MIRANT SUAL CORPORATION v. COMMISSIONER OF INTERNAL REVENUE

REPU&LIC OF THE PHILIPPINES COURT OF TAX APPEALS QUEZON CITY . FIRST DIVISION ************* TEAM SUAL CORPORATION C.T.A. CASE NO. 6630 (Formerly: MIRANT SUAL and 6733 CORPORATION), Members: Petitioner, -versus- ACOSTA, Chairperson BAUTISTA, and CASANOVA, JJ. COMMISSIONER OF INTERNAL r ��. ~ j'" REVENUE, ""F �.J Respondent. X- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - DECISION BAUTISTA, J.: This is a consolidation of two Petitions for Review separately filed by petitioner to seek the issuance of tax credit certificate or refund of alleged unutilized input value- added taxes (VAT) paid on its domestic purchases of goods and services and importation of goods attributable to its effectively zero-rated sales to the National Power Corporation (NPC) for taxable year 2001 in the amount of P166,720,367.79, broken down as follows: CTA Case No. Period Covered Amount of Claim 6630 1st quarter- 2001 p 37,985 ,009.25 6733 2nd , 3rd & 4th quarters -2001 128,735 ,358.54 p 166,720,367.79 TOTAL I ~98

DECISION C.T.A. CASE NOS. 6630 and 6733 TEAM SUAL CORPORATION (formerly: Mirant Sual Corporation) (Petitioner) is a corporation duly organized and existing under and by virtue of Philippine laws, with principal office at Barangay Pangascasan, Sual, Pangasinan. Petitioner is registered as a VAT taxpayer in accordance with Section 107 of the Tax Code (now Section 236 of the National Internal Revenue Code of 1997), with Bureau of Internal Revenue (BIR) Certificate of Registration bearing RDO Control No. 05-0181 and Taxpayer's Identification No. (TIN) 003-841-103. 1 It is principally engaged in the business of power generation and subsequent sale thereof to the National Power Corporation (NPC) under a Build, Operate, and Transfer (BOT) Scheme. Petitioner was originally registered with the Securities and Exchange Commission (SEC) under the name "Pangasinan Electric Corporation". Over the years, petitioner changed its name to "Southern Energy Pangasinan, Inc." on August 17, 1999; "Mirant SuaI Corporation"2 on June 28, 2001; and TEAM SuaI Corporation on July 23, 2007.3 Respondent is the Commissioner of Internal Revenue, who is duly appointed and empowered to perform the duties of his office, including among others, the duty to act on and approve claims for refund or tax credit as provided by law. He holds office at the BIR National Office Building, Diliman, Quezon City. On December 6, 2000, petitioner filed with the BIR Revenue District Office No. 5- Alaminos, Pangasinan an Application for VAT Zero-Rate for the supply of electricity to the National Power Corporation. The same was subsequently approved.4 1 Annex "A", Petition for Review (CTA Case No. 6630), Rollo, p. 7 2 Par. 4, Stipulation of Facts, Joint Stipulation of Facts and Issues (JSFI), Rollo, (CTA Case No. 6630), p.143 3 Petitioner's "Certificate of Filing of Amended Articles of Incorporation" 4 Exhibit "D" I

�, DECISION C.T.A. CASE NOS. 6630 and 6733 Petitioner filed its Quarterly VAT Returns for taxable year 2001 with the BIR on the following dates: Exhibit Period Covered Date of Filing "F" 151 Quarter-2001 A_gril 18, 2001 "G" 2nd Quarter-2001 July_ 24, 2001 "Hu October 24 , 2001 3rd Quarter-2001 Januaty24, 2002 "I" 4th Quarter-2001 In the said Returns, petitioner declared zero-rated sales amounting to P9,881,998.46, and excess input VAT of P166,720,367.79; detailed as follows: Input VAT Zero-Rated on Domestic Excess Exh Sales/Receipts Taxable Sales Output VAT Purchases on Importation Input VAT "F" p 3,497,849,694.35 p 484,811 .00 p 48,481.10 p 25,719,981 .35 P12 ,313,509.00 p 37,985,009.25 "G" 3,483,578,645 .29 8,613 ,210 .01 861 ,321.00 21,408,178 .12 8,751 ,699.00 29,298 ,556. 12 IIHII 3,606,942 ,848.42 31 '172,787.48 3,117,278.49 22,089,436.74 13,897,677.15 32,869,835.40 "I" 3,381,705,883.32 58 ,549 ,178.70 5 ,854 ,917 .87 63 ,103 ,992 .89 9,317,892.00 66,566,967.02 P13,970,077,071.38 P98,819,987.19 P9,881 ,998.46 P132,321 ,589.1 0 P44,280,777.15 P166,720,367.79 Pursuant to the procedure prescribed in Revenue Regulations No. 7-95, as amended, petitioner filed an administrative claim for refund of the unutilized input VAT with the BIR on March 20, 2003 in the total amount of P166J20,367. 79 for the four quarters of taxable year 2001. 5 Due to respondent's inaction and in order to suspend the running of the two-year prescriptive period within which to file a judicial claim for refund/issuance of a tax credit certificate, petitioner filed with this Court a Petition for Review, docketed as CTA Case No. 6630 on March 31, 2003, praying for the refund or issuance of tax credit certificate for its alleged unutilized input VAT for the first quarter of taxable year 2001 in the amount of P37,985,009.25. On July 23, 2003, petitioner filed another Petition for 5 Par. 10, Stipulation of Facts, JSFI, Rollo, (CTA Case No. 6630), p. 144 600

DECISION C.T.A. CASE NOS. 6630 and 6733 Review docketed as CTA Case No. 6733, seeking the refund or issuance of tax credit certificate for its alleged unutilized input VAT for the second, third, and fourth quarters of taxable year 2001 in the amount of P128,735,358.54. At the instance of petitioner, the said cases were consolidated on August 7, 2003.6 Respondent interposed the following Special and Affirmative Defenses in his Answers to the Petitions for Review for CTA Case Nos. 6630 and 6733: CTA Case No. 6630 "4. Petitioner failed miserably to show that the total amount of Php:37,985,009.25 allegedly representing VAT input taxes for the first quarter of year 2001, were erroneously or illegally collected, or that the same were properly documented. 5. Taxes paid and collected are presumed to have been paid in accordance with law; hence, not refundable. 6. In an action for tax refund/credit, the taxpayer has the burden to establish its right to refund, and failure to sustain the burden is fatal to the claim for refund. 7. It is incumbent upon petitioner to show that it has complied with the provisions of Section 204 (c) in relation to Section 279 of the Tax Code. 8. Well-established is the rule that claims for refund/tax credit are construed strictly against the taxpayer as they partake the nature of exemption from tax." CTA Case No. 6733 "4. He reiterates and pleads the preceding paragraphs of this answer as part of his Special and Affirmative Defenses; 5. Petitioner's alleged claim for refund is subject to administrative investigation/examination by the respondent; 6. To support its claim, it is imperative for petitioner to prove the following, viz: a. The registration requirements of a value-added taxpayer in compliance with Section 6 (a) and (b) 6 Rollo, (CTA Case No. 6630), p. 118 601

DECISION C.T.A. CASE NOS. 6630 and 6733 of the Revenue Regulations No. 6-97 in relation to Section 4.107-1 (a) of Revenue Regulations No. 7- 95, and Section 236 of the Tax Code, as amended; b. The invoicing and accounting requirements for VAT-registered persons, as well as the filing and payment of VAT in compliance with the provisions of Section 113 and 114 of the Tax Code, as amended; c. Proof of compliance with the prescribed checklist of requirements to be submitted involving claim for VAT refund in pursuance to Revenue Memorandum order No. 53-98, otherwise there would be no sufficient compliance with the filing of administrative claim for refund, the administrative claim thereof being mere pro- forma, which is a condition sine qua non prior to the filing of judicial claim in accordance with the provision of Section 229 of the Tax Code, as amended. It is worthy of emphasis that Section 112 (D) of the Tax Code, as amended, requires the submission of complete documents in support of the application filed with the Bureau of Internal Revenue before the 120-day audit period shall apply, and before the taxpayer could avail of judicial remedies as provided for in the law. Hence, petitioner's failure to submit proof of compliance with the above-stated requirements warrants immediate dismissal of the petition for review. d. That the input taxes of P128,735,358.54 allegedly paid by the petitioner on its purchases of goods and services and importation of goods for the second, third and fourth quarters of the year 2001 were attributable to zero-rated sales and such have not been applied against any output tax and were not carried over in the succeeding taxable quarter or quarters; e. That petitioner's administrative and judicial claims for tax credit or refund of the unutilized input tax (VAT) was filed within two (2) years after the close of the taxable quarter when the sales were made in accordance with Sections 112 (A) and (D) and 229 of the Tax Code, as amended; B02

DECISION C.T.A. CASE NOS. 6630 and 6733 f. That petitioner's domestic purchases of goods and services and importation of goods were made in the course of its trade or business, properly supported by VAT invoices and/or official receipts, import entry documents, confirmation receipt evidencing payment of VAT and other documents, such as subsidiary purchase Journal, showing that it actually paid VAT in accordance with Sections 110 (A) (2) and 113 of the Tax Code, as amended, and in pursuance to Section 4.104-5 (a) & (b) of Revenue Regulations No. 7-95 (Re: Substantiation of Claims for Input Tax Credit); g. The requirements as enumerated under Section 4.104-2 of the Revenue Regulations 7-95 (Re: Persons who can avail of the Input Tax Credits); 7. Furthermore, in an action for refund the burden of proof is on the taxpayer to establish its right to refund and failure to sustain the burden is fatal to the claim for refund/credit. This is so because exemptions from taxation are highly disfavored in law and he who claims exemption must be able to justify his claim by the clearest grant of organic or statutory law. An exemption from common burden cannot be permitted to exist upon vague implications. {Asiatic Petroleum Co. [P.L] v. Llanes/ 49 Phil. 46~ cited in Collector of Internal Revenue v. Manila Jockey Club/ Inc. 98 Phil. 670); 8. Claims for refund are construed strictly against the claimant for the same partake the nature of exemption from taxation." Petitioner formally offered its evidence on December 18, 2006, submitting Exhibits "A" to "GGGGG", inclusive of submarkings; while respondent submitted the case for decision without making a formal offer of evidence. The case was submitted for decision on June 17, 2008, taking into consideration respondent's Memorandum filed on May 26, 2008 and petitioner's Memorandum filed on June 13, 2008. 603

DECISION C.T.A. CASE NOS. 6630 and 6733 The following are parties' jointly stipulated issues7 submitted for this Court's resolution: "1. Whether or not the power generation services rendered by Petitioner to NPC are subject to zero percent (0%) VAT pursuant to Section 108(B)(3) and Section 112 (A) of the National Internal Revenue Code of 1997 ('Tax Code'); 2. Whether or not Petitioner has unutilized creditable input VAT for the four quarters of CY 2001 arising from its domestic purchases of goods and services and importations of goods amounting to P166,720,367.79 that can be a proper object of a claim for refund pursuant to Section 108 (B)(3) and Section 112 (A) of the Tax Code; 3. Whether or not the unutilized creditable input taxes for CY 2001 are substantiated by proper invoices and official receipts; 4. Whether or not the unutilized creditable input VAT for the four quarters of 2001 was carried over to the succeeding taxable quarter(s) and applied against any of the output VAT liability of the Petitioner; 5. 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 P166,720,367.79; 6. Whether or not the petitioner has filed its administrative and judicial claims for tax credit and/or refund in the amounts of P166,720,367.79 within the statutory period of two years as required under Sections 112 (A), 204 (C), and 229 of the Tax Code, as amended; 7. Whether or not petitioner is engaged in the business of power generation and subsequent sale thereof to the National Power Corporation ('NPC') under a Build, Operate, and Transfer ('BOT') scheme . " 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 unutilized input VAT payments amounting to P166,720,367.79, arising from its domestic purchases of goods 7 Stipulation of the Issues, JSFI, Rollo, (CTA Case No. 6630), pp. 144-14S 604

DECISION C.T.A. CASE NOS. 6630 and 6733 and services and importations of goods attributable to its effectively zero-rated sales to the National Power Corporation for the four quarters of taxable year 2001". Section 112(A) of the National Internal Revenue Code of 1997 lays down the requisites for refunds or issuance of a tax credit certificate 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: Provide~ 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): Provide~ 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 yvas filed within the two-year prescriptive period. This Court finds it appropriate to determine first the timeliness of the filing of the instant claim . The Supreme Court recently held in Commissioner of Internal Revenue vs. Mirant Pagbilao Corporation {Formerly Southern Energy Quezon, I

DECISION C.T.A. CASE NOS. 6630 and 6733 Inc.)8 that Section 112(A) of the NIRC of 1997 provides for the period within which to file the claim for refund or issuance of tax credit certificate for unutilized input VAT attributable to zero-rated or effectively zero-rated sales, the pertinent portion of the High Court's Decision reads: "The claim for refund or tax credit for the creditable input VAT payment made by MPC embodied in OR No. 0189 was filed beyond the period provided by law for such claim. Sec. 112(A) of the NIRC pertinently reads: (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: xxx. (Emphasis ours.) The above proviso clearly provides in no uncertain terms that unutilized input VAT payments not otherwise used for any internal revenue tax due the taxpayer must be claimed within two years reckoned from the close of the taxable quarter when the relevant sales were made pertaining to the input VAT regardless of whether said tax was paid or not. As the CA aptly puts it, albeit it erroneously applied the aforequoted Sec. 112(A), '[P]rescriptive period commences from the close of the taxable quarter when the sales were made and not from the time the input VAT was paid nor from the time the official receipt was issued.' Thus, when a zero- rated VAT taxpayer pays its input VAT a year after the pertinent transaction, said taxpayer only has a year to file a claim for refund or tax credit of the unutilized creditable input VAT. The reckoning frame would always be the end of the quarter when the pertinent sales or transaction was made, regardless when the input VAT was paid." (Emphasis supplied) Based on the afore-quoted jurisprudence, the reckoning of the prescriptive period shall commence from the close of the taxable quarter when the relevant sales were made pertaining to the input VAT regardless of whether said tax was paid or not. 8 G.R. No. 172129, September 12, 2008 I GOG

DECISION C.T.A. CASE NOS. 6630 and 6733 The present claim involves petitioner's input VAT incurred for the four quarters of 2001. Counting from the close of each of the said taxable quarters, petitioner had until the following dates within which to file its claim both in the administrative and judicial levels: CTA Taxable Close of End of Date of Filing_ Case Quarter Taxable Two(2) No. (Year 2001) Quarter year period Administrative Judicial Amount of 6630 3/31/2001 3/31/2003 Claim 6733 1st 6/30/2001 6/30/2003 Claim Claim 6733 2nd 9/30/2001 9/30/2003 P37,985 ,009.25 6733 3rd 12/31/2001 12/31/03 3/20/2003 3/31/2003 29 ,298,556 .12 4th 32 ,869 ,835.40 3/20/2003 7/23/2003 66 ,566 ,967.02 3/20/2003 7/23/2003 P166, 720,367.79 3/20/2003 7/23/2003 Petitioner's administrative and judicial claims for refund of input VAT for the first, third, and fourth quarters of taxable year 2001 fall within the two-year prescriptive period. The second quarter of taxable year 2001 does not however fall within the two- year period. Although the administrative claim filed on March 20, 2003 is seasonably filed, the Petition for Review filed on July 23, 2003 is outside the two-year prescriptive period; hence, the claim for the second quarter of 2001 in the amount of P29,298,556.12, shall be denied outright due to prescription. Consequently, this Court's evaluation will be limited only to petitioner's refund claim for the first, third, and fourth quarters of taxable year 2001. The Court will now determine petitioner's compliance with the other requisites. Petitioner posits that its sale of electricity to NPC is effectively zero-rated for VAT purposes pursuant to Section 108(8)(3) of the NIRC of 1997, in relation to Section 13 of Republic Act No. 6395, as amended, otherwise known as the NPC Charter, which are all quoted hereunder for easy reference:

,. DECISION C.T.A. CASE NOS. 6630 and 6733 "SEC. 108. Value-Added Tax on Sale of Services and Use or Lease of Properties. - )()()( )()()( )()()( (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: )()()( )()()( )()()( (3) Services rendered to persons or entities whose exemption under special laws or international agreements to which the Philippines is a signatory effectively subjects the supply of such services to zero percent (0�/o) rate;" (Emphasis supplied) "SECTION 13. Non-profit Character of the Corporation, Exemption from All Taxes, Duties, Fees, Imposts and Other Charges by the Government and Government Instrumentalities. - The Corporation shall be non-profit and shall devote all its returns from its capital investments, as well as excess revenues from its operation, for expansion. To enable the Corporation to pay its indebtedness and obligations and in furtherance of effective implementation of the policy enunciated in Section One of this Act, the Corporation, including its subsidiaries, is hereby declared exempt from the payment of all forms of taxes, duties, fees, imposts as well as costs and service fees including filing fees, appeal bonds, supersedeas bonds, in any court or administrative proceedings." (Emphasis supplied) The Court agrees with petitioner. This Court has consistently held that NPC is an entity with a special charter which categorically exempts it from payment of all taxes, direct or indirect, including VAT. By virtue of the said charter, services rendered by a VAT-registered entity like herein petitioner to NPC are effectively subject to zero percent (0%) VAT in accordance with Section 108(8)(3) of the NIRC of 1997. G0 8

,. DECISION C.T.A. CASE NOS. 6630 and 6733 In addition, the Supreme Court in its Resolution in the case of Maceda vs. Macaraig, Jr.9, affirmed NPC's tax exemption in the following manner: "A chronological review of the NPC laws will show that it has been the lawmaker's intention that the NPC was to be completely tax-exempt from all forms of taxes - direct or indirect. XXX XXX XXX One common theme in all these laws is that the NPC must be enabled to pay its indebtedness which, as of P.O. No. 938 was P12 Billion in total domestic indebtedness, at any one time, and US$4 Billion in total foreign loans at any one time. The NPC must be and has to be exempt from all forms of taxes if this goal is to be achieved." Moreover, respondent himself approved petitioner's Application for Effective Zero-Rate covering its sales of electricity to NPC. 10 Petitioner likewise was able to establish through the various invoices and official receipts it issued to the NPC11 that it actually derived revenues from its sale of power generation services to the NPC for the first, third, and fourth quarters of taxable year 2001 in the total amount of P10,486,498,426.09 which was reflected in its Quarterly VAT Returns as follows: Exhibit Year 2001 Zero-Rated "Fu 1st Quarter Sales/Receipts 3rd Quarter p 3,497,849,694 .35 "H" 4th Quarter "Ill 3,606,942 ,848.42 Total 3,381 '705,883.32 p 10,486,498,426.09 The Court will now determine the amount of input taxes attributable to petitioner's effectively zero-rated sales of P10,486,498,426.09. In its VAT Returns for the first, third, and fourth quarters of taxable year 2001, petitioner reported the following excess input VAT amounting to P137,421,811.67: 9 223 SCRA 217, June 8, 1993 10 Exhibit " D"; par. 5, Stipulation of Facts, JSFI, Rollo, (CTA Case No. 6630), p. 144 11 Exh ibit "LL" �09

DECISION C.T.A. CASE NOS. 6630 and 6733 Exhibit Year 2001 Excess Input VAT 1st Quarter p 37,985 ,009.25 "F" 3rd Quarter 32 ,869,835.40 4th Quarter 66 ,566,967.02 "H" p 137,421,811.67 Total ur� In support of the alleged input taxes of P137,421,811.67, petitioner presented its Schedules/Summaries of Domestic Purchases and Importation of Goods for taxable year 2001 12 and the related suppliers' invoices and official receipts, Bureau of Customs (BOC) Import Entries and Internal Revenue Declarations (IEIRDs), BOC official receipts, bank debit advicesjofficial receipts. 13 Upon verification of these documents, the Court- commissioned Independent CPA, made the following findings in its Report dated June 3, 2004: 14 Findings Annexed to 1st Qtr 3rd Qtr 4th Qtr Total Exhibit Z as I. Input Taxes on Purchases of - 20,169 .53 19,636.36 39,805.89 Goods (Annex 4-1) 9,524 .24 38,236 .69 58,753 .02 (Annex 4-2) 10 ,992 .09 376 .60 13,424.65 15,601 .25 1. Erroneously Computed (Annex 4-3) 1,800.00 20,167 .78 37 ,958 .63 2. Supported by VAT invoices (Annex 4-4) - 18,411.20 18,411 .20 (Annex 4-5) 17,790.85 10,771 .11 without BIR permit number (Annex 4-6) - 4,495.47 3,245.58 3. Supported by photocopied VAT (Annex 4-7) - - 50 ,788.00 (Annex 4-8) - 37 ,210 .50 invoices (Annex 4-9) 6,275.64 681 .82 50,788.00 272,545.18 4. Supported by documents other 2 ,563 .76 - - 131,810.04 than VAT Invoice - 24,209.34 5. Supported by an invoice without 37,210 .50 165,160.15 120,315.40 - 67,962.69 pre-printed "TIN-VAT" 6. Supported by VAT invoice with 39,422.34 pre-printed "TIN" only 7. Supported by Non-VAT invoices 8. Supported by an invoice with pre-printed "TAN-VAT" 9. Supported by an invoice with pre-printed "VAT#" only subtotal II. Input Taxes on Purchases of (Annex 5-1) 73,659 .57 34 ,713.69 23,436 .78 Services (Annex 5-2) - 24 ,209 .34 - (Annex 5-3) 47,438 .66 1. Erroneously Computed 39,420.61 33,456 .13 2. Supported by VAT ORs without BIR permit number 3. Supported by documents other than VAT OR 12 Exhibits "BB" "CC", "DD", and "EE" 13 Exhibits " FF" to "II" (including submarkings) 14 Exhibit "Z", pages 4 to 7 GlO

DECISION C.T.A. CASE NOS. 6630 and 6733 4. Supported by OR with pre- printed VAT number only (Annex 5-4) - - - - 5. Supported by OR with pre- 21 ,590 .9 1 - - 21,590 .91 1,806.44 - 1,806.44 printed TIN number only (Annex 5-5) - 3,104.32 147.00 8,166 .19 6. Supported by Non-VAT ORs (Annex 5-6) 4 ,9 14 .87 111,272.45 57,039.91 307,898.32 139,585.96 7. Supported by ORs issued not in the name of the company (Annex 5-7) subtotal Ill. Input taxes claimed on (Annex 6) 539 ,379.66 246,788.64 1,074,990.78 1,861 ,159.08 purchases of goods and services 539,379.66 246,788.64 1,074,990.78 1,861,159.08 without supporting documents subtotal IV. Input Claimed on Importations (Annex 7-1) - 38 ,335.09 - 38,335.09 (Annex 7-2) 1. Erroneously Computed (Annex 7-3) 5,188 .00 18 ,996.00 1,582 .00 25,766 .00 2. Supported by certified true 10,464.00 2,254.00 170,529.00 183,247.00 copies of Informal lEOs (by customs brokers) 3. Supported by certified true copies of lEOs (by customs brokers) without input tax amount 4. Supported only by BOC and/or bank Ors (Annex 7-4) 2 ,53 2,498 .00 700,785.15 1,662 ,761 .00 4,896 ,044.15 23,382 .00 5. Supported by photocopied lEOs (Annex 7-5) - - 23 ,382 .00 78 ,650.00 6. Supported by certified true 639,656.00 5,885,080.24 copies of lEOs (by custom 8,326,682.82 brokers) issued not in the name of the company (Annex 7-6) 28,132 .00 50 ,518.00 - 123,502.00 446 ,505.00 7. Without supporting documents (Annex 7-7) 2,699,784.00 1,257,393.24 69 ,649.00 3,418,171 .96 1,683,417.02 1,927,903.00 subtotal 3,225,093.84 Total The claimed input taxes of P272,545.1815 and P307,898.3216 on domestic purchases of goods and services, respectively, shall be denied for failure to meet the substantiation requirements under Sections llO(A) and 113(A) of the NIRC of 1997, as implemented by Sections 4.104-1, 4.104-5, and 4.108-1 of Revenue Regulations No. 7- 95. 15 No. I of the ICPA's Findings, detailed in Exhibit "Z", Annexes 4-1 to 4-9 16 No. II of the ICPA's Findings, detailed in Exhibit "Z", Annexes 5-1 to 5-7 iJl l

.- DECISION C.T.A. CASE NOS. 6630 and 6733 As regards the input taxes in the amount of P1,861,159.08, excepted by the Independent CPA for lack of supporting documents,17 petitioner presented the following documents to rebut the said findings: Supplier Exhibit 1st Qtr 3rd Qtr 4th Qtr Total Casipit Trading & Const 49,314 .86 n, zz 91 ,879.43 105,320.49 97,732.40 163,636.36 Victron UPS Philippines, Inc. 91,879.43 105,320.49 16,589.10 13,636.36 Meralco lnd'l Eng'g Serv Corp TI, MA 13,636.36 27,296 .29 Meralco lnd'l Eng'g Serv Corp 27 ,296 .29 Meralco lnd'l Eng'g Serv Corp TI,BBB 225 ,696 .59 225 ,696 .59 Meralco lnd'l Eng'g Serv Corp 200,290 .95 200 ,290 .95 Maunsell Phils. Inc. DOD 128,209.84 128,209.84 Best Hotel Mgt inc. FFF 105 ,3 20.49 758,766.39 Total HHH 91 ,879.43 955,966.31 Ill Ill FFFFF GGGGG This Court finds the aforesaid documents valid, except for the official receipts marked as Exhibits "BBB" and "DDD" supporting the input taxes of P16,589.10 and P13,636.36. The official receipt marked as Exhibit "BBB" bears the pre-printed TAN and VAT numbers of the supplier instead of the prescribed TIN-VAT number under Section 4.104- S(b) of Revenue Regulations No. 7-95, in relation to Section 113(A) of the NIRC of 1997. On the other hand, in Exhibit "DDD", the information contained therein is insufficient for this Court to ascertain if the input tax claim of P13,636.36 actually pertains to petitioner's purchase of services. Consequently, petitioner's input taxes on purchases of goods and services without supporting documents, as found by the Independent CPA, will now be reduced from P1,861,159.08 to P935,418.23. 17 No. III of the !CPA's Findings, detailed in Exhibit "Z", Annex 5-6 iJ12

DECISION C.T.A. CASE NOS. 6630 and 6733 As regards the P5,885,080.24 input VAT claim on importations, 18 the Court finds the amount of P4,709,152.0919 valid because the supporting SOC and/or bank statements clearly reflect the VAT amount paid by petitioner. The rest of the claimed input taxes in the amount of P1,175,928.1520 shall be denied for not being properly substantiated. The IEIRDs submitted by petitioner in support of the input taxes of P1,175,928.15 cannot be given credence and probative value as they were merely stamped as "certified true copy" or "certified photocopy" and the Court cannot ascertain whether the certifier named therein is actually the custodian of the said documents. Moreover, some of the IEIRDs for the third and fourth quarters of 2001 were issued under petitioner's former name, Southern Energy Pangasinan, Inc. It must be noted that petitioner's name was changed from Southern Energy Pangasinan, Inc. to Mirant Sual Corporation on June 28, 2001 21; hence, all documents in support of its claimed input VAT for the third and fourth quarters of taxable year 2001 should be under its new name "Mirant Sual Corporation".22 Also, some of the IEIRDs do not show any machine validation as to the payment of the customs duties and taxes indicated therein. While petitioner submitted SOC or bank ORs and bank debit advises, the same were either dated outside the period of claim or issued under petitioner's former name. In its Reports dated June 3, 200423 and July 12, 200424, the Independent CPA likewise made the following additional observations on petitioner's claimed input taxes: 18 No. IV of the !CPA's Findings, detailed in Exhibit " Z", Annexes 7-1 to 7-7 19 See Annex " A" for details 20 See Annex "A" for detailed breakdown 21 Par. 5, Stipulation of Facts, JSFI, Rollo, (CTA Case No. 6630), p. 110 22 However, pursuant to petitioner's Motion to Change Caption and the Resolution dated March 10, 2009, petitioner's name was changed from " MIRANT SUAL CORPORATION (Formerly: SOUTHERN ENERGY PANGASINAN, INC.)" to "TEAM SUAL CORPORATION (Formerly: MIRANT SUAL CORPORATION)". 23 Exhibit "Z", pages 7 and 8 24 Exhibit " RR", pages 2 and 3 Gl3

DECISION C.T.A. CASE NOS. 6630 and 6733 Findings Reference 1st Qtr 3rd Qtr 4th Qtr Total 1. Input taxes on local purchases of goods which are supported by VAT invoices issued in the name of Southern Energy Pangasinan , Inc., Annex 8, former name of petitioner Exhibit "Z" 42,290.74 5,367,192.88 915,006.22 6,324,489.84 2. Input taxes on local purchases of services which are supported by VAT ORs issued in the name of Southern Energy Pangasinan , Inc., Annex 9, former name of petitioner Exhibit "Z" - 1,089 ,900 .60 264,679.65 1,354,580.25 2 ,500 .00 3 ,650 .00 3. Input taxes on local purchases of 33 ,776 .59 5 ,066 .80 13,6 30.41 goods which are supported by Annex 10, 13, 201 .10 134 ,970 .70 45 ,143 .65 - undated VAT invoices Exhibit "Z" - 6 ,150 .00 13,132.00 2,186.70 4. Input taxes on local purchases of 2,784,631 .68 28,728 .00 services which are supported by Annex 11, 111 ,902.79 19 ,229 .58 - undated VAT ORs Exhibit "Z" - - 38 ,843.39 - 5. Input taxes on local purchases of 7,681 ,635.00 goods which are supported by VAT invoices with different TIN as compared with the TIN indicated in Annex 12, the "Schedule of VAT-Input Tax" Exhibit "Z" 228 ,311 .70 376 ,912 .81 6. Input taxes on local purchases of services which are supported by VAT ORs with different TIN as compared with the TIN indicated in Annex 13, the "Schedule of VAT-Input Tax" Exhibit "Z" 4 ,993.10 18 ,194.20 7. Input taxes on local purchases of goods which are supported by certified true copies of VAT Annex 14, - invoices Exhibit '"' 47 ,330 .35 8. Input taxes on local purchases of services which are supported by ORs with different supplier's name as compared with the name indicated in the "Schedule of VAT- Annex 15, Input Tax" Exhibit "Z" 768 .00 42 ,628.00 9. Input taxes on local purchases of goods which are supported by invoices dated outside the period of Annex 16, claim Exhibit "Z" 242,727.28 3,046,588 .54 10. Input taxes on local purchases of services which are supported by ORs dated outside the period of Annex17 , claim Exhibit "Z" 15 ,600 .00 127 ,502 .79 11 . Input taxes on purchases from non- residents which are supported by BIR Form 1600 and ORs dated Annex 18, outside the period of claim Exhibit "Z" 103,249.75 103 ,249 .75 12. Input taxes on importation of goods which are supported by Certified True Copies of lEOs (by Bureau of Customs) and Bureau of Customs ORs and Bank Debit Advice issued in the name of Southern Energy Annex 19A, Pangasinan, Inc. Exhibit "RR" 573 ,145.00 8,254,780.00 13. Input taxes on importation of goods which are supported by Certified

DECISION C.T.A. CASE NOS. 6630 and 6733 True Copies of lEOs (by Customs Broker) and Bureau of Customs ORs and Bank Debit Advice issued in the name of Southern Energy Pangasinan, Inc., former name of Annex 19B, the petitioner Exhibit "RR" 4,711 .00 4,711 .00 14. Input taxes on importation of goods 2,142 ,523.00 which are supported by Certified 27,455.00 4,525,424.00 True Copies of lEOs (by Bureau of 22 ,039 .00 Customs) and Bank ORs and Debit 3,237,982 .00 Memos issued in the name of 75 ,571.00 1,482,640.00 Southern Energy Pangasinan, Inc., Annex 19C, 129,060.00 former name of the petitioner Exhibit "RR" 1,504, 103.00 638,420.00 123 ,857 .00 15. Input taxes on importation of goods which are supported by Certified True Copies of lEOs (by Customs Broker) and Bank ORs and Debit Memos issued in the name of Southern Energy Pangasinan, Inc., Annex 190, former name of the petitioner Exhibit "RR" 9,130.00 8 ,325 .00 16. Input taxes on importation of goods which are supported by Certified True Copies of lEOs (by Bureau of Customs) and original Bank ORs Annex 20A, issued outside the period of claim Exhibit "RR" 4,525,424.00 17. Input taxes on importation of goods which are supported by Certified True Copies of lEOs (by Bureau of Customs) and orig inal Bank ORs Annex 20B, issued outside the period of claim Exhibit "RR" 22 ,039 .00 18. Input taxes on importation of goods which are supported by Certified True Copies of lEOs (by the Bureau of Customs and/or Customs Broker and/or COA Annex 21A, Auditor) Exhibit "RR" 177,453.00 1,905,261 .00 1'155,268.00 7,095.00 19. Input taxes on importation of goods 1,197,2 15.00 285 ,020.00 which are supported by Certified 120,168 .00 True Copies of lEOs (by the Annex 21B, Customs Broker) Exhibit "RR" 68,476.00 20. Input taxes on importation of goods which are supported by Certified True Copies of lEOs (by the Bureau of Customs) and BOC ORs Annex 22A, and Bank Debit Memos Exhibit "RR" 405 .00 21 . Input taxes on importation of goods which are supported by Certified True Copies of lEOs (by the Customs Broker) and BOC ORs Annex 22B , and Bank Debit Memos Exhibit "RR" 129,060.00 22. Input taxes on importation of goods which are supported by Certified True Copies of lEOs (by the Bureau of Customs and/or Customs Broker and/or COA Auditor) and Bank ORs and Bank Annex 22C , Debit Memos Exhibit "RR" 3,689 .00 Total 7,986 ,754.96 19,075,532.26 4,450,224.70 31,512,511.92 615

DECISION C.T.A. CASE NOS. 6630 and 6733 The claimed input taxes of P6,324,489.8425 on local purchases of goods and input taxes of P1,354,580.2526 on local purchases of services which are supported by invoices and official receipts issued under petitioner's former name, Southern Energy Pangasinan, Inc., respectively, shall be disallowed except for the input VAT of P42,290.74 on local purchases of goods for the first quarter of 2001. The invoices covering the amount of P42,290.74, though issued under petitioner's former name, Southern Energy Pangasinan, Inc., may still be allowed because petitioner's change of name took effect only on June 28, 2001, as stated earlier. The claimed input taxes of P6,150.0027 and P38,834.3928 pertaining to petitioner's local purchases of goods and services which are supported by undated invoices and official receipts, respectively, shall be denied pursuant to Section 4.108- 1(2) of RR 7-95 in relation to Sections 113(A) and 237 of the NIRC of 1997, which requires that the date of the transactions must be indicated in the invoices/receipts. The input taxes in the amounts of P376,912.81 29 and P18,194.2030 which are supported by invoices or official receipts with different TIN as compared with the TIN indicated in the "Schedule of VAT-Input Tax" as well as the input taxes of P42,628.0031 supported by official receipts with different supplier's name as compared with the name indicated in the "Schedule of VAT-Input Tax" represent petitioner's valid claims notwithstanding such discrepancies because the serial numbers of the invoices or official receipts and the amounts indicated therein are the same as those appearing in the "Schedule of VAT-Input Tax". 25 No. 1 of the !CPA's Findings, detailed in Exhibit "Z", Annex 8 26 No. 2 of the I CPA's Findings, detailed in Exhibit "Z", Annex 9 27 No. 3 of the I CPA's Findings, detailed in Exhibit "Z", Annex 10 28 No. 4 of the I CPA's Findings, detailed in Exhibit " Z". Annex 11 29 No. 5 of the !CPA's Findings, detailed in Exhibit "Z", Annex 12 30 No. 6 of the I CPA's Findings, detailed in Exhibit "Z", An nex 13 31 No. 8 of the I CPA's Findings, detailed in Exhibit "Z", Annex 15 tJlG

DECISION C.T.A. CASE NOS. 6630 and 6733 The input taxes in the amounts of P3,046,588.5432 and P127,502.7933 pertaining to petitioner's local purchases of goods and services which are supported by invoices and receipts, respectively, dated outside the period of claim as well as the input taxes of P103,249.7534 on petitioner's purchases from non-residents which are supported by BIR Forms 1600 and ORs dated outside the period of claim shall be disallowed. In a Resolution dated July 28, 2004 in the case of Telecommunications Technologies Phil., Inc. vs. Commissioner of Internal Revenue, C.T.A. Case No. 6168, this Court had the occasion to rule that the input VAT on domestic purchases of goods or properties shall be allowed as tax credit to the purchaser only upon consummation of sale, which means upon issuance by the seller of the VAT sales invoice evidencing the sale of goods/properties. On the other hand, the input VAT on purchases of services shall be available as tax credit to the purchaser only upon payment of the compensation or fee i.e., upon issuance by the seller of the VAT official receipt of the payment for services performed or yet to be performed . Section 110(A) of the NIRC of 1997, is clear that the input tax shall be allowed as tax credit to the purchaser only upon consummation of sale or upon payment of the compensation, as the case may be. Accordingly, it is imperative for petitioner to declare the input value added taxes on domestic purchases of goods and services at the end of the corresponding taxable quarter where purchases of goods were consummated, as evidenced by VAT invoices and where purchases of services were paid, as evidenced by VAT official receipts. It must be noted that the claimed input taxes of P3,046,588.54 and P127,502.79 pertain to the first, third and fourth quarters of 2001. Thus, the input 32 No. 9 of the I CPA's Findings, detailed in Exh ibit "Z", Annex 16 33 No. 10 of the !CPA's Findings, detailed in Exhibit "Z", Annex 17 34 No. 11 of the I CPA's Findings, detailed in Exhibit " Z", Annex 18 ti17

DECISION C.T.A. CASE NOS. 6630 and 6733 taxes on purchases of goods which are supported by VAT invoices and the input taxes on purchases of services which are supported by VAT official receipts bearing dates outside of the said taxable quarters cannot be considered as valid supports for petitioner's claimed tax credits of P3,046,588.54 and P127,502.79. The claimed input taxes of P47,330.3535 on local purchases of goods which are supported by certified true copies of VAT invoices shall be denied because it cannot be ascertained whether the certifiers named therein are actually the custodians of the said documents. As to the claimed input taxes on importations under nos. 12 to 22 of the !CPA's Findings totaling P20,026,042.0036, the Court finds that the input taxes in the amount of P13,633,015.0037 represents petitioner's valid claim as this is duly supported by BOC or bank official receipts and/or bank debit advises issued in the name of petitioner and within the period of claim. The remaining amount of P6,393,027.00 shall be denied for not being properly substantiated. To recapitulate, out of the P137,421,811.67 excess input VAT claim for the first, third and fourth quarters of 2001, only the amount of P117,330,550.62 is duly substantiated, computed as follows: Amount of Input VAT Claim for the year 2001 P166,720 ,367 .79 29,298,556 .12 Less: Prescribed Claim - 2nd Qtr P137,421 ,811 .67 Unprescribed Claim - 1st, 3rd & 4th Qtrs p 272 ,545 .18 Less: Not Properly Substantiated Claim -1st, 3rd & 4th Qtrs 307 ,898 .32 Input taxes on local purchases of goods per p 1,861 ,159.08 935 ,418.23 Annexes 4-1 to 4-9 , Exhibit "Z" Input taxes on local purchases of services per Annexes 5- 1 to 5-7, Exhibit "Z" Input taxes on local puchases of goods and services without supporting docs per Annex 6, Exh ibit "Z" Less: valid additional docs. presented (925 ,740 .85) 35 No. 7 of the ICPA's Findings, detailed in Exhibit "Z", Annex 14 36 Exhibit " RR", Annexes 19A to 22C 37 See Annex "A" for details 61 8

DECISION C.T.A. CASE NOS. 6630 and 6733 Input claimed on importations per Annexes p 5,885,080.24 1,175,928 .15 7-1 to 7-7, Exhibit "Z" (4 .709 .152 .09) 6,282 ,199.10 1,354 ,580 .25 Less : valid claim per this Court's verification p 6,324,489.84 Input taxes on local purchases of goods (42 .290.74) 6 ,150 .00 which are supported by invoices issued in 38 ,843.39 the name of Sourthern Energy Pangasinan , Inc. per Annex 8, Exhibit' "Z" 47 ,330.35 Less : valid claim per this Court's verification 3,046,588 .54 Input taxes on local purchases of services 127 ,502 .79 which are supported by ORs issued in the 103 ,249 .75 name of Southern Energy Pangasinan, inc. per Annex 9, Exhibit "Z" Input taxes on local purchases of goods which are supported by undated VAT invoices per Annex 10, Exhibit "Z" Input taxes on local purchases of services P 376 ,912.81 which are supported by undated VAT ORs (376 .912 .81) per Annex 11 , Exhibit "Z" Input taxes on local purchases of goods P 18,194.20 which are supported by VAT invoices with (18 ,194.20) different TIN as compared with the TIN indicated in the "Schedule of VAT-Input P 42 ,628 .00 Tax" per Annex 12, Exhibit "Z" (42.628 .00) Less: valid claim per this Court's verification Input taxes on local purchases of services p 8,254,780.00 which are supported by VAT ORs with 4,711 .00 different TIN as compared with the TIN indicated in the "Schedule of VAT-Input 2,142,523.00 Tax" per Annex 13, Exh ibit "Z" 27,455 .00 Less : valid claim per this Court's verification 4,525 ,424.00 Input taxes on local purchases of goods 22 ,039.00 which are supported by certified true copies of VAT invoices per Annex 14, Exhibit "Z" Input taxes on local purchases of services which are supported by ORs with different supplier's name as compared with the name indicated in the "Schedule of VAT- Input Tax", per Annex 15, Exhibit "Z" Less : valid claim per this Court's verification Input taxes on local purchases of goods which are supported by invoices dated outside the period of claim per Annex 16, Exhibit "Z" Input taxes on local purchases of services which are supported by ORs dated outside the period of claim per Annex 17, Exhibit "Z" Input taxes on purchases from non- residents which are supported by BIR Form 1600 and ORs dated outside the period of claim per Annex 18, Exhibit "Z" Input taxes on importation of goods : Annex 19A, Exhibit "RR" Annex 198, Exhibit "RR" Annex 19C, Exhibit "RR" Annex 190, Exhibit "RR" Annex 20A, Exhibit "RR" Annex 208 , Exhibit "RR" 619

DECISION C.T.A. CASE NOS. 6630 and 6733 Annex 21A, Exhibit "RR" 3,237,982 .00 Annex 21 B, Exhibit "RR" 75 ,571 .00 Annex 22A, Exhibit "RR" 1,482 ,640 .00 Annex 228, Exhibit "RR" 129,060.00 Annex 22C, Exhibit "RR" 123,857.00 Total input taxes on importations p 20,026,042.00 Less : valid claim per this Court's verification (13 .633 ,015.00) 6,393.027 .00 Total Disallowed Input VAT-1st, 3rd & 4th Qtrs 20.091.261 .05 Substantiated Claim -1st, 3rd & 4th Qtrs of 2001 P117 330.550.62 Considering that the substantiated input VAT of P117,330,550.62 is net of petitioner's output tax liability for the first, third and fourth quarters of 2001, the same is entirely attributable to petitioner's effectively zero-rated sales for the same period. Further, while petitioner carried-over the substantiated input VAT of P117,330,550.62 to the succeeding quarters until the second quarter of 200338, the same was not applied against any output VAT liability and it was fully deducted as "Any VAT Refund/TCC Claimed"39 in the second quarter of 2003. Therefore, the substantiated claim of Pl17,330,550.62 was no longer carried-over to the succeeding quarters. In sum, the Court finds petitioner entitled to a refund or issuance of a tax credit certificate in the amount of P117,330,550.62 representing unutilized excess input VAT incurred in relation to its effectively zero-rated sales to the NPC for the first, third, and fourth quarters of taxable year 2001. WHEREFORE, the instant Petition for Review is hereby PARTIALLY GRANTED. ACCORDINGLY, respondent Commissioner of Internal Revenue is hereby ORDERED to REFUND or to ISSUE A TAX CREDIT CERTIFICATE in the amount of ONE HUNDRED SEVENTEEN MILLION THREE HUNDRED THIRTY THOUSAND FIVE HUNDRED FIFTY PESOS AND 62/100 (P117,330,550.62) to petitioner Mirant Sual Corporation, representing unutilized input VAT from its domestic purchases 38 Exhibits "N" "0 " "P" "Q" "T" and "U" 39 Exhibit "U-ll " ' ' ' ' 6 20

DECISION C.T.A. CASE NOS. 6630 and 6733 of goods and services and importation of goods attributable to its effectively zero-rated sales to the National Power Corporation for the first, third, and fourth quarters of taxable year 2001. SO ORDERED. WE CONCUR: ~r2- CLA_ ( With Concurring and Dissenting Opinion ) ERNESTO D. ACOSTA Presiding Justice CAESAR A. CASANOVA Associate Justice CERTIFICATION Pursuant to Article VIII, Section 13 of the Constitution, it is hereby certified that the conclusions in the above Decision were reached in consultation before the case was assigned to the writer of the opinion of the Court's Division. ~ __::c- ' r Q'-V\ ERNESTO D. ACOSTA Presiding Justice Chairperson, First Division

ttt>~"' AN NEX A MIRANT SUAL CORPORATION (formerly SOUTHERN ENERGY PANGA SINAN, INC.) -versus- COMMISSIONER OF INTERNAL REVENUE CTA CASE NOS. 6630 & 6733 Per Summary Exh ibit Ref. No. 1st Qtr 3rd Qtr 4th Qtr Total Annexed to 4 ,306 .69 151,778 .00 4 ,306 .69 Exhibit Z 4 ,140.81 522 .00 4 ,140 .81 29 ,887 .59 29 ,887 .59 Allowable Input VAT on Importations (Annexes 7-1 to 7- 7, Exhibit Z) ] 2,734 .00 2,596 .00 2,000 .00 1,404 .00 Annex 7-1 HH-2864 to HH-2866 88561085 3,614 .00 3 ,119 .00 2,000 .00 2,382 .00 4 ,934 .00 3,614 .00 Annex7-1 HH-2869 to HH-2871 88561024 3,549 .00 2,382 .00 2,229 .00 3,54 9.00 Annex 7-1 HH-2921 to HH-2923 88561103 2,229 .00 179 .00 Annex 7-2 FF - 1046 85704674 2,596 .00 1,195 .00 349 .00 346 .00 Annex 7-2 FF - 1782 86364826 1,404 .00 10,066 .00 2,535 .00 18,853 .00 179.00 Annex 7-2 HH-2416 to HH-2418 88237387 22 ,763 .00 1,195 .00 20 ,133.00 151 ,778 .00 Annex 7-2 HH-2421 to HH-2423 88237371 522 .00 176 .00 2,734 .00 Annex 7-2 HH-2682 to HH-2684 89168021 51 .00 56 ,602 .00 30,935 .00 Annex 7-2 HH-2714 to HH-2719 88866233 835 .00 21,444 .00 50 .00 660 .00 Annex 7-2 HH-2726 to HH-2728 88968713 60 .00 58,20 3.00 184 ,149 .00 Annex 7-3 FF -287 80264563 349 .00 11 ,990 .00 166,625 .00 114 .00 16,828 .00 Annex 7-3 FF -1051 80265333 346 .00 100 .00 39 ,187 .00 37,066 .00 Annex 7-3 FF -1830 85910964 2,535 .00 151 ,214 .00 326,422 .00 421 '196 .00 20 ,367 .00 Annex 7-3 HH-2478 to HH-2480 88077972 89 ,041 .00 2,471 .00 177 ,34 3 .00 Annex 7-3 HH-2722 to HH-2724 88070735 190,342 .00 24 3,420 .00 Annex 7-3 11 -2883 88561724 636 ,981 .00 26 ,086.00 Annex 7-3 11-3106 86120727 20 3,446 .00 6,720.00 Annex 7-3 11-3111 , 11-3112 90264842 10,066 .00 18,85 3.00 Annex 7-4 FF-176 7543437 56 ,602 .00 22 ,76 3.00 20 ,133 .00 Annex 7-4 FF-207 , FF-208 7544432 30 ,935 .00 176 .00 Annex 7-4 FF-234 , FF-236 7544685 21,444 .00 51 .00 835.00 Annex 7-4 FF -290 80265132 660 .00 50 .00 Annex 7-4 FF-304 80072474 58 ,203 .00 60.00 11 ,990 .00 Annex 7-4 FF -933 80072885 184 ,149 .00 114 .00 100 .00 Annex 7-4 FF-943 , FF-944 80072946 166,625 .00 151 ,214 .00 421 ,196.00 Annex 7-4 FF-951 , FF-952 7545605 16,828 .00 2,471 .00 3 ,119 .00 Annex 7-4 FF-958 , FF-959 80072921 39 ,187.00 4 ,93 4 .00 Annex 7-4 FF-995 80072833 37 ,066 .00 Annex 7-4 FF - 997 80072842 326,422 .00 Annex 7-4 FF - 1003 80072876 20 ,367 .00 Annex 7-4 FF-1006, FF-1007 80072937 89 ,041 .00 Annex 7-4 FF-1009, FF-1010 80072982 177,343 .00 Annex 7-4 FF-1010 , FF-1 011 80072964 190 ,342 .00 Annex 7-4 FF-1013, FF-1014 80072955 243,420 .00 Annex 7-4 FF-1016, FF-1017 80072991 636 ,981 .00 Annex 7-4 FF - 1032 80072824 26 ,086 .00 Annex 7-4 FF - 1038 80072851 203,446 .00 Annex 7-4 FF - 1773 7546271 6 ,720 .00 Annex 7-4 HH-2293 to HH-2295 7902553 Annex 7-4 HH-2297 to HH-2299 7902554 Annex 7-4 HH-2301 to HH-2303 7902552 Annex 7-4 HH-2384 , HH-2386 7902567 Annex 7-4 HH-2403 , HH-2405 83961936 Annex 7-4 HH-2407 to HH-2409 85067647 Annex 7-4 HH-2411 to HH-2413 80072912 Annex 7-4 HH-2465 to HH-2467 85085673 Annex 7-4 HH-2468 85085646 Annex 7-4 HH-2470 to HH-2472 7902596 Annex 7-4 HH-2474 to HH-2476 85085682 Annex 7-4 HH-2647 to HH-2649 85085637 Annex 7-4 HH-2788 1104155 Annex 7-4 HH-2911 to HH-2913 88561304 Annex 7-4 HH-2790 , HH-2791 90185392 Annex 7-4 11-2485 92009136 Annex 7-4 11 -2519 8346885

ANN EX A MIRANT SUAL CORPORATION (formerly SOUTHERN ENERGY PANGASINAN, INC.) -ve rsus- COMMISSION ER OF INTERNAL REVENUE CTA CASE NOS. 6630 & 6733 Per Summary Ex h ibit Ref. No. 1st Qtr 3rd Qtr 4th Qtr Total Annexed to 3,921 .00 Exh ibit Z 58 .00 71 .00 Annex 7-4 86146261 3,921 .00 85 .00 86137527 58 .00 Annex 7-4 11 -2569 88114905 71 .00 97 ,063 .00 86145674 85 .00 9 , 164 .00 Annex 7-4 11 -2570 88562336 90645676 97 ,063 .00 33,223 .00 Annex 7-4 11 -257 1 8347014 9 ,164 .00 74 ,411 .00 88562302 134 ,113 .00 Annex 7-4 11-2643 88562293 33 ,223 .00 182 ,492 .00 88562074 74,411 .00 123,025 .00 Annex 7-4 11 -2644 88561681 134 , 113 .00 86 146812 182,492 .00 236 .00 Annex 7-4 11 -2679 88 115377 123,025 .00 3,005 .00 1120063 3,778 .00 Annex 7-4 11 -2680 8347507 236 .00 39,253 .00 88562381 3,005 .00 55 ,842 .00 Annex 7-4 11-2687 8343998 3,778 .00 124,598 .00 88561894 39 ,253 .00 65 ,139 .00 Annex 7-4 11-2690 88561916 55 ,842 .00 204 ,104.00 88561322 124,598 .00 77 ,248 .00 Annex 7-4 11-2754 1105152 6 5 , 139 .00 6 ,720 .00 86128174 204 ,104 .00 Annex 7-4 11-2772 88560726 77 ,248 .00 53 .00 8221976 6 ,720 .00 7 ,068 .00 Annex 7-4 11 -2803 6 ,768 .00 1132539 53 .00 6,078 .00 Annex 7-4 11-2812 1132538 7 ,068 .00 6 ,080 .00 8347664 6 ,768 .00 4 ,524 .00 Annex 7-4 11-2808 7896834 6,078 .00 12 ,778 .00 85059676 6 ,080 .00 5,584 .00 Annex 7-4 li-2861 7900918 4 ,524 .00 12,778 .00 12 .00 Annex 7-4 11-2886 6 ,919 .00 1,443 ,985.00 4,709 ,152.09 Annex 7-4 11-2894 Annex 7-4 11-2897 Annex 7-4 11-2982 Annex 7-4 11-2984 Annex 7-4 11-2985 Annex 7-4 11-3065 Annex 7-4 11-3102, 11-3103 Annex 7-4 11 -3123 Annex 7-5 11 -2515 Annex 7-5 11 -25 17 Annex 7-5 11 -2549 Annex 7-6 HH-2442 to HH-2 443 5 ,584 .00 12 .00 Annex 7-7 �35 , HH-2438 , HH -2439, HH-2440 , Hr 6 ,919 .00 Annex 7-7 HH-25 16 to HH-2518 726 ,070.09 Total Allowabl e Input VAT 2,539 ,097 .00 Disallowed Input VAT on Importations (Annexes 7- 1 to 7- 7, Exhibit Z) a.) Input taxes supported by BOG ORs dated outside the period of claim Annex 7-2 FF -221 84852686 1 ,188 .00 1,188 .00 2 ,168 .00 2 ,168 .00 Annex 7-3 FF - 2 4 3 83877771 4,965 .00 4,965 .00 Annex 7-3 FF-85, FF-87 84704103 101 .00 101 .00 95 .00 95 .00 Annex 7-3 FF - 2 4 8 80252532 5,298 .00 5,298 .00 Annex 7-4 FF-273 80258692 2,944 .00 Annex 7-7 FF-268 6813747 2,635 .00 1,919 .00 b.) Input taxes supported by undated BOG ORs 7-7 FF - 2 1 5 85461327 2 ,944 .00 85465037 2 ,635 .00 7-7 FF-217 85465405 1,919 .00 7-7 FF-219 c.) Input taxes supported by BOG ORs and/or bank statements issued under the petitioner's former name Annex 7-2 HH -2498 88485652 1,801 .00 1,801 .00 1,491 .00 1,491 .00 Annex 7-2 HH -2503 88583984 1,930 .00 1,930 .00 1,582 .00 Annex 7-2 HH -2849 89739571 807 .00 73 .00 807 .00 Annex 7-2 11-3069 88921043 1,582 .00 73 .00 12 ,145 .00 Annex 7-3 HH -2426 85074211 12 ,145.00 Annex 7-3 HH-2784 86100551 Annex 7-3 11-2925 88084927 t; 23

ANN EX A MIRANT SUAL CORPORATION (formerly SOUTHERN ENERGY PANGASINAN, INC.) -versus - COMMISSIONER OF INTERNAL REVENU E CTA CASE NOS. 6630 & 6733 Per Summary Exh ibit Ref. No. 1st Qtr 3rd Qtr 4th Qtr Total Annexed to 173 .00 22 ,736 .15 173 .00 Exhibit Z 2 ,165 .00 79 ,066 .00 22 ,736.15 96 .00 622 .00 Annex 7-3 11-2945 1098247 774 .00 2 ,165 .00 Annex 7-4 HH-24 30 86105774 44 ,934 .00 96.00 Annex 7-4 HH -2950 88086801 36 ,369.00 33 ,128.00 Annex 7-4 HH -2963 88561121 242 ,335 .00 79 ,066 .00 Annex 7-4 11 -2528 88079661 28 ,132.00 44 ,784 .00 622 .00 Annex 7-4 11 -2591 88561934 774 .00 Annex 7-4 11 -2593 4,783 .00 Annex 7-4 11 -2678 8340112 25 .00 33 .128.00 Annex 7-6 787373 28 .132.00 Annex 7-6 HH-2446 , HH-2447 7899739 44 ,934 .00 Annex 7-7 HH-2335 to HH-2336 88560096 36,369 .00 Annex 7-7 HH-2335 to HH-2336 88560096 242 ,335 .00 Annex 7-7 80074626 44 ,784.00 Annex 7-7 80074942 Annex 7-7 86114944 4 ,783 .00 25.00 c.) Input taxes without supporting documents 88561742 322 .00 8 ,114 .00 3,177.00 3 ,177 .00 Annex 7-3 80264222 173 .00 7,602 .00 322 .00 Annex 7-4 77513624 283 ,429 .00 173.00 Annex 7-4 77521385 41 .00 7,554 .00 173.00 41 .00 Annex 7-4 79017472 28 ,825 .00 Annex 7-4 7902627 5 ,100 .00 48 ,320 .00 28 ,353 .00 8,114 .00 Annex 7-4 88562801 7,784 .00 26 ,579 .00 40 ,119.00 7,602 .00 Annex 7-4 86155447 27 ,232 .00 28 3,429 .00 Annex 7-4 7517813 37 ,416 .00 531 ,323 .15 844 .00 Annex 7-7 84684984 21 ,912 .00 333 .00 173.00 Annex 7-7 7544663 6,507 .00 483 ,918.00 5,100 .00 Annex 7-7 7545118 4 ,755 .00 7,784.00 Annex 7-7 80072851 27 ,232.00 Annex 7-7 7889383 160 ,687 .00 37,416 .00 Annex 7-7 7547173 21 ,912 .00 Annex 7-7 6,507 .00 Annex 7-7 7900919 4,755 .00 Annex 7-7 1102840 7,554 .00 Annex 7-7 88560324 28 ,825 .00 Annex 7-7 11042121 48 ,320 .00 Annex 7-7 10505270 26 ,579 .00 Annex 7-7 8347507 28 ,35 3.00 Annex 7-7 88561435 40 ,119 .00 Annex 7-7 861309 31 844 .00 Total Disallowed Input VAT 333 .00 1,175 ,928 . 15 GRAND TOTAL 2,699 ,784.00 1,257,393.24 1,927,903.00 5,885,080.24 62 4