OCEANAGOLD (PHILIPPINES), INC. v. COMMISSIONER OF INTERNAL REVENUE (CONSOLIDATED WITH CTA CASE NOS. 9277 & 9416)

REPUBLIC OF THE PHILIPPINES COURT OF TAX APPEALS QUEZON CITY THIRD DIVISION OCEANAGOLD (PHILIPPINES), CTA CASE NOS. 9207,9277, INC., & 9416 Petitioner, tviembers: -versus- UY, Chairperson, RINGPIS-LIBAN, and MODESTO-SAN PEDRO, JJ. COMMISSIONER OF INTERNAL Promulgated : REVENUE, I : /(p /' . ..-.. � Re sp o ndent. X ------------------------------------------------------------------------------------------------------------- -X AMENDED DECISION .�.: RINGPIS-LIBA~ Submitted before this Court are the following: 1. Petitioner's Motion for Reconsideration (of the Decision dated July 24, 2020) flied on September 8, 2020, with respondent's Opposition (Re: Motion for Reconsideration) filed on O ctober 19, 2020; and, 2. Respondent's Motion for Partial Reconsideration (Re: D ecision promulgated 24 June 2020) filed on September 9, 2020, with petitioner's Comment/Opposition [To Respondent's Motion for Partial Reconsideration (re. Decision dated July 24, 2020) dated September 9, 2020] flied on October 19, 2020. On July 24, 2020, the Court promulgated a D ecision for the present consolidated cases, partially granting petitioner's claim for refund of unutilized input value-added tax ryA1) for the yu and 4111 quarters of taxable year (TY) 2013 and the 1sr quarter ofTY 2014, disposing of the case as follows: "WHEREFORE, in light o f the foregoing considerations, the instant Petition for Review is PARTIALLY GRANTED. Accordingly, respondent is DIRECTED TO REFUN~

AMENDED DECISION CTA Case Nos. 9207, 9277, & 9416 petitioner the amount of P27,434,794.00, representing the latter's unutilized excess input VAT arising from its domestic purchases and importation of goods (other than capital goods), domestic purchases of services, and purchases of capital goods which are attributable to zero-rated sales for the 3'd and 4'h quarters of TY 2013 and 1" Quarter ofTY 2014. SO ORDERED." In the above Decision, this Court primarily found that not all of petitioner's reported zero-rated sales or effectively zero-rates sales during the 3'd and 4'h quarters of TY 2013 and the 1" quarter of TY 2014, qualify as such, and that not all of its input VAT being claimed for refund are due or paid. More so, the Court also ruled that since there are both zero-rated sales and taxable sales subject to 12% VAT, the claimed amount of P47,860,882.23 was proportionately allocated on the basis of sales volume. Hence, upon final determination of the refundable amount, the Court allowed the refund of the amount of P27,434,794.00. Petitioner's Motion for Reconsideration In its Motion, petltloner prays that the Court reconsiders the said Decision, raising the following grounds in support of its arguments, viz: THE HONORABLE COURT ERRED IN RULING THAT PETITIONER FAILED TO COMPLY WITH ALL REQUISITES TO SUCCESSFULLY OBTAIN A CREDIT/REFUND OF INPUT VAT PURSUANT TO THE PROVISIONS OF SECTIONS 112(A) AND (C) OF THE NATIONAL INTERNAL REVENUE CODE ('NIRC') OF 1997, AS AMENDED. THE HONORABLE COURT ERRED IN RULING THAT THE ZERO-RATED SALES DECLARED DURING THE 1s1 QUARTER OF TY 2014 IN THE TOTAL AMOUNT OF P4,681,519,998.33 IS NOT WITHIN THE PERIOD OF CLAIM. THE HONORABLE COURT ERRED IN DISALLOWING THE INPUT VAT IN THE AMOUNT OF P14,875,604.42 ATTRIBUTABLE TO PURCHASES OF GOODS AND SERVICES DULY SUPPORTED BY INVOICES AND OFFICIAL RECEIPTS BUT WITHOUT AUTHORITY TO PRINT PURSUANT TO REVENUE MEMORANDUM CIRCULAR NO. 52-201~

AMENDED DECISION CTA Case Nos. 9207, 9277, & 9416 THE HONORABLE COURT ERRED IN RULING THAT NOT ALL OF PETITIONER'S INPUT VAT BEING CLAIMED FOR REFUND ARE DUE OR PAID. This Court finds petitioner's Motion for Reconsideration partially meritorious. Petitioner's export sales should be supported byinvoices dated within the period ofclaim. In the assailed Decision, this Court denied petitioner's zero-rated sales that were declared in the 1'' quarter of TY 2014, in the total amount of 1"4,681,519,998.33 ($104,438,010.16), on the ground that while they were supported by invoices, such were however dated outside the period of claim, to wit. Customer Sales Invoice Amount Declared Peso Equivalent in the 1st Quarter I Trafigura Pte. � No. 00025 Ltd. (CuCon ofTY 2014 663,780,032.46 I Shipment 14) � Date: 5-Apr-2014 Trafigura Pte. 14,819,297.20 I Ltd. (CuCon � Exhibit P-2007-20 5 hipment 15) 15,300,333.57 687,391,966.17 Trafigura Pte. � No. 00026 Ltd. (CuCon I 5 hipment 16) � Date: 7-May-2014 Trafigura Pte. Ltd. (CuCon � Exhibit P-2007-21 5 hip_ment 17j_ Trafigura Pte. � No. 00027 Ltd. (CuCon 5 hipment 18) � Date: 1-Jun-2014 14,592,624.86 655,135,893.09 i Perth Mint Australia � Exhibit P-2007-22 (Dore 8) � No. 00028 I � Date: 6-Aug-2014 28,841,830.48 1,291,871,734.13 27,900,782.04 � Exhibit P-2007-23 I � No. 00029 1,249,720,668.82 . � Date: 6-Aug-2014 � Exhibit P-2007 -24 � No. 00034 � Date: 02-Apr-14 2,983,142.01 133,619,703.66 � Exhibit P-2007-26 -- - -- -TOTAL- - -- - - 104,~38,010.16 -� ~681,519,998.33- In its Motion, petitioner argues that the Court erred in using the date of issuance of the sales invoices as basis in determining the zero-rated export sale since the same is contrary to the numerous decisions issued by this Court. Petitioner asserts that the bill of lading should be regarded as the actual date of export sales in view of the peculiar nature of export sale of mineral products. In support thereto, petitioner cited the Court of Tax Appeals (CTA) cases of Phi/ex Mining Corporation v. Commissioner of Internal Revenue (CTA Case Nos. 7528 and 1564 dated February 9, 2010; and CTA Case No. 8228 dated Mqy 31, 2012) an~

AMENDED DECISION CTA Case Nos. 9207, 9277, & 9416 Phil. Gold Processing & Refining Corporation v. Commissioner of Internal Revenue (CTA EB Case No. 1670 datedJu!J 9, 2018). Unfortunately, this Court does not agree. To reiterate, Section 106(A)(2)(a)(1) of the National Internal Revenue Code (NIRC) of 1997, as amended, in relation to Section 113(A)(1), (B)(1), (2)(c), and (3) of the same Code and Section 4.113-1(A)(1), B(1), and (2)(c) of Revenue Regulations (RR) No. 16-05,1 requires a VAT registered person claiming VAT zero-rated export sales to present at least three (3) types of documents, to wit. 1. the sales invoice as proof of sale of goods; 2. bill of lading or airway bill as proof of actual shipment of goods from the Philippines to a foreign country; and, 3. bank credit advice, certificate of bank remittance or any other document proving payment for the goods in acceptable foreign currency or its equivalent in goods and services. While this Court acknowledges that the shipment date indicated in the Bills of Lading is considered as the date of sale of petitioner's exported products, the absence nonetheless of their corresponding sales invoices - dated within the period of claim- is fatal to petitioner's claim for refund. The Court cannot overemphasize the importance of proper substantiation of zero-rated sales being claimed by petitioner as expressly provided for by law. Petitioner contends that it issued provisional invoices in relation to the supposed zero-rated sales and these were all dated within the 1" quarter of TY 2014. In the testimony of its witness, Ms. Josefina Mallari, petitioner's Finance Manager, she explained the procedure in issuing the provisional and final invoices, as follows: "Q-57You mentioned that petitioner issues provisional invoice and final invoice relative to its sale of export sales of minerals. Can you explain why petitioner issues provisional invoice and final invoice? A57 Petitioner issues a provisional invoice upon shipment of the mineral products to its foreign buyer. The provisional invoice covers approximately ninety percent (90%) of the estimated value of the shipment. Petitioner makes a provisional pricing or valuation based on weight (dry and wet weight) and moisture as determined by it and als~ 1 "SUBJECT: Consolidated Value-Added Tax Regulations of 2005", dated September 1, 2005.

AMENDED DECISION CfA case Nos. 9207, 9277, & 9416 based on its provisional assays showing copper, gold and silver content. Subsequently, a final invoice is issued after petitioner and its foreign buyer have reached an agreement regarding the final settlement weights, assays and quotations and the final price of the shipment. The final price is based on the weight and moisture content upon arrival of the concentrates at the port of unloading and the metal price at the London Metal Exchange three (3) months after the arrival of the shipment at the port of destination. The remaining unpaid balanced based on the final invoice is paid within three (3) days upon receipt of the same. QS8 Does petitioner issue a provisional invoice and a final invoice for all its export sales? ASS Yes. QS9 Given that petitioner issues a provisional invoice and final invoice for all its export sales, when is the date of the sale transaction? AS9 The date of the sale transaction is at the rime of the delivery of the shipment to the carrier appearing in the bill of lading."' Regrettably, however, petitioner failed to present the alleged provisional invoices it issued as nowhere in the records can the said provisional invoices be found. Notably, the sales invoices3 presented by petitioner, which were the same documents examined by the court-commissioned Independent Certified Public Accountant (ICPA), were merely described as "Sales Invoice" without stating whether they are provisional or final invoices. Moreover, while it is true that in a number of cases involving Phi/ex Mining Corporation (PMCY the Court accepted PMC's Final Invoices despite bearing dates much later than the dates of shipment indicated in the bills of lading and provisional invoices, thereby ruling that PMC sufficiently proved that there were actual export sales and actual shipment of goods from the Philippines to a foreign country; nonetheless, petitioner's reliance on the ruling )V 2 Exhibit "P-50". 3 Exhibits "P-2007-1" to "P-2007-26". 4 Commissioner of Internal Revenue v. Philex Mining Corporation, CTA EB No. 1525 (CTA Case No. 8808), June 13, 2018; Commissioner of Internal Revenue v. Philex Mining Corporation, CTA EB No. 1493 (CTA Case No. 8819), August 24, 2017; Philex Mining Corporation v. CIR, CTA Case No. 8753 and 8762, February 17, 2016; Philex Mining Corporation v. CIR, CTA Case No. 8228 dated May 31, 2012.

AMENDED DECISION CTA Case Nos. 9207, 9277, & 9416 made in the cases of PMC is not applicable herein since the facts the PMC cases are not in allfours in the present consolidated cases. It bears stressing that PMC submitted before the Court its duly issued provisional invoices, aside from the final invoices, and the Court ruled that the final invoices issued by PMC were merely additional evidence to support its claimed zero-rated sales. Thus, the ruling of the Court in the said cases was premised on the fact that petitioner PMC export sales were duly supported by bills of lading and provisional invoices issued upon shipment of the mineral products. In contrast with the present consolidated cases, no provisional invoices were ever presented by petitioner. If there were in fact provisional invoices issued, as testified by Ms. Mallari, petitioner should have presented and formally offered the same before this Court. Hence, the disallowance of petitioner's zero-rated sales which were declared in the 1" quarter of 1Y 2014 in the total amount of P4,681,519,998.33 ($104,438,010.16) on the same ground that such were supported by invoices but dated not within the period of claim shall be retained by this Court. The disallowance of input VAT amounting to ?14,875,604.42 pursuant to RMC No. 52-2013 was proper. In the assailed Decision, the Court disallowed petitioner's input VAT on purchases of goods and services in the total amount of P14,875,604.42 on the ground that it was supported by invoices/official receipts without Authority to Print (ATP). The Court's ruling was in accordance with RMC No. 52-2013, which provides that "In all prindpal and supplementary receipts/invoice which can still be used until October 31, 2013, the term "valid until October 31, 2013 only" shall be stamped prominent!J on the face of the receipts or invoices (original and duplicate copies). Otherwise, no deduction and input tax mcg be claimed using these receipts/invoices." In its Motion, petitioner argues that this Court erroneously relied on RMC No. 52-2013; that none of the provisions of the NIRC or RR No. 16- 2005 requires that the phrase "valid until October 31, 2013 on!J" be stamped or printed on the face of the invoice or official receipt in order for a taxpayer to be able to validly claim an input VAT refund or tax credit certificate. To bolster its argument, petitioner cites the CTA case of Deutsrhe Knowledge Services Pte. Ltd. v. Commissioner of Internal Revenue (CTA EB Case Nos. 1917 and 1919 [CTA Case No. 9079], dated February 5, 2020), wherein it was ruled that RMC No. 52-2013 cannot prevail over the clear and plain language of the NIRC. More so, petltJ.oner further cites the case of Commissioner of Internal Revenue v. Silicon Philippines (former!J Intel Philippines Manufacturing, Inr.)/ wherei~ 5 G.R. No. 169778, March 12, 2014.

AMENDED DECISION CTA Case Nos. 9207, 9277, & 9416 the Supreme Court held that while an ATP must be obtained from the Bureau of Internal Revenue (BIR) prior to printing invoices or receipts in order that such invoices or receipts may be used as basis for filing a refund/ credit of input VAT on zero-rated sales, the ATP need not be reflected or indicated in the invoices or receipts because there is no law or regulation that requires it. Lasdy, petitioner insists that even assuming that the submission of an ATP as provided under RMC No. 52-2013 is a valid requirement, it manifests that the input VAT in the aggregate amount of 1'8,369,177.57 is duly supported with ATP as found by the ICPA in Exhibit "P-65B-20". This Court is not convinced. First, petitioner's reliance on the ruling in the CTA case of Deutsche Knowledge Seroices Pte. Ltd. v. Commissioner of Internal Revenue is misplaced. Worth noting is that petitioner cited the following excerpt in its Motion, vii;: "Moreover, it bears noting that in the aforementioned Section 113 of the Tax Code and Sections 4.113-1 (B) of RR No. 16-2005, which specify the mandatory information that must be contained in the VAT invoices and ORs, there is no requirement that the phrase 'valid until October 31, 2013' must be stamped or imprinted on the face of the invoices or ORs to be able to claim deduction and input tax refund/credit. As discussed above, while administrative issuance such as RMC No. 52-2013, have the force and effect of law, and benefit from the same presumption of validity and constitutionality enjoyed by statutes, it cannot prevail over the clear and plain language of the Tax Code. In view thereof, We find that the Court in Division erred in disallowing the input VAT for failure to stamped the term 'valid until October 31, 2013' on the face of the invoices and receipts." However, the above-quoted pronouncement was incompletely cited and, apparendy, was taken out of context by petitioner. In the said ruling, the Court also held that: "The requirement of stamping the term 'valid until October 31, 20 13' on the face of the invoices and receipts was only introduced in RMC No. 52-2013 which was issued on August 13, 2013. Considering that the instant case involves the claim for refund or credit ofunutilized input VAT for the taxable period April to June 2013, or the 2nd quarter ofCY2013, it is evident that the requirement under RMC No. 52-13 wa:v-

AMENDED DECISION CfA Case Nos. 9207, 9277, & 9416 inexistent during the subject period of claim, and therefore could not have been complied with by Deutsche Knowledge. The said circular cannot be applied retroactively so as to prejudice Deutsche Knowledge, given the well-entrenched principle that statutes, including administrative rules and regulations, operate prospectively only, unless the legislative intent to the contrary is manifest by express terms or by necessary implication." (Emphasis supplied) Based on the foregoing, the Court did not explicidy rule that the requirement under RMC No. 52-2013 was an invalid requirement, or was totally in contrast against the provisions of the NIRC of 1997, as amended. What the Court concluded is that RMC No. 52-2013 was not applicable because the said circular was inexistent during the subject period of claim by Deutsrhe Knowledge Services Pte. Ltd Furthermore, the Court also ruled that RMC No. 52-2013 cannot be applied retroactively, but prospectively. Thus, it is apt to restate that RMC No. 52-2013 clearly requires that the term "valid until October 31, 2013 only" shall be stamped prominendy on the face of the receipts or invoices (original and duplicate copies) so that it can still be used until October 31, 2013. Otherwise, no deduction and input tax may be claimed using these receipts/invoices. Second, petitioner's assertion that the input VAT in the total amount of P8,369,177.57 is supported with ATP as found by the ICPA has a paucity of merit. The Court's disallowance in the total amount of P14,875,604.42, which the amount of P8,369,177.57 was included, was proper. As held in the assailed Decision, the supporting documents of the said amount were invoices/official receipts with ATP dated between January 1, 2011 and January 17, 2013, thus, disallowed pursuant to RMC No. 52-2013. Although petitioner presented new ATPs of the entities who issued the said invoices/official receipts,6 these new ATPs have no significance to input taxes claimed by petitioner since the said new ATPs were for new invoices/official receipts with new serial numbers to be printed and issued and do not in any way validate the ones previously issued to petitioner. As such, the disallowance of petitioner's input VAT in the total amount ofP14,875,604.42 shall also be retained by this Court. The following input taxes were inadvertently disallowed twice by the Court/ 6 Exhibits "P-2006-1" to "P -2006-76".

AMENDED DECISION CTA case Nos. 9207, 9277, & 9416 Again, in the assailed Decision, this Court disallowed the input VAT in the total amount of P6,391,154.73 under item "A" (Input VAT on purchases of goods and services supported lry invoices/offidal receipts without authoriry to print). Notably, the same amount was also part of the total disallowed input VAT under item "E" (Input VAT on purchases ofgoods and services supported lry invoices/official meipts with alteration without counter-signature or with counter-signature but without authoriry), to wit: Exhibit Registered Name Document Date Input VAT No. 26-Jul-13 P-389 DIDIPIO 26-Jul-13 I P-389 COMMUNITY DEVT 0097 P-390 CORP p 6,600.021 P-391 DIDIPIO 0098 26-Jul-13 P-391 COMMUNITY DEVT ' P-391 CORP 0099 29-Jul-13 P-391 DIDIPIO 9,000.031 P-391 COMMUNITY DEVT 0101 16-Aug-13 P-391 CORP I P-391 DIDIPIO P-391 COMMUNITY DEVT 12,225.841 P-391 CORP P-391 DIDIPIO 209,678.571 P-392 COMMUNITY DEVT CORP I DIDIPIO COMMUNITY DEVT 43,665.95 CORP DIDIPIO I COMMUNITY DEVT CORP 122,596.66 DIDIPIO 1 COMMUNITY DEVT CORP I DIDIPIO COMMUNITY DEVT 126,096.00 CORP DIDIPIO 3,150.00 COMMUNITY DEVT CORP ' DIDIPIO COMMUNITY DEVT 10,404.48 . CORP DIDIPIO 9,774.24 COMMUNITY DEVT CORP 4,200.00 DIDIPIO COMMUNITY DEVT 120,671.38 CORP DIDIPIO 363,778.09 COMMUNITY DEVT 36,806.40 /V""

AMENDED DECISION CTA Case Nos. 9207, 9277, & 9416 P-392 CORP 0102 16-Aug-13 I P-392 DIDIPIO P-393 COMMUNI1Y DEVT 0103 16-Aug-13 10,979.761 P-393 CORP P-393 DIDIPIO 0105 27-Aug-13 I P-394 COMMUNI1Y DEVT P-394 CORP 0104 22-Aug-13 43,252.92 P-394 DIDIPIO 4,320.00 P-394 COMMUNI1Y DEVT 0106 27-Aug-13 40,714.70 P-394 CORP 4,968.96 P-395 DIDIPIO 2,707.20 P-396 COMMUNI1Y DEVT 231,423.37 P-396 CORP 191,675.98 P-396 DIDIPIO 86,045.59 P-396 COMMUNI1Y DEVT 404,762.01 P-396 CORP 15,600.00 P-397 DIDIPIO 9,500.16 COMMUNI1Y DEVT 7,975.26 CORP 116,997.04 DIDIPIO 7,446.66 COMMUNI1Y DEVT 583,030.53 CORP 162,480.00 DIDIPIO COMMUNI1Y DEVT ~ CORP DIDIPIO COMMUNI1Y DEVT CORP DIDIPIO COMMUNI1Y DEVT CORP DIDIPIO COMMUNI1Y DEVT CORP DIDIPIO COMMUNI1Y DEVT CORP DIDIPIO COMMUNI1Y DEVT CORP DIDIPIO COMMUNI1Y DEVT CORP DIDIPIO COMMUNI1Y DEVT CORP DIDIPIO COMMUNI1Y DEVT CORP DIDIPIO COMMUNI1Y DEVT CORP

AMENDED DECISION CTA Case Nos. 9207, 9277, & 9416 P-397 DIDIPIO 0107 30-Aug-13 14,584.32 P-397 COMMUNITY DEVT 2,822.40 P-398 CORP 0108 09-Sep-13 21,151.50 P-398 DIDIPIO 7,784.72 P-398 COMMUNITY DEVT 0'109 16-Sep-13 7,148.58 P-398 CORP 764,093.50 P-398 DIDIPIO 18,086.40 P-398 COMMUNITY DEVT 205,731.93 P-398 CORP 8,082.13 P-399 DIDIPIO 82,800.00 P-399 COMMUNITY DEVT 45,073.68 P-399 CORP 26,811.36 P-399 DIDIPIO 487,261.00 P-399 COMMUNITY DEVT 120,671.38 P-399 CORP 612,642.39 P-400 DIDIPIO 8,691.25 P-400 COMMUNITY DEVT 8,633.95 P-400 CORP 7,685.67 DIDIPIO COMMUNITY DEVT ,-/ CORP DIDIPIO COMMUNITY DEVT CORP DIDIPIO COMMUNITY DEVT CORP DIDIPIO COMMUNITY DEVT CORP DIDIPIO COMMUNITY DEVT CORP DIDIPIO COMMUNITY DEVT CORP DIDIPIO COMMUNITY DEVT CORP DIDIPIO COMMUNITY DEVT CORP DIDIPIO COMMUNITY DEVT CORP DIDIPIO COMMUNITY DEVT CORP DIDIPIO COMMUNITY DEVT CORP DIDIPIO

AMENDED DECISION CTA case Nos. 9207, 9277, & 9416 P-400 COMMUNITY DEVT I P-400 CORP P-400 DIDIPIO I P-400 COMMUNITY DEVT P-400 CORP 8,799.90 DIDIPIO 44,816.331 COMMUNITY DEVT 79,591.84 I CORP DIDIPIO 8,216.10 I COMMUNITY DEVT 797,446.62 CORP P6,391,154. 73 DIDIPIO COMMUNITY DEVT CORP DIDIPIO COMMUNITY DEVT CORP TOTAL Admittedly, for having inadvertently disallowed the above input VAT twice, the total valid input VAT shall accordingly be adjusted in by 1"6,391 ,154. 73. Second, the input VAT in the amount of 1"129,623.04 was disallowed under item "G" (Input VAT on domestic purchase of services without supporting official receipts). As correctly pointed out by petitioner, the same was also deducted twice, to wit: Exhibit Registered Name Document Date Input VAT No. Input VAT on domestic purchase of services without supporting official receipts ANTRAK P-189 PHILIPPINES I' 383.04 TRANSPORT ANTRAK P-189 PHILIPPINES 60,360.00 TRANSPORT ANTRAK P-189 PHILIPPINES 3,600.00 TRANSPORT ANTRAK 0000044 17-0ct-13 P-189 PHILIPPINES 480.00 TRANSPORT ANTRAK P-189 PHILIPPINES 3,300.00 TRANSPORT ANTRAK P-189 PHILIPPINES 5,700.00 TRANSPORT P-189 ANTRAK 390.00 ~-

AMENDED DECISION CTA case Nos. 9207, 9277, & 9416 Page 13 of IS P-189 PHILIPPINES 22,200.00 P-189 TRANSPORT P-189 ANTRAK 32,820.00 PHILIPPINES TRANSPORT 390.00 ANTRAK 129,623.04 PHILIPPINES TRANSPORT 383.04 ANTRAK PHILIPPINES TRANSPORT Jubtota! P-189 ANTRAK 60,360.00 P-189 PHILIPPINES P-189 TRANSPORT 3,600.00 P-189 ANTRAK P-189 PHILIPPINES 480.00 P-189 TRANSPORT P-189 ANTRAK 0000044 17-0ct-13 3,300.00 P-189 PHILIPPINES 5,700.00 P-189 TRANSPORT P-189 ANTRAK 390.00 PHILIPPINES TRANSPORT 22,200.00 ANTRAK PHILIPPINES 32,820.00 TRANSPORT ANTRAK 390.00 PHILIPPINES TRANSPORT 129,623.04 ANTRAK P259,246.08 PHILIPPINES TRANSPORT ANTRAK PHILIPPINES TRANSPORT ANTRAK PHILIPPINES TRANSPORT ANTRAK PHILIPPINES TRANSPORT subtotal TOTAL Petitioner further claims that contrary to the Court's findings, the amount of 1'129,623.04 was duly supported with Official Receipt No. 0000044. Nonetheless, while the said amount is duly supported with official receipt, the same should still be denied on the ground that the amount of VAT was not separately indicated therein. / '

AMENDED DECISION CTA case Nos. 9207, 9277, & 9416 Accordingly, for having inadvertently disallowed the amount of P129,623.04 twice, the total valid input VAT shall be accordingly adjusted by P129,623.04. Lastly, petitioner submits that there is duplication in the disallowance particularly in the following input VAT, as follows: Findings Amount Duplication 1"30,411,196.48 CTA Findine 1"1,746,783.60 1,746,783.60 E. Input VAT on purchases of goods 195,799.12 p 195,799.12 P1,942,582. 72 and servtces supported by 286,887.28 Invoices/Official Receipts with alteration without counter-signature (1) or with counter-signature but without authority /CPA Findinl!' n. With alterations without countersignature CTAFinding I. Over-claimed input VAT (Discrepancy between the amount (2) of claim and the input VAT reflected per Official Receipt) /CPA Findine o. Amount claimed is higher than the amount per docs TOTAL To recall, the Court's findings of additional disallowances in tl!e total amount of P82,682,714.18 was based on the "Total No Exceptions Noted - P130,543,596.41" in the ICPA report witl! Exhibit Reference of "P-65B-1" to "P-65-B-6", "P-2001" to "P-2004" and "P-65-B-18". This Court, however, failed to notice that the disallowances of the ICPA under items "n" and "o" were still included in "P-65-B-5" and "P-65-B-6" schedules. Consequently, when the Court disallowed the amount of P1,942,582.72, there was indeed a duplication of disallowance botl! per ICPA findings as well as per this Court's determination. Admittedly, for having inadvertently disallowed the amount of P1,942,582.72 twice, tl!e total valid input VAT shall accordingly be adjusted by P1,942,582.72. In sum, the total adjustment made to tl!e disallowance on petitioner's input VAT claim amounts to P8,463,360.49, computed below as follow/

AMENDED DECISION p 6,391 ,154. 73 I CTA Case Nos. 9207, 9277, & 9416 129,623.04 I 1,942,582.721I a. Disallowed input VAT under item "A" and item "E" b. Disallowed input VAT under item "G" I P8,463,360.49 c. Disallowed input VAT both per ICPA and this Court's findings , Total Adjust111ent - As such, petitioner's adjusted total valid input VAT claim for the 3'd and 4'h quarters of TY 2013 and 1" quarter of TY 2014 amounts to P56,324,242. 72, as determined below, to wit: Valid input VAT per assailed Decision p 47,860,882.23 Add: Adjustment per this Motion for Reconsideration I Adjusted total Valid Input VAT 8,463,360.49 P56,324,242.72 . Consequently, the allocation of petitioner's valid input VAT of P56,324,242.72 is computed as follows: Total taxable sales per VAT Returns p 2, 708,923.84 Divided by the reported total sales per Quarterly VAT Returns 11 '446,282,3 72.44 Multiplied by adjusted total valid input VAT Valid Input VAT allocated to Total Sales ' subject to 12% VAT 56,324,242.72 I p 13,329.92 I Total zero-rated Sales per VAT Returns P11,443,573,448.60 I Divided by the reported total sales per Quarterly VAT Returns 11,446,282,372.44 I Multiplied by adjusted total valid input VAT Valid Input VAT allocated to Total Zero- 56,324,242.72 Rated Sales P56,310,912.80 ' - - --���- Henceforth, for purposes of, and with regard to petitioner's compliance with the eight requisite, the amount of valid input VAT attributable to its zero- rated sales is now adjusted to P56,310,912.80. Determination of the refundable amount. In the assailed Decision, it was determined that petitioner has output VAT liability in the amount of 1"325,070.86. Since petitioner's valid input VAT allocated to sales subject to 12% VAT is only P13,329.92, petitioner still has output VAT due ofP311,740.94, computed as follows: ~

AMENDED DECISION p 325,070.86 CTA Case Nos. 9207, 9277, & 9416 Page 16 of 18 13,329.92 P311,740.94 Output VAT Less: Valid input VAT allocated to sales subject to 12% VAT Output VAT still due Thereafter, the valid input VAT attributable to total reported zero-rated sales in the amount of P56,310,912.80 shall then be utilized against the remaining output VAT liability of P311,740.94. Accordingly, only the remaining input VAT of P55,999,171.86 can be attributed to the entire zero-rated sales reported by petitioner in the amount of P11,443,573,448.60, and only the input VAT of P32,319,333.57 is attributable to valid zero-rated sales of P6,604,538,160.70, computed as follows: Valid Input VAT allocated to reported zero-rated sales p 56,310,912.80 Output VAT still due 311,740.94 Valid input VAT allocated to total reported zero-rated sales p 55,999,171.86 Divide by total declared zero-rated sales Multiply by valid zero-rated sales 11,443,573,448.60 Excess input VAT attributable to valid zero-rated sale_s___ 6,604,538, 160.70 p 32,319,333.57 Respondent's Motion for Partial Reconsideration In his Motion, respondent alleges that the input tax on purchases should be direcdy attributable to its zero-rated sales. He asserts that there should be the connection between the purchases and the finished products which must be concrete and not imaginary or remote. Respondent points out that there is nothing in the assailed Decision which discussed the direct attributability of the purchases or input tax to the finished product whose sale is subjected to VAT at zero-rate. This Court does not agree. There is no requirement that the input taxes subject of the claim for refund be direcdy attributable to zero-rated sales under Section 112 of the NIRC of 1997, as amended. As a matter of fact, the provision allows allocation of input taxes in case the same cannot be direcdy and entirely attributed to any of the sales, to wit: "SEC. 112. Refunds or Tax Credits of Input Tax. - (A.) Zero-rated or Effictive!J 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 /

AMENDED DECISION CTA Case Nos. 9207, 9277, & 9416 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: x x x 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(B) (6), the input taxes shall be allocated ratably between his zero-rated and non-zero-rated sales." (Emphasis supplied) WHEREFORE, premises considered, respondent's Motion for Partial Reconsideration (Re: Decision promulgated on 24 June 2020) is DENIED for lack of merit. On the other hand, petitioner's Motion for Reconsideration (of the Decision dated July 24, 2020) is PARTIALLY GRANTED. Accordingly, the dispositive portion of the Decision dated July 24, 2020, is hereby amended to read as follows: "WHEREFORE, in light of the foregoing considerations, the Petitions for Review is PARTIALLY GRANTED. Accordingly, respondent is DIRECTED TO REFUND to petitioner the amount of P32,319,333.57, representing the latter's unutilized excess input VAT arising from its domestic purchases and importation of goods (other than capital goods), domestic purchases of services, and purchases of capital goods which are attributable to zero-rated sales for the 3'd and 4'h quarters of TY 2013 and 1" Quarter of TY 2014. SO ORDERED." SO ORDERED. ~]!..<. ~ _4 z_ MA. BELEN M. RINGPIS-LIBAN Associate Justice We Concur: ERL~P.UY Associate Justice

AMENDED DECISION CTA Case Nos. 9207, 9277, & 9416 ATTESTATION I attest that the conclusions in the above Amended Decision were reached in consultation before the cases were assigned to the writer of the opinion of the Court. ERL~P.UY Associate Justice Chairperson CERTIFICATION Pursuant to Article VIII, Section 13 of the Constitution, and the Division Chairperson's Attestation, it is hereby certified that the conclusions in the above Amended Decision were reached in consultation before the cases were assigned to the writer of the opinion of the Court. Presiding Justice