BOEHRINGER INGELHEIM (PHILIPINES), INC. v. COMMISSIONER OF INTERNAL REVENUE

CTA Form No. 8 1111111111111111 11111111111 11111 11111 1111111111111111111111111111111111111111111 22-000049-0056 REPUBLIC OF THE PHILIPPINES COURT OF TAX APPEALS QUEZON CITY FIRST DIVISION CTA CASE NO. 10758 BOEHRINGER INGELHEIM NOTICE OF DECISION (PHILIPINES), INC., Petitioner, - versus- COMMISSIONER OF INTERNAL REVENUE, Respondent. To: OFFICE OF THE SOLICITOR GENERAL 134 Amorsolo Street, Legazpi Village Makati City ATTY. BRYAN ANTONY C. DIEGO Bureau of Internal Revenue Room 703, Litigation Division, BIR National Office Building Sen. Miriam P. Defensor-Santiago Avenue Diliman, Quezon City CASTILLO LAMAN TAN PANTALEON & SAN JOSE 2nd to 5th and 9th Floors, The Valero Tower 122 Valero Street, Salcedo Village Makati City GREETINGS: You are hereby notified by these presents that on October 22, 2024, a Decision was rendered in the above-entitled case, copy of which is attached hereto. Quezon City, Philippines, October 28, 2024. Jo~ Atty. Maria Executive ~~~urCthaIIn-Te

REPUBLIC OF THE PHILIPPINES COURT OF TAX APPEALS QUEZON CITY FIRST DIVISION BOEHRINGER INGELHEIM CTA CASE NO. 10758 (PHILIPPINES), INC. , Petitioner, Members: -versus- DEL ROSARIO, P.J., Chairperson, BACORRO-VILLEN, A, and CUI-DAVID, JJ. COMMISSIONER OF Promulgated: INTERNAL REVENUE, 02~ Respondent. .QCT 22 2 1;Jar- )(---------- - --------------- -~- --- _v_--- -)( DECISION CUI-DAVID, J.: Before the Court is the Petition for Review 1 filed by petitioner Boehringer Ingelheim (Philippines) , Inc. on February 2 , 2022, praying for the Court to render judgment ordering respondent Commissioner of Internal Revenue (CIR) to refund the amount ofP89 ,760,906.71 , representing petition~r's alleged erroneously paid and/ or collected value-added ta)( (VAT) on its importation of prescription drugs and medicines for diabetes, high cholesterol, and hypertension from January 23, 2020 to April 20, 2020. THE PARTIES Petitioner Boehringer Ingelheim (Philippines), Inc . is a domestic corporation with principal office address at the 23rd floor, BDO Towers (formerly Citibank Tower) Valero Building, 8741 Paseo de RoJ(as, Bel-Air, Makati City, Philippines.2 It is registered with the Bureau of Internal Revenue (BIR) under Ta)( Identification Number (TIN) 000-11 0-0 15-000.3 \{<" 1 Docket -Vol. l, pp. I5-51. 2 Docket - Vol. Ill, p. 967, Joint Stipulation ofFacts and Issues (JSFI), Stipulated Facts, par. 2. 3 Docket- Vol. I, p. I ll , Exhibit "P-4".

DECISION CTA Case No. 10758 Boehringer Ingelheim (Philippines), Inc. v. Commissioner of Internal Revenue X------------------------------------------------------------------------------------X Pursuant to the Amended Articles of Incorporation 4 of petitioner, the primary purposes for which it was formed are "to import, export, manufacture, process, compound, repack, prepared for market, buy, sell at wholesale, distribute, transport and promote general merchandise, goods and wares of all kinds and descriptions, particularly but not limited to pharmaceutical preparation, drugs, medicines, veterinary medicines, agricultural chemical, pesticides, fungicides, insecticides, chemicals, compounds, druggists' sundries and supplies, cosmetics, perfumeries, toilet articles, scientific apparatus, and physicians and hospital supplies; and likewise to apply for, obtain, register, purchase, lease or otherwise, acquire, and to hold, use, exercise, develop, operate and introduce, and to sell, assign, grant licenses or territ~rial rights in respect of, or otherwise to turn to account or dispose of, any trademarks, trade names, brands, labels, patents, inventions, formulas or processes for such products." Respondent is the Commissioner of the BIR, vested by law to enforce and implement the provisions of the Tax Code, as amended, as well as related statutes and their implementing rules and regulations. He holds office at the BIR National Office Building, BIR Road, Diliman, Quezon City. 5 THE FACTS AND THE PROCEEDINGS From January 17, 2020 to April 20, 2020, petitioner imported various prescription drugs and medicines for the treatment of diabetes, high cholesterol, and hypertension. These products were subjected to VAT on importati'on, which petitioner paid per relevant importation from January 23, 2020 to April 20, 2020.6 On January 22, 2020, the President of the Philippines approved Republic Act (RA) No. 11467,7 which amended certain sections of the National Internal Revenue Code (NIRC) of 1997, as amended.s Section 15 of RA No. 11467 states that the law shall "take effect on January 1, 2020, after its complete ~ /d. at 74-82, Exhibit �'P-1". Docket- Vol. lll, p. 967, JSFI, Stipulated Facts. par. I. !d. at 967-968, JSFI, Stipulatt:d Facts, par. 3. AN ACT AMENDING SECTIONS 109.141, 142, 143,144, 147, 152, 263, 263-A, 265, AND 288-A, AND ADDING A NEW SECTION 290-A TO REPUBLIC ACT NO. 8424, AS AMENDED, OTHERWISE KNOWN AS THE NATIONAL INTERNAL REVENUE CODE OF 1997, AND FOR OTHER PURPOSES Docket- Vol. lll, p. 968, JSFI. Stipulated Facts, par. 4.

DECISION CTA Case No. 10758 Boehringer Ingelheim (Philippines), Inc. v. Commissioner of Internal Revenue x------------------------------------------------------------------------------------x publication either in the Official Gazette or in a newspaper of general circulation."9 Subsequently, on June 8, 2020, respondent issued Revenue Memorandum Circular (RMC) No. 62-2020,10 which published the full text of a letter from the Food and Drug Administration (FDA) of the Department of Health (DOH), listing prescription drugs and medicines exempt from VAT pursuant to RA No. 11467. The RMC also stated that the listed medicines would be exempt from VAT beginning January 27, 2020.11 On June 26, 2020, the Secretary of Finance issued Revenue Regulations (RR) No. 18-2020,12 implementing RA No. 11467. 13 . Thereafter, on October 14, 2020, respondent issued RMC No. 113-2020, 14 which amended RMC No. 65-2020, 15 and published the full text of a letter from the Department of Finance (DOF) clarifying the effective date of RA No. 11467. The issuance confirmed that the law took effect on January 23, 2020, instead of January 27, 2020, due to its publication on the Official Gazette website on that date. 16 On October 15, 2020, respondent issued Revenue Memorandum Order (RMO) No. 36-2020,17 laying down the guidelines and procedures for the refund of erroneously paid VAT on imported prescription drugs pursuant to RR No. 18- 2020 and Section 204(c) of the NIRC of 1997, as amended. 18 \i !d. at 968. JSFI, Stipulated Facts, par. 5. 10 SUBJECT: Publishing the Full Text of the Letter from the Food and Drug Administration (FDA) of the Department of Health (DOH) Containing the "List of Prescription Drugs and Medicines for Diabetes, High- Cholesterol and Hypertension Exempt from VAT Beginning January 27, 2020" Pursuant to Section I of Republic Act No. I I467. II Docket- Vol. III, p. 968, JSFI, Stipulated Facts, par. 6. 12 SUBJECT: Regulations to Implement Section 1 of Republic Act (R.A.) No. 11467, Further Amending Section 109 (AA) of the National Internal Revenue Code (Tax Code) of 1997, as Amended by Republic Act (R.A.) No. 10963 or the "TRAIN Law," Providing for Value-Added Tax (VAT) Exemption on the Sales and Importation of Drugs and Medicines Prescribed for Diabetes, High CholesteroL Hypertension, Cancer. Mental Illness, Tuberculosis, and Kidney Diseases. IJ Docket- Vol. III, p. 968, JSFI. Stipulated Facts, par. 7. 14 SUBJECT: Publishes the full text of the letter from the Department of Finance to amend the effectivity date of RA No. I 1467, as circularized under RMC No. 65-2020 15 SUBJECT: Circularizes the effectivity date of Republic Act (RA) No. 11467 entitled "An Act Amending Sections 109, 141, 142, I43, 144, 147, 152,263. 263-A, 265 and 288-A, and Adding a New Section 290-A to RA No. 8424 as Amended, Otherwise Known as the National Internal Revenue Code of 1997, and for Other Purposes" " Docket- Vol. III, p. 968, JSFJ, Stipulated Facts. par. 8. 17 SUBJECT: Providing Guidelines and Procedures in the Refund of Erroneously Paid Value Added Tax (VAT) on Imported Drugs Prescribed for Diabetes, High Cholesterol and Hypertension as Implemented Under Revenue Regulations (RR) No. 18-2020 Pursuant to Section 204(C) of the Tax Code of 1997, as Amended. 18 Docket- Vol. III, p. 969, JSFI, Stipulated Facts, par. I0.

DECISION CTA Case No. 10758 Boehringer Ingeiheim (Philippines), Inc. v. Commissioner of Internal Revenue x------------------------------------------------------------------------------------x Petitioner's total VAT paid on the importation of medicines covered by RA No. 11467, as listed in the DOH-FDA's letter published under RMC No. 62-2020, within the relevant period of the claim, amounted to P89,760,906.71.19 Hence, on December 15, 2020, petitioner filed an administrative claim 2o for a refund with the Large Taxpayer Audit Division (LTAD) 1 of the BIR, requesting a refund of the erroneously paid VAT amounting to P89,760,906.71. In a letter dated January 7, 2021, the BIR LTAD 1 required petitioner to submit: (a) wet-ink signed originals of BIR Form No. 1914, and (b) Bureau of Customs (BOC)-authenticated copies of the Single Administrative Document (SAD) and Statement of Settlement of Duties and Taxes (SSDT), which were already attached to the claim for refund. Petitioner complied on January 20 and 21, 2021.21 Thereafter, the BIR's Large Taxpayers Service, through OIC-Assistant Commissioner (OIC-ACIR) Manuel V. Mapoy, issued a letter dated February 8, 2021, denying petitioner's administrative claim for a refund.22 Petitioner filed a request for reconsideration23 which was denied through a letter dated June 3, 2021.24 Petitioner then filed a Request for Reconsideration with respondent on July 9, 2021.25 Alleging inaction, petitioner elevated its claim to the Court via the instant Petition for Review filed on February~' 2022. In his Answer (Re: Petition for Review dated 31 January 2022) filed on April 19, 2022, respondent argued that the instant Petition for Review should be denied, citing petitioner's failure to substantiate its claim for refund at the administrative level. According to respondent, tax refunds are subject to administrative and routine investigation and are not ipso facto granted. The BIR still had to investigate and ascertain the validity of the claim. The BIR must investigate and verify the 19 /d. at 968, JSFI, Stipulated Facts, par. 9. \nl\/ 20 Docket- Vol. I, pp. 103 to I 10. Exhibit �'P-3". \I' 21 Docket- Vol. III, p. 969, JSFI, Stipulated f-ncts, par. 12. 22 Docket- Vol. III, p. 969, JSFI, Stipulated Facts. par. 13: Docket- Vol. I, pp. I44-145, Exhibit "P-I 9". 23 !d. at 969, JSFI, Stipulated Facts, par. !4; !d. at 146-154. Exhibit "P-20". " !d. at 969, JSFI, Stipulated Facts, par. 15; !d. at 163-164, Exhibit "P-24". 25 !d. at 969, JSFI, Stipulated Facts, par. 16; !d. at 165-174, Exhibit �'P-25''.

DECISION CTA Case No. 10758 Boehringer Ingelheim (Philippines), Inc. v. Commissioner of Internal Revenue X------------------------------------------------------------------------------------X validity of the claim. Moreover, the taxpayer-claimant bears the heavy burden of proving compliance with all statutory and administrative requirements to be entitled to a tax refund. Allegedly, petitioner failed to demonstrate its entitlement to refund the alleged erroneously paid VAT on its importation of prescription drugs and medicines, in the amount of 1"89,760,906.71, at the administrative level. Since a decision had been rendered at the administrative level, petitioner could not submit documents not previously submitted. Moreover, the Court is confined to reviewing whether the denial was proper, given the evidence submitted during the administrative proceedings. On June 16, 2022, respondent transmitted to this Court the BIR Records of the case,26 consisting of 153 pages in one folder. After the Pre-Trial Conference on September 12, 2022, the parties submitted a Joint Stipulation of Facts and Issues27 on October 12, 2022, which served as the basis for the Pre-Trial Order2B issued on November 7, 2022. The trial then ensued, during which petitioner presented its witnesses, including: (1) Mr. Ermel N. Teodoro,29 petitioner's Head of Finance and Administration; (2) Ms. Mylene P. Salindong-Vicmudo, 30 petitioner's Central Accounting Manager; (3) Mr. Marlon L. Sesante,3 1 petitioner's Commercial Supply Chain Lead; and (4) Mr. Ericson D. Tadeja, 32 the Court- commissioned independent certified public accountant (ICPA).33 On April 14, 2023, petitioner filed its Offer ofDocumentary of Evidence,34 to which respondent filed his Comment (Re: Offer of Documentary Evidence dated 14 April 2023) on April 19, 2023. 35 ~ 26 Jd. at 905-907, Compliance dated June 16, 2022. 27 !d. at 967-978. 28 !d. at 992-999. 29 Docket- Vol. I, pp. 55-73, Exhibit "'P-30''; Docket- Vol. Ill, pp. 1005-1007. Minutes of the hearing held on, and Order dated. Februarv 15. 2023. 30 Docket- Vol. II, pp.� 846-855, Exhibit ��P-32": Docket- Vol. III, pp. 1005-1007, Minutes of the hearing held on, and Order dated, February 15,2023. Jt Docket- Vol. I, pp. 184-190, Exhibit "P-31"; Docket- Vol. Ill. pp. 1042-1044, Minutes of the hearing held on. and Order dated, March 30, 2023. l2 Docket- Vol. 111, pp. t027-1040. Exhibit "P-37" (offered as Exhibit "P-34"); 1042-1044. Minutes of the hearing held on, and Order dated, March 30, 2023. n Docket- Vo1.111, p. 1001, Oath of Commission dated January 26.2023: 1002-1004, Minutes of the hearing held on. and Order dated. January 26, 2023. 34 Docket- Vol. Ill, pp. 1045-1054. " !d. at I 056--1058.

DECISION CTA Case No. 10758 Boehringer Ingelheim (Philippines), Inc. v. Commissioner of Internal Revenue x------------------------------------------------------------------------------------x In a Resolution dated May 5, 2023,36 the Court admitted petitioner's offered exhibits, except Exhibits "P-16-139" and "P- 16-195", for not being found in the records of the case; and Exhibit "P-17," for failure to submit the duly marked ex)l.ibit. On May 18, 2023, petitioner filed a Motion for Partial Reconsideration,37 praying the Court to partially reconsider its Resolution dated May 5, 2023, and to admit into evidence P62--eIBtCi-tPIiCAoPn"Ae' r""',sP-E"3P-xI-hC7iP-bIAiCt"sP'A""PP-s-1e47r-i'I'eC' s"P"PA, -"1A'6n"-Pn1-e35x9-"IC"' AP"P.A1-"-3I'5C""PP'A-"6"P--Aa1-n-IICdCPPA"AP""-''3""6PP"--. Respondent filed a Comment (Re: Petitioner's Motion for Partial Reconsideration dated 18 May 2023) on June 5, 2023.38 ' In the Resolution promulgated on July 6, 2023,39 the Court admitted Exhibits "P-16-139" and "P-1 7", except Exhibits "P-1-ICPA" ' ""PP--62--BIC-IPCAP"A' "",P-"3P-I-C7-PIAC"P'A"Ps-e4r-iIeCsP"Aa"n' d"P-A5-nInCePxA""'A".P1-- 6-A-ICPA", ICPA", for not being properly offered. For his part, respondent offered the testimony of Revenue Officer (RO) Ellen TS. Espiritu. 4o After presenting his lone witness, respondent filed a Formal Offer of Evidence 41 on August 9, 2023, to which petitioner filed a Comment/ Opposition (re: respondent's Formal Offer ofEvidence dated August 9, 2023) on August 22, 2023.42 On September 13, 2023, the Court issued a Resolution43 admitting all of respondent's offered exhibits. In �the same Resolution, the parties were given thirty (30) days from notice to file their respective memoranda. With the filing of petitioner's Memorandum on October 18, 202344 and respondent's Manifestation on October 23, 2023,45 adopting his arguments in his Answer dated April 19, 2022 as his Memorandum, the instant case was submitted for qecision on November 9, 2023. 36 Id. at 1061-1064. 37 !d. at 1067-1070. 38 !d. atl 080 to I082. 39 !d. at 1087-1091. " /d. at 897-904, Exhibit "R-8"; 1099-1100, Order dated August 8, 2023. 41 /d.at1104-1107. 42 /d.atllll-1115. 43 !d. at 1119-1120. 44 !d. at 1154-1180. " !d. at 1184--1186.

DECISION CTA Case No. 10758 Boehringer Ingelheim (Philippines), Inc. v. Commissioner of Internal Revenue X------------------------------------------------------------------------------------X THE ISSUE As stipulated by the parties, 46 the lone rssue for this Court's resolution is: WHETHER PETITIONER IS ENTITLED TO A REFUND IN THE AMOUNT OF EIGHTY-NINE MILLION SEVEN HUNDRED SIXTY THOUSAND NINE HUNDRED SIX PESOS AND SEVENTY-ONE CENTAVOS (!'89,760,906.71) REPRESENTING ERRONEOUSLY PAID VAT FOR THE PERIOD JANUARY 23, 2020 TO APRIL 30, 2020. Petitioner's arguments: Petitioner asserts that its importation of prescription drugs and medicines for diabetes, high cholesterol, and hypertension are exempt from VAT; that in good faith, petitioner duly substantiated its claim for refund based on the prevailing issuances at the time of filing of the said claim; that RMC No. 99-2021 does not apply to its refund claim; and that the taxes erroneously collected by the BIR must be refunded under the principle of solutio indebiti. Respondent's counter-arguments: Respondent contends that the instant claim should be denied for petitioner's failure to substantiate its claim for refund at the administrative level; that it is incumbent upon petitioner to prove its entitlement to the refund, as a refund is not ipso facto granted upon filing; that tax refunds are subject to administrative routinary investigation and are strictly construed against the taxpayer and in favor of the government. THE COURT'S RULING Pertinent to the resolution of the issue at hand are Sections 204(C) and 229 of the NIRC of 1997, as amended, which read as follows: SEC. 204. Authority of the Commissioner to Compromise, Abate and Refund or Credit Taxes. - The Commissioner may x x x 46 Docket- Vol. lll. p. 970, JSFI. Stipulated Issue. par. 20.

DECISION CTA Case No. 10758 Boehringer Ingelheim (Philippines), Inc. v. Commissioner of Internal Revenue X------------------------------------------------------------------------------------X (C) Credit or refund taxes erroneously or illegally received or penalties imposed without authority, refund the value of internal revenue stamps when they are returned in good condition by the purchaser, and, in his discretion, redeem or change unused stamps that have been rendered unfit for use and refund their value upon proof of destruction. No credit or refund of taxes or penalties shall be allowed unless the taxpayer files in writing with the Commissioner a claim for credit or refund within two (2) years after the payment of the tax or penalty: Provided, however, that a return filed showing an overpayment shall be considered as a written claim for credit or refund. xxx SEC. 229. Recovery of Tax Erroneously or fllegally Collected.- No suit or proceeding shall be maintained jn any court for the recovery of any national internal revenue tax hereafter alleged to have been erroneously or illegally assessed or collected, or of any penalty claimed to have been collected without authority, or of any sum alleged to have been excessively or in any manner wrongfully collected, until a claim for refund or credit has been duly filed with the Commissioner; but such suit or proceeding may be maintained, whether or not such tax, penalty, or sum has been paid under protest or duress. In any case, no such suit or proceeding shall be filed after the expiration of two (2) years from the date of payment of the tax or penalty regardless of any supervening cause that may arise after payment: Provided, however, That the Commissioner may, even without a written claim therefor, refund or credit any tax, where on the face of the return upon which payment was made, such payment appears clearly to have been erroneously paid. (Emphasis supplied) Pursuant to the aforementioned provisions, to be entitled to a refund of erroneously or illegally collected taxes, the following requisites must be satisfied and established: 1. that the tax has been erroneously or illegally collected, or the penalty has been collected without authority, and/ or any sum has been excessively or in any manner wrongfully collected; and 2. that the claim for refund or credit has been filed within two years from the date of payment of tax, or penalty, regardless of any supervening cause that may arise after payment.

DECISION CTA Case No. 10758 Boehringer Ingelheim (Philippines), Inc. v. Commissioner of Internal Revenue x------------------------------------------------------------------------------------x As in other refund cases, the Court must first determine the timeliness of petitioner's administrative and judicial claims for a refund. Both Sections 204 and 229 of the NIRC of 1997, as amended, govern the refund of erroneously or illegally collected taxes. Section 204 applies to administrative claims for refund, while Section 229 pertains to judicial claims for refund. In both instances, the claim must be filed within two (2) years from the date of tax payment or penalty. Notably, Section 229 requires that an administrative claim for refund must first be lodged with the CIR before the taxpayer may seek judicial intervention for the claim for refund or credit. 47 The two (2)-year prescriptive period is mandatory, regardless of any supervening cause that may arise after payment_4s In other words, filing the claim for refund with respondent is a pre-requisite to filing a Petition for Review with this Court. However, both the administrative and judicial claims must be filed within two (2) years from the date of the tax paymer;tt being refunded. Petitioner's administrative and judicial claims for refund were filed within the 2-year prescriptive period. Record shows that petitioner, on various dates from January 23, 2020 to April20, 2020, paid VAT on its importation of prescription drugs and medicines for diabetes, high cholesterol, and hypertension, covering the period from January 17, 2020, to April 20, 2020. 49 Counting from the earliest payment on January 23, 2020,50 petitioner had until January 23, 2022, to file its administrative and judicial claims for a refund. 47 CBK Power Company Limited v. Commissioner ofInternal Revenue. G.R. Nos. 193383-84 & 193407-08, January 14. 2015 [Per J. Pcrlas-I3crnabc, First Division]. 48 Commissioner ofInternal Revenue v. Manila Electric Company (MERALCO), G.R. No. 181459, June 9, 2014 [Per J. Peralta, Third Division]. ' 0 Docket- Vol. III, pp. 967-968, JSFI, Stipulated Facts, par. 3. so !d.: Exhibit "P-14", BIR Records, p. I.

DECISION CTA Case No. 10758 Boehringer Ingelheim (Philippines), Inc. v. Commissioner of Internal Revenue X------------------------------------------------------------------------------------X However, due to the alarming increase in COVID-19 infections, the Supreme Court issued Administrative Circular No. 01-2022 on January 10, 2022,51 extending "the filing periods of any and all pleading and other court submissions falling due in the month of January 2022 in all courts" until February 1, 2022. Notably, February 1, 2022,s2 was declared a special non-working day under Presidential Proclamation No. 1236, dated October 29, 2021.53 Consequently, petitioner had until February 2, 2022, to file its judicial claim. Evidently, petitioner's administrative claim for a refund, filed on December 15, 2020, with the BIR,54 and the Petition for Review filed with this Court on February 2, 2022,55 are well within the two (2)-year prescriptive period. The importation of prescription drugs and medicines for diabetes, high cholesterol, and hypertension from January 23, 2020, to April 20, 2020, is exempt from VAT; hence, petitioner successfully proved that the VAT payment was erroneous. Section 109(1)(AA)(i) of the NIRC of 1997, as amended by RA No. 10963, 56 otherwise known as the Tax Reform for Acceleration and Inclusion Act (TRAIN), and further amended by RA No. 11467,57 provides that the importation of prescription drugs and medicines for diabetes, among others, is exempt from VAT, as follows: "SEC. 109. Exempt Transactions. - (1) Subject to the provisions of Subsection (2) hereof, the following transactions shall be exempt from the value-added tax: XXX XXX XXX 51 Extension of the deadline for the filing of any and all pleadings and other court submissions falling due in the month of January 2022 in all courts. 52 Chinese Ne\v Year was observed on February I, 2022 (Tuesday). 53 Declaring the regular holidays and special (working/non-working) days for the year 2022. " Docket- Vol. I, pp. 103-110, Exhibit "P-3". ss Docket- Vol. I, pp. 7-54; Docket- Vol. Ill, p. 970, JSFI, Stipulated Facts, par. I9. ss AN ACT AMENDING SECTIONS 5. 6, 24. 25, 27, 31. 32, 33, 34, 51, 52, 56, 57, 58, 74, 79, 84, 86, 90, 91, 97, 99, 100,101,106, 107,108. 109, 110,112,114,116,127, I28,129,145,148, 149,151,155,171.174,175,177,178, 179, 180, 18I, 182.183, 186, 188, 189, 190. 191. 192. 193, 194, 195, 196, 197,232,236,237,249,254,264,269, AND 288: CREATING NEW SECTIONS 51-A, 148-A, 150-A, 150-B, 237-A, 264-A, 264-B, AND 265-A; AND REPEALING SECTIONS 35,62, AND 89: ALL UNDER REPUBLIC ACT NO. 8424, OTHERWISE KNOWN AS THE NATIONAL INTERNAL REVENUE CODE OF 1997, AS AMENDED. AND FOR OTI-IER PURPOSES. 57 Supra note 7.

DECISION CTA Case No. 10758 Boehringer Ingelheim (Philippines), Inc. v. Commissioner of Internal Revenue x------------------------------------------------------------------------------------x (AA) Sale or importation of prescription drugs and medicines for: 1. Diabetes, high cholesterol, and hypertension beginning January 1, 2020; and 11. Cancer, mental illness, tuberculosis, and kidney diseases beginning January 1, 2023: Provided, That the DOH shall issue a list of approved drugs and medicines for this purpose within sixty (60) days from the effectivity of this Act: xxx (Emphases and underscoring added) Pursuant to the foregoing provision, RMC No. 62-202058 was issued on June 8, 2020, following the release ,of a letter dated March 2, 2020, by the DOH-FDA with an approved list of medicines for diabetes, high cholesterol, and hypertension that qualified for VAT exemption beginning January 27, 2020. Furthermore, on October 14, 2020, respondent issued RMC No. 113-2020,59 clarifying that the effectivity date of RA No. 11467 was January 23, 2020, rather than January 27, 2020, based on the law's publication m the Official Gazette via its website on that date.6o It is worth noting, however, that while RMC No. 113-2020 indicates that the exemption begins on January 23, 2020, RA No. 11467 explicitly provides for an effectivity date of January 1' 2020. The time-honored doctrine in case of conflict is that the law prevails over the administrative regulations implementing it. The authority to promulgate implementing rules proceeds from the law itself. To be valid, a rule or regulation must conform to and be consistent with the provisions of the enabling statute.51 Thus, if a discrepancy occurs between the law and an implementing rule or regulation, the law prevails because the law cannot be broadened by a mere administrative issuance - an administrative agency certainly cannot amend an act of Congress. 62 58 SUBJECT: Publishing the full text of the letter from the Food and Drug Administration (FDA) of the Department of Health (DOH) containing the ''List of Prescription Drugs and Medicines for Diabetes, High-Cholesterol and Hypertension Exempt from VAT beginning January 27. 2020" pursuant to Section 1 of Republic Act No. 11467. 59 SUBJECT: Publishing the full text of the letter from the Food Publishing the Full Text of the Letter from the Department of Finance (DOF) to Amend the Effectivity Date of Republic Act (R.A.) No. 11467, as Circularized Under Revenue Memorandum Circular No. 65-2020. 60 Docket- Vol. Ill, p. 968. JSFI. Stipulated Facts. par. 8. 61 Perez v. Philippine Telegraph and Telephone Company, G.R. No. 152048. April 7, 2009 [Per J. Corona, En Bane]. AfCC Industrial Sales Corporation v. Ssangyong Corporation, G.R. No. 170633, October 17, 2007 [Per J. Nachura, Third Division].

DECISION CTA Case No. 10758 Boehringer Ingelheim (Philippines), Inc. v. Commissioner of Internal Revenue X------------------------------------------------------------------------------------X Administrative issuances must not override, supplant, or modify the law; they must remain consistent with the law intended to carry out.63 Particularly, administrative issuances such as revenue memorandum circulars cannot amend or modify the law.64 In the recent case of Manila Peninsula Manila Hotel, Inc. v. Commissioner of Internal Revenue, 65 the Supreme Court cited Philippine Bank of Communications v. Commissioner of Internal Revenue,66 where it upheld the nullification ofRMC No. 7-85 for being inconsistent with Section 230 of the 1977 NIRC. In so doing, the Supreme Court stated that the BIR did not simply interpret the law; instead, it legislated guidelines contrary to the statute passed by Congress. Thus, the Court held as follows: "It bears repeating that Revenue [Memorandum Circulars] are considered administrative rulings (in the sense of more specific and less general interpretations of tax laws) which are issued from time to time by the Commissioner of Internal Revenue. It is widely accepted that the interpretation placed upon a statute by the executive officers, whose duty is to enforce it, is entitled to great respect by the courts. Nevertheless, such interpretation is not conclusive and will be ignored if judicially found to be erroneous. Thus, courts will not countenance administrative issuances that override, instead of remaining consistent and in harmony with, the law they seek to apply and implement." (Emphasis added) Similarly, in Saint Wealth Ltd. v. Bureau of Internal Revenue,67 the Supreme Court En Bane declared cet;tain parts of RMC No. 102-2017 and RMC No. 78-2018 invalid and unconstitutional for being issued without any statutory basis and for encroaching upon the legislative power to enact laws. Applying these jurisprudential pronouncements to the present case, the Court holds that the importation of prescription drugs and medicines for diabetes, high cholesterol, and hypertension is exempt from VAT beginning January 1, 2020. 63 Bureau ofInternal Revenue v. First �-Bank Tower Condominium Corp., G.R. No. 215801 & 218924, January 15, [Per J. Lazaro-Javier. First Divisionl 64 JNG Bank N 1~ v. Commissioner o/lntcrnal Rc\'CJIIIC, G.R. No. 167679 (Resolution), Apri\20, 2016 [Per J. Leonen. Second Divisionl 65 G.R. No. 229338, Aprill7, 2024 [Per J. Caguioa, Third Division]. 66 G.R. No. 112024, January 28, 1999 [Per J. Quisumbing, Second Division]. 67 G.R. Nos. 252965 and 254102, December 7. 2021 [Per J. Gaerlan. En Bane].

DECISION CTA Case No. 10758 Boehringer Ingelheim (Philippines), Inc. v. Commissioner of Internal Revenue x------------------------------------------------------------------------------------x Notably, the parties have already stipulated that petitioner imported various prescription drugs and medicines for diabetes, high cholesterol, and hypertension from January 17, 2020 to April20, 2020 and that these imported products were subjected to VAT on importation, which petitioner paid per relevant importations from January 23, 2020 to April 20, 2020. 68 Furthermore, they stipulated that the total VAT paid by petitioner during the relevant period for the medicines covered by RA No. 11467, as listed in the DOH-FDA's letter published under RMC No. 62-2020, amounted to P89,760,906.71.69 Nevertheless, petitioner submitted in evidence ~he related BOC SADs, SSDTs, and suppliers' invoices which reflected VAT payments in the total amount of P95,308,789.42, which is higher by a net amount ofP5,547,882.71, when compared with that of petitioner's claim of P89,760,906.71, as summarized below: VAT Payment DiscrepancyI Invoice SAD SSDT SSDT Date Item Description Per SADI SSDT Per Claim Claim is lhl�herl/lower Exhibit Exhibit Exhibit 29 January 20188 PCS p 500,325.00 p 500,325.00 "P-16-3" "P-16-1" "P-16-2" TRAJENTA, FICTA - Exhibit Exhibit Exhibit 2020 CATAPRESAN, 4,324.043.00 4,324,043.00 - "P-16-6" "P-16-4" "P-16-5" 29 January TABS/ J00/0.075MG BLIRP 2,788,265.00 2,788,265.00 - Exhibit Exhibit Exhibit 2020 MICARDIS, "P-16-9" "P-16-7" "P-16-8" TABSj30/40MG BLI 2,728.295.00 2,728,295.00 - 30 January RP Exhibit Exhibit Exhibit ~AR~~~ANCE , FICTA 874,928.00 ' 874,928.00 - "P-16-10" "P-16-11" 2020 "P-16-12" 10 25MG BLI PH I ,995,626.00 1,995,626.00 (4,492.91) Exhibit Exhibit 23 January MICARDIS. Exhibit "P-16-13" "P-16-14" 2020 TABS/30/40MG BLI 188,973.00 188,973.00 "P-16-15" RP 2,840,734.8070 2,845,227.71 Exhibit Exhibit 24 February 11899 PCS Exhibit "P-16-16" "P-16-17" 2020 TWYNSTA,LTAB/30/ "P-16-18" 40/10 MG Exhibit Exhibit 24 February 19188PCS Exhibit "P-16-19" "P-16-20" 2020 "P-16-21" ;3o TWYNSTA Exhibit Exhibit 24 February Exhibit "P-16-22" "P-16 23" 2020 1rAEi /so 11oMo "P 16-24" 5 February 2020 5457 PCS JARDIANCE DUO,F!CTA JARDIANCE FICTA 30/JOMG RP 68 Docket- Vol. III, pp. 967-968, JSFI, Stipulated Facts, par. 3. 69 !d. at 968, JSFI, Stipulated Facts, par. 9. 70 XXX Dutiable Value Gross Weight Allocation of VA Table 12% VAT per SAD in KG the difference Value oer SAD (Annex A. I per SAD between (Landed Cost) 1'2,840, 734,80 !CPA Report, Dutiable per SAD 114.602.62 Jardiance Ficta 30/IOMG RP Exh. "P-27", Jardiance Duo, Value and 1'23,672,789.98 Ficta/1 0/12.5+500MG USB) �955,02 !.82 VA Table Subtotal P21,781,312.95 Value per Pradaxa, Cansu/3011 10 MG 762.096.41 1,636,000 SAD P22,543,409.36 94,000 1'1, I 29,380.62 890,130.76 64,89!.06

DECISION CTA Case No. 10758 Boehringer Ingelheim (Philippines), Inc. v. Commissioner of Internal Revenue x------------------------------------------------------------------------------------x JARDIANCE DUO, 114,602.6271 405,725.00 114,602.62 FICTA/10/ 12.5+500 406,744.00 1,019.00 MGBLI 18,318.00 18,318.00 PRADAXA,CAPSU/ Exhibit "Exhibit Exhibit 19 February 30/110 MG 9,924,683.00 9,924,683.00 - "P-16-27" P-16-25" "P-16-26" 2020 GLYXAMBI, FICTA/ 10/ IO+SMG 509,511.00 509,511.00 - Exhibit Exhibit Exhibit 10 February BLI RP 2,188,419.00 "P-16-30" "P-16-28" "P-16-29" 2020 SPIRIVA OTHER 1,892,552.00 '2,188,419.00 - MED. AIDS - Exhibit Exhibit Exhibit 7 February 2020 HANDIHALER 1,892,552.00 - "P-16-33" "P-16-31" "P-16-32" 12 February - 2020 JARDIANCE DUO , 506,452.00 506,452.00 - Exhibit Exhibit Exhibit 17 February FICTA/30f12.5f100 "P-16-36" "P-16-34" "P-16-35" 2020 OMG RP 1,266,186.00 1,266,186.00 - 19 February Exhibit Exhibit Exhibit 2020 GLYXAMBI I ,221,437.00 I ,221,437.00 1,767,397.00 "P-16-39" "P-16-37" "P-16-38" 17 February FICTA/30/ I0/5MG I ,099.00 2020 RP 1,312,056.00 I ,312,056.00 Exhibit Exhibit Exhibit 19 February 7600 PCS - "P-16-42" "P-16-40" "P-16-41" 2020 TRAJENTA DUO 474,244.00 474,244.00 - 21 February FICTA - Exhibit Exhibit Exhibit 2020 20886 PCS 5,710,729.00 5,710,729.00 - "P-16-45" "P-16-43" "P-16-44" TWYNSTA, LTAB - 27 February 24480 PCS 1,767,397.00 ' 398,184.00 - Exhibit Exhibit Exhibit 2020 MICARDIS,TABS/30 399,283.00 2,020,229.00 "P-16-48" "P-16-46" "P-16-47" /80MG BLI RP 1,642,891.00 27 February 7972 PCS 2,020,229.00 12,445.00) Exhibit Exhibit Exhibit 2020 TRAJENTA "P-16-51" "P-16-49" "P-16-50" DUO,FICTA 2,352,135.00 2,352,135.00 26 February 17280 PCS Exhibit Exhibit Exhibit 2020 TWYNSTA,LTAB/30/ 724,905.00 724,905.00 "P-16-54" "P-16-52" "P-16-53" 40/5MG RP 28 February 16647 PCS 1,130,147.00 1,130,147.00 Exhibit Exhibit Exhibit 2020 TWYNSTA,LTAB/30/ "P-16-57" "P-16-55" "P-16-56" 40/5MG RP 1,069,583.00 I ,069,583.00 28 February 17895 PCS Exhibit Exhibit Exhibit 2020 TWYNSTA,LTAB730/ 540,972.00 540,972.00 "P-16-60" "P-16-58" "P-16-59" 40/5MG RP 1,642,891.00 12 March 2020 Exhibit Exhibit Exhibit 12816 PCS "P-16-63" "P-16-61" "P-16-62" II March 2020 JARDIANCE FICTA/ I0/25MG Exhibit Exhibit Exhibit II March 2020 GLYXAMBI "P-16-66" "P-16-64" "P-16-65" FICTAf10f10+5MG 5 March 2020 BLI RP Exhibit Exhibit Exhibit "P-16-69" "P-16-67" "P-16-68" JARDIANCE, FICTAj30J25MG RP Exhibit Exhibit Exhibit SPIRIVA, INHCA/ "P-16-72" "P-16-70" "P-16-71" 30/18UG REFILL RP Exhibit Exhibit Exhibit JARDIANCE, FICTA/ "P-16-75" "P-16-73" "P-16-74" 10/IOMG 19440 PCS Exhibit Exhibit Exhibit TWYNSTA LTAB "P-16-78" "P-16-76" "P-16-77" 30/80/IOMG 35187 PCS TRAJENTA DUO 5,368,840.00 5,371,285.00 FICTA 14676 PCS JARDIANCE DUO FICTA /10/12.5 +IOOOMG 15387 PCS TWYNSTA,LTAB/30/ 40/5MG 14400 PCS TWYNSTA, LTAB 30j40/5MG RP 7354 PCS TWYNSTA,LTAB/30/ 40/5MG RP GIOTRIF ,FICTA/28j30MG 811 RP JARDIANCE, FICTA/30/25MG RP Total P23,433,540, 12 1,730,000 Pl,l94,271.68 P24,627,811.80 P2,955,337.42 71 !d.

DECISION CTA Case No. 10758 Boehringer Ingelheim (Philippines), Inc. v. Commissioner of Internal Revenue x------------------------------------------------------------------------------------x GLYXAMBI,FICTA/3 4,483,479.00 4,484,821.00 11,342.001 0/25/5MG 2,010,836.00 2,010,836.00 TRAIN-KIT PLAC, Exhibit Exhibit Exhibit II March 2020 DOSLI/4ML 1/+RSP - 10 March 2020 GB "P-!6-8!" "P-!6-79" "P-16-80" !3 March 2020 MICARDIS, 2,552,961.00 2,552,961.00 - 25 March 2020 TABS/30/40MG BLI Exhibit Exhibit Exhibit RP 2,436,939.00 2,436,939.00 - "P-16-84" "P-!6-82" "P-16-83" 3 April2020 M1CARDIS, 472,021.00 472,021.00 - 3 April2020 TABS/30/40MG BLI - Exhibit Exhibit Exhibit 6 April 2020 RP 1,032,225.00 1,032,225.00 "P-!6-87" "P-16-85" "P-16-86" 6 April 2020 6323 PCS TWYNSTA, - LTAB/30/40/5MG 2,704,709.00 2,704,709.00 Exhibit Exhibit Exhibit 3 April2020 14027 PCS 2,672,798.00 - "P-16-90" "P-16-88" "P-16-89" TWYNSTA,LTAB/30/ ' 16 April 2020 40/10 MG - Exhibit Exhibit Exhibit 17 April 2020 MICARDIS PLUS, 2,672,798.00 - "P-!6-198" "P-16- "P-16-197" 17 April 2020 TABS/30/40+ 12,5M - 196" 20 April 2020 G BLI RP 5,846,959.00 5,846,959.00 - Exhibit Exhibit Exhibit MICARDIS, "P-16-20!" "P-16- "P- !6-200" TABS/30j40MG BLI 837,084.00 837,084.00 RP Exhibit 199" Exhibit GLYXAMBI "P- !6-204" Exhibit "P-16-203" F!CTA/30/25j5MG "P-16- RP 1 Exhibit Exhibit MICARDIS PLUS "P-16-207" 202" "P-16-206" TABS/30/4+12, Exhibit 5MG BLI RP "P-16- MICARDIS, TABS/30j80MG BLI 205" RPI JARDIANCE DUO, Exhibit Exhibit Exhibit FICTA/20/ 12.5/500 5,100,086.00 5,100,086.00 "P-16-210" "P-16- "P-16-209" MGRP 208" MICARDIS, Exhibit Exhibit Exhibit TABS/30/40MG BLI 2,636,812.00 2,636,812.00 "P-16-213" "P-16- "P-16-212" RP 211" 7,844 PCS 862,205.00 862,205.00 Exhibit Exhibit Exhibit TWYNSTA,LTAB/30/ "P-16-216" "P-16- "P-16-215" 80+5MG 637,594.00 637,594.00 214" 9,432 PCS Exhibit Exhibit TRAJENTA DUO, 2,218,576.00 2,2!8,576.00 "P-16-219" Exhibit "P-16-218" F!CTA/30/2.5+ 1000 "P-16- MG Exhibit 217" Exhibit 20,160 PCS "P-16-222" TWYNSTA,LTAB/30/ Exhibit "P-16-221" 80/IOMG "P-16- 220" TOTAL P95,308,789.42 P89:760,906.71 P5,547,882.71 It is important to note that the following discrepancy amounting to .P5,554,044.62 does not form part of petitioner's claim, as this represents VAT paid on prescription drugs and medicines that are not included in the DOH-FDA approved list of VAT-exempt prescription drugs and medicines: Invoice SAD SSDT SSDT Date Item Description Discrepancy Exhibit Exhibit Exhibit 5 February 2020 PRADAXA, CAPSU/30/110 r 114,602.62 "P-16-24" "P-16-22" "P-16-23" MG 27 February SPIRIVA OTHER MED. AIDS 18,318.00 Exhibit Exhibit Exhibit 2020 HAND! HALER 1,767,397.00 "P-16-57" "P-16-55" "P-16-56" SPIRIVA, INHCA/ 30/ 18UG I ,642,891.00 5 March 2020 REFILL RP 2,010,836.00 Exhibit Exhibit Exhibit GIOTRIF, FICTA/28/30MG P5,554,044,62 "P-16-78" "P-16-76" "P-16-77" BLI RP TRAIN-KIT=PLAC, DOSLI/4ML I /+RSP GB Total

DECISION CTA Case No. 10758 Boehringer Ingelheim (Philippines), Inc. v. Commissioner of Internal Revenue X------------------------------------------------------------------------------------X Anent the discrepancies involving petitioner's claim, the Court finds instances where the claimed amount exceeded the payment reflected per SAD/SSDT or vice-versa. Therefore, in line with the principle that tax refunds are strictly construed, this Court shall only consider the lesser of the two amounts. Accordingly, petitioner's claim for a refund requires a downward adjustment of'P8,279.91, broken down as follows: VAT Pavment Claim is higher Invoice SAD SSDT SSDT Date Item Description Per Per Claim SAD/SSDT p (4,492.91) 5 February JARDIANCE FICTA Exhibit Exhibit Exhibit 2020 30/IOMG RP P2,840,734.80 P2,845,227.71 12 445.00\ "P-16- "P-16- "P-16- JARDIANCE DUO, (l ,342.001 FICTA/ 10/ 12.5+500MG ' p (8,279.91) 24" 22" 23" BLI JARDIANCE FICTA/30/25MG RP 5,368,840.00 5,371,285.00 GLYXAMB!,FICTA/30/2 4,483,479.00 5/5MG 4,484,821.00 Total The requirement that the input tax on imported items must not have been reported or claimed as an input tax credit in the monthly and/or quarterly VAT returns should not apply to petitioner's refund claim. Petitioner argues that RMC No. 99-2021,72 issued on August 16, 2021, does not apply to its refund claim, which was already filed on December 15, 2020. In other words,. according to petitioner, the requirement to reflect the importation as part of the "Purchases not Qualified for Input Tax" row in the Quarterly VAT Return and Monthly VAT Declaration did not exist at the time petitioner filed its refund. The Court agrees with petitioner. The denial by OIC-ACIR Manuel V. Mapoy of petitioner's administrative claim, as stated in his letters dated February 8, n SUBJECT: Clarifying Issues Relative to the Value-Added Tax (VAT) Exemption of Certain Medicines and other Medical Devices for COVID-19 Under Sections \09(1)(AA) and \09(l)(BB)(ii) ofthc National internal Revenue Code of 1997 (Tax Code), as Amended by Republic Act (RA) Nos. 10963 (TRAIN Law), 11467 and 11534 (CREATE Act).

DECISION CTA Case No. 10758 Boehringer lnge1heim (Philippines), Inc. v. Commissioner of Internal Revenue x------------------------------------------------------------------------------------x 202 F 3 and June 3, 2021,74 is anchored on Section 3 of RR No. 18-2021,75 issued on June 26, 2020,76 to wit: "SECTION 3. Transitory Provisions. VAT on importation of prescription drugs and medicines for diabetes, high cholesterol, and hypertension included in the Department of Health-Food and Drug Administration (DOH-FDA) approved list from the effectivity of R.A. No. 11467 on January 27, 2020 until the effectivity of these Regulations, shall be refunded pursuant to Section 204 (C) of the Tax Code of 1997, as amended, in accordance with the existing procedures for refund of VAT on importation, provided that the input tax on the imported items have not been reported and claimed as input tax credit in the monthly and/or quarterly VAT returns. The same shall not be allowed as input tax credit pursuant to Section 110 of the Tax Code of 1997, as amended, for purposes of computing the VAT payable of the concerned taxpayer/ s for the said period." (Emphases and underscoring added) Subsequently, RMC No. 99-202177 was issued on August 16, 2021. Q6 / A6 therein provides: "Q6: In relation to RR No. 18-2020, please further clarify the meaning of the phrase, 'provided that the input tax on the imported items have not been reported as input tax credit in the monthly and/or quarterly VAT returns', found in Section 3 (Transitory Provisions) thereof, in order to refund the erroneously paid VAT on importation ofVAT�e~empt drugs? A6: The above-mentioned phrase was included therein to ensure that the imported items have not been reported and claimed as input tax credit in the monthly and quarterly VAT returns pursuant to Section 110 of the Tax Code of 1997, as amended, for purposes of computing the VAT payable. However, the taxpayer may be allowed to reflect the said importation as part of the 'Purchases not Qualified for Input Tax' row of the monthly and quarterly VAT returns 73 Docket- Vol. lll, p. 969, JSFI, Stipulated Facts, par. 13: Docket- Vol. I, pp. 144-145, Exhibit "P-19". 74 !d. at 969, JSFI, Stipulated Facts, par. 15: !d. at 163-164, Exhibit "P-24". 75 SUBJECT: Regulations to Implement Section 1 of Republic Act (R.A.) No. 11467, Further Amending Section !09(AA) of the National Internal Revenue Code (Tax Code) of 1997, as Amended by Republic Act (R.A.) No. 10963 or the "TRAIN Law��, Providing for Value-Added Tax (VAT) Exemption on the Sales and Importation of Drugs and Medicines Prescribed for Diabetes. High Cholesterol, Hypertension, Cancer, Mental Il!ness, Tuberculosis, and Kidney Diseases. " Docket- Vol. III, p. 968, JSFI, Stipulated facts. par. 7. 77 SUBJECT: Clarifying Issues Relative to the Value-Added Tax (VAT) Exemption of Certain Medicines and other Medical Devices for COVID-19 Under Sections 109(l)(AA) and 109(l)(BB)(ii) ofthc Nattonallnternal Revenue Code of 1997 (Tax Code), as Amended by Republic Act (RA) Nos. 10963 (TRAIN Law), 11467 and 11534 (CREATE Act).

DECISION CTA Case No. 10758 Boehringer Ingelheim (Philippines), lnc. v. Commissioner of Internal Revenue x------------------------------------------------------------------------------------x to properly show the amount of purchases for a certain period." (Emphasis added) Notably, the phrase "provided that the input tax on the imported items have not been reported and claimed as input tax credit in the monthly and/or quarterly VAT returns" found in RR No. 18-2020, does not appear in the law itself, i.e., RA No. 11467. As a corollary, before the effectivity of RR No. 18-2020, no such requirement or condition existed in any BIR administrative issuance. It is a well-established principle that statutes, 'including administrative rules and regulations, operate prospectively unless a clear legislative intent to the contrary is manifest by express terms or necessary implication. 78 There is no clear indication of a legislative intent to apply the requirement that "the input tax on the imported items have not been reported and claimed as input tax credit in the monthly and/or quarterly VAT returns" to transactions that already transpired prior- to the issuance of RR No. 18-2020 on June 26, 2020, and RMC No. 99-2021 on August 16, 2021. Thus, this requirement cannot be applied to petitioner's refund claim, which covers transactions from January 23, 2020 to April 20, 2020. Be that as it may, the input tax on the imported items has not been claimed as an input tax credit in the monthly and/or quarterly VAT returns. A perusal of petitioner's Amended Quarterly VAT Return for the 1st quarter of the calendar year 2020 and Amended Monthly VAT Declaration for April 2020 reveals that while the claimed amount ofP89,760,906.71 was included in the reported input VAT for "Importation of Goods Other Than �Capital Goods",79 it remained unutilized in the computation of the VAT payable, because it was also deducted as "VAT Refund/TCC claimed" in that same VAT return and declaration, in the amounts of 1'66,244,083.71 8o and 1'23,516,823.00, 81 respectively. Consequently, this claim no longer formed part of v the excess input VAT of 1'6,434,932.90 as of April 30, 2020, 7R BPI Leasing Cmporafion v. Court a/Appeals. G.R. No. 127624. November 18. 2003 [Per J. Azcuna, First Oi~ision_l 79 Exhibit �'P-2T, Line 21H (1'142,931,815.99) and Exhibit "P-28". Line ISH (1'28.941.024.82') as summanzed m Exhibit "P-16", USB. 80 Exhibit �'P-2T, Line 23D, USB. 8 ' Exhibit �"P-28", Line 20D, USB.

DECISION CTA Case No. 10758 Boehringer Ingelheim (Philippines), Inc. v. Commissioner of Internal Revenue x------------------------------------------------------------------------------------x which was to be carried over to the succeeding months/quarters. Thus, on this score, petitioner must be deemed to have satisfied the wisdom behind above-stated requirement under RR No. 18-2020, as articulated in the above- quoted A6 ofRMC No. 99-2021, which aims "to ensure that the imported items have not been reported and claimed as input tax credit in the monthly and quarterly VAT returns pursuant to Section 110 of the Tax Code of 1997, as amended, for purposes of computing the VAT payable." In summary, petitioner has sufficiently demonstrated that the claimed amount of P89,760,906.71 was not claimed as an input tax credit in its VAT returns for the subject period of claim and in the succeeding months/quarters. Verily, the amount ofP89,752,626.80, as computed below, constitutes erroneously paid VAT that is refundable pursuant to Sections 204 and 229(C) of the NIRC of 1997, viz.:, Amount of VAT Claim p 89,760,906.71 Less: Overstatement of Claim 8,279.91 Refundable VAT Claim P89, 752,626.80 WHEREFORE, in light of the foregoing considerations, the Petition for Review is PARTIALLY GRANTED. Accordingly, respondent is ORDERED TO REFUND to petitioner the amount of 1"89,752,626.80, representing the erroneously paid value- added tax on its importation of prescription drugs and medicines for diabetes, high cholesterol, and hypertension from January 23, 2020 to April 20, 2020. SO ORDERED. /rwMdfnJ.. WE CONCUR: LANEE S. CUI-DAVID Associate Justice Associate Justice r- JEANMA LLENA

DECISION CTA Case No. 10758 Boehringer Ingelheim (Philippines), Inc. v. Commissioner oflnternal Revenue X------------------------------------------------------------------------------------X CERTIFICATION Pursuant to Section 13, Article VIII 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 '