INTEL TECHNOLOGY PHILIPPINES, INC vs. COMMISSIONER OF INTERNAL REVENUE

REPUBliC OF THE PHiliPPINES Coon ol Tax Appeals QUEZON CITY INTEL TECHNOLOGY PHILIPPINES, CTA CASE NO. 6128 INC., Members: Petitioner, ACOSTA, CASTANEDA, JR., and -versus - BAUTISTA, JJ. COMMISSIONER OF INTERNAL Promulgated: REVENUE, MAY 2 5 201V Respondent. \ / J !o~ P�"', X- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - - - - f'" - - - -X DECISION CASTANEDA, JR., J.: This is a remanded case involving a claim for refund in the amount of P11, 770,181.70 allegedly representing petitioner's unutilized VAT input taxes on its domestic purchases of goods and services for the period April 1, 1998 to June 30, 1998 attributable to its zero-rated sales for the said period. Initially, this case was decided by the Court of Tax Appeals (CTA original composition) prior to the effectivity of Republic Act (RA) No . 9282.1 The facts of the case are as follows : ~ 1 An Act Expanding The Jurisdiction Of The Court of Tax Appeals (CTA), Elevating Its Rank To The Level of A Collegiate Court With Special Jurisdiction And Enlarging Its Membership, Amending For The Purpose Certain Sections Of Republic Act No. 1125, As Amended, Otherwise Known As The Law Creating The Court Of Tax Appeals, And For Other Purposes.

DECISION CTA CASE NO. 6 128 Page 2 of20 Petitioner is a domestic corporation duly registered with the Securities and Exchange Commission (SEC) and is engaged primarily in the business of designing , developing , manufacturing and exporting advanced and large-scale integrated circuits components or IC's. 2 It is registered with the Philippine Economic Zone Authority (PEZA) as pioneer enterprise enjoying six (6) years Income Tax Holiday with Certificate of Registration No. 95-133 3 and with the Bureau of Internal Revenue (SIR) as a value-added tax (VAT) entity with Certificate of Registration No. 96-540-000713 and Tax Identification No. 004- 833-143.4 As a VAT-registered entity, petitioner reported input taxes it incurred from April 1, 1998 to June 30, 1998 in its Quarterly VAT Returns5 and Monthly VAT Declarations6 for the second quarter of 1998 filed and stamped received by the BIR or its agent. 7 On May 18, 1999, petitioner filed with respondent, through the One Stop Shop Inter-Agency Tax Credit and Duty Drawback Center of the Department of Finance, an application for tax credit/refund of VAT input taxes paid on its domestic purchases of goods and/or services directly used by the J<- petitioner in its commercial operations, amounting to P11 ,770,181.70, covering 2 Paragraph I, Stipulation of Facts, Joint Stipulation of Facts and Simplification of Issues (JSFSI), docket, pp. 47-48. 3 Exhibit "A"; Paragraph 2, Stipulation of Facts, JSFSI , docket, p. 48 . 4 Exhibit "B"; Paragraph 3, Stipulation of Facts, JSFSI , docket, p. 48 . 5 Exhibit " F" 6 Exhibits "C" and " D" 7 Paragraph 4, Stipulation of Facts, JSFSI, docket, p. 48 .

DEC IS ION CTA CASE NO. 6 128 Page 3 of20 the period April 1, 1998 to June 30, 1998.8 Without action on the part of the respondent,9 petitioner filed this Petition for Review.10 In the Answer, respondent raised the following Special and Affirmative Defenses :11 "4. Petitioner being allegedly registered with the Philippine Economic Zone Authority, is exempt from all taxes , including value-added tax, pursuant to Section 24 of Republic Act No. 7916 in relation to Section 103 of the Tax Code, as amended by R.A. 7716. Since its sales are not zero-rated but are exempt from VAT, petitioner is not entitled to refund of input tax pursuant to Section 4.106-1 and 4.103-1 of Revenue Regulations No. 7-95; 5. Petitioner alleged claim for refund is subject to administrative routinary investigation/examination by the Bureau ; 6. The amount of P47,582,813.72 being claimed by petitioner as alleged VAT input taxes for the period of 01 July 1997 to 31 December 1997 was not properly documented (sic) ; 7. 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; 8. Petitioner must show that it has complied with the provisions of Sections 204(c) and 229 of the Tax Code on the prescriptive period for claiming tax refund/credit; ~ 8 Exhibits "M" and "N" 9 Paragraph 7, Stipulation of Facts, JSFS I, docket, p. 49. 10 Docket, pp. 1- 18. 11 Docket, pp. 20-2 1.

DEC IS IO N CTA CASE NO. 6 128 Page 4 of20 9. Claims for refund are construed strictly against the claimant for the same partake the nature of exemption from taxation." After the parties filed their respective Pre-trial Briefs, the court ordered the submission of Joint Stipulation of Facts and Issues. On September 18, 2000, the parties filed their Joint Stipulation of Facts and Simplification of lssues,12 approved in a Resolution 13 dated September 21 , 2000. In the same Resolution, the pre-trial was considered terminated. During trial, petitioner presented and formally offered its documentary and testimonial evidence. In a Resolution dated November 5, 2002 , Exhibits "A", "B", "C", "C-1 ", "0 ", "D-1 ", "E", "E-1 ", UF", "F-1 " to "F-6", "G" to "L", "H-2", "K-2", "G-1 " to "L-1 ", "H-3", "1-2", "K-3","L-2", "M", "N", "M-1 ", "N-1 ", "0 ", "0 -1", "0-2", "P"," P-1 ", "P-2", "Q", "Q-1 ", "Q-2", "S", "T", "T-1","U-1" to "U-375", "V-1 " to "V-665" , "W-1 " to "W-424", "X" to "X-669", and "Y" were admitted as part of petitioner's evidence.14 On the other hand , respondent's counsel manifested that the case has no report of investigation ; thus, she moved for the submission of the case for decision. 15 On February 1, 2002 16 and February 26, 2002 17 petitioner and respondent, respectively, filed their Memoranda. On February 28, 2002, petitioner filed a "Motion to Admit" 18 the summary of VAT claimed deductions ~ 12 Docket, pp. 47-51. 13 Docket, p. 52. 14 Docket, p. 259. 15 Docket, p. 194. 16 Docket, pp. 199-209. 17 Docket, pp. 214-218. 18 Docket, pp. 220-224.

DEC ISION CTA CASE NO. 6 128 Page 5 of20 as part of the exhibits of the petitioner. In a Resolution 19 dated March 21 , 2002 , the Court granted the motion and submitted the case for decision. On June 21 , 2002 , the Court granted petitioner's "Motion to Re-Open" the case for presentation of additional document.20 On August 29, 2002, the "Amended Formal Offer of Petitioner's Evidence"21 was filed . On November 5, 2002 , the Court resolved to admit exhibits mentioned in the Amended Formal Offer of Petitioner's Evidence and submitted the case for decision. 22 The parties raised the following issues to be resolved by this court: 1. Whether or not Petitioner's sales were actually export sales subject to zero-rated (sic) for VAT purposes; 2. Whether or not the export proceeds of Petitioner were inwardly remitted in accordance with the rules and regulations of the Bangko Sentral ng Pilipinas ; 3. Whether or not the VAT input taxes have not been applied to the output tax for the period covered in its claim or any succeeding quarter or quarters ; 4. Whether or not the VAT input taxes on domestic purchases of Jt- goods and services are attributable to Petitioner's zero-rated sales; and 19 Docket, p. 227. 20 Docket, p. 235. 21 Docket, pp. 239-258. 22 Docket, p. 259.

DEC IS ION CTA CASE NO. 6 128 Page 6 of20 5. Whether or not Petitioner is entitled to a refund of the VAT input taxes arising from domestic purchases of taxable goods and services from April1 , 1998 to June 30, 1998 in the amount of P11,770,181 .70.23 On April 21 , 2003, the Court of Tax Appeals (CTA original composition) prior to the effectivity of RA No. 9282, promulgated a Decision24 denying the petition for failure to substantiate its export sales with valid VAT export sales invoices which should contain BIR authority to print and Taxpayer's Identification Number VAT (TIN-V) . The ruling reads : On the basis of all the foregoing , the documents submitted by petitioner in support of its claim cannot be considered as valid evidence to prove its zero-rated sales of goods for VAT purposes. Apparently, petitioner failed to substantiate its demand for refund/issuance of tax credit certificate. WHEREFORE, in view of the foregoing , petitioner's claim for issuance of a tax credit certificate in the amount of P11 ,770,181 .70 allegedly representing its VAT input taxes on domestic purchases of goods and services for the period April 1, 1998 to June 30, 1998 is hereby DEN IED. SO ORDERED. 25 On May 14, 2003, petitioner filed a Motion for Reconsideration26 and a Supplemental Motion for Reconsideration on June 23, 200327 which the CTA denied in the Resolution28 dated September 1, 2003. Aggrieved by the Decision and Resolution of the CTA, petitioner filed a Petition for Review with the Court of Appeals (CA) . In the Decision dated~ 23 Simplication of Issues, JSFSI , docket, pp. 49-50. 24 Docket, pp. 261-272. 25 Docket, p. 271. 26 Docket, pp. 274-280. 27 Docket, pp. 283-288. 28 Docket, pp. 294-298.

DEC IS ION CTA CASE NO. 6 128 Page 7 of20 August 12, 2004, the CA affirmed the decision of the CTA which denied petitioner's claim for refund . Thus, by way of Petition for Review docketed as G.R. No.166732 petitioner appealed the denial of its claim to the Supreme Court. In its Decision29 dated April 27, 2007, the Supreme Court reversed the ruling of the CA and partially granted the petition. The case was remanded to the CTA for determination and computation of petitioner's tax credit/refund . The Supreme Court held : In a claim for refund or issuance of a tax credit certificate attributable to zero-rated sales, what is to be closely scrutinized is the documentary substantiation of the input VAT paid , as may be proven by other export documents, rather than the supporting documents for the zero-rated export sales. And since petitioner has established by sufficient evidence that it is entitled to a refund or issuance of a tax credit certificate, in accordance with the requirements of Sections 106 (A)(2)(a)(1) and 112(A) of the Tax Code, then its claim should not be denied , notwithstanding its failure to state on the invoices the BIR authority to print and the TIN-V. Worthy of mentioning again is the fact that even the CTA and the CA have found petitioner to be legally entitled to a claim for refund or issuance of a tax credit certificate of its unutilized VAT input taxes on domestic purchases of goods and services attributable to its zero-rated sales. XXX XXX XXX Even as the Court now holds that petitioner is legally entitled to a refund or issuance of a tax credit certificate of its unutilized VAT input taxes on domestic purchases of goods and services attributable to its zero-rated sales, the case shall nevertheless be remanded to the CTA for proper determination and computation of petitioner's tax credit/refund , considering that in the Report of the independent auditor, Eliseo Aurellado , only the amount of P.9,688,809.00 was deemed as petitioner's valid claim for tax credit. According to Aurellado , the difference of P-2,081,372 .32 from petitioner's input VAT claim of P-11 ,770,181.70 was not supported by sufficient documentary proof. The Court, not being a trier of facts , cannot certainly decide this factual circumstance. ~ 29 Docket, pp. 84 1-871 .

DECISION CTA CASE NO. 6 128 Page 8 of20 WHEREFORE , premises considered , the petition is PARTIALLY GRANTED. The Decision dated August 12, 2004 of theCA in CA-G .R. SP No. 79327 is REVERSED and SET ASIDE. The instant case is REMANDED to the Court of Tax Appeals for the determination and computation of petitioner's tax crediUrefund . SO ORDERED. When the case was remanded to the CTA, petitioner's counsel moved that petitioner be granted cash refund instead of tax credit certificate on the ground that it already stopped its operation and is actually in the process of dissolution. Acting on said motion , the Court ordered petitioner to submit "Compliance," showing that indeed petitioner has stopped operation , hence the grant of cash refund instead of tax credit certificate.30 Respondent did not file her comment or opposition to the petitioner's "Compliance and Manifestation" filed on April 23, 2012 . Attached to the "Compliance and Manifestation"31 were the following documents: a. Secretary's Certificate dated February 3, 2012 of Board Resolution dated 29 June 2010 shortening the Corporate Term to June 30, 201 0;32 b. Duly received application with the BIR for the issuance of a Tax Clearance dated 30 December 201 0;33 and c. E-Letter of Authority issued by the BIR dated May 12, 2011 .34 ~ 30 Docket, p. 960. 31 Docket, pp. 96 1-962. 32 Docket, p. 963. 33 Docket, pp. 964-967 34 Docket, pp. 968-970.

DEC ISION CTA CASE NO. 6 128 Page 9 of20 In compliance with the Supreme Court's decision dated April 27, 2007 where it has been settled that petitioner is legally entitled to a refund , this court now proceeds to determine and compute petitioner's tax crediUrefund representing the VAT input paid on domestic purchases of goods and services for the period April 1, 1998 to June 30, 1998 attributable to its zero-rated sales. As regards the substantiation issue on the claimed input VAT payment of P11 ,770,181 .70, the commissioned independent CPA, Mr. Eliseo A Aurellado , in his report dated May 18, 2001 ,35 noted the following exceptions and observations36 as far as the total claimed amount of unutilized input taxes are concerned : Exceptions Findings Amount Exception A p 2,029 ,491 .77 Exception B No supporting documents Sold/billed to Intel Philippines Manufacturing , 51 ,880.54 Total Inc. p 2,081,372.31 Of the total disallowances of petitioner's input VAT arrived at by the commissioned independent CPA in the amount of P2,081 ,372.31 , only the amount of P2,068,280.85 37 represents petitioner's disallowed input VAT on purchased of goods and services and the remaining amount of P13,091.4638 previously disallowed by the independent CPA should then be allowed for its available documents properly support the claimed input VAT. ~ 35 Exhibit "Q", Docket, pp. 143 -1 84. 36 Exhibit "T", Docket, pp. 168- 174. 37 P2,081 ,372.3 I less P 13 ,091.46 (total 2nd batch, exception B of ICPA report). 38 2nd batch total , exception B ofiCPA report.

DECISION CTA CASE NO. 6 128 Page 10 of20 However, further verification and examination of the records discloses that additional amount of P2 ,153,422.07 of the input taxes claimed should be disallowed for failure to properly document the same, to wit: Findings Total Input VAT Input tax on purchase of goods/services supported by invoice/OR p 1,209 ,653 .71 but dated outside the period of claim . 275 ,428 .34 Input tax on purchase of goods/services supported by invoice/OR 288 ,503 .93 but not in the name of petitioner. 102,245.42 Input tax on purchase of goods/services supported by "TIN-V" 176,271 .76 invoice/OR. 101 ,318 .91 Input tax on purchase of goods/services not supported by the re_quired documents. p 2,153,422.07 Input tax on purchase of goods supported by zero-rated sales invoice. Input tax on purchase of goods supported by invoice not registered with the SIR Total Disallowances The details of these disallowances are as follows: Exhibit Supplier Invoice Date Input Tax Purchase of goods/services supported by invoice/OR but ADD SERVICES & SUPPLY 03/22/98 14 ,400 .00 dated outside the period of ADD SERVICES & SUPPLY 03/22/98 15,454 .55 claim. ADD SERVICES & SUPPLY 03/22/98 30 ,909 .09 Batch #1 ASIAN AUTOMATION & ROBOTICS CORP . 03/10/98 209 .09 U-15 ATS RESOURCE CENTER , INC. 03/25/98 2,424 .00 U- 16 AUTOMATED TOOL FAB . U-17 RESOURCES 10/16/97 396 .15 BASE CORP. 12/16/97 3,273 .60 U-48 BENEDICT SAFETY SHOES & IND'L U-77 SUPPLY 03/31/98 285 .00 BENEDICT SAFETY SHOES & IND'L U-78 SUPPLY 03/31/98 1,282 .50 U-80 BLUE SKY TRADING COMPANY INC. 03/21/98 5,909 .09 BOOKHAVEN , INC 03/31/98 8,513 .64 U-88 BROWN DIRECT SALES CORP. 03/23/98 2 ,196 .00 BROWN DIRECT SALES CORP. 03/03/98 1,477 .27 U-89 CHASE PACIFIC TECH. 03/23/98 U-96 CHASE PACIFIC TECH. 03/30/98 271 .82 U-97 CITIMEX INC . 11/24/97 86 .36 U-98 U-99, 100 41 ,809 .09 U- 103 U- 106 U-109 , 110

DEC IS ION CITIMEX INC . 07/23/97 27,872 .73 CTA CASE NO. 6 128 COMPUMEDICS CORP. 02/11/98 1,561 .82 Page II of20 CONSOLIDATED IND'L GASES INC . 03/26/98 7,333 .26 CONSOLIDATED IND'L GASES INC . 03/26/98 6,807 .00 U-109 , 111 CONSOLIDATED IND'L GASES INC . 03/26/98 4,673 .10 U-112 , 113 CONSOLIDATED IND'L GASES INC. 03/26/98 7,769 .80 CONSOLIDATED IND'L GASES INC. 03/26/98 7,378 .92 U-114 CONSOLIDATED IND'L GASES INC . 03/26/98 6,700 .50 U-114 CONSOLIDATED IND'L GASES INC. 03/26/98 6,552 .94 U-114 CONSOLIDATED IND'L GASES INC. 03/26/98 4 ,338.45 U-115 CONSOLIDATED IND'L GASES INC. 03/26/98 6 ,426 .07 U- 115 CONSOLIDATED IND'L GASES INC. 03/22/98 3,829.40 U-115 CONSOLIDATED IND'L GASES INC . 03/19/98 5,907 .55 U-115 CONSOLIDATED IND'L GASES INC . 03/19/98 7,862 .59 U-115 CONSOLIDATED IND'L GASES INC . 03/18/98 4 ,749 .14 U-115 CONSOLIDATED IND'L GASES INC . 03/23/98 7,259 .21 U-116 CONSOLIDATED IND'L GASES INC . 03/22/98 7,258 .76 U-117 CONSOLIDATED IND'L GASES INC . 03/23/98 6,234 .63 U-118 CONSOLIDATED IND'L GASES INC . 01/20/98 7,024 .07 U- 119 CONSOLIDATED IND'L GASES INC . 03/31/98 7,228 .71 U-120 CONSOLIDATED IND'L GASES INC . 03/31/98 6 ,703 .60 U-121 CONSOLIDATED IND'L GASES INC. 03/31/98 6,491 .15 U-122 CONSOLIDATED IND'L GASES INC. 03/31/98 6,671 .28 U-123 CONSOLIDATED IND'L GASES INC. 03/31/98 3,844.42 U-126 CONSOLIDATED IND'L GASES INC. 03/31/98 6,470 .09 U-126 CONSOLIDATED IND'L GASES INC. 03/31/98 7,309 .35 U-126 CONSOLIDATED IND'L GASES INC. 03/31/98 7,016 .72 U-126 CONSOLIDATED IND'L GASES INC. 03/31/98 7,389 .81 U-126 CONSOLIDATED IND'L GASES INC. 03/31/98 6 ,386.45 U-1 27 CONSOLIDATED IND'L GASES INC. 03/31/98 3,027.19 U-127 CONSOLIDATED IND'L GASES INC. 03/31/98 4 ,855 .67 U-127 CONSOLIDATED IND'L GASES INC. 03/31/98 6 ,470 .31 U-127 CONSOLIDATED IND'L GASES INC . 03/31/98 6 ,840 .17 U-127 CONSOLIDATED IND'L GASES INC. 03/31/98 7,113.16 U-127 CONSOLIDATED IND'L GASES INC . 03/31/98 6 ,378 .87 U-128 CONSOLIDATED IND'L GASES INC. 03/31/98 7,962.46 U-128 CONSOLIDATED IND'L GASES INC. 01/23/98 845 .82 U-128 CONSOLIDATED IND'L GASES INC. 03/10/98 1, 106 .18 U-128 CONSOLIDATED IND'L GASES INC. 03/03/98 5,454 .55 U-128 CONSOLIDATED IND'L GASES INC . 03/09/98 7,669.09 U-12 9 CORNERSTEEL SYSTEM CORP . 03/26/98 2,080 .70 U-131 CORNERSTEEL SYSTEM CORP . 03/31/98 U-133 DATA CENTER DESIGN CORP. 10/15/98 32,498 .00 U-134 DELTA STAR POWER MFG . CORP. 09/08/98 6,818 .1 8 U-135 DIVERSO 02/13/98 4,363 .64 U-146 DIVERSO 01/28/98 5,1 84 .00 U-147 DIVERSO 01/20/98 12,527.46 U-155 , 156 DIVERSO 03/30/98 9,931 .09 U-157 , 158 DIVERSO 02/02/98 14,545 .46 U- 164 DIVERSO 03/29/98 4,092 .00 U- 165 OMS ENG'G & SERVICES 03/26/98 7,863 .64 U-166 OMS ENG'G & SERVICES 07/06/98 1,909.09 U-167 417 .27 U-168 U-179 U-202 U-314

DEC IS ION OMS ENG'G & SERVICES 07/06/98 8,116 .36 CTA CASE NO. 6 128 OMS ENG'G & SERVICES 07/06/98 1,500 .00 Page 12 of20 OMS ENG'G & SERVICES 07/06/98 1,636.36 OMS ENG'G & SERVICES 07/06/98 1,622 .83 U-314 OMS ENG'G & SERVICES 07/06/98 4 ,545.45 U-314 OMS ENG'G & SERVICES 07/06/98 7,868 .09 U-314 OMS ENG'G & SERVICES 07/06/98 4,818 .18 U-314 OMS ENG'G & SERVICES 07/06/98 5,636 .36 U-314 OMS ENG'G & SERVICES 07/06/98 5,236.36 U-314 532,882.76 U-314 Subtotal U-314 U-314 Batch #2 V-41 EGO-TRIANGLE TECH . 3/24/1998 409 .09 V-43 EGO-TRIANGLE TECH . 3/26/1998 259 .09 V-44 EGO-TRIANGLE TECH . 2/20/1998 195.45 V-45 EQUIPMENT TECH ., INC . 3/30/1998 2,644.40 V-46 EQUIPMENT TECH ., INC . 1/26/1998 2,571.48 FLORO BLUE PRINTING LAS PINAS , V-81 INC 3/24/1998 1,781 .82 V-82 GEM STATIONERY INC . 3/25/1998 52 .18 V-83 GEM STATIONERY INC . 3/26/1998 67 .56 V-84 GEM STATIONERY INC . 3/26/1998 58 .18 V-85 GEM STATIONERY INC . 3/26/1998 V-86 GEM STATIONERY INC . 3/25/1998 137 .51 V-87 GEM STATIONERY INC . 3/25/1998 268 .25 V-88 GEM STATIONERY INC . 3/25/1998 V-89 GEM STATIONERY INC . 3/25/1998 51.10 V-90 GEM STATIONERY INC . 3/25/1998 280 .38 V-91 GEM STATIONERY INC . 3/25/1998 245 .25 V-92 GEM STATIONERY INC. 3/26/1998 302 .38 V-93 GEM STATIONERY INC. 3/25/1998 434 .90 V-94 GEM STATIONERY INC . 3/25 / 1998 263 .95 V-95 GEM STATIONERY INC. 3/25/1998 1,068 .03 V-96 GEM STATIONERY INC. 3/25 / 1998 V-97 GEM STATIONERY INC . 3/26/1998 56 .94 V-98 GEM STATIONERY INC. 3/26 / 1998 24 .55 V-99 GEM STATIONERY INC. 3/25/1998 973 .93 V-100 GEM STATIONERY INC. 3/25/1998 44 .50 V-101 GEM STATIONERY INC . 3/25 / 1998 104.43 V-102 GEM STATIONERY INC . 3/26/1998 150.50 V-278 GOLDEN PYRAMID TRADING 3/18/1998 46 .10 V-280 GOLDEN PYRAMID TRADING 3/18/1998 29 .55 V-606 HEWLETT-PACKARD PHILS. CORP 2/4/1998 61 .36 V-608 HEWLETT-PACKARD PHILS. CORP 2/23/ 1998 1,310 .68 V-610 HOLLAND PACIFIC PAPER , INC. 3/23/1998 2,282 .13 V-609 HOLLAND PACIFIC PAPER , INC . 1/4/1998 1,835 .00 V-612 I & CS, INC . 2/9/1998 1,896 .00 V-620 INCA PLASTIC PHILS., INC. 3/28/1998 1,797 .82 INPHASE UNDUSTRIAL 4,494 .55 V-623 CONSTRUCTION 7/8/1998 2,036 .36 V-625 INTEGRATED WASTE MANAGEMENT 8/5/1998 513 .00 V-625 INTEGRATED WASTE MANAGEMENT 8/5/1998 V-625 INTEGRATED WASTE MANAGEMENT 8/5/1998 14,261 .06 890 .91 890 .91 890 .91

D EC ISION INTEGRATED WASTE MANAGEMENT 8/5/1998 890 .91 CTA CASE NO. 6 128 INTEGRATED WASTE MANAGEMENT 8/5/1998 2 ,672 .73 Page 13 of20 INTEGRATED WASTE MANAGEMENT 8/5/1998 2,672 .73 51,918.53 V-625 Subtotal V-625 V-625 FILEMIX SYSTEMS & SERVICES, INC. 01/08/98 2 ,508 .86 J.E. AUTOMATED PARTS 02/10/98 1,653 .00 Batch #3 JUNNA INDUSTRIAL SALES 01/22/98 4,441 .73 W -411 KEMARS ENGG & SUPPLY CORP. 03/18/98 1,250 .00 W-412 LEAD MARKETING & IND'L INC. 03/11/98 2,18 1.82 W-413 LINKAGE FIRST VENTURES, INC. 03/20/98 20,490 .91 W- 14 LINKAGE FIRST VENTURES, INC. 03/11/98 13 ,502 .73 W -27 LIONAPEX 01/14/98 W -28 MABELLE PRINTING & TRADING 03/13/98 809 .09 W-29 MABELLE PRINTING & TRADING 03/13/98 1,590 .91 W - 32 MABELLE PRINTING & TRADING 03/11/98 2,386 .36 W - 33 MABELLE PRINTING & TRADING 03/13/98 W-34 MABELLE PRINTING & TRADING 03/23/98 436 .36 W-35 MABELLE PRINTING & TRADING 03/18/98 12,863 .64 W-36 MABELLE PRINTING & TRADING 03/16/98 W-37 MABELLE PRINTING & TRADING 03/20/98 1,454 .55 W -38 MABELLE PRINTING & TRADING 03/03/98 250 .00 W-40 MACRO LABEL CENTER 02/17/98 W-41 MAGNETO ENTERPRISES 03/24/98 2 ,168.18 W-42 MAGNETO ENTERPRISES 03/25/98 21 ,818.18 W-44 MAGNETO ENTERPRISES 03/24/98 W-47 MAGNETO ENTERPRISES 03/17/98 4 ,363.64 W-48 MAGNETO ENTERPRISES 03/12/98 68 ,181 .82 W-49 MAGNETO ENTERPRISES 03/02/98 W -50 MAXTRONIX, INC. 11/27/9 7 4 ,963.64 W - 51 MEDINA SALES CO . INC. 03/31/98 1,2 1 8 .18 W - 54 MERCURY DRUG CORP. 01/03/98 3 ,954 .55 W -59 MERCURY DRUG CORP. 01 /03/98 8,700 .00 W -77 MERCURY DRUG CORP. 01/03/98 11 ' 163.64 W -79 MERCURY DRUG CORP. 01/03/98 7 ,118 .18 W-80 MERCURY DRUG CORP. 01/03/98 W -81 MERCURY DRUG CORP. 01 /03/98 7 55 .89 W-82 MERCURY DRUG CORP. 01/03/98 4 ,309.01 W - 83 MERCURY DRUG CORP. 01/03/98 1,651 .00 W - 84 MESCO INC. 03/10/98 W - 85 MICROWILL PRECISION TOOLS 03/24/98 705 .68 W-86 MICROWILL PRECISION TOOLS 03/09/98 6 ,168 . 18 W-87 MICROWILL PRECISION TOOLS 03/24/98 W - 92 MIDDLE BY PHILIPPINES CORP. 09/22/98 783 .64 W - 93 MIRAGE IND'L RESOURCES 03/04/98 168 .7 6 W-94 MIRAGE IND'L RESOURCES 03/04/98 1,897 .27 W-95 MIRAGE IND'L RESOURCES 03/31/98 8,569 .09 W - 97 MOLTEN STEEL CORPORATION 03/26/98 935 .08 W - 97 MOLTEN STEEL CORPORATION 03/25/98 1,590 .00 W-98 MONARK EQUIPT. CORP. 07/17/98 850 .00 N.P. LIBALIB 02/ 12/98 840 .91 W-103, 104 760 .00 W-105 , 106 1,22 7. 2 7 W-1 16, 11 7 12,064 .91 4 9 .09 W- 121 3, 196.36 826 .36 1,994 .09 82 ,954 .55 200 .00

DEC IS ION N.P. LIBALIB 07/07/98 1,020 .00 CTA CASE NO. 6 128 OKASAKIINDUSTRIAL CORP. 03/09/98 1,620.20 Page 14 of20 PILTEL 07/17/98 PILTEL 07/17/98 197 .05 W - 125 PILTEL 07/17/98 186 .75 W - 134 PILTEL 07/17/98 220 .31 W- 173 PILTEL 07/17/98 590 .05 W-173 PLOT 07/08/98 204 .20 W - 173 PLOT 07/08/98 503.29 W-173 PLOT 07/01/98 1,993 .35 W-173 POLARIS 02/12/98 7,646 .16 W - 187 PRECY'S SUPERIOR PRODUCTS 03/07/98 363.64 W-187 PRIME SALES INC. 03/26/98 4 ,890 .91 W-190 PRIME SALES INC. 03/06/98 1,618 .68 W-191 PRIME SALES INC. 09/16/98 1,464 .55 W-192 PROTECTIVE SYSTEMS 3,754 .62 W-193, 195 TECHNOLOGY INC. 03/12/98 W-193, 197 PROTECTIVE SYSTEMS 1,420.00 W-199, 200 TECHNOLOGY INC. 03/12/98 PVC INTERNATIONAL 03/13/98 2,140 .00 W-205 PVC INTERNATIONAL 03/13/98 265 .68 RELIABLE TOOLING SYSTEM INC. 02/18/98 W-206 R-JELL MARKETING 02/20/98 1,545 .27 W-207 RS UNITECH MFG . & TRDG. CORP. 01/28/98 3,402 .73 W-208 RS UNITECH MFG . & TRDG . CORP. 01/28/98 2,121 .82 W-217 SEIKO SERVICE CENTER 03/27/98 W -210 SEMICON INTEGRATED 818 .18 W-224 ELECTRONICS CORP. 02/06/98 1,236 .36 W-225 SEMICON INTEGRATED 12 ,113 . 18 W-236 ELECTRONICS CORP. 02/06/98 SEMICON INTEGRATED 414 .00 W-237 ELECTRONICS CORP. 02/10/98 SEMICON INTEGRATED 22 .73 W-238 ELECTRONICS CORP. 01/23/98 SERVANTECH ENTERPRISES 03/07/98 319 .73 W-239 SKY FREIGHT FORWARDERS , INC. 09/25/98 SKY FREIGHT FORWARDERS , INC. 09/25/98 400 .00 W-414 SKY FREIGHT FORWARDERS , INC. 09/25/98 545 .46 W-251 SKY FREIGHT FORWARDERS, INC. 09/25/98 100 .00 SKY FREIGHT FORWARDERS, INC. 09/25/98 417 .57 W-254 to 270 SKY FREIGHT FORWARDERS, INC. 09/25/98 424 .72 W-254 to 270 SKY FREIGHT FORWARDERS, INC. 09/25/98 100 .00 W-254 to 270 SKY FREIGHT FORWARDERS, INC. 09/25/98 100 .00 W-254 to 270 SKY FREIGHT FORWARDERS , INC. 09/25/98 100.00 W-254 to 270 SKY FREIGHT FORWARDERS, INC. 09/25/98 281 .33 W-254 to 270 SKY FREIGHT FORWARDERS, INC. 09/25/98 284 .39 W-254 to 270 SKY FREIGHT FORWARDERS, INC. 09/25/98 311 .95 W-254 to 270 SKY FREIGHT FORWARDERS, INC. 09/25/98 100.00 W-254 to 270 SKY FREIGHT FORWARDERS, INC. 09/25/98 100.00 W-254 to 270 SKY FREIGHT FORWARDERS, INC. 09/25/98 100 .00 W-254 to 270 SKY FREIGHT FORWARDERS, INC. 09/25/98 100 .00 W-254 to 270 SKY FREIGHT FORWARDERS , INC. 09/25/98 100.00 W-254 to 270 SKY FREIGHT FORWARDERS , INC. 09/25/98 100.00 W-254 to 270 SKY FREIGHT FORWARDERS , INC. 09/25/98 100.00 W-254 to 270 120.00 W-254 to 270 100 .00 W-254 to 270 811.47 W-254 to 270 W-254 to 270

DEC ISION SKY FREIGHT FORWARDERS, INC. 09/25/98 120 .00 CTA CASE NO. 6 128 SKY FREIGHT FORWARDERS , INC. 09/25/98 1,336 .02 Page 15 of20 SKY FREIGHT FORWARDERS , INC. 09/25/98 SKY FREIGHT FORWARDERS , INC. 09/25/98 120 .00 W-254 to 270 SKY FREIGHT FORWARDERS , INC. 09/25/98 100.00 W-254 to 270 SKY FREIGHT FORWARDERS, INC. 09/25/98 100.00 W-254 to 270 SKY FREIGHT FORWARDERS, INC. 09/25/98 100 .00 W-254 to 270 SKY FREIGHT FORWARDERS , INC. 09/25/98 100 .00 W-254 to 270 SMC PNEUMATICS PHILS . INC. 02/26/98 621 .87 W-254 to 270 SMC PNEUMATICS PHILS . INC. 03/05/98 967 .27 W-254 to 270 STRAIGHTWAY TRADING 03/12/98 880 .91 W-254 to 270 SYSTEMS CONTROLS 3 ,264 .00 INSTRUMENTATIONS, INC. 03/03/98 W-317 T.I.Q. MARKETING 07/07/98 2,727. 27 W-318 T.I.Q. MARKETING 07/07/98 8 ,727 .27 W-320 TAIHON CHEMICALS INC 03/20/98 6,68 1.82 THE UNITED POLYRESINS , INC . 12/29/97 10 ,909 .09 W-325 TRANE PHIL 07/23/98 3 ,218 .18 W-338 , 339 TRANE PHIL 08/19/98 9,436 .36 W-339 , 340 TRELLEBORG 03/26/98 9,436 .36 TRELLEBORG 01/08/98 40 ,745.46 W-341 TRI-S FILIPINAS , INC . 03/30/98 5,363 .64 W-371 TRITON COMM'S CORP . 03/11/98 1,750 .00 W-377 , 378 TRITON COMM'S CORP. 01/17/98 33 ,618 .18 W-416, 417 UNIMATE INT'L. INC . 03/12/98 29 ,090.91 W-380 UNIMATE INT'L. INC . 03/11/98 2 ,320 .77 W-381 UNIMATE INT'L. INC . 03/11/98 1,080 .00 W-383 UNIWELL TECH . CORP. 07/06/98 1,275.46 W-385 UP-TOWN IND. SALES 03/31/98 16,351 .05 W-386 WELLTECH SERVICE 4,484 .18 W-387 CORPORATION 07/06/98 W-388 WESOLV OPEN COMPUTING INC. 01/22/98 1,227. 27 W-389 WILLIAM & COMPANY PHILS INC . 03/17/98 7 ,396 .55 W-392 , 393 WINCEL ENTERPRISES 02/11/98 20 ,000.00 W-394 WINCEL ENTERPRISES 02/11/98 4 ,88 7 .27 WINCEL ENTERPRISES 02/04/98 4 ,939 .64 W-418 2 ,618 .18 W-403 Subtotal 624,852.42 W-404 W-405 W-406 W-419 , 420 Total 1,209,653.71 Purchase of goods/services AMANTE AIR BALANCE INC . 04/27/98 1,090 .91 supported by invoice/OR but AMANTE AIR BALANCE INC . 04/27/98 3,000 .00 not in the name of petitioner. AMANTE AIR BALANCE INC . 04/27/98 4,363 .64 Batch #1 AMANTE AIR BALANCE INC. 05/08/98 2,727 .27 AMANTE AIR BALANCE INC . 04/22/98 5,181 .82 U-26 AMANTE AIR BALANCE INC . 05/20/98 3,272 .73 U-27 AMANTE AIR BALANCE INC . 06/08/98 1,090 .91 U-27, 30 AMANTE AIR BALANCE INC . 06/08/98 3,272 .73 U-29 U-28 U-31 U-32 U-32 , 33

DECISION CTA CASE NO. 6 128 Page 16 of20 U-94 , 95 BETA ELECTRIC 06/17/98 100,000 .00 Subtotal 124,000.01 FILCONFAB , INC . Batch #2 AUTOMATED TOOL FAB . V-78 RESOURCES 4/2/1998 2,272 .73 AUTOMATED TOOL FAB . Subtotal 2,272.73 RESOURCES Batch #3 AUTOMATED TOOL FAB. 05/15/98 1,928 .5 0 RESOURCES W-408 MAEDAN ENTERPRISE 05/15/98 402 .00 W-409 MICRO DATA SYSTEM & MGT., INC. 05/15/98 90 .00 TECHNI-TOOL ENG'G 04/13/98 5,454 .55 W-410 W-46 TECHNI-TOOL ENG'G 03/27/98 29 ,545.46 03/23/98 5,190 .00 W-91 TECHNI-TOOL ENG'G W-342, 343 TECHNI-TOOL ENG'G 03/23/98 20 ,7 60 .00 TECHNI-TOOL ENG'G W-342 , 344 , 345 TECHNI -TOOL ENG'G 03/23/98 10,380 .00 TECHNI-TOOL ENG'G 03/23/98 10,380 .00 W-342 , 346 , 347 TECHNI -TOOL ENG'G 03/23/98 10,380 .00 W-342 , 348 , 349 TECHNI -TOOL ENG'G 03/23/98 10,380 .00 W-342 , 350 , 351 TOP-MASTER METAL 02/26/98 W-342 , 352 , 353 ZUELLIG PHARMA 02/26/98 5,190.00 W-342 , 354, 355 ZUELLIG PHARMA 02/26/98 5,190.00 W-342 , 356, 357 ZUELLIG PHARMA 04/02/98 5,190.00 W-342, 358 , 359 ZUELLIG PHARMA 06/10/98 20,056 .00 06/08/98 4 ,990 .91 W-415 06/08/98 1,756 .18 W-421 06/08/98 W-422 482 .91 W-423 Subtotal 1,409.09 W-424 149,155.60 Total 275,428.34 Purchase of goods/services A.T. TONIO ENTERPRISES 04/20/98 405 .68 supported by "TIN-V" ADD SERVICES & SUPPLY 04/22/98 6,818 .18 invoice/OR. ADD SERVICES & SUPPLY 04/24/98 36,000 .00 Batch #1 ADD SERVICES & SUPPLY 04/24/98 11,397.27 ASIA PACIFIC COMPUTER U-1 TECHNOLOGY CENTER 05/19/98 23 , 185.46 U-18 ASIA PACIFIC COMPUTER U-19 TECHNOLOGY CENTER 06/24/98 9,541 .82 U-20 ASIA PACIFIC COMPUTER TECHNOLOGY CENTER 08/14/98 1,296.00 U-41 , 43 DINGCA ENTERPRISE 04/16/98 1,820.70 DINGCA ENTERPRISE 04/06/98 5,106.66 U-44, 45 U-46, 47 U-159 U-160

DECISION DINGCA ENTERPRISE 02/20/98 5,762 .21 CTA CASE NO. 6 128 DINGCA ENTERPRISE 04/07/98 3,122.73 Page 17 of20 DINGCA ENTERPRISE 05/05/98 11 ,281 .82 115,738.53 U-161 GMV CORPORATION Subtotal U- 162 GMV CORPORATION U- 163 GMV CORPORATION JAC INDUSTRIAL SALES Batch #2 JAC INDUSTRIAL SALES JAC INDUSTRIAL SALES V-273 JAC INDUSTRIAL SALES 5/19/1998 3,363 .64 V-273 JAC INDUSTRIAL SALES 5/19/1998 2 ,943 .18 V-273 JAC INDUSTRIAL SALES 5/19/1998 3,363 .64 V-636 JAC INDUSTRIAL SALES 3/23/1998 2,113.64 V-637 JAC INDUSTRIAL SALES 3/23/1998 4,635 .68 V-638 JAC INDUSTRIAL SALES 4/4/1998 4,510 .91 V-639 JAC INDUSTRIAL SALES 4/4/1998 2,941 .36 V-640 JAC INDUSTRIAL SALES 5/2/1998 2,200 .00 V-641 JAC INDUSTRIAL SALES 5/2/1998 4 ,472 .73 V-642 JAC INDUSTRIAL SALES 5/2/1998 1,363.64 V-643 JAC INDUSTRIAL SALES 4/21/1998 4,963 .91 V-644 JAC INDUSTRIAL SALES 4/21/1998 V-645 JAC INDUSTRIAL SALES 4/21/1998 279 .55 V-646 JAC INDUSTRIAL SALES 4/21/1998 2,987.45 V-647 JAC INDUSTRIAL SALES 4/22/1998 V-648 JAC INDUSTRIAL SALES 4/21/1998 509 .09 V-649 JAC INDUSTRIAL SALES 4/21/1998 3,1 05 .09 V-650 JAC INDUSTRIAL SALES 4/21/1998 V-651 JAC INDUSTRIAL SALES 4/22/1998 721.36 V-652 JAC INDUSTRIAL SALES 4/21/1998 2,454 .55 V-653 JACINTO INDUSTRIAL 4/21/1998 V-654 4/21/1998 627 .27 V-655 L.C.U. DESIGNS , INC. 4/21/1998 1,730.91 V-656 L.C.U. DESIGNS , INC. 4/22/1998 V-657 L.C.U. DESIGNS , INC. 4/21/1998 855 .00 V-658 L.C .U. DESIGNS, INC. 4/14/1998 1,3 18.18 V-659 L.C.U. DESIGNS , INC. 3/21/1998 3,072 .73 L.C .U. DESIGNS , INC. L.C .U. DESIGNS, INC . Subtotal 602 .18 L.C .U. DESIGNS , INC . 4,309 .08 L.C .U. DESIGNS, INC . 2 ,163 .64 L.C .U. DESIGNS, INC . MDA WOODCRAFT 208.45 SINOFIL PHILS., INC. 5,600 .00 SINOFIL PHILS. , INC. 67,416.85 Batch #3 W-16 04/15/98 1,080.00 W-17 04/20/98 14 ,236 .36 W-18 04/16/98 11 ,072 .73 W-19 03/30/98 W-20 04/30/98 3,250 .00 W-21 04/29/98 16,663 .64 W-22 04/23/98 20,544 .55 W-23 05/26/98 2,570 .00 W-24 06/01/98 W-24 05/30/98 3,570.27 W-72 04/20/98 2,590.91 W-252 04/07/98 3,927 .27 W-253 04/03/98 14,861.00 9,672 .73 Subtotal 1,309 .09 105,348.55 Total

DECISION CTA CASE NO. 6 128 Page 18 of20 288,503.93 Purchase of goods/services ABB KOPPEL INC. 02/06/98 50,045 .16 not supported by the required ABB KOPPEL INC. 02/06/98 37,533 .87 documents. 87,579.03 Subtotal Batch #1 U-3 U-5 Batch #3 SCANDIA DESIGN 01/20/98 13 ,373 .60 W-228 SMART COMMUNICATIONS, INC. 04/17/98 389 .21 SMART COMMUNICATIONS, INC. 04/17/98 42 .78 W-302 , 303 SMART COMMUNICATIONS, INC . 06/08/98 158.21 W-304 , 305 SMART COMMUNICATIONS, INC . 05/04/98 148.42 W-306 , 307 SMART COMMUNICATIONS, INC . 05/05/98 86 .77 W-308 , 309 SMART COMMUNICATIONS, INC . 05/20/98 146.32 W-310 , 311 SMART COMMUNICATIONS, INC . 05/20/98 169.32 W-312 , 313 SMART COMMUNICATIONS, INC . 05/20/98 151 .76 W-312, 314 W-312, 315 Subtotal 14,666.39 Total 102,245.42 Purchase of goods supported CONSOLIDATED IND'L GASES INC . 04/16/98 7,028 .40 by zero-rated sales invoice. CONSOLIDATED IND'L GASES INC . 04/16/98 5,299.47 Batch #1 CONSOLIDATED IND'L GASES INC . 04/16/98 7 ,273 .34 CONSOLIDATED IND'L GASES INC . 04/16/98 5,510 .77 U- 141 CONSOLIDATED IND'L GASES INC. 04/16/98 6,831 .92 U- 141 CONSOLIDATED IND'L GASES INC. 04/16/98 6,750 .99 U-141 CONSOLIDATED IND'L GASES INC . 04/16/98 6,260 .24 U-141 CONSOLIDATED IND'L GASES INC . 04/16/98 6,938 .33 U-141 CONSOLIDATED IND'L GASES INC . 04/16/98 5,751 .39 U-141 CONSOLIDATED IND'L GASES INC. 04/16/98 7,162.41 U-141 CONSOLIDATED IND'L GASES INC. 04/16/98 6,704 .22 U-142 CONSOLIDATED IND'L GASES INC. 04/16/98 6,487 .19 U-142 CONSOLIDATED IND'L GASES INC . 04/16/98 6,230 .77 U-142 CONSOLIDATED IND'L GASES INC. 04/16/98 7,333 .52 U-142 CONSOLIDATED IND'L GASES INC. 04/16/98 7 ,183 .85 U-142 CONSOLIDATED IND'L GASES INC. 04/16/98 7,237 .78 U-142 CONSOLIDATED IND'L GASES INC . 04/16/98 8,396 .65 U-142 CONSOLIDATED IND'L GASES INC . 04/16/98 6,422 .30 U-143 CONSOLIDATED IND'L GASES INC . 04/16/98 7,329 .61 U-143 CONSOLIDATED IND'L GASES INC . 04/16/98 7 ,468 .89 U- 143 CONSOLIDATED IND'L GASES INC. 04/16/98 3,802 .22 U- 143 CONSOLIDATED IND'L GASES INC. 04/16/98 7 ,305 .10 U- 143 CONSOLIDATED IND'L GASES INC. 04/16/98 6,577 .94 U-143 CONSOLIDATED IND'L GASES INC. 04/16/98 3,621.44 U-143 CONSOLIDATED IND'L GASES INC. 04/16/98 5,319 .39 U- 144 CONSOLIDATED IND'L GASES INC. 04/16/98 6,684 .54 U-144 U- 144 U- 144 U- 144

D EC ISION CTA CASE NO. 6 128 Page 19 of20 U- 144 CONSOLIDATED IND'L GASES INC . 04 / 16/98 7,359 .09 Total 176,271.76 Purchase of goods supported TELPLUS 05/19/98 49,410 .90 by invoice not registered with TELPLUS 05/19/98 51 ,908.01 the BIR 101,318.91 Total Batch #3 W-368 W-369 Grand Total 2,153,422.07 Thus , petitioner was able to support by proper VAT invoices and/or official receipts input taxes in the amount of P7,548,478.78, computed as follows : Claimed Input Taxes for Refund p 11,770,1 81.70 Less: Disallowances per Commissioned Independent CPA's Report p 2,081 ,372.31 Adjustment on disallowances made by Commissioned Independent CPA as per this Court's further verification (1 3,091.46) Add itional disallowances per th is Court's further verification 2,153,422.07 4,221 ,702.92 Total Substantiated Amount p 7,548,478.78 WHEREFORE , premises considered , petitioner's claim for refund is hereby PARTIALLY GRANTED. Accordingly, respondent is hereby ORDERED TO REFUND in favor of petitioner the reduced amount of P7,548,478.78, representing petitioner's VAT input taxes on its domestic purchases of goods and services for the period April 1, 1998 to June 30, 1998. SO ORDERED. ~�c.c.~a4 Q q--UANITO C. CASTANEDA, .JJC. Associate Justice

DEC ISION LOVE~~nR~ii'if~ISTA CTA CASE NO. 6 128 Page 20 of20 Associate Justice WE CONCUR: t~~-~ ERNESTO D. ACOSTA Presiding 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. I(~Lc - <Q~ ERNESTO D. ACOSTA Presiding Justice