,624, 111.16 20 Details are shown in An nex " B" I A "'' ra 't (u

DECISION C.T .A. CASE NO. 7468 Petitioner had output tax liability for taxable year 2004 in the total amount of P159,047.70. Hence, petitioner's valid creditable input ta x is P14,526,563.31, computed as follows: Total available input VAT per VAT Returns p 28,280,542.87 Less: Disallowances PeriCPA p 11,047,034.58 Per Court's verification 1 624 111.16 (12 671145.74) Less: Output VAT (159,047.70) Valid input VAT p 15,450 349.43 Multiply by percentage of substantiated zero - 94.02% rated sales Valid creditable input tax p 14, 526, 563.31 As regards the fourth requisite, petition er, in its original and amended Quarterly VAT Returns for the fourth quarter of ta xable year 2005 21 , deducted the amount P59,533,378.83, of which the valid input VAT of P14,526,563.31 forms part, as "Any VAT Refund/TCC Claimed" from the total available input ta x of P68,350,275.57. Therefore, petitioner could not have possibly utili zed the input VAT of P14,526,563 .31 in the succeeding quarters. Anent the last requisite, the reckoning of the two-year prescri ptive period for the filing of the claim for input VAT refund commences from the date of filing of the corresponding Quarterly VAT Return. Counting from April 26, 2004, July 26, 2004, October 25, 2004, and January 24, 2005, the dates when petitioner fil ed its Quarterly VAT Returns for the first, second, third, and fourth quarters of 2004, respectively; both the administrative claim for refund filed on December 21, 2005 22 and the Petition for Review filed on April 24, 2006 fell within the two-year prescriptive period. 21 Exhibits " N" to " N-2" and "0" to "0-2" 22 Exhibit " D" 47 7

DECISION C.T .A. CASE NO. 7468 In sum, petitioner has sufficiently proven its entitlement to a refund or issuance of ta x credit certificate in the reduced amount of P14,526,563.31. WHEREFORE, premises consid ered, th e Petition for Revi ew is hereby PARTIALLY GRANT ED. Accordingly, respond ent is hereby ORDERED to REFUND or to ISSUE A TAX CREDIT CERTIFICATE in favor of petition er in th e reduced amount of P14,526,563.31, representing unutilized input VAT attributable to its zero-rated sales as power generation company for ta xable year 2004. SO ORDERED . . 81cUTISTA WE CONCUR: L-l9. ~ ( With Dissenting and Concurring Opinion ) ERNESTO D. ACOSTA Presiding Justice CAESAR A. CASANOVA Associate Justi'ce CERTIFICATION Pursuant to Articl e VIII, Section 13 of th e Constitution, it is hereby certifi ed that the conclu sions in th e above Deci sion we re reached in con sultation before th e case was assigned to the writer of th e opinion of th e Court's Division . L ---.:- . ~ ERNESTO D. ACOSTA Presiding Justice Chairperson, First Division 47 8

Panay Power Corporation vs. Commissioner of Internal Revenue ANNEX"A" CTA Case No. 7468 COMPARISON OF ZERO-RATED SALES AMOUNTS PER OFFICIAL RECEIPTS AND INVOICES Invoice Invoice Difference Exh . OR No. OR Date Customer OR Amount Exh. No. Date Invoice amount (Invoice- OR) FF-1 0530 1/5/2004 PECO p 73,925,182.61 NO INVOICE PRESENTED p 78,625,723.89 p 4,700,541.28 FF-2 0531 2/5/2004 Panay Power Corp. 70,382,851.92 GG-1 0081 1/9/2004 74,813,378.06 4,430,526.14 FF-3 0532 3/5/2004 PECO 72,173,225.75 GG-2 0084 2/13/2004 76,675,426.88 4,502,201.13 FF-4 0533 4/6/2004 PECO 65,335,130 .55 NO INVOICE PRESENTED 69,638,932.29 4,303,801. 74 FF-5 0534 5/6/2004 · PECO 78,216,099.91 GG-3 0088 4/10/2004 81,479,290.86 3,263,190.95 FF-6 0536 6/7/2004 PECO 75,786,368.26 GG-4 0090 5/11/2004 80,672,833.22 4,886,464. 96 FF-7 0537 7/5/2004 PECO 79,555,819.69 GG-5 0092 6/10/2004 84,744,282.34 5,188,462.65 FF-8 0538 8/5/2004 PECO 68,885,928.54 NO INVOICE PRESENTED 73,781,546.77 4,895,618.23 FF-9 0539 9/6/2004 PECO 81,524,885.95 GG-6 0096 8/13/2004 86,893,451.03 5,368,565.08 FF-10 0540 10/5/2004 PECO 80,904,102.61 GG-7 0098 9/7/2004 86,176,108.24 5,272,005.63 FF-11 0541 11/5/2004 PECO 75,234,156.09 GG-8 0100 10/8/2004 80,501 ,339.33 5,267,183.24 FF-12 0542 12/6/2004 PECO 7813381662.70 GG-9 0103 11/10/2004 8315101388.62 51171,725.92 TOTAL P900,262,414.58 P957,512,701.53 P57,250,286.95 NO INVOICE PRESENTED : I p 78,625,723.89 69,638,932.29 73.781.546.77 P222,046,202.95 ,j:). -...! c.o Pag e 1 of 1

CTA Case No. 7468 ADDITIONAL DISALLOWANCES PER COURT'S VERIFICATION OR linv. ORlinv. Ex h. No. Date Supplier Input VAT 1. Supported by DRs/invoices printed with TIN or TIN-V only Y-321 6076/ 6167 2/5/2004 RJLP Marketing p 284 .32 X-209 113 2/23/2004 Beautex Emporium 5,981.83 X-93 3407 1/ 16/ 2004 Tetra Tech Em Inc. 5,806 .98 X-94 3445 3/3/ 2004 Tetra Tech Em Inc. 5,806 .98 X-131 489 1/ 17/2004 Magna Matic Marketing 2,685.74 Y-4 115 3/1/2004 Beautex Emporium 727.27 Y-152 3476 4/14/2004 Tetra Tech Em Inc. 11,613 .95 Y-153 3475 4/14/ 2004 Tetra Tech Em Inc. 5,806.98 Y-154 3457 3/ 17/ 2004 Tetra Tech Em Inc. 5,806.98 Y-155 3511 5/ 28/2004 Tetra Tech Em Inc. 5,806 .98 Y-358 1063 4/ 20/ 2004 Valley Technologies Inc. 3,272.73 Y-383 00729 3/ 10/ 2004 Winterfield Marketing 72.73 Y-384 00730 3/ 10/ 2004 Winterfield Marketing 368.18 Y-386 00778 3/ 19/2004 Winterfield Marketing 1,323 .63 Y-387 00824 3/ 29/ 2004 Winterfield Marketing 10,873.00 Y-388 00779 3/ 29/ 2004 Winterfield Marketing 185.46 Y-389 00860 4/6/2004 Winterfield Marketing 349 .10 Y-390 00825 3/29/ 2004 Winterfield Marketing 980.95 Y-391 00982 5/ 5/2004 Winterfield Marketing 795 .50 Z-294 1084 7/ 1/ 2004 Valley Technologies Inc. 4,490 .00 Z-308 01063 5/ 18/ 2004 Winterfield Marketing 100.04 Z-309 00913 4/ 23/ 2004 Winterfield Marketing 110.91 Z-310 00996 5/ 6/ 2004 Winterfield Marketing 201.63 Z-311 01234 6/9/2004 Winterfield Marketing 1,027.30 Z-312 01204 6/5/2004 Winterfield Marketing 3,782.12 Z-313 01403 7/ 1/ 2004 Winterfield Marketing 128.56 Z-314 01406 7/1/2004 Winterfield Marketing 168.02 Z-315 01407 7/ 1/2004 Winterfield Marketing 687.96 Z-316 01464 7/ 8/ 2004 Winterfield Marketing 1,193 .20 Z-317 01402 7/ 1/ 2004 Winterfield Marketing 1,591.00 Z-318 1534 7/ 17/ 2004 Winterfield Marketing 770 .18 AA-9 118 12/10/ 2004 Beautex Emporium 14,199.55 AA-43 798 11/ 10/ 2004 Mama Gan Restaurant 136.91 AA-59 005865 8/ 27/2004 MOF Company Subic Inc. 1,179 .09 AA-164 3657 11/ 17/ 2004 Tetra Tech Em Inc. 21,288.61 AA-360 124583 7/ 16/ 2004 Iloilo Paint Center Corp . 1,052 .73 AA-361 124584 7/16/ 2004 Iloilo Paint Center Corp. 281.82 AA-362 124642 7/ 26/ 2004 Iloilo Paint Center Corp. 213.78 AA-363 124836 8/ 20/ 2004 Iloilo Paint Center Corp. 106.86 AA-364 131130 7/ 16/ 2004 Iloilo Paint Center Corp. 1,468.20 AA-365 131133 7/16/ 2004 Iloilo Paint Center Corp. 308.73 AA-366 131135 7/16/ 2004 Iloilo Paint Center Corp. 547.47 AA-367 133929 8/ 20/2004 Iloilo Paint Center Corp. 409.14 AA-368 142562 9/13/ 2004 Iloilo Paint Center Corp. 896 .83 AA-499 1533 7/17/ 2004 Winterfield Marketing 970.00 4 80

CTA Case No. 7468 AA-500 02280 9/ 29/ 2004 Winterfield Marketing 400.00 AA-501 02418 10/ 11/ 2004 Winterfield Marketing 324.66 AA-502 02419 10/ 11/ 2004 Winterfield Marketing 170.06 AA-503 02734 11/ 12/ 2004 Winterfield Marketing 748 .73 AA-504 01564 7/ 22/ 2004 Winterfield Marketing 477 .30 AA-505 01620 7/ 29/ 2004 Winterfield Marketing 687.24 AA-506 01642 8/ 1/ 2004 Winterfield Marketing 840.92 AA-507 01674 8/ 5/2004 Winterfield Marketing 625 .00 AA-508 01837 8/ 20/ 2004 Winterfield Marketing 1,272 .80 AA-509 01838 8/ 20/ 2004 Winterfield Marketing 181.36 AA-510 01839 8/ 20/ 2004 Winterfield Marketing 84 .27 AA-511 01925 8/ 27/2004 Winterfield Marketing 636 .40 AA-512 01996 9/ 2/ 2004 Winterfield Marketing 541.10 AA-513 02119 9/ 13/2004 Winterfield Marketing 1,185.91 AA-514 02641 11/4/ 2004 Winterfield Marketing 355.45 AA-515 02642 11/ 4/2004 Winterfield Marketing 548 .18 AA-516 02644 11/ 4/2004 Winterfield Marketing 372.73 AA-517 02715 11/ 11/ 2004 Winterfield Marketing 629 .09 AA-518 02733 11/ 12/ 2004 Winterfield Marketing 539.27 AA-519 02865 11/ 25/ 2004 Winterfield Marketing 654 .55 AA-520 02915 12/ 1/ 2004 Winterfield Marketing 654.55 AA-521 02951 12/ 6/ 2004 Winterfield Marketing 82 .64 AA-522 02964 12/ 7/ 2004 Winterfield Marketing 1,216.36 AA-523 03024 12/ 14/2004 Winterfield Marketing 1,909.09 AA-524 03028 12/ 14/ 2004 Winterfield Marketing 695.45 AA-525 03039 12/14/ 2004 Winterfield Marketing 623 .18 AA-526 03041 12/ 14/ 2004 Winterfield Marketing 1,054.55 AA-527 03050 12/ 15/ 2004 Winterfield Marketing 270.91 AA-528 03085 12/ 18/ 2004 Winterfield Marketing 148.18 Subtotal p 143J89.86 2. Supported by DRs/ invoices with no year indicated in the date X-33 012770 19-Jan PLOT p 115 .71 X-37 012772 19-Jan PLOT 1,416.89 X-40 012774 19-Jan PLOT 1,039.72 Z-40 022836 22-Jun PLOT 109.52 Z-41 022837 22-Jun PLOT 109.52 Z-42 022832 22-Jun PLOT 117.D2 Z-43 022835 22-Jun PLOT 288 .19 Z-45 022834 22-Jun PLOT 435 .52 Z-46 022833 22-Jun PLOT 444 .96 Z-47 022838 22-Jun PLOT 651.73 Z-49 022839 22-Jun PLOT 2,230 .89 Z-52 028359 1-Sep PLOT 109.13 Z-53 028364 1-Sep PLOT 116.90 Z-54 028358 1-Sep PLOT 197.59 Z-55 028362 1-Sep PLOT 210 .82 Z-56 028363 1-Sep PLOT 395 .87 Z-57 028365 1-Sep PLOT 652.65 Z-58 028361 1-Sep PLOT 2,033 .58 Z- 124 130557 23-Aug The Sulo Hotel Corp . 1,022.73 f Page 2 of 4 48 1

. ' CTA Case No. 7468 AA-18 272348 11/19/2004 Ousit Hotel Nikko 1,819.88 AA-75 032382 27-0ct PLOT 376 .18 AA-76 032383 27-0ct PLOT 275.91 AA-77 032384 27-0ct PLOT 219 .67 AA-78 032385 27-0ct PLOT 109.00 AA-79 032386 27-0ct PLOT 109.00 AA-80 032387 27-0ct PLOT 462.01 AA-81 032388 27-0ct PLOT 2,527 .14 AA-82 036764 25-Nov PLOT 454 .50 AA-83 036765 25-Nov PLOT 190.94 AA-84 036766 25-Nov PLOT 216.15 AA-85 036767 25-Nov PLOT 109.00 AA-86 036768 25- Nov PLOT 196.00 AA-87 036770 25-Nov PLOT 2,186.48 AA-96 036769 25-Nov PLOT 437 .93 Subtotal p 21,388.73 3. Supported by undated DRs/ invoices Y-137 42279 Smart Communications Inc. p 185.97 Y-207 1750 Cyber Link Compu Sales 1,654.54 Y-210 4352 Cyber Link Compu Sales 2,800.00 Y-353 92105 Up-Town Industrial Sales Inc. 1 152.45 Subtotal p 5, 792.96 4. Supported by DRs/ invoices issued not in the name of Petitioner Y-165 43505 2/ 20/2004 Travel Managers International p 560 .09 Y-178 A0120583A 3/ 17/2004 WG&A, Inc. 405.27 Y-179 A0122894A 4/ 1/2004 WG&A, Inc. 265 .11 Z-141 A0111450A 7/ 19/ 2004 WG&A, Inc. 79 .11 Z-142 0010035 8/ 10/ 2004 WG&A, Inc. 1,170.19 AA- 181 A0148112A 10/ 6/ 2004 WG&A, Inc. 323 .62 AA- 182 A0149802A 10/ 6/ 2004 WG&A, Inc. 143.41 AA-183 A0149812A 10/ 21/ 2004 WG&A, Inc. 140.06 AA- 184 A0149818A 11/ 12/2004 WG&A, Inc. 803.21 AA-413 2984 12/28/ 2004 NIG Marketing 4,545.45 AA-414 2985 12/ 28/2004 NIG Marketing 4 545.46 Subtotal p 12,980.98 S. Supported by DRs/ invoices dated outside the period of claim 8125- X-237a 005212 10/ 28/2003 BOC p 66,417.00 X-238a 0015347 12/ 5/ 2003 BOC 2,346.00 X-239a 109458203 12/ 18/ 2003 BOC 7,556.00 SN X-240 50441885 12/ 9/ 2003 BOC 1,081,672.00 X-241 108935967 12/ 2/ 2003 BOC 2 651.00 Subtotal p 1,160, 642.00 6. Supported by DRs/ invoices which are not duly registered with the BIR Y-190 3154 4/ 16/2004 Atom Industrial Sales & Services ·p 4,181.82 AA-216 41311054 12/ 28/2004 Asea Brown Boveri Inc. 85,712.91 I Page 3 of 4 48 2

CTA Case No. 7468 Subtotal p 89,894.73 7. Input VAT on a transaction whose nature cannot be ascertained 066- X-21 4098823 1/20/2004 Metropolitan Bank and Trust Co . p 20,625.00 Subtotal p 20,62S.OO 8. Input VAT on purchase of vehicle with engine displacement of more than 2, 000 cc X-156 07164 3/15/2004 Toyota Iloilo Inc. __:_P_ _ __::8:.::1..r..: ,0:..:9..::.0.:.:.9:.::1_ Subtotal P 81, 090.91 ~==~~~~ 9. Input VAT on importation supported by IEIRD which is not machine validated AA-595 56351547 8/ 23/2004 BOC -'- P_ ___;:2:.::.. 9=1..::.. 34-'-'.-0.::..:0_ Subtotal P 29,134.00 ================= 10. Overclaimed input VAT on importation AA-594 57363031 9/ 24/ 2004 BOC p 58,772.00 Subtotal p S8,772.00 TOTAL p 1,624,111.16 II 48 3