REMA TIP TOP PHILIPPINES, INC., v. COMMISSIONER OF INTERNAL REVENUE

REPUBLIC OF THE PHILIPPINES COURT OF TAX APPEALS QUEZON CITY SPECIAL SECOND DIVISION REMA TIP TOP CTA CASE NO. 10303 PHILIPPINES, INC., Members: Petitioner, -versus- BACORRO-VILLENA, Chairperson, and CUI-DAVID, JJ. COMMISSIONER OF Promulgated: INTERNAL REVENUE, JUN zZ2023 / X- - - - - - - - - - - _R_e~~nd~~~~ --- -----~- --------X DECISION 'f: ~,. "'� CUI-DAVID, J.: Before the Court is a Petition for Review 1 filed by petitioner Rema Tip Top Philippines, Inc. (Petitioner) on July 10, 2020, praying for the refund or issuance of a tax credit certificate in the amount of P4,434,530.00, allegedly representing its unutilized input value-added tax (VAT) attributable to zero-rated sales for the taxable year (TY) 2018. THE PARTIES Petitioner Rema Tip Top Philippines, Inc. is a domestic corporation duly organized and existing under Philippine laws. 2 It is registered with the Bureau of Internal Revenue (BIR) under Taxpayer Identification Number (TIN) 008-042- 655-000, with address at Unit 502 Richmonde Plaza, Ortigas, San Miguel Ave., Brgy. San Antonio, Ortigas Center, Pasig.3 \1 1 Docket, pp. 7-40. 2 The Parties, Petition for Review, docket, p, 1I. 3 Exhibit "P-1", Docket, p. 2419.

DECISION CTA Case No. 10303 Rema Tip Top Philippines, Inc. vs. Commissioner of Internal Revenue Page 2 of68 X------------------------------------------------------------------------------------X Respondent is the Commissioner of Internal Revenue (CIR), the officer duly appointed and empowered by law to act on claims for refund or credit, with office address at the 5th Floor, BIR National Office Building, Agham Road, Diliman, Quezon City.4 THE FACTS AND THE PROCEEDINGS During TY 2018, petitioner allegedly had aggregate sales in the amount ofP162,794,001.62, broken down as follows: Sales/ I'' 2"' 3'' 4'h Total Receipts Quarter' I' 19,316,404.95 VA Table Quarter' Quarter' Quarter' I' 4,307,340.22 143,477,596.67 Zero-Rated I' 4,849,145.77 I' 5,362,847.30 60,261,952.90 I' 162,794,001.62 Total I' 4,797,071.66 I' 64,569 293.12 30,838,615.19 16,216,363.91 36, 160 664.67 I' 35,687,760.96 I' 41 ,523,511.97 1'21,013,435.57 While generating the aforesaid VATable and zero-rated sales, petitioner purchased various materials, services, and capital goods in the aggregate amount of P66,132,806.23, details of which are as follows: Purchases I" Quarter 2"'_Quarter 3''-Quarter 4th Quarter Total Capital I' 9,375,000.00 I' 9,375,000.00 Goods I' 214,339.55 I' 297,230.39 I' 109,974.30 Exceeding 555,933.16 106,983.16 675,793.10 254,152.37 728,527.40 IM 980,727.20 3,515,707.37 460,945.56 341,951.72 Local 5,001,586.00 Purchases of 8 473,527.33 562,134.96 3,312,606.77 8,414,904.06 2,345,759.44 Goods 1'10,224,527.24 9,194,926.86 5,941,328. 78 Importation 13,344,639.59 1'13,941 ,502.68 1'15,062,311.23 11,727,510.83 of Goods 1'26,904,465.08 Local 36,954,422.56 Purchases of 1'66, 132,806.23 Services Purchases not Qualified for Input Tax Others Total Allegedly, out of petitioner's total purchases, the amount of P36,954,422.56 is attributable or allocable to zero-rated sales, for which an input VAT amounting to P4,434,530.00 was paid. For purchases allocated to its VATable sales, petitioner paid the output tax in the aggregate amount of 4 The Parties, Petition for Review, docket, p. 12. ~ 5 Exhibit "P-1 0". Docket. p. 2451. 6 Exhibit "P-11", Docket, p. 2453. 7 Exhibit "P-12", Docket, p. 2455. 8 Exhibit "P-13", Docket, p. 2457.

DECISION CTA Case No. 10303 Rema Tip Top Philippines, Inc. vs. Commissioner of Internal Revenue x------------------------------------------------------------------------------------x P1,137,854.74. Petitioner added that all the foregoing input VAT for current transactions were reported in its Amended Quarterly VAT Returns forTY 2018. On December 27, 2019, petitioner filed with the BIR - Revenue District Office (RDO) No. 43 an administrative claim9 for refund of its input VAT attributable to zero-rated sales made in TY 2018. Alleging inaction, petitioner elevated its claim before the Court via the instant Petition for Review filed on July 10, 2020. In his Answer10 filed within the extension period given, respondent interposed, by way of Special and Affirmative Defense, that the Court has no jurisdiction over the instant case as petitioner prematurely filed its Petition for Review. According to respondent, petitioner's administrative refund claim was filed on December 27, 2019. However, additional documentary requirements were submitted on February 10, 17, 19, and March 6, 2020. Hence, according to respondent, the filing of the Petition for Review on July 10, 2020 was premature, considering that the counting of the 90 days to act should have commenced on March 6, 2020, and not December 27, 2019. On November 10, 2020, the Court issued a Notice of Pre- Trial Conference, 11 informing the parties of the pre-trial conference set on February 8, 2021. Both parties filed their pre-trial briefs before the scheduled pre-trial conference on February 5, 2021. 12 After the Pre-Trial Conference, the parties filed their Joint Stipulation of Facts and Issues13 on March 1, 2021, based on which a Pre-Trial Order14 was issued on March 8, 2021. The trial then ensued, during which petitioner presented its witnesses, namely: (1) Ms. Jennilyn U. Gaanan, its Director and Chief Finance Officer; and (2) Ms. Charlene Mae A. Monje, 9 Exhibit "P-9'", docket, p. 2448. 10 Docket, pp. 1932-1938. 11 Docket, pp.1940-1941. "Docket, pp. 1985-2015 and pp. 2018�2021, respectively. 13 Docket. pp. 2066-2075. 14 Docket, pp. 2079-2086.

DECISION Public CTA Case No. 10303 Rema Tip Top Philippines, Inc. vs. Commissioner of Internal Revenue Page 4 of68 x------------------------------------------------------------------------------------x the Court-commissioned Independent Certified Accountant (ICPA). By way of a Judicial Affidavit, 15 Ms. Jennilyn U. Gaanan testified that she is the Chief Finance Officer (CFO) and a member of petitioner's Board of Directors. As the CFO, she is in charge of preparing and maintaining petitioner's books of accounts and tax and financial records. She is familiar with the instant case because she caused the filing of the instant petition as authorized by petitioner's Board of Directors. Ms. Gaanan declared that the instant case is about petitioner's claim for a refund of input VAT attributable or properly allocated to zero-rated sales made in TY 2018. On December 27, 2019, petitioner filed an administrative claim for refund with the BIR-RDO No. 43, as evidenced by the Application for Claim for Tax Credit/Refunds, along with the complete documentary requirements covered by a Transmittal Letter dated December 26, 2019, with stamped "RECEIVED" by the BIRon December 27, 2019. Ms. Gaanan further declared that petitioner is a VAT- registered taxpayer, as shown in its BIR Certificate of Registration (BIR Form No. 2303), and paid its Annual Registration Fee forTY 2018. In 2018, petitioner had an aggregate sale of f'162,794,001.62, consisting of sales subject to 12% VAT m the amount of f'19,316,404.95 and zero-rated sales in the amount of f'143,477,596.67. The output tax due from the f'19,316,404.95 amounted to f'2,317,968.59. For the zero-rated sales of f'143,477,596.67 made to Taganito HPAL Nickel Corporation and Coral Bay Nickel Corporation, both registered with the PEZA, and Oceanagold (Philippines), Inc., an enterprise registered with the Bureau of Investments (BOI). In the course of generating the total sales of f'162,794,001.62 for 2018, petitioner made purchases, both local and imported, amounting to f'66,132,806.23, of which the amount of f'36,954,422.56, were attributable to its zero- rated sales with corresponding input tax of f'4,434,530.00. 15 Exhibit"P-98'', docket, pp. 2638�2671.

DECISION CTA Case No. 10303 Rema Tip Top Philippines, Inc. vs. Commissioner of Internal Revenue Page 5 of68 x------------------------------------------------------------------------------------x According to Ms. Gaanan, none of the P4,434,530.00 were applied against output tax due forTY 2018 and the succeeding periods, as evidenced by its Amended Quarterly VAT Returns for TYs 2018 and 2019. Ms. Gaanan further declared that, for some time, they did not hear from the BIR about their administrative claim for refund. Thus, they made a follow-up, to which they were informed that a team had yet to be assigned to petitioner's administrative claim. A new team was eventually assigned to process petitioner's application for refund. Said team requested again the documents petitioner initially filed on December 27, 2019, to which petitioner complied as evidenced by the stamped "RECEIVED" dated "FEB 10, 2020", on the face of the Transmittal Letter dated December 26, 20 19, signed by Jakereen L. Gonzalo, the same person who received it the first time on December 27, 2019. After that, the BIR requested additional documents, which petitioner provided. The submissions of additional documents were enclosed in the following Transmittal Letters with the signature of the BIR Examiner receiving the documents: 1. Transmittal Letter dated February 17, 2020: a. Alphalist of Suppliers of petitioner; b. Copy of SEC Registration and By-Laws of petitioner; and c. VAT Return for the 4th Quarter of the taxable year 2017. 2. Transmittal Letter dated February 19, 2020: a. Certification from the Department of Finance One-Stop Shop Inter-Agency and Duty Drawback Center (OSS). 3. Transmittal Letter dated March 6, 2020: a. VAT Relief for Sales in 2018; b. VAT relief for Importations in 2018; and c. VAT Relief for Purchases in 2018.

DECISION CTA Case No. 10303 Inc. vs. Commissioner of Internal Revenue Rema Tip Top Philippines, xP-a-g--e--6--o--f-6-8------------------------------------------------------------------------x Ms. Gaanan continued that after receiving the requested additional documents, the BIR no longer contacted petitioner. As such, petitioner waited for the lapse of 90 days for the BIR to process its administrative claim for refund. However, the 90-day period was initially suspended when t he Enhanced Community Quarantine (ECQ) was imposed in Metro Manila on March 17, 2020, and resumed on June 1, 2020, when the Modified ECQ was lifted, and restrictions in Metro Manila were downgraded to the General Community Quarantine (GCQ). Hence, the 90-day period for the BIR to process petitioner's administrative claim for refund ended on June 10, 2020. Petitioner had thirty (30) days from the lapse of the 90 days to file its judicial claim for refund. According to Ms. Gaanan, petitioner filed its judicial claim for refund on July 10, 2020. ICPA Charlene Mae A. Monje, by way of an Amended Judicial Affidavit, 16 testified that she is the ICPA commissioned by the Court in the instant case to perform the duties and responsibilities of an ICPA under Rule 32 of the Rules of Court in relation to Rule 13 of the Revised Rules of the Court of Tax Appeals (RRCTA). ICPA Monje declared that she, with the assistance of her team, prepared the required ICPA Report and Supplemental Report, and pertinent annexes based on the documents presented by petitioner, pre-marked the Exhibits and scanned said Report, attachments and Exhibits, and stored such copies into portable devices in the form of DVDs. ICPA Monje further declared that based on the results of the procedures they performed, applying applicable laws, rules, and regulations, the input tax that can be refunded in the instant case amounts to P4,440,970.03. There being no more witness to be presented, and upon petitioner's counsel, petitioner was granted the instance of from February 16, 2022, or until March 3, fifteen (15) days (FOE). Respondent file its Formal Offer of Evidence of petitioner's FOE 2022, to given fifteen (15) days from receipt was also to file his comment. Further, and considering the manifestation of respondent's counsel that respondent will no 16 Exhibit P-150, Docke~ pp. 2285-2295.

DECISION CTA Case No. 10303 Rema Tip Top Philippines, Inc. vs. Commissioner of Internal Revenue Page 7 of68 x------------------------------------------------------------------------------------x longer present a witness in this case, the parties were granted thirty (30) days from receipt of the Court's Resolution on petitioner's FOE to file their respective memoranda. 17 On March 3, 2022, petitioner filed its Motion to Transfer Marking of Exhibits and Formal Offer of Documentary Exhibits, 1B which the Court partly admitted in the Resolution19 dated April4, 2022. On June 22, 2022, the instant case was deemed submitted for decision considering the Report20 of the Records Division that both parties failed to file their respective memorandum within the period granted by the Court.21 Hence, this Decision. THE ISSUE The parties agreed to submit the following issue22 for the resolution of the Court: WHETHER OR NOT PETITIONER IS ENTITLED TO A REFUND OF INPUT VAT ATTRIBUTABLE OR PROPERLY ALLOCATED TO ZERO-RATED SALES MADE IN TAXABLE YEAR 2018 IN THE AGGREGATE AMOUNT OF FOUR MILLION FOUR HUNDRED THIRTY-FOUR THOUSAND FIVE HUNDRED THIRTY PESOS (1"4,434,530.00) PURSUANT TO SECTION 112 OF NATIONAL INTERNAL REVENUE CODE OF 1997. Petitioner's Arguments: Petitioner submits that to be entitled to a tax credit certificate or refund of excess input VAT attributable to zero- rated or effectively zero-rated sales, the following requisites must be present: 17 Order dated February 16,2022, Docket, p. 2291. 18 Docket, pp. 2394-2416. 19 Docket. pp. 2687-2693. 20 Docket, p. 2694. 21 Resolution, Docket, p. 2695. 22 Statement of the Issues, Joint Stipulation ofFacts and Issues (JSFI), Docket, pp. 2066-2067.

DECISION CTA Case No. 10303 Rema Tip Top Philippines, Inc. vs. Commissioner of Internal Revenue Page 8 of68 x------------------------------------------------------------------------------------x 1. The taxpayer is VAT-registered; 2. The taxpayer is engaged in zero-rated or effectively zero-rated sales; 3. The input taxes are due or paid; 4. The input taxes are not transitional input taxes; 5. The input taxes have not been applied against output taxes during and in the succeeding quarters; 6. The input taxes claimed are attributable to zero-rated or effectively zero-rated sales; 7. For zero-rated sales under Sections 106 (A) (2) (1) and (2); 106 (B); and 108 (B) (1) and (2), the acceptable foreign currency exchange proceeds have been duly accounted for in accordance with BSP rules and regulations; 8. Where there are both zero-rated or effectively zero-rated sales and taxable or exempt sales, and the input taxes cannot be directly and entirely attributable to any of these sales, the input taxes shall be proportionately allocated on the basis of sales volume; and 9. The claim is filed within two years after the close of the taxable quarter when such sales were made. According to petitioner, it has complied with the foregoing requirements. Hence, it is proper that the input tax in the aggregate amount of P4,434,530.00 be refunded by way of refund or issuance of a tax credit certificate. Respondent's Arguments: For his part, respondent submits that the instant Petition for Review should be dismissed, considering that the Court has no jurisdiction over petitioner's claim for refund or issuance of tax credit certificate. According to respondent, petitioner's administrative claim for refund was filed on December 27, 2019. However, additional documentary requirements were submitted on February 10, 17, 19, and March 6, 2020. Hence, the filing of the Petition for Review on July 10, 2020 was premature, considering that the counting of the 90 days to act should have commenced on March 6, 2020, and not December 27, 2019.

DECISION CTA Case No. 10303 Rema Tip Top Philippines, Inc. vs. Commissioner of Internal Revenue Page 9 of68 x------------------------------------------------------------------------------------x THE COURT'S RULING Pertinent to the resolution of the instant case is Section 112(A) and (C) of the National Internal Revenue Code (NIRC) of 1997, as amended by Republic Act (RA) No. 10963,23 otherwise known as the Tax Reform for Acceleration and Inclusion Act (TRAIN), which reads as follows: SEC. 112. Refunds or Tax Credits of Input Tax. - (A) Zero-Rated or Effectively Zero-Rated Sales. - Any VAT-registered person, whose sales are zero-rated or effectively zero-rated may, within two (2) years after the close of the taxable quarter when the sales were made, apply for the issuance of a tax credit certificate or refund of creditable input tax due or paid attributable to such sales, except transitional input tax, to the extent that such input tax has not been applied against output tax: Provided, however, That in the case of zero-rated sales under Section 106(A)(2)(a)(1), (2) and (b) and Section 108(8)(1) and (2), the acceptable foreign currency exchange proceeds thereof had been duly accounted for in accordance with the rules and regulations of the Bangko Sentral ng Pilipinas (BSP): Provided, further, That where the taxpayer is engaged in zero-rated or effectively zero-rated sale and also in taxable or exempt sale of goods of properties or services, and the amount of creditable input tax due or paid cannot be directly and entirely attributed to any one of the transactions, it shall be allocated proportionately on the basis of the volume of sales: Provided, finally, That for a person making sales that are zero-rated under Section 108(8)(6), the input taxes shall be allocated ratably between his zero-rated and non-zero- rated sales. XXX XXX XXX (C) Period within which Refund of Input Taxes shall be Made. - In proper cases, the Commissioner shall grant a refund for creditable input taxes within ninety (90) days from the date of submission of the official receipts or invoices and other documents in support of the application filed in accordance with Subsections (A) and (B) hereof: Provided, That should the Commissioner find that the grant of refund is not proper, the Commissioner must state in writing the legal and factual basis for the denial.~ 23 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, 128, 129, 145, 148, 149, 151, 155, 171, 174, 175, 177, 178, 179. 180. 181. 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, !50-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 OTHER PURPOSES.

DECISION CTA Case No. 10303 Rema Tip Top Philippines, Inc. vs. Commissioner of Internal Revenue x------------------------------------------------------------------------------------x In case of full or partial denial of the claim for tax refund, the taxpayer affected may, within thirty (30) days from the receipt of the decision denying the claim, appeal the decision with the Court of Tax Appeals: Provided, however, That failure on the part of any official, agent, or employee of the BIR to act on the application within the ninety (90)-day period shall be punishable under Section 269 of this Code." Based on the foregoing provision, jurisprudence 24 has laid down certain requisites the taxpayer-applicant must comply with to successfully obtain a credit/refund of input VAT. Said requisites may be classified into specific categories as follows: As to the timeliness of the filing of the administrative and judicial claims: 1. The claim is filed with the BIR within two (2) years after the close of the taxable quarter when the sales were made;25 2. In case of full or partial denial of the refund claim, or the failure on the part of Respondent to act on the said claim within a period of ninety (90) days, the judicial claim must be filed with this Court, within thirty (30) days from receipt of the decision or after the expiration of the said 90-day period; Concerning the taxpayer's registration with the BIR: 3. The taxpayer is a VAT-registered person;26 In relation to the taxpayer's output VAT: 4. The taxpayer is engaged in zero-rated or effectively zero- rated sales;27 5. For zero-rated sales under Sections 106(A)(2)(a)(l) and (3); and 108(8)(1) and (2), the acceptable foreign currency exchange proceeds have been duly accounted for in accordance with BSP rules and regulations;2" 24 Commissioner ofInternal Revenue vs. Toledo Power Co., G.R. Nos. 195175 & 199645, 10 August 2015, 766 SCRA 20�33. 25 Intel Technology Philippines, Inc. vs. Commissioner of Internal Revenue, G.R. No. 166732, April 27, 2007; San Roque Power Corporation vs. Commissioner of Internal Revenue, G.R. No. 180345, November 25, 2009; and AT&T Communications Services Philippines, Inc. vs. Commissioner ofInternal Revenue, G.R. No. 182364, August 3, 2010. 26 Intel Technology Philippines, Inc. vs. Commissioner of Internal Revenue. supra: San Roque Power Corporation vs. Commissioner of Internal Revenue. !d. supra; and AT&T Communications Services Philippines, Inc., supra. 27 28 Par. 2, Sec. 4.112�l.(a) of RR No. 16�2005, as further amended by RR No. 13�20 18.

DECISION CTA Case No. 10303 Rema Tip Top Philippines, Inc. vs. Commissioner of Internal Revenue Page 11 of68 x------------------------------------------------------------------------------------x As regards the taxpayer's input VAT being refunded: 6. The input taxes are not transitional;29 7. The input taxes are due or paid;Jo 8. The input taxes claimed are attributable to zero-rated or effectively zero-rated sales. However, where there are both zero-rated or effectively zero-rated sales and taxable or exempt sales, and the input taxes cannot be directly and entirely attributable to any of these sales, the input taxes shall be proportionately allocated on the basis of sales volume;JI and 9. The input taxes have not been applied against output taxes during and in the succeeding quarters.32 Relative thereto, it must be emphasized that in cases filed before this Court, which are litigated de novo, party-litigants must prove every minute aspect of their case. 33 Thus, it behooves petitioner to comply with the foregoing requisites. As a corollary, the absence of any of the said requisites is a valid ground to deny the refund claim. The Court has jurisdiction over the instant Petition. First and second requisites: Petitioner's administrative and judicial claims were timely filed. The first requisite pertains to filing a claim for tax refund or tax credit of input VAT before the BIR within two (2) years from the close of the taxable quarter when the zero-rated or effectively zem-mted sales we" madv 29 Intel Technology Philippines, Inc. vs. Commissioner ofInternal Revenue, supra; San Roque Power Corporation vs. 30 supra; and AT&T Communications Services Philippines, Inc., supra. Commissioner ofInternal Revenue, /d. 31 Intel Technology Philippines, Inc. vs. Commissioner of Internal Revenue, supra; and San vs. Commissioner ofInternal Revenue, supra. Roque Power Corporation 32 Intel Technology Philippines. Inc. vs. Commissioner of Internal Revenue, supra; San Roque Power Corporation vs. Commissioner ofInternal Revenue, supra; and AT&T Communications Services Philippines, Inc., supra. 33 E2S109de17pis56toe16nm58,,b(BeJAuraluty2ag9au2.ns,)2t20C03110o44,g:;e2rnD0oe1imrz7aom;tniioCsvnsos.imCoCnmooeriuprssoroitroafontIefinorTtneaorxvnfsAa.IlpnCptReeoreamnvlaesm,nliuseRestieooVvlnSe..,enruGUeo.nRfiv.tIsen.NdteoPSr.hanli1avl4ialp0}R:p9!iee4nv4eea,nnANudeap,tTriiooelwtn3a0sael,gqe2B.,0a(0PGn8kh.;R,ilA.sG.t)Nl..Raos.Isn.CNc2o.o.0n.1Gso61.Rl68i5d.0a2Nat9neo0dd., Mining and Development Corporation vs. Commissioner of Internal Revenue, G.R. No. 145526, March 16, 2007; and Commissioner ofInternal Revenue vs. Manila Mining Corporation, G.R. No. 153204, August 3 I, 2005.

DECISION CTA Case No. 10303 Rema Tip Top Philippines, Inc. vs. Commissioner of Internal Revenue Page 12 of68 x------------------------------------------------------------------------------------x The present claim covers the first, second, third, and fourth quarters of TY 2018, which closed on March 31, 2018, June 30, 2018, September 30, 2018 and December 31, 2018 respectively. Counting two (2) years from the said dates, petitioner had until March 31, 2020, June 30, 2020, September 30, 2020, and December 31, 2020, within which to fl.le its administrative claim for tax credit/refund for the respective quarters. By fl.ling its administrative claim with the BIR on December 27, 2019, petitioner has seasonably complied within the period provided by law. The second requisite is that the judicial claim must have been fl.led within thirty (30) days from receipt of respondent's decision or after the expiration of the 90 days under the afore- quoted Section 112(C) of the NIRC of 1997, as amended. In this case, petitioner fl.led its administrative claim on December 27, 2019. It also submitted additional documents upon respondent's request -the last being made on March 6, 2020. According to petitioner, the 90-day period began to run on December 27, 2019. However, on March 17, 2020, the BIR issued RMC No. 27-2020, which suspended the running of the 90 days, given the government's order placing Metro Manila under ECQ. The suspension of the 90-day period was lifted only on June 1, 2020, when the restriction in Metro Manila was downgraded to GCQ. For petitioner, the 90 days for the BIR to act on its administrative claim for refund ended on June 10, 2020, considering that only nine (9) days had left when the suspension was imposed on March 17, 2020. Hence, for petitioner, it timely filed its judicial claim on July 10, 2020, within 30 days from the lapse of the 90 days for the BIR to act on its claim. Respondent, however, disagrees. According to respondent, the 90-day period to process petitioner's claim for refund commenced on March 6, 2020, upon submitting petitioner's complete documents in support of its administrative claim. Counting 90 days from March 6, 2020, excluding the period from March 17, 2020 to June 1, 2020, the 90 days to act on petitioner's administrative claim for refund ended on August 19, 2020. Hence, for respondent, the filing of petitioner's judicial claim via the instant Petition for Review on July 10, 2020, was premature.\!'

DECISION CTA Case No. 10303 Rema Tip Top Philippines, Inc. vs. Commissioner of Internal Revenue Page 13 of68 X------------------------------------------------------------------------------------X The Court finds for petitioner. One of the amendments introduced under the TRAIN law is found under Section 112 of the NIRC of 1997, as amended. More specifically, the period within which a claim for a refund or tax credit was shortened from 120 days to 90 days, commencing from the date of submission of the official receipts or invoices and other documents in support of the application for refund. It is also worth noting that the word "complete" from the phrase "from the date of submission of complete documents in support of the application" under the previous Section 112(D)34 of the NIRC of 1997, as amended, was deleted under the TRAIN law. Significantly, and to keep up with the shortened time frame to process claims for VAT refund under the TRAIN law, the BIR issued Revenue Memorandum Circular (RMC) No. 047-19,35 providing, among others, that: I. GENERAL POLICIES XXX XXX XXX 5. The taxpayer-claimant shall ensure the completeness and authenticity of the documentary requirements upon filing of the application for VAT refund. Failure on the part of the taxpayer-claimant to submit the complete documents in support of the claim shall result in non- acceptance of the applications. Due to the very limited time for processing the VAT refunds, no additional document/s shall be subsequently requested/required from the taxpayer-claimant. Any unsupported claim shall be outrightly disallowed, resulting in full/ partial denial of the claim. XXX XXX XXX II. DOCUMENTS TO BE SUBMITTED BY THE TAXPAYER- CLAIMANTS UPON FILING OF THE APPLICATIONS FOR VAT REFUND XXX XXX XXX "SECTION I I2. Refunds or Tax Credits ofinput Tax.~ XXX XXX XXX (D) Period within which Refund or Tax Credit of Input Taxes shall be Made. ~ In proper cases, the Commissioner shall grant a refund or issue the tax credit certificate for creditable input taxes within one hundred twenty ( 120) days from the date of submission of complete documents in support of the application filed in accordance with Subsections (A) and (B) hereof. 35 SUBJECT: Revised Guidelines and Mandatory Requirements for the Processing and Grant of Value-Added Tax (VAT) Refund Claims within the 90-day Period Pursuant to Section 112 ofthe Tax Code of 1997, as Amended.

DECISION CTA Case No. 10303 Rema Tip Top Philippines, Inc. vs. Commissioner of Internal Revenue x------------------------------------------------------------------------------------x 6. The taxpayer-claimant shall attach a notarized sworn certification (Annex "B") attesting to the completeness of the documents submitted. Accordingly, the claim/s shall be processed based on the documents submitted. The books of accounts and accounting records shall be presented by the taxpayer-claimant upon written request of the assigned ROs. Failure to present the books of accounts and accounting records relevant to the claim/s shall be a ground for denial of the claims. xx.x {Emphases supplied) Clear from the foregoing that an application for refund of input VAT shall only be accepted if the documents in support thereof are complete. Once received, it presupposes that the documents submitted in support thereof are already complete. The taxpayer-claimant must submit a notarized sworn certification stating that the documents in support of its application for refund are already complete. This means that upon receipt of the application for refund, the 90-day period begins to run. Besides, jurisprudence 36 dictates that the taxpayer- claimant determines the completeness of the documents submitted for purposes of counting the 90-day provided under Section 112(C) of the NIRC of 1997, as amended. In the instant case, petitioner filed its administrative claim for refund on December 27, 2019, which the BIR received/ accepted on an even date. Hence, the 90-day period for the BIR to process petitioner's claim for refund commenced on December 27, 2019. Counting 90 days from December 27, 2019, respondent had until March 26, 2020 to act on petitioner's application for tax credit/ refund of input VAT. However, the 90-day period was suspended on March 17, 2020, when the ECQ was imposed in Metro Manila, and was lifted on June 1, 2020, when restrictions in Metro Manila were downgraded to GCQ. As petitioner correctly pointed out, the 90-day period for the BIR to process its claim for refund ended on June 10, 2020. 37 As no decision on the administrative claim was received after the lapse of the 90 days, petitioner had until July 10, 2020, to appeal respondent's inaction before this Court. 36 Pilipinas Total Ga. 1nc. vs. rommissioner oflnternal Revenue. G.R. No. 207112, December 8. 2015. 37 From December 27, 2019 to March 17, 2020 (the period was suspended due to the ECQ). 81 days had lapsed. The ECQ was lifted on June 1, 2020 plus 9 days (remaining days to complete the 90-day period), the 901h day fell on June 10, 2020.

DECISION CTA Case No. 10303 Rema Tip Top Philippines, Inc. vs. Commissioner of Internal Revenue x------------------------------------------------------------------------------------x The present Petition for Review was timely filed on July 10, 2020. Having settled that the Petition was timely filed, We requisite jurisdiction to likewise rule that the Court has the Section 3(a)(1), Rule 438 take cognizance of this Petition under of the RRCTA. Third requisite: Petitioner is a VAT-registered person. As for its compliance with the third requisite, petitioner presented its BIR Certificate of Registration No. OCN 3RC0000758904 with TIN 008-042-655-000, indicating that it is liable to VAT, among other taxes.39 Fourth and fifth requisites: Petitioner had zero-rated sales/receipts during the TY 2018 but only in the amount ofP58,601,925.94. The fourth and fifth requisites require that the taxpayer is engaged in zero-rated or effectively zero-rated sales and for zero-rated sales under Sections 106(A)(2)(a)(1) and (3), and 108(B)( 1) and (2) of the NIRC of 1997, as amended, the acceptable foreign currency exchange proceeds have been duly accounted for in accordance with the Bangko Sentral ng Pilipinas ("BSP") rules and regulations. In its amended Quarterly VAT Returns for the TY 2018, petitioner reported total sales/receipts in the amount of P162,794,001.62, consisting of VATable sales/receipts of P19,316,404.95 and zero-rated sales/receipts of i P143,477,596.67, as shown below: 38 Section 3. Cases Within the Jurisdiction ofthe Court in Divfsions. --The Court in Divisions shall exercise: to review by appeal the following: (a) Exclusive original or appellate jurisdiction Revenue in cases involving disputed assessments. refunds of internal ( 1) Decisions of the Commi.;;;sioner of Internal in relation thereto, or other matters arising under the National Internal revenue taxes, fees or other charges, penalties Revenue Code or other laws administered by the Bureau of Internal Revenue. 39 Exhibit "P�l", Docket, p. 2419.

DECISION CTA Case No. 10303 Rema Tip Top Philippines, Inc. vs. Commissioner of Internal Revenue x------------------------------------------------------------------------------------x Sales/ 1�� 2�� 3�� 4th Total Receipts Quarter<> Quarter41 Quarter42 Quarter43 p 19,316,404.95 VATable I' 4,849, 145.77 p 4, 797,071.66 143,477,596.67 p 5,362 847.30 1'4 307,340.22 1'162, 794,001.62 Zero-Rated 30,838 615.19 16,216,363.91 60 261,952.90 36,160,664.67 1'64,569,293.12 Total 1'35,687,760.96 1'21,013,435.57 1'41,523,511.97 In her amended Report, the ICPA Monje accounted petitioner's total zero-rated sales/receipts in the amount of P143,399,993.02, extracted and summarized as follows: 44 Zero-rated Sales Amount Sales to SOl-registered entity p 352,697.60 FCF Minerals Corp I' 5,412,963.16 64_,_599 ,850.85 Sales to PEZA-registered entities 59,186,887.69 Coral Bay Nickel Corporation I' 623,981.98 723 395.23 Taganito HPAL Nickel Corporation 99,413.25 Sales of goods to non-resident cort)orations 1'61 436,414.88 Mee Wha Precision Ind. Co., Ltd Tip Top Japan Inc 16,287,634.46 77,724,049.34 Sales o_f services to non-resident cort)orations 1'143,399,993.02 Rema Tip Top South Africa Pty Ltd. Rema Tip Top Surface Protection Australia Total Zero-rated Sales Notably, the amount of P77,603.6545 pertaining to the zero-rated sales/receipts declared per amended Quarterly VAT Returns but was not adequately supported by documentary evidence is denied VAT zero-rating. Sales of goods and services to entities registered with PEZA and BOI whose products are 100% exported. Petitioner claims that its sales of goods and services to entities registered with PEZA and BOI during TY 2018 are subject to zero percent (0%) VAT under Sections 106(A)(2)(a)(5) and (b), and 108(B)(3) of the NIRC of 1997, as amended, m "Exhibit "P-10'", Docket, p. 2451. tl 41 Exhibit "P-11 ", Docket, p. 2453. 42 Exhibit "'P-12", Docket, p. 2455. 43 Exhibit "P-13'", Docket, p. 2457. 44 Table V of No.3. Exhibit "P-120", Docket, p. 2307. 45 Total zero-rated sales/receipts Amount As declared per amended Quarterly VAT Returns 1'143,477,596.67 As accounted by ICPA 143,399,993.02 Discrepancy p 77,603.65

DECISION CTA Case No. 10303 Rema Tip Top Philippines, Inc. vs. Commissioner of Internal Revenue Page 17 of68 x------------------------------------------------------------------------------------x relation to Section 4.106-5 of Revenue Regulations (RR) No. 13-2018. Section 106(A)(2)(a)(5) and (b) of the NIRC of 1997, as amended, states: "SEC. 106. Value-Added Tax on Sale of Goods or Properties. - (A) Rate and Base of Tax. - xxx (2) The following sales by VAT-registered persons shall be subject to zero percent (0%) rate: (a) Export Sales. - The term 'export sales' means: XXX XXX XXX (5) Those considered export sales under Executive Order No. 226, otherwise known as the Omnibus Investment Code of 1987, and other special laws; and XXX XXX XXX (b) Sales to persons or entities whose exemption under special laws or international agreements to which the Philippines is a signatory effectively subjects such sales to zero rate." (Boldfacing supplied) Section 108(B)(3) of the NIRC of 1997, as amended, provides as follows: "SEC. 108. Value-added Tax on Sale of Services and Use or Lease of Properties. - (A) Rate and Base of Tax.- xxx XXX XXX XXX (B) Transactions Subject to Zero Percent (0%) Rate. - The following services performed in the Philippines by VAT- registered persons shall be subject to zero percent (0%) rate: XXX XXX XXX (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%) rate;" (Boldfacing supplied) ~

DECISION CTA Case No. 10303 Rema Tip Top Philippines, Inc. vs. Commissioner of Internal Revenue x------------------------------------------------------------------------------------x Relative thereto, Sections 4.106-5(a)(4), (b) and 4.108- 5(b)(3) of RR No. 13-2018, also provide: "SEC. 4.106-5. Zero-Rated Sales of Goods or Properties. - x x x The following sales by VAT-registered persons shall be subject to zero percent (0%) rate: (a) Export sales. - 'Export Sales' shall mean: XXX XXX XXX (4) Transactions considered export sales under Executive Order No. 226, otherwise known as the Omnibus Investments Code of 1987, and other special laws. 'Considered export sales under Executive Order No. 226' shall mean the Philippine port F.O.B. value determined from invoices, bills of lading, inward letters of credit, landing certificates, and other commercial documents, of export products exported directly by a registered export producer, or the net selling price of export products sold by a registered export producer to another export producer, or to an export trader that subsequently exports the same: Provided, That sales of export products to another producer or to an export trader shall only be deemed export sales when actually exported by the latter, as evidenced by landing certificates or similar commercial documents: Provided, further, That without actual exportation the following shall be considered constructively exported for purposes of these provisions: (1) sales to bonded manufacturing warehouses of export-oriented manufacturers; (2) sales to export processing zones; (3) sales to registered export traders operating bonded trading warehouses supplying raw materials in the manufacture of export products under guidelines to be set by the Board in consultation with the Bureau of Internal Revenue (BIR) and the Bureau of Customs (BOC); (4) sales to diplomatic missions and other agencies and/ or instrumentalities granted tax immunities, of locally manufactured, assembled or repacked products whether paid for in foreign currency or not. For purposes of zero-rating, the export sales of registered export traders shall include commission income. The exportation of goods on consignment shall not be deemed export sales until the export products consigned are in fact sold by the consignee; and Provided, finally, that sales of goods, properties or services made by a VAT- registered supplier to a HOI-registered manufacturer/producer whose products are 100% "'portod ~ conoidered oxport oales. A cortillcatlon to~

DECISION CTA Case No. 10303 Rema Tip Top Philippines, Inc. vs. Commissioner of Internal Revenue X------------------------------------------------------------------------------------X this effect must be issued by the Board of Investment (BOI) which shall be good for one year unless subsequently re-issued by the BOI. XXX XXX XXX (b) Sales to persons or entities whose exemption under special laws or international agreements to which the Philippines is a signatory effectively subjects such sales to zero rate." (Boldfacing supplied) "SEC. 4.108-5. Zero-Rated Sale of Services. - XXX XXX XXX (b) Transactions Subject to Zero Percent (0%) VAT Rate. - The following services performed in the Philippines by a VAT-registered person shall be subject to zero percent (0%) VAT rate: XXX XXX XXX (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%) rate;" (Boldfacing supplied) RA No. 7916, as amended by RA No. 8748, otherwise known as "The Special Economic Zone Act of 1995, "provides for the creation of the PEZA and the treatment of special economic zones (Ecozones) as separate customs territory, Sections 8 and 24 thereof respectively provide as follows: "REPUBLIC ACT NO. 7916 (as amended by Republic Act No. 8748) AN ACT PROVIDING FOR THE LEGAL FRAMEWORK AND MECHANISMS FOR THE CREATION, OPERATION, ADMINISTRATION, AND COORDINATION OF SPECIAL ECONOMIC ZONES IN THE PHILIPPINES, CREATING FOR THIS PURPOSE, THE PHILIPPINE ECONOMIC ZONE AUTHORITY (PEZA) AND FOR OTHER PURPOSES. XXX XXX XXX SECTION 8. ECOZONE to be Operated and Managed as Separate Customs Territory. - The ECOZONE shall be managed and operated by the PEZA as separate customs territory.

DECISION CTA Case No. 10303 Rema Tip Top Philippines, Inc. vs. Commissioner of Internal Revenue Page 20 of68 x------------------------------------------------------------------------------------x The PEZA is hereby vested with the authority to issue certificates of origin for products manufactured or processed in each ECOZONE in accordance with the prevailing rules of origin, and the pertinent regulations of the Department of Trade and Industry and/ or the Department of Finance. XXX XXX XXX SECTION 24. Exemption from National and Local Taxes. -Except for real property taxes on land owned by developers, no taxes, local and national, shall be imposed on business establishments operating within the ECOZONE. xxx" (Boldfacing supplied) Since the Ecozone is viewed as a foreign territory by legal fiction, sales of goods and services made by a VAT-registered person in the Philippine customs territory to an entity registered and operating within an Ecozone are considered export sales to a foreign country subject to zero percent (0%) VAT. This was elucidated by the Supreme Court in the case of Commissioner of Internal Revenue vs. Toshiba Information Equipment (Phils.}, Inc., 46 to wit: "This Court agrees, however, that PEZA-registered enterprises, which would necessarily be located within ECOZONES, are VAT-exempt entities, not because of Section 24 of Rep. Act No. 7916, as amended, which imposes the five percent (5%) preferential tax rate on gross income of PEZA-registered enterprises, in lieu of all taxes; but, rather, because of Section 8 of the same statute which establishes the fiction that ECOZONES are foreign territory. xxx An ECOZONE or a Special Economic Zone has been described as - xxx [S]elected areas with highly developed or which have the potential to be developed into agro-industrial, industrial, tourist, recreational, commercial, banking, investment and financial centers whose metes and bounds are fixed or delimited by Presidential Proclamations. An ECOZONE may contain any or all of the following: industrial estates (IEs), export processing zones (EPZs), free trade zones and tourist/recreational centers. 46 G.R. No. 150154, August 9, 2005.

DECISION CTA Case No. 10303 Rema Tip Top Philippines, Inc. vs. Commissioner of Internal Revenue x------------------------------------------------------------------------------------x The national territory of the Philippines outside of the proclaimed borders of the ECOZONE shall be referred to as the Customs Territory. Section 8 of Rep. Act No. 7916, as amended, mandates that the PEZA shall manage and operate the ECOZONES as a separate customs territory; thus, creating the fiction that the ECOZONE is a foreign territory. As a result, sales made by a supplier in the Customs Territory to a purchaser in the ECOZONE shall be treated as an exportation from the Customs Territory. Conversely, sales made by a supplier from the ECOZONE to a purchaser in the Customs Territory shall be considered as an importation into the Customs Territory. Given the preceding discussion, what would be the VAT implication of sales made by a supplier from the Customs Territory to an ECOZONE enterprise? The Philippine VAT system adheres to the Cross Border Doctrine, according to which, no VAT shall be imposed to form part of the cost of goods destined for consumption outside of the territorial border of the taxing authority. Hence, actual export of goods and services from the Philippines to a foreign country must be free of VAT; while those destined for use or consumption within the Philippines shall be imposed with ten percent (10%) VAT. 47 (Boldfacing supplied) Meanwhile, pursuant to Revenue Memorandum Order (RMO) No. 9-2000, 48 sales of goods, properties, or services made by a VAT-registered supplier to a HOI-registered entity whose products are 100% exported shall be accorded automatic VAT zero-rating, subject to the following reportorial and documentary requirements, prescribed under Section 3 thereof, viz: "SECTION 3. Sales of goods, properties or services made by a VAT registered supplier to a SOl-registered exporter shall be accorded automatic zero-rating, i.e., without necessity of applying for and securing approval of the application for zero-rating as provided in Revenue Regulations No. 7-95, subject to the following conditions: (1) The supplier must be VAT-registered; (2) The SOl-registered buyer must likewise be VAT- registered; 47 Now at 12% VAT rate. 48 SUBJECT: Tax Treatment of Sales of Goods, Properties and Services Made by VAT-registered Suppliers to SOl- registered Manufacturers-Exporters With 100% Export Sales.

DECISION CTA Case No. 10303 Rema Tip Top Philippines, Inc. vs. Commissioner of Internal Revenue x------------------------------------------------------------------------------------x (3) The buyer must be a BOI-registered manufacturer/producer whose products are 100% exported. For this purpose, a Certification to this effect must be issued by the Board of Investments (BOI) and which certification shall be good for one year unless subsequently re-issued by the BOI; (4) The DOl-registered buyer shall furnish each of its suppliers with a copy of the aforementioned DOl Certification which shall serve as authority for the supplier to avail of the benefits of zero-rating for its sales to said DOl-registered buyers; and (5) The VAT-registered supplier shall issue for each sale to BOI-registered manufacturer/exporters a duly registered VAT invoice with the words 'zero-rated' stamped thereon in compliance with Sec. 4.108-1(5) of Revenue Regulations No. 7-95. The supplier must likewise indicate in the VAT-invoice the name and BOI-registry number of the buyer." (Emphasis supplied) Based on the foregoing, sales of goods and services by a VAT-registered taxpayer, such as petitioner, to entities located in the ECOZONEs, as well as to BOI-registered entities whose products are 100% exported, are considered "export sales" subject to VAT zero-rating pursuant to Sections 106(A)(2)(a)(5) and (b); and 108(B)(3) of the NIRC of 1997, as amended, and as implemented by Sections 4.106-5(a)(4), (b) and 4.108-5(b)(3) ofRR No. 13-2018. A. Sales to SOl-registered entity Petitioner avers that its sales to FCF Minerals Corporation, an enterprise registered with the BOI and whose products are 100% exported, are subject to zero percent (0%) VAT, pursuant to Section 106(A)(2)(a)(5) and (b) of the NIRC of 1997, as amended, in relation with Section 4.106-5 of RR No. 13-2018 and Section 3 of RMO No. 9-2000. As extracted from petitioner's Schedule ofZero-Rated Sale ofGoods,49 the zero-rated sales in the amount of'P352,697.60, wJ as detailed below, pertains to its sales of goods to FCF M;nemls Co,-poration' 49 Annex "A", Exhibit "P-120", Docket, pp. 2318 to 2321.

DECISION CTA Case No. 10303 Rema Tip Top Philippines, Inc. vs. Commissioner of Internal Revenue x------------------------------------------------------------------------------------x SINo. Date Amount Exhibit I' 14,960.00 "P-223"; "P-595" 1815 15-Jan-18 "P-223"� "P-595" 4,360.00 "P-223"; "P-595" 1815 15-Jan-18 25,836.00 "P-223"; "P-595" 18 715.20 "P-224"; "P-596" 1815 15-Jan-18 36,492.00 "P-224"; "P-596" 58,564.00 1815 15-Jan-18 14,960.00 "P-225" "P-225" 1969 23-May-18 4,360.00 "P-226"; "P-598" 17,952.00 "P-226"; "P-598" 1969 23-May-18 "P-227" 5,232.00 "P-227" 2016 25-Jun-18 89,760.00 "P-228" 26 160.00 "P-228" 2016 25-Jun-18 22 118.40 "P-228" 2056 23-Jul-18 5 232.00 7,996.00 2056 23-Jul-18 1'352,697 .60 2085 10-Aug-18 2085 10-Aug-18 2171 3-0ct-18 2171 3-0ct-18 2171 3-0ct-18 Total Sales to BOI-registered entity A perusal of the BOI Certificate shows that the exported sales of FCF Minerals Corporation pertain to its sales for the year 2017, before the period of claim, despite its validity for the year 20 18. so Hence, the whole amount ofP352,697.60 pertaining to its sales without BOI Certification to the effect that FCF Minerals Corporation is a BOI-registered entity whose products are 100% exported for the TY 2018, shall be denied VAT zero- rating. B. Sales to PEZA-registered entities To prove that its clients are duly registered with the PEZA, petitioner submitted various Certifications issued by the said agency. Listed below are the clients of petitioner for the TY 2018 with the corresponding proof of VAT zero rating: Name of CUent Proof of VAT Exhibit Certification zero-rating "P-1009" Period Coral Bay "P-lOJI" Nickel Corporation Certificate No. for the year Taganito HPAL 2018-0784 2018 Nickel ColJl.oration Certificate No. for the year 2018-0206 2018 Accordingly, petitioner's sales to Coral Bay Nickel Corporation (CBNC) and Taganito HPAL Nickel Corporation (THPAL) for the TY 2018 qualify for VAT zero-rating under i Sections 106(A)(2)(a)(5), (b), and 108(B)(3) of the NIRC of 1997, 50 Exhibits "P-1010'" to "P-1010-1 ",Exhibit "P- 129" (USB flash drive).

DECISION CTA Case No. 10303 Rema Tip Top Philippines, Inc. vs. Commissioner of Internal Revenue x------------------------------------------------------------------------------------x as amended, and as implemented by Sections 4.106-5(a)(4), (b) and 4.108-5(b)(3) of RR No. 13-2018, provided that the same are properly supported by VAT zero-rated sales invoices (Sis) [for sales of goods] and official receipts (ORs) [for sales of services] in accordance with Section 113(A) and (B) of the NIRC of 1997, as amended, which provides: "SEC. 113. Invoicing and Accounting Requirements for VAT-registered Persons.- (A) Invoicing Requirements. -A VAT-registered person shall issue: (1) A VAT invoice for every sale, barter or exchange of goods or properties; and (2) A VAT official receipt for every lease of goods or properties, and for every sale, barter or exchange of services. (B) Information Contained in the VAT Invoice or VAT Official Receipt. - The following information shall be indicated in the VAT invoice or VAT official receipt: (1) A statement that the seller is a VAT-registered person, followed by his Taxpayer's Identification Number (TIN); (2) The total amount which the purchaser pays or is obligated to pay to the seller with the indication that such amount includes the value-added tax: Provided, That: (a) The amount of the tax shall be shown as a separate item in the invoice or receipt; (b) If the sale is exempt from value-added tax, the term 'VAT-exempt sale' shall be written or printed prominently on the invoice or receipt; (c) If the sale is subject to zero percent (0%) value- added tax, the term 'zero-rated sale' shall be written or printed prominently on the invoice or receipt; (d) If the sale involves goods, properties or services some of which are subject to and some of which are VAT zero-rated or VAT-exempt, the invoice or receipt shall clearly indicate the break-down of the sale price between its taxable, exempt and zero-rated components, and the calculation of the value-added tax on each portion of the sale shall be shown on the invoice or receipt: Provided, That the seller may issue separate invoices or receipts for the taxable, exempt, and zero-rated components of the sale.

DECISION CTA Case No. 10303 Rema Tip Top Philippines, Inc. vs. Commissioner of Internal Revenue X------------------------------------------------------------------------------------X (3) The date of transaction, quantity, unit cost and description of the goods or properties or nature of the service; and (4) In the case of sales in the amount of One thousand pesos (P1,000) or more where the sale or transfer is made to a VAT-registered person, the name, business style, if any, address and Taxpayer Identification Number (TIN) of the purchaser, customer or client." (Boldfacing supplied) The foregoing provisions are further implemented by Section 4.113-l(A) and (B) of RR No. 16-2005, as amended, which are all quoted hereunder: "SEC. 4.113-1. Invoicing Requirements. - (A) A VAT-registered person shall issue:- (1) A VAT invoice for every sale, barter or exchange of goods or properties; and (2) A VAT official receipt for every lease of goods or properties, and for every sale, barter or exchange of services. Only VAT-registered persons are required to print their TIN followed by the word "VAT" in their invoice or official receipts. Said documents shall be considered as a "VAT Invoice" or "VAT official receipt." All purchases covered by invoices/receipts other than VAT Invoice/VAT Official Receipt shall not give rise to any input tax. VAT invoice/official receipt shall be prepared at least in duplicate, the original to be given to the buyer and the duplicate to be retained by the seller as part of his accounting records. (B) Information contained in VAT invoice or VAT official receipt. - The following information shall be indicated in VAT invoice or VAT official receipt: (1) A statement that the seller ts a VAT-registered person, followed by his TIN; (2) The total amount which the purchaser pays or is obligated to pay to the seller with the indication that such amount includes the VAT, Provided, That: (a) The amount of tax shall be shown as a separate item in the invoice or receipt;

DECISION CTA Case No. 10303 Rema Tip Top Philippines, Inc. vs. Commissioner of Internal Revenue x------------------------------------------------------------------------------------x (b) If the sale is exempt from VAT, the term "VAT- exempt sale" shall be written or printed prominently on the invoice or receipt; (c) If the sale is subject to zero percent (0%) VAT, the term "zero-rated sale" shall be written or printed prominently on the invoice or receipt; (d) If the sale involves goods, properties or services some of which are subject to and some of which are VAT zero-rated or VAT-exempt, the invoice or receipt shall clearly indicate the break-down of the sale price between its taxable, exempt and zero-rated components, and the calculation of the VAT on each portion of the sale shall be shown on the invoice or receipt. The seller has the option to issue separate invoices or receipts for the taxable, exempt, and zero-rated components of the sale. (3) In the case of sales in the amount of one thousand pesos (Pl,OOO.OO) or more where the sale or transfer is made to a VAT-registered person, the name, business style, if any, address and TIN of the purchaser, customer or client, shall be indicated in addition to the information required in (1) and (2) of this Section." In addition to the above requirements, the Sis and ORs must be duly registered with the BIR as prescribed under Section 237, in relation to Section 238 of the NIRC of 1997, as amended, to wit: "SEC. 237. Issuance of Receipts or Sales or Commercial Invoices. - All persons subject to an internal revenue tax shall, for each sale or transfer of merchandise or for services rendered valued at Twenty-five pesos (P25.00) or more, issue duly registered receipts or sale or commercial invoices, prepared at least in duplicate, showing the date of transaction, quantity, unit cost and description of merchandise or nature of service: xxx XXX XXX XXX SEC. 238. Printing of Receipts or Sales or Commercial Invoices. - All persons who are engaged in business shall secure from the Bureau of Internal Revenue an authority to print receipts or sales or commercial invoices before a printer can print the same No authority to print receipts or sales or commercial invoices shall be granted unless the receipts or invoices to be i printed are serially numbered and shall show, among other things, the name, business style, Taxpayer Identification Number (TIN) and business address of the person or entity to

DECISION CTA Case No. 10303 Rema Tip Top Philippines, Inc. vs. Commissioner of Internal Revenue Page 27 of68 x------------------------------------------------------------------------------------x use the same, and such other information that may be required by rules and regulations to be promulgated by the Secretary of Finance, upon recommendation of the Commissioner." To prove compliance with the VAT invoicing requirements under the aforementioned provrswns and regulations, petitioner submitted its Schedules of Zero-Rated Sales of Goods and Services 51 and the related Sis, ORs, collection receipts and billing statements52 in support of its zero-rated sales/receipts to PEZA-registered entities of P64,599,850.85, which the ICPA duly examined. Upon examination of the submitted Sis and ORs in support of petitioner's sales of goods and services to PEZA- registered entities, the amount of P5,997,924.91, as detailed below, shall be denied VAT zero-rating due to the following reasons: Sl/ Name of OR No. Date Buyer Amount Exhibit 1. Sales of goods not supported by VAT SI (Sis were among those denied53 admission by the Court for failure to present the originals for comparison); supported only by collection receipts 1838 19-Jan-18 THPAL I' 35 149.50 "P-232"; "P-602" 1838 19-Jan-18 THPAL 13,000.00 "P-232"; "P-602" 1840 19-Jan-18 THPAL 3 240.00 "P-233"; "P-602" 1840 19-Jan-18 THPAL 10,800.00 "P-233"� "P-602" 1840 19-Jan-18 THPAL 700,000.00 "P-233"; "P-602" 1838 31-Jan-18 THPAL 9,350.00 "P-232"� "P-602" 1838 31-Jan-18 THPAL 160 000.00 "P-232"; "P-602" 1838 31-Jan-18 THPAL 20 800.00 "P-232"; "P-602" 1838 31-Jan-18 THPAL 1,940.00 "P-232"� "P-602" 1982 30-May_::l8 THPAL 978,215.00 "P-240"; "P-605" 1982 30-May-18 THPAL 155,112.00 "P-240"; "P-605" 1982 30-May-18 THPAL 126,304.00 "P-240"; "P-605" 1982 30-May-18 THPAL 179,955.00 "P-240"; "P-605" 1983 30-May-18 THPAL 96,026.00 "P-241"; "P-605" 1983 30-Mav-18 THPAL 56,700.00 "P-241 "� "P-605" 1983 30-Mav-18 THPAL 140,808.511 "P-241"; "P-605" Subtotal 1'2 505, 782.99 2. Sales of goods without supporting documents (Sis and collection receipts were among denied 54 admission by the Court for failure to present the originals for comoarison) 2097 17-Aug-18 THPAL I' 74 070.00 "P-246"; "P-609" 2097 17-Aug-18 THPAL 135,165.00 "P-246"; "P-609" 51 Annexes "A" and "8", Exhibit "P-120", Docket, pp. 2318 to 2324. 52 Exhibits "P-200" to "P-20 I", "P-203" to "P-205", "P-207" to "P-213", "P-215" to "P-231 ", "P-234" to ''P-239". "P- 242" "P-245", "P-247" to "P-252", "P-254" to "P-255", "P-257" to "P-260", "P-553" to "P-557", "P-559" to "P- 573". "P-574". "P-577" to "P-578". ''P-580" to "P-587". "P-595" to "P-598". "P-601" to "P-606", "P-931" to "P- 933" and "P-939" to "P-986", Exhibit "P-129" (USB flash drive). 53 Resolution dated April 4, 2022, Docket, pp. 2689 to 2690. 54 /d.

DECISION CTA Case No. 10303 Rema Tip Top Philippines, Inc. vs. Commissioner of Internal Revenue X------------------------------------------------------------------------------------X 2097 17-AU!!:: 18 THPAL 56 700.00 "P-246"; "P-609" 2097 17-Aug-18 THPAL 8,056.00 "P-246"; "P-609" 2097 17-Aug-18 THPAL 14,398.40 "P-246"; "P-609" 2097 17-Aug-18 THPAL 17,506.40 "P-246"; "P-609" 2097 17-Aug-18 THPAL 11 983.80 "P-246"; "P-609" 2097 17-Aug-18 THPAL "P-246"� "P-609" 2201 23-0ct-18 THPAL 61,719.90 "P-253"; "P-612" 2201 23-0ct-18 THPAL 631 270.25 "P-253"� "P-612" 2201 23-0ct-18 THPAL (31,563.501 "P-253"; "P-612" 2201 23-0ct-18 THPAL 835,886.34 "P-253"; "P-612" 2201 23-0ct-18 THPAL 632,500.00 "P-253"; "P-612" 2201 23-0ct-18 THPAL 698 725.00 "P-253"; "P-612" 2201 23-0ct-18 THPAL (34,935.00) "P-253"; "P-612" 2201 23-0ct-18 THPAL 120,000.00 "P-253"; "P-612" 2218 30-0ct-18 THPAL "P-256"; "P-613" 2218 30-0ct-18 THPAL 50.400.00 "P-256"; "P-613" 2218 30-0ct-18 THPAL 4,712.50 "P-256"; "P-613" 2218 30-0ct-18 THPAL "P-256"; "P-613" 2218 30-0ct-18 THPAL 23,500.00 "P-256"; "P-613" 2218 30-0ct-18 THPAL 7,200.00 "P-256"� "P-613" 2218 31-0ct-18 THPAL "P-256"; "P-613" 31,891.50 Subtotal 20,190.50 35,149.50 9,350.00 1'3 413 876.59 3. Sales of goods not supported by VAT SI� supported only by collectton recetpts JV#201801-0017 31-Jan-18 THPAL I' 743.66 "P-602" JV#20 1801-0017 31-Jan-18 THPAL 7,784.84 "P-602" JV#201801-0017 31-Jan-18 THPAL 69 736.83 "P-602" Subtotal I' 78265.33 Total zero-rated sales to PEZA registered P5,997,924.91 entity not orooerly substantiated Thus, out of the zero-rated sales/receipts to PEZA- registered entities in the total amount of P64,599,850.85, only the amount of P58,601,925.94, 55 qualify for VAT zero-rating under Sections 106(A)(2)(a)(5), (b) and 108(B)(3) of the 1997 NIRC as amended, in relation to Sections 4.106-5(a)(4), (b) and 4.108-5(b)(3) ofRR No. 13-2018. C. Sales of goods to non-resident Corporations Petitioner states that for sales to non-resident foreign corporations (NRFC), one of the requirements to qualify as zero-rated sales is that the payments by or collections from these NRFCs should be made in foreign currency.56 Petitioner posits that its sales of goods to NRFCs are subject to zero percent (0%) VAT, pursuant to Section 106(A)(2)(a)(3) of the NIRC of 1997, as amended, which provides: 55 P64,599,850.85less 1'5,997,924.91. 56 No. 4, Exhibit "P-120", Docket, p. 2307.

DECISION CTA Case No. 10303 Rema Tip Top Philippines, Inc. vs. Commissioner of Internal Revenue Page 29 of68 X------------------------------------------------------------------------------------X "SEC. 106. Value-Added Tax on Sale of Goods or Properties. - (A) Rate and Base of Tax. - xxx XXX XXX XXX (2) The following sales by VAT-registered persons shall be subject to zero percent (0%) rate: (a) Export Sales. -The term 'export sales' means: XXX XXX XXX (3) Sale of raw materials or packaging materials to a nonresident buyer for delivery to a resident local export- oriented enterprise to be used in manufacturing, processing, packing or repacking in the Philippines of the said buyer's goods and paid for in acceptable foreign currency and accounted for in accordance with the rules and regulations of the Bangko Sentral ng Pilipinas (BSP);" The alleged zero-rated sales of goods to NRFCs amounting to P723,395.23, as extracted and summarized from petitioner's Schedule of Zero-Rated Sale of Goods, are as follows:57 Sl Amount Exhibit No. Date Name of Buyer I' 126265.41 No. 271 877.93 1802 4-Jan-18 MEE WHA PRECISION IND. CO., LTD 81,701.I4 "P-200"; "P-577'' 1802 4-Jan-18 MEE WHA PRECISION IND. CO., LTD 23 719.69 "P-200"; "P-577" 1802 4-Jan-18 MEE WHA PRECISION IND. CO., LTD 93,323.80 "P-200"; "P-577" 1802 4-Jan-18 MEE WHA PRECISION IND. CO., LTD 27,094.01 "P-200"; "P-577" 1803 8-Jan-18 MEE WHA PRECISION IND. CO. LTD 99,413.25 "P-201"� "P-578" 1803 8-Jan-18 MEE WHA PRECISION IND. CO., LTD "P-201"; "P-578" 2247 26-Nov-18 TIP TOP JAPAN INC 1'723 395.23 "P-202"� "P-579"58 Total Sales of Goods to Non-resident Corporation However, other than the Sis and collection receipts issued to Mee Wha Precision Ind. Co., Ltd, SEC Certificates of Non-Registration of Corporation/Partnership, 59 Bank of the Philippine Islands settlement advice, 60 and Reconciliation of Export Sales and Foreign Currency Remittances on Zero-rated Sale of Goods for the period January to December 2018;61 no other documents were submitted to prove that its alleged zero-. _/ 57 Annex "A". Exhibit "P-120", Docket, pp. 2318 to 2321. W 58 Exhibits "P-202" and ''P-579" were among those denied admission by the Court through Resolution dated April 4, 2022, Docket. p. 26R9. 59 Exhibits "P-3791" to "P-3792", Exhibit "P-129" (USB flash drive). 60 Exhibits ''P-999" to "P-1001", Exhibit "P-129" (USB flash drive). 61 Exhibit "P-91", Docket, p. 2624.

DECISION CTA Case No. 10303 Rema Tip Top Philippines, Inc. vs. Commissioner of Internal Revenue Page 30 of68 x------------------------------------------------------------------------------------x rated sales of goods to NRFCs were sales of raw materials or packaging materials to a nonresident buyer for delivery to a resident local export-oriented enterprise to be used m manufacturing, processmg, packing or repacking in the Philippines of the said buyer's goods under Section 106(A)(2)(a)(3) of the NIRC of 1997, as amended. Moreover, even the ICPA ascertained that the zero-rated sales of goods to non-resident corporations in the amount of P723,395.2362 are not valid as zero-rated sales. Thus, the alleged zero-rated sales of goods to NRFCs amounting to P723,395.23 shall be denied VAT zero-rating. D. Sales of services to non-resident foreign corporation Out of petitioner's zero-rated sales/receipts in the aggregate amount of P143,399,993.02 as accounted by the ICPA for the four quarters of TY 2018, P77,724,049.34 pertains to sales of services to NRFCs, as follows:63 Customer Name In Foreign Amount Rema Tip Top South Africa Ptv Ltd. Currency I' 61,436,414.88 Rema Tip Top Surface Protection Australia $992,516.10 Total 16,287 634.46 260,247.00 P77,724 049.34 Pertinent to the determination of whether the sales of services to a NRFC qualify for VAT zero-rating, Section 108(B)(2) of the NIRC of 1997, as amended, states: "SEC. 108. Value-added Tax on Sale of Services and Use or Lease ofProperties.- XXX XXX XXX (B) Transactions Subject to Zero Percent (0%) Rate. - The following services performed in the Philippines by VAT- registered persons shall be subject to zero percent (0%) rate: (1) Processing, manufacturing or repacking goods for other persons doing business outside the Philippines which goods are subsequently exported, where the services are paid for in acceptable foreign currency and accounted for in 62 Annex "A'", Exhibit "P-120", Docket, pp. 2318 to 2321. 63 Table V of No.3, Exhibit "P-120", Docket, p. 2307.

DECISION CTA Case No. 10303 Rema Tip Top Philippines, Inc. vs. Commissioner of Internal Revenue X------------------------------------------------------------------------------------X accordance with the rules and regulations of the Bangko Sentral ng Pilipinas (BSP); (2) Services other than those mentioned in the preceding paragraph rendered to a person engaged in business conducted outside the Philippines or to a non- resident person not engaged in business who is outside the Philippines when the services are performed, the consideration for which is paid for in acceptable foreign currency and accounted for in accordance with the rules and regulations of the Bangko Sentral ng Pilipinas (BSP);" Based on the foregoing prov1s1on, certain essential elements must be present for a sale or supply of services to be subject to a VAT rate of zero percent (0%) under Section 108(B)(2) of the NIRC of 1997, as amended, to wit: 1. The recipient of the services is a foreign corporation, and the said corporation is doing business outside the Philippines or is a nonresident person not engaged in business who is outside the Philippines when the services were performed;64 2. The services fall under any of the categories under Section 108(B)(2), 65 or simply, the services rendered should be other than "processing, manufacturing or repacking goods" ;66 3. The services must be performed in the Philippines67 by a VAT- registered person; and 4. The payment for such services should be in acceptable foreign currency accounted for in accordance with BSP rules.68 Relative to the first essential element, to prove that its client is a NRFC for purposes of VAT zero-rating under Section 108(B)(2) of the NIRC of 1997, as amended, petitioner must establish that: (1) the client was established under the laws of a foreign country; and, (2) it is not engaged in trade or i business in the Philippines. There must be sufficient proof of these requirements to establish that a client is a foreign corporation and is not doing business in the Philippines.69 64 Site! Philippines Corporation (Formerly Clientlogic Phils. Inc.) vs. Commissioner of Internal Revenue, G.R. No. 201326, February 8, 2017; Commissioner of Internal Revenue vs. Burmeister and Wain Scandinavian Contractor Mindanao, Inc., G.R. No. 153205, January 22, 2007; Accenture, Inc. vs. Commissioner of Internal Revenue, G.R. No. 190102. July 11.2012. 65 Commissioner of Internal Revenue vs. American Express International, Inc. (Philippine Branch), G.R. No. 152609, June 29. 2005. 66 Commissioner ofInternal Revenue vs. Burmeister and Wain Scandinavian Contractor Mindanao, Inc., supra. 67 Commissioner of Internal Revenue vs. Burmeister and Wain Scandinavian Contractor Mindanao, Inc.. supra; rommissioner of Internal Revenue vs. American Rxpress International. Inc. (Philippine Branch). supra. 68 Commissioner of Internal Revenue vs. Burmeister and Wain Scandinavian Contractor Mindanao, Inc., supra; Commissioner of Internal Revenue vs. American Express International, Inc. (Philippine Branch), supra. 69 Commissioner ofInternal Revenue vs. Deutsche Knowledge Services Pte. Ltd., G.R. No. 234445, July 15, 2020.

DECISION CTA Case No. 10303 Rema Tip Top Philippines, Inc. vs. Commissioner of Internal Revenue x------------------------------------------------------------------------------------x Thus, petitioner must submit for each NRFC client, at the very least, both: (1) the SEC Certificate of Non-Registration of Corporation/Partnership; and (2) Proof of Certificate/Articles of Foreign Incorporation/Association showing the state/province/country where the entity was organized.70 The SEC Certificate of Non-Registration shows that the foreign client is not engaged in trade or business in the Philippines. On the other hand, the Certificate/Articles of Foreign Incorporation/Association proves that the client was established under the laws of a foreign country. Together, these two (2) documents prove the two (2) requisites necessary to establish the NRFC status of a client. Upon review of the records, it is shown that petitioner was able to present the SEC Certificates of Non-Registration of Corporation/Partnership71 for all its NRFC entities. However, petitioner failed to submit the Certificate/Articles of Foreign Incorporation/ Association to prove the NRFC status of its foreign clients. Moreover, as ascertained by the ICPA, petitioner was unable to secure authenticated copies of their respective certificates of registration in their places of residence but obtained only a photocopy of the Certificate of the Company Information as support for zero-rating.72 Examination of petitioner's formally offered exhibits disclosed that the same were among those denied73 admission by the Court per Resolution 74 dated April 4, 2022. Thus, petitioner failed to comply with the first essential element. Concerning the second essential element, no evidence was presented by petitioner to prove that the services it rendered fall under any of the categories under Section 108(B)(2). As such, petitioner failed to comply with the second essential element as it was not able to establish that the services it provided to its clients were not in the same category v as "processing, manufacturing or repacking ofgoods." �7 Commissioner of Internal Revenue vs. CJTCO International Support Services Limited-Philippine ROHQ, CTA EB No. 2018. November 29, 2019. 71 Fxhihits "P-37R9" to "P<n90". Exhihit "P-129" (liSA fiash drive). 72 No.5 and Index, Exhibit "P- 120", Docket, pp. 2307 to 2308 and 2386. respectively. 73 Exhibits "P-3793" to "P-3794-A". 74 Docket, p. 2690.

DECISION CTA Case No. 10303 Rema Tip Top Philippines, Inc. vs. Commissioner of Internal Revenue Page 33 of68 X------------------------------------------------------------------------------------X Neither did petitioner show proof that the purported services rendered were performed in the Philippines. As such, the third essential element was also not complied with. As regards the fourth essential element, petitioner presented its Reconciliation of Export Sales and Foreign Currency Remittances on Zero-Rated Sale of Services for the period January to December 2018, 75 bank statements/settlement advice/passbook page 76 purportedly showing the foreign currency remittances of its clients to petitioner. Considering the foregoing, petitioner fell short in establishing that the amount ofP77,724,049.34 declared sales of services to NRFC for the TY 2018 qualify for VAT zero-rating under Section 108(B)(2) of the NIRC of 1997, as amended. In sum, out of the total reported zero-rated sales/receipts of P143,477,596.67, only the sales of goods and services to PEZA-registered entities in the total amount of P58,60 1,925.94 qualify for VAT zero-rating for the TY 2018. Thus, for the fourth requisite, the Court finds that petitioner had VAT zero-rated sales/receipts for the TY 2018, but only in the amount ofP58,601,925.94. As for the fifth requisite, which is to the effect that petitioner must prove that the acceptable foreign currency exchange proceeds have been duly accounted for in accordance with BSP rules and regulations under Sections 106(A)(2)(a)(l) and (3); and, lOS(B)(l) and (2), all of the NIRC of 1997, as amended, since the legal basis for petitioner's zero- rated sales of P58,60 1,925.94 is Sections 106(A)(2)(a)(5), (b) and 108(8)(3) of the NIRC of 1997, as amended, the instant case need not comply with the said fifth requisite. In this connection, while petitioner alleges that it has sales of services to certain NRFC, the Court need not determine whether there was compliance with the same fifth requisite since it was not duly proven, as above shown, that the said sales of goods and services qualify for VAT zero-rating under Sections v 106(A)(2)(a)(3) and 108(B)(2) of the NIRC of 1997, as amended. 75 Exhibit "P-92", Docket, p. 2625. 76 Exhibits "P-1002" to "P-1008", Exhibit "P-129" (USB flash drive).

DECISION CTA Case No. 10303 Rema Tip Top Philippines, Inc. vs. Commissioner of Internal Revenue X------------------------------------------------------------------------------------X Having found that petitioner had VAT zero-rated sales in the total amount ofP58,601,925.94 for the TY 2018, the Court shall proceed to determine whether petitioner complied with the following remaining requisites: a. Sixth requisite: the input taxes are not transitional; b. Seventh requisite: the input taxes are due or paid; c. Eighth requisite: the input taxes claimed are attributable to zero-rated or effectively zero-rated sales. However, where there are both zero-rated or effectively zero-rated sales and taxable or exempt sales, and the input taxes cannot be directly and entirely attributed to any of these sales, the input taxes shall be proportionately allocated on the basis of sales volume; and d. Ninth requisite: the input taxes have not been applied against output taxes during and in the succeeding quarters. Sixth requisite: The input taxes being claimed are not transitionaL The claimed input taxes do not appear to be transitional, as understood under Section 111 (A) of the NIRC of 1997, as amended, to wit: "SEC.lll. Transitional/ Presumptive Input Tax Credits. - (A) Transitional Input Tax Credits. - A person who becomes liable to value-added tax or any person who elects to be a VAT-registered person shall, subject to the filing of an inventory according to the rules and regulations prescribed by the Secretary of Finance, upon recommendation of the Commissioner, be allowed input tax on his beginning inventory of goods, materials and supplies equivalent to two percent (2%) of the value of such inventory or the actual value-added tax paid on such goods, materials and supplies, whichever is higher, which shall be creditable against the output tax." ~

DECISION CTA Case No. 10303 Rema Tip Top Philippines, Inc. vs. Commissioner of Internal Revenue x------------------------------------------------------------------------------------x Parenthetically, trar~sitional input tax credit operates to benefit newly VAT-registered persons, whether they previously paid taxes in the acquisitions of their beginning inventory of goods, materials, ar~d supplies. During the trar~sition period from non-VAT to VAT status, the trar~sitional input tax credit serves to alleviate the impact of the VAT on the taxpayer. 77 Since there is no showing that the claimed input taxes are trar~sitional, petitioner has complied with the sixth requisite for the grar~t of ar1 input VAT refund. Seventh requisite: Not all input VAT being claimed are due or paid. Anent the seventh requisite in claiming VAT refund, it is of fatal importar~ce for petitioner to provide supporting documents proving that the input taxes claimed during the four quarters of TY 2018 were due or paid in accordar~ce with Section llO(A) of the NIRC of 1997, as amended, which provides that: "SEC. 110. Tax Credits.- (A) Creditable Input Tax. - (1) Any input tax evidenced by a VAT invoice or official receipt issued in accordance with Section 113 hereof on the following transactions shall be creditable against the output tax: (a) Purchase or importation of goods: (1) For sale; or (ii) For conversion into or intended to form part of a finished product for sale including packaging materials; or (iii) For use as supplies m the course of business; or (iv) For use as materials supplied m the sale of service; or ~ 77 Fort Bonifacio Development Corporation vs. Commissioner of Internal Revenue, G.R. Nos. 158885 and 170680, April 2, 2008.

DECISION CTA Case No. 10303 Rema Tip Top Philippines, Inc. vs. Commissioner of Internal Revenue Page 36 of68 x------------------------------------------------------------------------------------x (v) For use in trade or business for which deduction for depreciation or amortization is allowed under this Code. (b) Purchase of services on which a value-added tax has actually been paid. (2) The input tax on domestic purchase or importation of goods or properties by a VAT-registered person shall be creditable: (a) To the purchaser upon consummation of sale and on importation of goods or properties; and (b) To the importer upon payment of the value-added tax prior to the release of the goods from the custody of the Bureau of Customs. Provided, That the input tax on goods purchased or imported in a calendar month for use in trade or business for which deduction for depreciation is allowed under this Code, shall be spread evenly over the month of acquisition and the fifty-nine (59) succeeding months if the aggregate acquisition cost for such goods, excluding the VAT component thereof, exceeds One million pesos (P1,000,000): Provided, however, That if the estimated useful life of the capital good is less than five (5) years, as used for depreciation purposes, then the input VAT shall be spread over such a shorter period: Provided, further, That the amortization of the input VAT shall only be allowed until December 31, 2021 after which taxpayers with unutilized input VAT on capital goods purchased or imported shall be allowed to apply the same as scheduled until fully utilized: Provided, finally, That in the case of purchase of services, lease or use of properties, the input tax shall be creditable to the purchaser, lessee or licensee upon payment of the compensation, rental, royalty or fee." The above provisions are implemented by Sections 4.110- 1 to 4.110-3 of RR No. 16-2005, as further amended under RR No. 13-2018, which provide as follows: "SECTION 4.110-1. Credits For Input Tax.- "Input tax" means the VAT due on or paid by a VAT-registered person on importation of goods or local purchases of goods, properties, v or services, including lease or use of properties, in the course of his trade or business. It shall also include the transitional input tax and the presumptive input tax determined in a~onl=oe with Sec. 111 of tho T~ Code.

DECISION CTA Case No. 10303 Rema Tip Top Philippines, Inc. vs. Commissioner of Internal Revenue Page 37 of68 x------------------------------------------------------------------------------------x It includes input taxes which can be directly attributed to transactions subject to the VAT plus a ratable portion of any input tax which cannot be directly attributed to either the taxable or exempt activity. Any input tax on the following transactions evidenced by a VAT invoice or official receipt issued by a VAT-registered person in accordance with Sees. 113 and 237 of the Tax Code shall be creditable against the output tax: (a) Purchase or importation of goods (1) For sale; or (2) For conversion into or intended to form part of a finished product for sale, including packaging materials; or (3) For use as supplies in the course of business; or (4) For use as raw materials supplied in the sale of services; or (5) For use in trade or business for which deduction for depreciation or amortization is allowed under the Tax Code, (b) Purchase of real properties for which a VAT has actually been paid; (c) Purchase of services in which a VAT has actually been paid; (d) Transactions "deemed sale" under Sec. 106 (B) of the Tax Code; (e) Transitional input tax allowed under Sec. 4.111 (a) of these Regulations; (f) Presumptive input tax allowed under Sec. 4.111 (b) of these Regulations; (g) Transitional input tax credits allowed under the transitory and other provisions of these Regulations. SECTION 4.110-2. Persons Who Can Avail of the Input Tax Credit. -The input tax credit on importation of goods or local purchases of goods, properties or services by a VAT- registered person shall be creditable: (a) To the importer upon payment of VAT prior to the release of goods from customs custody; ~

DECISION CTA Case No. 10303 Rema Tip Top Philippines, Inc. vs. Commissioner of Internal Revenue x------------------------------------------------------------------------------------x (b) To the purchaser of the domestic goods or properties upon consummation of the sale; or (c) To the purchaser of services or the lessee or licensee upon payment of the compensation, rental, royalty or fee. SECTION 4.110-3. Claims for Input Tax on Depreciable Goods. - Where a VAT-registered person purchases or imports capital goods, which are depreciable assets for income tax purposes, the aggregate acquisition cost of which (exclusive of VAT) in a calendar month exceeds One Million pesos (P1,000,000.00), regardless of the acquisition cost of each capital good, shall be claimed as credit against output tax in the following manner: (a) If the estimated useful life of a capital good is five (5) years or more - The input tax shall be spread evenly over a period of sixty (60) months and the claim for input tax credit will commence in the calendar month when the capital good is acquired. The total input taxes on purchases or importations of this type of capital goods shall be divided by 60 and the quotient will be the amount to be claimed monthly. (b) If the estimated useful life of a capital good is less than five (5) years- The input tax shall be spread evenly on a monthly basis by dividing the input tax by the actual number of months comprising the estimated useful life of the capital good. The claim for input tax credit shall commence in the calendar month that the capital goods were acquired. Where the aggregate acquisition cost (exclusive of VAT) of the existing or finished depreciable capital goods purchased or imported during any calendar month does not exceed One million pesos (P1,000,000.00), the total input taxes will be allowable as credit against output tax in the month of acquisition. Capital goods or properties refers to goods or properties with estimated useful life greater than one (1) year and which are treated as depreciable assets under Sec. 34(F) of the Tax Code, used directly or indirectly in the production or sale of taxable goods or services. The aggregate acquisition cost of depreciable assets in any calendar month refers to the total price, excluding the VAT, agreed upon for one or more assets acquired and not on the payments actually made during the calendar month. i Thus, an asset acquired on installment for an acquisition cost of more than P1,000,000.00, excluding the VAT, will be subject to the amortization of input tax despite the fact that

DECISION CTA Case No. 10303 Rema Tip Top Philippines, Inc. vs. Commissioner of Internal Revenue X------------------------------------------------------------------------------------X the monthly payments/installments may not exceed P1,000,000.00." Further, Section 4.110-8 of RR No. 16-2005 provides for the substantiation requirements of input tax credits on domestic purchases of goods, properties, and services, as follows: "SECTION 4.110-8. Substantiation of Input Tax Credits. (a) Input taxes for the importation of goods or the domestic purchase of goods, properties, or services is made in the course of trade or business, whether such input taxes shall be credited against zero-rated sale, non-zero-rated sales, or subjected to the 5% Final Withholding VAT, must be substantiated and supported by the following documents, and must be reported in the information returns required to be submitted to the Bureau: (1) For the importation of goods- import entry or other equivalent document showing actual payment of VAT on the imported goods. (2) For the domestic purchase of goods and properties - invoice showing the information required under Sees. 113 and 237 of the Tax Code. (3) For the purchase of real property - public instrument i.e., deed of absolute sale, deed of conditional sale, contract/ agreement to sell, etc., together with VAT invoice issued by the seller. (4) For the purchase of services - official receipt showing the information required under Sees. 113 and 237 of the Tax Code. A cash register machine tape issued to a registered buyer shall constitute valid proof of substantiation of tax credit only if it shows the information required under Sees. 113 and 237 of the Tax Code." It is categorically mentioned in the above provisions that to be entitled to input tax credits, the same must be evidenced by VAT Sis (for domestic purchases of goods or properties) or ORs (for domestic purchases of services) issued in accordance with Sections 113 and 237 of the NIRC of 1997, as amended, which were quoted earlier. vi

DECISION CTA Case No. 10303 Rema Tip Top Philippines, Inc. vs. Commissioner of Internal Revenue Page 40 of68 X------------------------------------------------------------------------------------X Thus, to prove entitlement to credits for input taxes due or paid, petitioner must not only present the supporting documents prescribed under Section 4.110-8 of RR No. 16- 2005, but more importantly, these documents must comply with the invoicing requirements under Sections 113(A) and (B), 237 and 238 of the NIRC of 1997, as amended, and as implemented by Section 4.113-1(A) and (B) ofRR No. 16-2005, as further amended under RR No. 13-2018. In its amended Quarterly VAT Returns for the TY 2018, petitioner reported input taxes from its amortization of input VAT on capital goods exceeding P1Million, domestic purchases and importation of goods other than capital goods, and domestic purchases of services in the total amount of 1"5,572,385.45 out of which the amount of 1"4,434,530.7078 as reflected in "Others," specifically under Line 210, is the subject of petitioner's claim for refund, to wit: Nature of 1�� 2�� 3�� 4th Inout Tax Transaction Input Tax Q_uarter79 Quarterso Quarter81 Quarter8~ Deferred on Capital Goods - - p 56,250.00 I' 56,250.00 I' 112,500.00 exceeding - PI Million from I 125,000.00 - - I 125,000.00 the Previous - (1,068,750.00) - - (I 068,750.00) Quarter - (Line 20B) I' 56,250.00 I' 56,250.00 p 56,250.00 I' 168,750.00 Add: Input Taxon Purchase of Capital Goods exceeding PI Million (Line 21D) Less: Input Taxon Purchases of Capital Goods exceeding PI Million deferred for the succeeding period (Line 23A) Input Tax Amortized for the period Add: Current Input Taxes 78 With PO. 70 discrepancy against the amount of claim. 79 Exhihit "P-I 0". Docket. pp. 2451 to 2452. 80 Exhibit "P-11 ", Docket, pp. 2453 to 2454. 81 Exhibit "P-12", Docket, pp. 2455 to 2456. 82 Exhibit "P-13", Docket, pp. 2457 to 2458.

DECISION CTA Case No. 10303 Rema Tip Top Philippines, Inc. vs. Commissioner of Internal Revenue x------------------------------------------------------------------------------------x Domestic p 25,720.75 I' 12,837.98 p 35,667.65 I' 13,196.92 I' 87,423.30 Purchases of Goods Other 66,711.98 421,884.88 81,095.17 30,498.28 600 190.31 than Capital Goods 117,687.26 67,456.20 55,313.47 41,034.21 281,491.14 (Line 21F) 1 016 823.28 1 601 356.75 1 103 391.22 712 959.45 4 434 530.70 Importation of Goods P1 226 943.27 1'2 159,785.81 P1,331 717.51 P853,938.86 P5 572,385.45 Other than Capital Goods (Line 21Hi Domestic Purchase of Services (Line 21J) Others (Line 210) Total Input Taxes The input VAT of P4,434,530.70, as reported in "Others" (Line 210) in the Quarterly VAT Returns of TY 2018, was determined by petitioner83 and the ICPA84 to be composed of input VAT on purchases of goods and services directly attributable to zero-rated sales, and input VAT on purchases of goods and services allocable to zero-rated sales, as follows: Purchases 1�� Quarter 2nd Quarter 3�� Quarter 4th Quarter Total 1'7,952,193.25 1'12,867,698.84 1'8, 740,582.03 1'5,565, 155.70 1'35, 125,629.8185 Purchases allocated to 521,334.08 476,940.75 454,344.83 376,173.08 1,828,792.7586 Zero-Rated Sales P8 473 527.33 P13 344 639.59 P9 194 926.86 P5 941,328.78 P36 954,422.56 0.12 Purchases Directly p 4,434 530.71 Attributable to Zero- Rated Sales Total Purchases Directly Attributable or allocated to Zero- Rated Sales Total Input VAT on Purchases Directly Attributable or allocated to Zero-Rated Sales However, upon verification by the Court, it was found that petitioner failed to prove that certain domestic purchases and importation of goods other than capital goods, purchase of capital goods exceeding Pl million, and domestic purchase of services in the total amount of P1,828,792.75 were directly attributable to zero-rated sales made during the four quarters of TY 2018. Thus, the Court is constrained to consider the i 81 Pars. 23 and 24. Petitinnfor Review. Docket. pp. 14 to 15. 84 Table I, Exhibit "P-120", Docket, p. 2298. 85 With PO.Ol difference per footing. 86 With P'O.Ol difference per footing.

DECISION CTA Case No. 10303 Rema Tip Top Philippines, Inc. vs. Commissioner of Internal Revenue X------------------------------------------------------------------------------------X whole amount of P5,572,385.45 as petitioner's total input VAT on amortization of capital goods exceeding P1 million, domestic purchases and importation of goods other than capital goods, and domestic purchase of services, subject to proportional allocation between VATable, VAT-exempt, and VAT zero-rated sales under Section 112(A) of the NIRC of 1997, as amended. In support of its input taxes due or paid, petitioner submitted its Schedule of Local Purchases with Input Tax, 87 Schedule of Importations, 88 various sales invoices, ORs, and importation documents,89 which the ICPA examined. Based on the !CPA's Schedule of Local Purchases with Input Tax, 90 the input VAT in the amount ofP472,611.41 shall be disallowed for failure to meet the invmcmg and substantiation requirements under Sections 110(A), 113(A), and (B), and 237 of the NIRC of 1997, as amended, in relation to Sections 4.110-1, 4.110-2, 4.110-8 and 4.113-1 of RR No. 16-2005, as amended. In addition to the above disallowances, the following input VAT amounting to P2,274,264.72 shall likewise be disallowed for failure to meet the invoicing and substantiation requirements prescribed under the VAT law and regulations, vzz: Exhibit Input No. Registered Name of Supplier VAT 1. Input VAT on purchases of goods/services supported by documents that were among those denied91 admission by the Court for failure to present the originals for comparison "P-1205" HONEYLEMON FOODS INC I' 37.18 "P-1376" HONEYLEMON FOODS INC 53.36 "P-1490" SUPERVALUEINC 40.29 "P-1633" TOYOTA BUTUAN CITY 1,161.65 "P-1634" MULTI STORE CORP 70.50 "P-1640" E ZARATE HOSPITAL 431.79 "P-1641" CHJCKIE SARAP FOODS CORP 27.64 "P-1840" DIAMANT VELOURS FOOD 253.50 CORP "P-1841" E ZARATE HOSPITAL 2 742.32 "P-1860" CIPCON PETROL VENTURES 10.71 INC 87 Annex "D", Docket. pp. 2340 to 23 76. 88 Annex ''E'', Docket. pp. 2377 to 237&. 89 Exhibits "P-1021" to "P-3788" and submarkings. 90 Annex "D", Docket, pp. 2340 to 2376. " Resolution dated April 4, 2022, Docket. pp. 2689 to 2690.

DECISION CTA Case No. 10303 Rema Tip Top Philippines, Inc. vs. Commissioner of Internal Revenue Page 43 of68 x------------------------------------------------------------------------------------x "P-1861" BALIWAG LECHON MANOK INC 72.75 "P-1880" 3,796.39 "P-188I" THE BELLEVUE MANILA (RPJ DEVELOPMENT INC) 1,667.92 "P-1988" "P-2006" THE BELLEVUE MANILA (RPJ DEVELOPMENT INC) 248.55 "P-2045" 326.89 "P-2046" NUSERY CARE CORP 804.24 "P-2047" "P-2048" K3CP CORPORATION 20.04 "P-2049" 33.11 "P-2050" SUPERVALUEINC 14.36 127.93 "P-2062" PALAWAN JOLLY FOODS CORP 299.14 "P-2063" GRANDIOSA CORP. 467.14 "P-2064" PALAWAN JOLLY FOODS CORP 214.29 "P-2248" "P-2691" PHILIPPINE PIZZA INC 467.14 57.64 "P-2692" GOOD GRUB INC 2!.19 "P-2693" TRAVELBEE MANAGEMENT "P-2694" CORPORATION 39.64 "P-2695" M YAMZON INTERNATIONAL TRADING 319.74 "P-2696" CORP "P-2697" TRAVELBEE MANAGEMENT 92.31 CORPORATION 10.71 "P-2698" 267.86 SOUTHGATEFOODSINC 96.43 "P-2699" SANFORD MARKETING CORPORATION 10.71 "P-2701" FREEMONT FOODS CORPORATION "P-2702" (JOLLIBEE) 214.29 "P-2705" NEY SHELL SERVICE STATION 39.64 "P-2706" 165.00 "P-2707" ROBINSONS HANDYMAN INC "P-2708" 231.43 "P-2709" SHUKEY KEY SERVICES & TRADING 102.06 321.43 "P-2710" CEBU PRIMEGRILL CORP 2,475.42 "P-2711" 335.28 "P-2714" SHUKEY KEY SERVICES & TRADING TOP SPRING PURIFIED DRINKING WATER & DIST 37.50 "P-2715" SERVICES 17.91 "P-2719" AEROPHINE ENTERPRISES & 44.89 "P-2720" "P-2753" co. I 07.14 428.04 "P-2755" FREEMONT FOODS CORPORATION 675.54 (JOLLIBEEI 204.42 "P-2760" "P-2762" KINGS MULTI PARTS GENERAL SALES 21.43 "P-2763" CEBU ORIGINAL LECHON "P-2764" BELLY 28.71 78.00 SANFORD MARKETING CORPORATION 54.24 471.43 NEY SHELL SERVICE STATION ESPRUTINGKLE GAS & SERVICE INC CEBU PRIMEGRILL CORP M YAMZON INTERNATIONAL TRADING CORP LECIANN VENTURES INC SANFORD MARKETING CORPORATION M YAMZON INTERNATIONAL TRADING CORP GRANDRESTO INC CEBU PRIMEGRILL CORP U-FREIGHT PHILS INC KARTON BUSINESS VENTURES INC AL & TL FOOD FRANCHISE CORP KALREJ CORPORATION SUPERVALUEINC TOOLBOX TRADING

DECISION CTA Case No. 10303 Rema Tip Top Philippines, Inc. vs. Commissioner of Internal Revenue Page 44 of68 x------------------------------------------------------------------------------------x "P-2765" INFINITY SHELL GAS STATION 5.36 RUSTAN COFFE CORP (STARBUCKS "P-2892" COFFEE) 184.29 "P-2893" 38.06 RUSTAN SUPERCENTERS INC "P-2894" EASYGAS CONVENIENCE 53.57 "P-2895" STATION 17.68 "P-2896" 17.36 "P-2898" AVALON SCION FOODS CORPORATION 17.57 "P-2899" 73.15 "P-2901" GOLDEN ARCHES DEVELOPMENT CORP 17.36 "P-2902" 61.61 "P-2903" FRONTLAKEINC 145.07 "P-2904" 20.36 "P-2905" RUSTAN SUPERCENTERS INC 24.64 "P-2906" 12.32 "P-2907" HARBOUR CITY DIMSUM HOUSE INC 26.79 "P-2918" 184.29 "P-2946" FRIJOLES CORPORATION 125.63 "P-2950" SOUTHROAD GRILL CORP 17.14 "P-2958" 27.32 "P-2959" CHOWFUN INC 107.14 "P-2960" 48.64 PERSIAN KEBAB TANDOORI CUISINE "P-2961" 24.00 S&R PIZZA INC "P-2962" 44.25 "P-2963" HANDSBURY INC 148.58 "P-2965" WENDYS ALL PLATINUM RETAILERS INC 75.00 "P-3114" "P-3122" COCHINILLO INC 328.82 FREEMONT FOODS CORPORATION 7 920.00 "P-3316" (JOLLIBEEI "P-3422" 17.68 "P-3462" BALIWAG LECHON MANOK INC 14.40 "P-3466" 2,182.52 "P-3467" KALREJ CORPORATION 111.43 204.31 "P-3499" BALIWAG LECHON MANOK INC INTELLIGENT E PROCESSES 11.25 "P-3500" TECHNOLOGIES MICHAEL PAUL NOODLE 5.79 "P-3753" HOUSE 583.13 SUPERVALUEINC !' 33 255.37 BRITE TOWN AUTO PARTS DHL EXPRESS (PHILIPPINES) CORP MANDAUE CONSTELLATION BUSINESS PLAZA INC. RUSTAN COFFE CORP (STARBUCKS COFFEEI FILLER UP GASOLINE STATION ESPRUTINGKLE GAS & SERVICE INC YUNITED CORP AKROASIA PETRON SERVICE STATION BEERY HAPPY FOOD SERVICES BEERY HAPPY FOOD SERVICES TOYOTA MANDAUE SOUTH CEBU Subtotal 2. Input VAT on purchases of goods/services supported by documents that were among those dented�� admission by the Court for being unreadable "P-1329" MANDAUE TRADE CENTER !' 12.86 "P-1540" ACE HARDWARE PHILS INC 20.87 "P-3021" ACE HARDWARE PHILS INC 23.55 92 No. 3, Resolution dated April 4, 2022, Docket, p. 2690.

DECISION CTA Case No. 10303 Rema Tip Top Philippines, Inc. vs. Commissioner of Internal Revenue Page 45 of68 x------------------------------------------------------------------------------------x Subtotal ,. 57.28 3. Input VAT on purchases of goods/services supported by unreadable/blurred documents "P-1226" ACE HARDWARE PHILS INC p 1I 1.30 "P-1275" MERCURY DRUG 83.71 "P-1599" SOLIDMARK INC 972.77 "P-1888" CEBU PORT AUTHORITY 220.32 "P-1890" CEBU PORT AUTHORITY 112.44 "P-1951" ROBINSONS HANDYMAN INC 21.30 "P-1984" RUSTAN COFFE CORP (STARBUCKS 127.50 COFFEE) "P-3174" ZUBUFOODS INC. 48.75 "P-3496" MULTI STORE CORP 109.39 "P-3497" MULTI STORE CORP 204.37 "P-3498" SANFORD MARKETING CORPORATION 136.74 "P-3685" LAUGHING BUDDH FOOD CORP ,. 11.79 2 160.38 Subtotal 4. Input VAT on purchases ofaoods/services suoported by photocopied03 documents I' "P-1544" THE BELLEVUE MANILA (RPJ DEVELOPMENT INC) 198.21 "P-1545" MAJOR SHOPPING MANAGEMENT CORP 157.50 "P-2690" GLOBALVIEW TRAVEL & TOURS CORP 803.57 "P-3718" GLOBAL SECURITY SOLUTIONS INC. ,. 461.60 Subtotal 1 620.88 5. Over-claimed input VAT from purchases of goods/services Input VAT amounts per per OR claim "P-1233" ALAIN ASIA TRADING CORP I' 321.43 I' 312.43 I' 9.00 "P-1373" MINDANAOAN MARKETING & 4.29 AUTO PARTS 31.07 26.78 "P-1600" GAISANO CAPITAL-SURIGAO 1.01 (TAl- 101.03 100.02 0.9! PAN DEVELOPMENT INCI 8.52 149.20 "P-1681" ARMY NAVY BURGER INC 31.45 30.54 "P-1807" MOTHERS CHOICE SUR!GAO 853.32 844.80 91.75 "P-I 987" INC 151.56 SANFORD MARKETING 2.36 13.29 "P-2428" CORPORATION 277.97 GA!SANO CAPITAL-SUR!GAO 140.49 48.74 "P-2444" (TAl- PAN DEVELOPMENT INC) ,. 487.68 474.39 GAISANO CAPITAL-SURIGAO (TAl- PAN DEVELOPMENT INC) Subtotal 6. Input VAT on purchases of goods/services suoported b.'ll computer-generated VAT 93 Index, Exhibit "P-120", Docket, pp. 2384 to 2386.

DECISION CTA Case No. 10303 Rema Tip Top Philippines, Inc. vs. Commissioner of Internal Revenue Page 46 of68 x------------------------------------------------------------------------------------x invoices/official receipts with alterations/insertions of petitioner's name and/or TIN/address without the countersignature of the Issuer I' 200.11 107.15 FAST WHEEL SHELL GAS "P-1051" STATION FAST WHEEL SHELL GAS "P-1052" STATION "P-1054" INFINITY SHELL GAS STATION 171.43 "P-1057" DAVAO CITIHARDWARE INC 2,764.23 "P-1059" FPG INSURANCE CO., INC 17,904.60 "P-1078" FAST WHEEL SHELL GAS 10.71 "P-1083" STATION 27.62 ABACUS BOOK AND CARD CORP (NATIONAL BOOKSTORE) "P-1084" NEY SHELL SERVICE STATION 17.15 "P-1085" ABACUS BOOK AND CARD CORP (NATIONAL 9.80 "P-1088" BOOKSTORE) 17.86 EASYGAS CONVENIENCE STATION "P-1099" NEY SHELL SERVICE STATION 321.43 "P-1100" NEY SHELL SERVICE STATION 107.14 "P-1107'' ICED PETRON SERVICE 13.70 "P-1120" STATION 10.71 FAST WHEEL SHELL GAS STATION "P-1125" GARNTLINE INC 20.36 "P-1133" INFINITY SHELL GAS STATION 10.71 "P-1135" ABACUS BOOK AND CARD CORP (NATIONAL 25.69 BOOKSTORE) "P-1138" INFINITY SHELL GAS STATION 10.71 "P-1145" NATIONAL BOOK STORE INC 14.28 "P-1186" GA!SANO CAPITAL-SUR!GAO (TAl-PAN 11.68 DEVELOPMENT INC) "P-1194" CHARTER PING AN INSURANCE CORP 20,327.29 "P-1200" SANFORD MARKETING CORPORATION 85.00 "P-1211" FAST WHEEL SHELL GAS 198.40 STATION "P-1213" INFINITY SHELL GAS STATION 214.29 "P-1223" MANDAUE BEST FUEL DEPOT 17.60 "P-1228" INC 9.64 FREEMONT FOODS CORPORATION IJOLLIBEE) "P-1229" LVC FOODS 4.29 "P-1231" NEY SHELL SERVICE STATION 321.43 "P-1240" CUBIXOOFFICE INC 8.73 "P-1241" OFFICE WAREHOUSE INC 13.71 "P-1245" CUBIXOOFFICE INC 7.95 "P-1246" CUBIXOOFFICE INC 16.07 "P-1250" CUBIXOOFFICE INC 3.75 "P-1251" GOLDEN ARCHES DEVELOPMENT CORP 9.86 "P-1255" ANCECAR SPECIALTY FOODS 149.46 INC "P-1256" MAJOR SHOPPING MANAGEMENT CORP 157.50 "P-1265" CUBIXOOFFICE INC 4.47 "P-1294" XPRESSFILL SERVICE 70.29 STATION "P-1304" INFINITY SHELL GAS STATION 32.14 "P-1305" TRI OKTO SHELL GASOLINE STATION 10.71

DECISION CTA Case No. 10303 Rema Tip Top Philippines, Inc. vs. Commissioner of Internal Revenue X------------------------------------------------------------------------------------X "P-1318" ICED PETRON SERVICE 16.07 STATION "P-1323" ICED PETRON SERVICE 10.71 "P-1324" STATION 322.62 "P-1327" "P-1333" NEY SHELL SERVICE STATION 44.55 "P-1337" 1.61 "P-1344" SANFORD MARKETING CORPORATION "P-1346" 11.79 "P-1349" CUBIXOOFFICE INC 24.64 "P-1353" 64.61 CUBIXOOFFICE INC 11.68 "P-1378" "P-1383" NATIONAL BOOK STORE INC 3.00 "P-1413" CUBIXOOFFICE INC 6.27 "P-1415" 214.29 JOINT VENTURE "P-1416" 203.57 CUBIXOOFFICE INC 137.76 "P-1417" GAISANO CAPITAL-SURIGAO (TAl-PAN "P-1450" DEVELOPMENT INC) 203.58 "P-1456" LAVENDER SHELL SERVICE STATION & GEN MDSE 160.72 "P-1460" FAST WHEEL SHELL GAS 42.86 "P-1462" STATION 10.71 "P-1468" INFINITY SHELL GAS STATION 321.44 "P-1469" FAST WHEEL SHELL GAS STATION 17.58 "P-1473" FAST WHEEL SHELL GAS "P-1475" STATION 15.11 "P-1477" 214.29 "P-1480" PROTON MICROSYSTEM "P-1481" XPRESSFILL SERVICE 16.71 "P-1491" STATION 293.37 "P-1509" 509.97 "P-1510" NEY SHELL SERVICE STATION 48.21 "P-1513" AKROASIA PETRON SERVICE STATION 94.29 EASYGAS CONVENIENCE 21.43 "P-1516" STATION 32.12 "P-1549" 32.14 NEY SHELL SERVICE STATION "P-1554" ICED PETRON SERVICE 24.62 STATION "P-1555" 29.69 NEY SHELL SERVICE STATION 1.07 "P-1569" SANFORD MARKETING CORPORATION 45.36 "P-1602" "P-1642" HONDA MOTOR WORLD INC 9.93 "P-1643" HONDA MOTOR WORLD INC 28.77 "P-1647" MAJOR SHOPPING MANAGEMENT CORP 26.57 192.86 "P-1648" ACE HARDWARE PHILS INC 140.68 LAVENDER SHELL SERVICE STATION & GEN MDSE GAISANO CAPITAL-SURIGAO (TAl-PAN 179.49 DEVELOPMENT INC) 203.58 LATINUS FOODS INCORPORATED GOLDEN GREAT VALUE PROPERTIES INC GAISANO CAPITAL-SURIGAO (TAl-PAN DEVELOPMENT INC) CLYBROS MERCHANDISING INC GAISANO CAPITAL-SURIGAO (TAl-PAN DEVELOPMENT INC) C!Tl HARDWARE BACOLOD INC INFINITY SHELL GAS STATION ICED PETRON SERVICE STATION -- -� FAST WHEEL SHELL GAS STATION FAST WHEEL SHELL GAS STATION

DECISION CTA Case No. 10303 Rema Tip Top Philippines, Inc. vs. Commissioner of Internal Revenue Page 48 of68 x------------------------------------------------------------------------------------x "P-1665" HARI-RAYA COFFEE SHOP INC 650.91 "P-1678" 40.50 "P-1693" GOLDEN ARCHES DEVELOPMENT CORP 10.71 "P-1703" 13.39 "P-1711" INGUSAN GASOLINE STATION "P-1715" 107.14 "P-1718" GRANATINA FOOD CORP 94.29 "P-1727'' 33.35 "P-1729" NEY SHELL SERVICE STATION 321.43 "P-1741" SANFORD MARKETING CORPORATION 2.68 "P-1743" SANFORD MARKETING CORPORATION 10.71 "P-1748" NEY SHELL SERVICE STATION 13.04 "P-1751" "P-1752" SEATTLE'S BEST COFFEE 16.09 EASYGAS CONVENIENCE 289.77 "P-1753" STATION "P-1766" ICED PETRON SERVICE 53.57 "P-1773" STATION "P-1774" NEW VENTURES SHELL 134.60 "P-1775" STATION 31.82 2.68 "P-1776" NEY SHELL SERVICE STATION 2.68 9.11 "P-1777" NEY SHELL SERVICE STATION MANDAUE FOAM INDUSTRIES 10.93 "P-1781" INC "P-1796" 10.50 "P-1810" HONEYLEMON FOODS INC "P-1812" 649.29 "P-1825" ASEANA HOLDINGS INC 57.51 27.96 "P-1827" ASEANA HOLDINGS INC 3.21 "P-1828" GOLDEN LION FOODS (SUR!GAO II) CORPORATION 166.50 "P-1835" FREEMONT FOODS CORPORATION (JOLLIBEE) 33.00 "P-1837" FREEMONT FOODS CORPORATION 107.12 "P-1842" (JOLLIBEE) "P-1856" SILICON VALLEY COMPUTER GROUP 197.68 PH!LS INC "P-1859" 577.98 "P-1863" SANFORD MARKETING CORPORATION 43.07 48.27 "P-1864" SAM HIRANAND FOOD CORPORATION "P-1867" 10.71 "P-1869" CUBIXOOFFICE INC 192.86 "P-1914" "P-1917" MIA MAISON HOME INC 203.58 "P-1918" GOLDILOCKS BAKESHOP HAPPY FOODS 160.72 "P-1921" CORP I 583.04 "P-1929" "P-1934" MAJOR SHOPPING MANAGEMENT CORP 10.71 ANCECAR SPECIALTY FOODS 47.57 INC 34.29 CIT! HARDWARE BACOLOD 321.48 INC 20.32 CUBIXOOFFICE INC 5.30 CUBIXOOFFICE INC MM YAMAT MOTORIST CENTER INFINITY SHELL GAS STATION FAST WHEEL SHELL GAS STATION INFINITY SHELL GAS STATION CUBIXOOFFICE INC FOUR A PETROLEUM STATION SANFORD MARKETING CORPORATION MISTER DONUT NEY SHELL SERVICE STATION NEY SHELL SERVICE STATION ABACUS BOOK AND CARD CORP (NATIONAL

DECISION CTA Case No. 10303 Rema Tip Top Philippines, Inc. vs. Commissioner of Internal Revenue Page 49 of68 x------------------------------------------------------------------------------------x "P-1936" BOOKSTORE) 18.08 "P-1940" 21.45 "P-1941" SANFORD MARKETING CORPORATION 21.45 "P-1943" LECIANN VENTURES INC 99.00 "P-1944" 143.44 "P-1946" NEY SHELL SERVICE STATION 213.18 ABACUS BOOK AND CARD CORP (NATIONAL "P-1956" BOOKSTORE) 16.50 "P-1959" 335.59 "P-1981" MULTI STORE CORP "P-1986" 51.84 NEY SHELL SERVICE STATION 304.18 "P-20!2" ICED PETRON SERVICE STATION 27.80 "P-2019" NEY SHELL SERVICE STATION 143.04 "P-2053" UNIVERSITY OF CEBU MEDICAL CENTER 202.56 "P-2054" "P-2056" BELMONT INDUSTRIAL TOOL CENTER 234.62 GA!SANO CAPITAL-SURIGAO (TAl-PAN 166.62 "P-2086" DEVELOPMENT INC) "P-2092" CONTEMPORIAN FOODS INC (JCO DONUTS & 15.32 COFFEE) 74.89 "P-2102" FAST WHEEL SHELL GAS STATION 80.33 "P-2103" FAST WHEEL SHELL GAS "P-2107" STATION 19.72 "P-2120" 15.11 "P-2125" INFINITY SHELL GAS STATION 318.07 LAMUAN SHELL GAS STATION 15.32 "P-2126" INC 10.07 "P-2137" KALREJ CORPORATION "P-2163" CIT! HARDWARE BACOLOD 15.00 INC 319.78 "P-2164" ICED PETRON SERVICE STATION 10.71 "P-2175" JMR GOLDEN FOOD VENTURES INC 42.27 "P-2182" "P-2192" NEY SHELL SERVICE STATION 29.29 "P-2198" 41.04 "P-2209" JMR GOLDEN FOOD VENTURES INC 25.71 FREEMONT FOODS CORPORATION 13.93 "P-2215" IJOLLIBEE) "P-2217" GA!SANO CAPITAL-SURIGAO (TAl-PAN 57.32 "P-2244" DEVELOPMENT INCI 6.86 "P-2252" "P-2254" NEY SHELL SERVICE STATION 21.50 EASYGAS CONVENIENCE 160.74 "P-2255" STATION 128.63 GAISANO CAPJTAL-SURIGAO (TAl-PAN 179.29 "P-2256" DEVELOPMENT INC) GA!SANO CAPITAL-SURIGAO (TAl-PAN 231.00 "P-2257" DEVELOPMENT INC) "P-2260" 202.55 ONG KIN KING & CO INC 499.82 ZUBUFOODS, INC. INFINITY SHELL GAS STATION RUSTAN COFFE CORP (STARBUCKS COFFEE! INNOVACHOWS CORP LECJANN VENTURES INC INFINITY SHELL GAS STATION INFINITY SHELL GAS STATION FAST WHEEL SHELL GAS STATION FAST WHEEL SHELL GAS STATION FAST WHEEL SHELL GAS STATION CUB!XOOFFICE INC

DECISION CTA Case No. 10303 Rema Tip Top Philippines, Inc. vs. Commissioner of Internal Revenue X------------------------------------------------------------------------------------X "P-2296" KALREJ CORPORATION 20.68 "P-2297" 14.46 GOLDEN ARCHES DEVELOPMENT CORP "P-2316" NEW VENTURES SHELL 10.71 STATION "P-2318" CANELLE FOOD 19.29 "P-2320" CORPORATION 21.43 "P-2323" "P-2328" SCOOBYS GAS DEPOT 9.64 "P-2329" 65.36 MANDAUE BOLT CENTER 44.92 "P-2340" "P-2354" NATIONAL BOOK STORE INC 13.93 10.71 "P-2356" NATIONAL BOOK STORE INC "P-2361" ACHIEVERS FUEL & SERVICE CENTER 46.50 "P-2364" CORP 37.50 "P-2368" 318.20 "P-2376" INFINITY SHELL GAS STATION "P-2380" YDLAZAVON PANCIT HABHAB 9.16 "P-2392" INC 265.09 "P-2424" "P-2474" RED RIBBON BAKESHOP INC 42.64 "P-2487" 12.32 NEY SHELL SERVICE STATION 952.86 "P-2518" 56.76 "P-2536" MANDAUE BOLT CENTER 148.22 "P-2542" NEY SHELL SERVICE STATION 18.75 "P-2552" 314.66 MULTI STORE CORP "P-2564" 16.07 "P-2568" DIVI MART CORP "P-2576" 37.51 TOYOTA BUTUAN CITY "P-2577" 482.14 "P-2583" MULTI STORE CORP 105.00 "P-2594" INFINITY SHELL GAS STATION 68.78 LVV (LITTLE VIN-VIN) FOOD "P-2596" CORPORATION 15.00 99.62 "P-2611" NEY SHELL SERVICE STATION 85.61 "P-2653" AKROASIA PETRON SERVICE STATION "P-2676" LATINUS FOODS 44.20 "P-2687" INCORPORATED "P-2689" SILICON VALLEY COMPUTER GROUP 10.71 PHILS INC "P-2722" 12.29 "P-2728" MAJOR SHOPPING MANAGEMENT CORP 324.68 "P-2729" 319.73 "P-2732" PANCAKE HOUSE 3PEAS IN A POD INC 145.50 "P-2775" FAST WHEEL SHELL GAS "P-2779" STATION 235.72 I ,330. 71 ISLAND SOUVENIR INC 1,069.29 OCTAGON COMPUTER SUPERSTORE PROTON MICROSYSTEMS 133.90 GAISANO CAPITAL-SURIGAO (TAl-PAN 18.21 DEVELOPMENT INC) 62.14 FREEMONT FOODS CORPORATION (JOLLIBEE) THE SM STORE MINDANAO SHOPPERS DAILY DESTINATION CORP NCCC SUPERMARKET LTS RETAIL SPECIALIST INC NEY SHELL SERVICE STATION MULTI STORE CORP FAST WHEEL SHELL GAS STATION CUBIXOOFFICE INC CUBIXOOFFICE INC MAJOR SHOPPING MANAGEMENT CORP WS AND LANDIN INC SANFORD MARKETING CORPORATION

DECISION CTA Case No. 10303 Rema Tip Top Philippines, Inc. vs. Commissioner of Internal Revenue X------------------------------------------------------------------------------------X "P-2780" ABACUS BOOK AND CARD CORP (NATIONAL 56.25 BOOKSTORE) "P-2784" ALL FRESH FOOD PRODUCTS 53.57 "P-2790" INC 418.47 "P-2794" SANFORD MARKETING CORPORATION 22.40 "P-2795" ICED PETRON SERVICE 351.86 "P-2796" STATION 107.14 "P-2799" "P-2800" NEY SHELL SERVICE STATION 49.20 10.71 "P-2805" NEY SHELL SERVICE STATION "P-2819" 93.40 "P-2824" SANFORD MARKETING CORPORATION 48.21 "P-2831" 12.86 "P-2833" AKROASIA PETRON SERVICE STATION 21.40 "P-2835" ABACUS BOOK AND CARD CORP (NATIONAL 35.12 BOOKSTORE) 487.40 "P-2849" OFFICE WAREHOUSE INC 17.24 "P-2853" "P-2888" INFINITY SHELL GAS STATION 28.83 107.14 "P-2920" SUPERVALUEINC "P-2932" 300.01 4S HIRANAND FOOD CORPORATION 12.86 "P-2943" "P-2977" CUBIXOOFFICE INC 16.07 "P-2984" GAISANO CAPITAL-SURIGAO (TAl-PAN 104.57 "P-2996" DEVELOPMENT INC) 214.29 "P-3003" GAISANO CAPITAL-SURIGAO (TAl-PAN "P-3020" DEVELOPMENT INC) 58.87 "P-3029" 214.29 "P-3030" LAVENDER SHELL SERVICE STATION & GEN MDSE "P-3032" FAST WHEEL SHELL GAS 3.43 STATION 19.82 "P-3041" 123.75 TWO FOUR ENTERPRISES 10.71 "P-3115" XPRESSFILL SERVICE STATION 26.79 "P-3116" CEBU BELMONT INC 314.84 "P-3131" "P-3 I 38" NEY SHELL SERVICE STATION 203.60 "P-3159" MULTI STORE CORP 53.57 "P-3165" 19.29 "P-3167" LECIANN VENTURES INC "P-3181" 38.09 SUPERVALUE INC 19.29 "P-3182" 214.29 "P-3187" ARMY NAVY BURGER INC 22.61 "P-3189" "P-3194" HIGH HAVEN SPIRITS & CIGAR INC. 19.34 "P-3206" 214.29 INFINITY SHELL GAS STATION 214.29 LATINUS FOODS INCORPORATED 17.09 FAST WHEEL SHELL GAS 22.93 STATION FAST WHEEL SHELL GAS STATION XPRESSFILL SERVICE STATION FEDERAL BRENT RETAIL INC ABACUS BOOK AND CARD CORP (NATIONAL BOOKSTORE! SCOOBYS GAS DEPOT AKROASIA PETRON SERVICE STATION CEBU BELMONT INC ICED PETRON SERVICE STATION NEY SHELL SERVICE STATION PHILIPPINE TOYOKO INN INC. DIVI MART CORP CHOWFUN INC

DECISION CTA Case No. 10303 Rema Tip Top Philippines, Inc. vs. Commissioner of Internal Revenue Page 52 of68 x------------------------------------------------------------------------------------x "P-3225" PALAWAN BAKER'S HILL CORP 122.68 FAST WHEEL SHELL GAS "P-3279" STATION 244.57 FAST WHEEL SHELL GAS "P-3280" STATION 171.48 "P-3322" 194.23 "P-3336" AKROASIA PETRON SERVICE STATION 189.13 "P-3338" SUPERVALUEINC 30.54 "P-3339" "P-3343" WONDERFOODS INC (SIZZLING PLATES) 92.85 PRESAM SHELL SERVICE 32.68 "P-3346" CENTER 37.39 "P-3347'' KERWIN MINIMART "P-3356" KAKJNG SHOPPING CENTER 56.68 "P-3357" INC 48.08 "P-3364" CEBU BUENA VICTORIA TRADING 96.05 COMPANY INC 570.64 "P-3366" "P-3368" ROBINSON INCORPORATED 57.43 "P-3405" 123.59 "P-3411" SUYEN CORPORATION "P-3412" 30.35 "P-3415" SOLIDMARK INC 20.36 "P-3427" SBARRO FRESH ITALIAN 26.57 "P-3450" COOKING "P-3469" 6.86 "P-3479" SUPERVALUEINC 375.00 469.73 "P-3480" ROSE PHARMACY INC 55.29 "P-3481" JOLLIBEE FOODS CORP 8.04 "P-3495" MANG !NASAL PACIFIC MALL 139.29 "P-3509" ARJANNA GAS STATION INC 181.54 "P-3518" 18.96 FIRST GLOBAL PREMIUM DEALER CO LTD "P-3548" 75.00 "P-3549" TOYOTA BUTUAN CITY "P-3550" 107.14 "P-3556" SUPERVALUE INC "P-3557" 23.14 "P-3558" GOLDEN GREAT VALUE SPECIALIST INC 1.07 "P-3559" FAST WHEEL SHELL GAS 1.07 "P-3560" STATION 5.73 "P-3562" FAST WHEEL SHELL GAS 1.07 "P-3563" STATION 1.07 "P-3564" 1.07 "P-3570" BALTE FOOD CORP 1.07 "P-3575" BAAN SHELL SERVICE 1.07 "P-3576" STATION 1.07 "P-3579" SOLARIE SERVICE STATION (SOLARIE VENTURES CO 1.07 LTD) 1.07 CLYBROS MERCHANDISING 5.36 INC 3.21 1.07 GOLDEN GREAT VALUE PROPERTIES INC GOLDEN GREAT VALUE PROPERTIES INC SANFORD MARKETING CORPORATION GOLDEN GREAT VALUE PROPERTIES INC GOLDEN GREAT VALUE PROPERTIES INC GOLDEN GREAT VALUE PROPERTIES INC GOLDEN GREAT VALUE PROPERTIES INC GOLDEN GREAT VALUE PROPERTIES INC GOLDEN GREAT VALUE PROPERTIES INC GOLDEN GREAT VALUE PROPERTIES INC GOLDEN GREAT VALUE PROPERTIES INC 7 ELEVEN 7 ELEVEN GOLDEN GREAT VALUE PROPERTIES INC

DECISION CTA Case No. 10303 Rema Tip Top Philippines, Inc. vs. Commissioner of Internal Revenue x------------------------------------------------------------------------------------x "P-3580" GOLDEN GREAT VALUE PROPERTIES INC 1.07 "P-3619" 1.07 "P-3643" GOLDEN GREAT VALUE PROPERTIES INC 180.00 "P-3647" 56.25 HAPCHAN TEA HOUSE "P-3648" 139.56 RUSTAN COFFE CORP "P-3653" CG & E SHELL SERVICE 147.86 "P-3662" STATION 2.14 DEMP RETAIL MANAGEMENT "P-3668" CORPORATION 33.75 "P-3689" NORWEN PARKING SERVICES 12.21 "P-3690" FREEMONT FOODS 1.07 CORPORATION "P-3693" BEERY HAPPY FOOD 5.79 "P-3694" SERVICES 127.98 "P-3696" GOLDEN GREAT VALUE PROPERTIES INC 10.71 "P-3699" PHILIPPINE SEVEN "P-3700" CORPORATION 2.14 "P-3704" 2.14 "P-3706" PRINCITY INC 9.43 3.21 "P-3742" SCOOBYS GAS DEPOT ROBINSON LAND 16.61 "P-3744" CORPORATION "P-3747" 5.79 "P-3754" NORWEN PARKING SERVICES 1.07 "P-3755" 54.70 "P-3762" PROMOLABELS INC 65.14 "P-3765" 5.01 "P-3770" MAKATI PARKING AUTHORITY 53.57 "P-3781" BEERY HAPPY FOOD 2.37 SERVICES 32.14 "P-3784" BEERY HAPPY FOOD "P-3785" SERVICES 68.04 29.36 GOLDEN GREAT VALUE PROPERTIES INC F 74,497.98 TRIM FOOD VENTURES A-D 7 ENTERPRISE SUPERVALUEINC JOLY-RED CEBU INC PHILIPPINE PORTS AUTHORITY FRONTLAKE INC AJL ASIA-PACIFIC FOODS CORP PALAWAN JOLLY FOODS CORP Subtotal 7. Input VAT on purchases of services dated outside the period of claim CARAG ZABALLERO LLAMADO & ABIERA LAW "P-3270" OFFICE p 12,939.60 30,288.86 CARAG ZABALLERO LLAMADO & ABIERA LAW 7,714.29 "P-3271" OFFICE 50,942.75 CARAG ZABALLERO LLAMADO & ABIERA LAW "P-3409" OFFICE Subtotal F 8. Input VAT on purchases of goods not supported by VAT sales invoices "P-3363" ROMANEL ENTERPRISES I' 910.71 468.64 "P-3374" TT & COMPANY INC "P-3375" CLYBROS MERCHANDISING 42.96 INC 49.50 1,236.99 "P-3406" TT & COMPANY INC "P-3407" TT & COMPANY INC

DECISION CTA Case No. 10303 Rema Tip Top Philippines, Inc. vs. Commissioner of Internal Revenue Page 54 of68 x------------------------------------------------------------------------------------x "P-3408" TT & COMPANY INC 1,268.57 1,012.06 "P-3461" TT & COMPANY INC I 01.25 "P-3527" TT & COMPANY INC 1,I18.18 "P-3529'' TT & COMPANY INC 752.95 6961.81 "P-3532" TT & COMPANY INC Subtotal !' 9. Input VAT on purchases of goods/services supported by VAT invoices/ofjicial receipts without petitioner's name and/or TIN/address "P-1091" LBC EXPRESS INC !' 38.57 "P-1108" TOP SPRING PURIFIED DRINKING WATER & DIST "P-1113" "P-1114" SERVICES 53.57 "P-1118" LBC EXPRESS INC 16.61 "P-1119" "P-1122" LBC EXPRESS INC 17.14 "P-1123" DHL EXPRESS (PHILIPPINES) 135.54 "P-1148" CORP "P-1292" "P-1449" LBC EXPRESS INC 82.50 "P-1713" "P-1816" LBC EXPRESS INC 20.89 "P-1848" LBC EXPRESS INC 20.89 "P-1874" "P-1925" LBC EXPRESS INC 20.89 "P-1 947" "P-2004" SUPERVALUE INC 118.09 "P-2008" "P-2024" DONICA CORPORATION 26.89 "P-2099" LBC EXPRESS INC 20.89 "P-3011" "P-3016" LBC EXPRESS INC 9.11 "P-3027" "P-3028" LBC EXPRESS INC 37.50 "P-3118" LINCOLN REALTY 3,214.29 "P-3268" CORPORATION "P-3420" "P-3421" LBC EXPRESS INC 20.89 "P-3449" "P-3456" LBC EXPRESS INC 20.89 "P-3578" to "P-3578-2" LBC EXPRESS INC 20.89 "P-3722" FIRST GLOBAL PREMIUM DEALER CO LTD 214.18 LBC EXPRESS INC 20.89 ATS AIR TECHNIC SERVICES 2,550.18 MEGATECH SURVEILLANCE AND COMPUTER 890.36 TECHNOLOGIES CORP. MOTORCENTRAL SALES CORP 29.01 LBC EXPRESS INC 17.89 LBC EXPRESS INC 17.89 DHL GLOBAL FORWARDING (PHILS) INC. 551.25 LBC EXPRESS INC 21.43 LBC EXPRESS INC 23.04 LBC EXPRESS INC 25.18 LBC EXPRESS INC 21.43 LBC EXPRESS INC 21.43 ATLAS COPCO (PHILIPPINES) 168,750.00 INC SURIGAO DEL NORTE ELECTRIC COOPERATIVE, INC. 3,542.21 Subtotal !' 180,592.41 10. Input VAT on purchases of services wherein the nature of the service is not

DECISION CTA Case No. 10303 Rema Tip Top Philippines, Inc. vs. Commissioner of Internal Revenue X------------------------------------------------------------------------------------X indicated KUEHNE + NAGEL INC I' I,734.3I "P-1064" PEARL ENTERPRISES 47,460.00 "P-1065", "P-1066" PEARL ENTERPRISES 103,260.00 "P-1065", TOYOTA ALABANG HILLS 1 992.24 "P-1066" MOREDONE VENTURES INC 653.57 "P-1081" MOREDONE VENTURES INC 37.50 "P-1094" MOREDONE VENTURES INC 653.57 "P-1096" PARKWAY CLYBROS MERCHANDISING INC 680.79 "P-1104" INSIGHT PRINTING PERFECTION INC 1,264.29 "P-1166'' LINCOLN REALTY "P-1270" CORPORATION 3,214.29 VDCU PRINCE HOTEL INC 143.68 "P-1280" GLOBAL SECURITY SOLUTIONS INC. 425.85 ''P-1334" LINCOLN REALTY "P-1422" CORPORATION 3,214.29 PEARL ENTERPRISES 71,190.00 "P-1428" PEARL ENTERPRISES 114 425.00 "P-1435" GAC PHILIPPINES INC 74,591.52 "P-1436" PILJPINAS TELESERV INC ''P-1441" PHILIPPINE POSTAL CORPORATION 79.83 "P-1518" GLOBALVJEW TRAVEL & TOURS CORP 12.00 "P-1523" GAC PHILIPPINES INC 14,449.80 "P-1653" GLOBALVIEW TRAVEL & TOURS CORP 27,547.03 "P-1662" GAC PHILIPPINES INC 11 018.30 ''P-1871'' PHILIPPINE PIZZA INC 31 784.65 "P-1883" INQUIRER PUBLICATIONS, 63.96 "P-1911" INC. GLOBALVIEW TRAVEL & TOURS CORP 44.57 "P-1924" TOYOTA ALABANG INC 23,301.22 "P-2044" GLOBALCARS INC "P-2084" DB SCHENKER PHILS INC 1,315.84 "P-2150" GAC PHILIPPINES INC 214.29 "P-2281" GAC PHILIPPINES INC 336.00 "P-2282" GAC PHILIPPINES INC "P-2283" GAC PHILIPPINES INC 1 231.80 "P-2284" FEDERAL EXPRESS PACIFIC 1,140.00 "P-2287'' LLC 1 543.80 GAC PHILIPPINES INC 1,591.80 "P-2288" GAC PHILIPPINES INC "P-2290" LAT!NUS FOODS 566.40 "P-2291" INCORPORATED 3,600.00 GLOBAL SECURITY SOLUTIONS INC. 2,550.32 "P-2397'' GAC PHILIPPINES INC "P-2503" RICHMONDE HOTEL ORTIGAS 29.89 "P-2512" GAC PHILIPPINES INC 372.25 "P-2733" GAC PHILIPPINES INC 7 580.73 "P-2750" CONPAC WAREHOUSING INC "P-2754" ORIENT FREIGHT 26.25 "P-2929" INTERNATIONAL 10,356.90 21,403.80 "P-2931" 622.68 1,914.38

DECISION CTA Case No. 10303 Rema Tip Top Philippines, Inc. vs. Commissioner of Internal Revenue X------------------------------------------------------------------------------------X "P-3163" CHOOBI CHOOBI FLAVORS CORPORATION 78.21 "P-3216" 50.79 "P-3291" BACOLOD CHICKEN !NASAL 316.07 "P-3311" 2 565.72 EGYP MOBILE COMMUNICATION CORP "P-3352" 1,179.64 "P-3370" CONPAC WAREHOUSING INC 150.00 "P-3487" SAN PEDRO COUNTRY FARM RESORT & EVENT CENTER INC 19,599.04 "P-3505" "P-3642" STA FE BEACH CLUB INC 69.21 2,000.00 GAC PHILIPPINES INC !' 615,648.07 BYA'S LOUNGE CAFE (ANNABELLE BORJALI SARSALEJO SECURITY AGENCY INC Subtotal 11.Input VAT on the purchase of service on the vat-exempt transaction "P-1980" UNIVERSITY OF CEBU MEDICAL CENTER p 64.29 64.29 Subtotal !' 12. Input VAT on purchase of goods supported by VAT invoice wherein the VAT amount was not separately indicated therein "P-3679" SUPERVALUEINC p 16.66 Subtotal !' 16.66 13. Input VAT on purchases of goods/services supported by VAT invoices/official receipts with incorrect TIN of petitioner/with correction on TIN but without the countersignature of the issuer "P-2502" TOYOTA MANDAUE SOUTH p I, 723.71 CEBU TOYOTA MANDAUE SOUTH "P-2811" CEBU 48.00 TOYOTA MANDAUE SOUTH "P-3119" CEBU 2 279.32 TOYOTA MANDAUE SOUTH "P-3682" CEBU 583.13 TOYOTA MANDAUE SOUTH "P-3750" CEBU 395.71 Subtotal !' 5 029.87 14. Input VAT on importations supported by documents that were among those denied94 admission by the Court for failure to present the originals for comparison "P-1024" to REMA TIP TOP AG p 221,791.00 "P-I 024-12" 123,429.00 GMA GARNET GROUP 7,337.00 "P-1025" to TIP TOP OBERFLANCHENSHUTZ ELBE 23791.00 "P-1025-7" GMBH 4,430.00 TIP TOP OBERFLANCHENSHUTZ ELBE 9,116.00 "P-1027" to GMBH 3,932.00 "P-1027-7" TIP TOP OBERFLANCHENSHUTZ ELBE 6,106.00 GMBH "P-103l"to "P-1031-8" AME INTERNATIONAL "P-1032" to AME INTERNATIONAL "P-1032-9" HAMATON AUTOMOTIVE TECHNOLOGY CO LTD "P-1033" to "P-1033-8" "P-1034" to "P-1034-5" "P-1035" to "P-I 035-7" 94 Resolution dated April4, 2022, Docket- Vol. V, pp. 2689 to 2690.

DECISION CTA Case No. 10303 Rema Tip Top Philippines, Inc. vs. Commissioner of Internal Revenue X------------------------------------------------------------------------------------X "P-1037" to REMA TIP TOP AG 188,154.00 "P-1037-12" 22,692.00 TIP TOP JAPAN INC "P-1039" to 112 498.00 "P-1 039-9" REMA TIP TOP AG 9 898.00 "P-1040" to HAMATON AUTOMOTIVE TECHNOLOGY CO LTD 296 849.00 "P-1 040-16" TIP TOP OBERFLANCHENSHUTZ ELBE GMBH 9 597.00 "P-1041" to 9,123.00 "P-1041-10" AME INTERNATIONAL 102,100.00 TIP TOP OBERFLANCHENSHUTZ ELBE 57,517.00 "P-1044" to GMBH 4 481.00 "P-1044-11" TIP TOP OBERFLACHENSCHUTZ ELBE 25,154.00 GMBH "P-1045"; 15,721.00 "P-1045-2" to REMA TIP TOP AG 12631.00 "P-1 045-11" !' 1 266,347.00 REMA TIP TOP AG "P-1046" to "P-1046-9" REMA TIP TOP AG "P-1047" to HAMATON AUTOMOTIVE TECHNOLOGYY CO LTD "P-1047-7" TIP TOP JAPAN INC. "P-1048" to Subtotal "P-1048-11" "P-1049" to "P-1049-5" "P-1050" to "P-1 050-12" "P-1021"; "P-1021-2" to "P-1021-7'' "P-1023" to "P-1023-11" 15. Input VAT on importation supported by documents not pertaining to the transaction "P-1026" to "P-1 026-5" REMA TIP TOP AG p 36,792.00 Subtotal !' 36 792.00 Total p 2,274 264.72 Thus, in compliance with the seventh requisite, only the amount of P2,825,509.32, as computed below, is duly substantiated and shall be considered valid input VAT, to wit: Reported input VAT per amended p 5,572,385.45 Quarterly VAT Returns forTY 2018 1'472,611.41 Less: Disallowances 2,274,264.72 2,746,876.13 Per !CPA's Amended Report P2,825,509.32 Per this Court's further verification Valid input VAT

DECISION CTA Case No. 10303 Rema Tip Top Philippines, Inc. vs. Commissioner of Internal Revenue Page 58 of68 X------------------------------------------------------------------------------------X Eighth requisite: Since there are both zero-rated and taxable sales subject to 12% VAT, the valid input VAT of P2,825,509.32 shall be proportionately allocated based on petitioner's sales volume. To reiterate, the eighth requisite is that the input taxes claimed are attributable to zero-rated or effectively zero-rated sales. However, where there are both zero-rated or effectively zero-rated sales and taxable or exempt sales, and the input taxes cannot be directly and entirely attributable to any of these sales, the input taxes shall be proportionately allocated based on sales volume. As stated earlier, petitioner declared taxable sales/receipts subject to 12% VAT and zero-rated sales/receipts, reflecting total sales/receipts of P162,794,001.62 forTY 2018, as shown below: Particulars Amount p 19,316,404.95 VATable SalesI Receipts 143,4 77,596.67 Zero-Rated Sales/Receipts p 162,794,001.62 Total Sales/Receipts In the present case, only P58,601,925.94 qualified for VAT zero-rating of sales of goods and services to PEZA- registered entities. Out of the total reported input VAT of P5,572,385.45 attributable to both twelve percent (12%) VAT- able and zero-rated transactions, only P2,825,509.32 was substantiated with VAT official receipts and invoices. Since petitioner's input VAT cannot be directly or entirely attributed to any of the transactions, the valid input VAT of P2,825,509.32 shall be allocated proportionately based on the volume of petitioner's total reported sales/receipts of P162,794,001.62. Consequently, only the portion of input VAT amounting to P1,017,115.41 is attributable to the valid zero- rated sales/receipts ofP58,601,925.94, computed as follows: Valid zero-rated sales/receipts forTY 2018 I' 58,601,925.94 162,794,001.62 Divided by: Total reported sales/receipts forTY 2018 Multiplied by: Valid input VAT not directly attributable to any 2,825,509.32 activity Pl,017 115.41 Valid input VAT attributable to valid zero-rated sales/receipts

DECISION CTA Case No. 10303 Rema Tip Top Philippines, Inc. vs. Commissioner of Internal Revenue X------------------------------------------------------------------------------------X Thus, regarding petitioner's compliarice with the eighth requisite, only the amount of !'1,017,115.41 represents petitioner's valid input VAT directly attributable arid allocable to its valid zero-rated sales/receipts for the TY 2018. Ninth requisite: Petitioner failed to establish that the subject claim was not carried over nor applied against any output tax in the succeeding quarters. Having determined that petitioner had valid input VAT attributable to its zero-rated sales/receipts, the Court shall now determine whether the same was not applied against its output VAT liability during arid in the succeeding quarters, relative to the ninth requisite for the successful prosecution of ari input VAT refund claim. At this juncture, it is worth mentioning the recent pronouncement of the Supreme Court in the case of Chevron Holdings, Inc. (Formerly Caltex Asia Limited) vs. Commissioner of Internal Revenue,95 where it held that the input tax attributable to zero-rated sales may, at the option of the VAT-registered taxpayer, be: (1) charged against output tax from regular 12% VAT-able sales, arid ariY unutilized or "excess" input tax may be claimed for refund, or the issuarice of a tax credit certificate; or (2) claimed for refund or tax credit in its entirety, arid such option is vested with the taxpayer- claimarit. In the instarit case, petitioner claims for refund arid/ or issuarice of tax credit certificate of its alleged unutilized input VAT attributable to zero-rated sales in its entirety, thus, availing of the option (2) as mentioned above. Concerning the ninth requisite, petitioner submitted in evidence its amended Quarterly VAT Returns for the 4th quarter of TY 2017 to the 1st quarter of TY 2020.96 However, the Court find' the p<eced;ng document' ;mufficient.~ 95 G.R. No. 215159, July 5, 2022. 96 Exhibits "P-I 0" to "P-13", "P-94" to "P-97", "P-I 0 12" to "P-1020-1 ", and, "P-3 796 and submarkings", Docket, pp. 2451 to 2458, 2630 to 2637 and USB.

DECISION CTA Case No. 10303 Rema Tip Top Philippines, Inc. vs. Commissioner of Internal Revenue Page 60 of68 x------------------------------------------------------------------------------------x While petitioner's Quarterly VAT Returns for the four quarters of TY 2018 97 show that the claimed input taxes attributable to zero-rated sales/receipts were not credited against output taxes98 because of the substantial amount of input tax carried over from the previous period, 99 petitioner failed to prove that the claimed input taxes were not applied against any output tax in the succeeding quarters. It must be emphasized that although petitioner is allowed under Section llO(B) of the NIRC of 1997, as amended, to carry over the excess input VAT of a given quarter to the succeeding quarter(s), petitioner is required to deduct the claimed input taxes from its accumulated input VAT as of the quarter when it opted to file a claim therefor as provided under Section 11 O(C) of the NIRC of 1997, as amended, to wit: "SEC. 110. Tax Credits XXX XXX XXX {C) Detennination of Creditable Input Tax. - The sum of the excess input tax carried over from the preceding month or quarter and the input tax creditable to a VAT-registered person during the taxable month or quarter shall be reduced by the amount of claim for refund or tax credit for value-added tax and other adjustments, such as purchase returns or allowances and input tax attributable to exempt sale. xxx" {Boldfacing supplied) The deduction ensures that the claimed input VAT shall not be carried-over nor applied against any output tax in the succeeding quarter(s). In this case, the ICPA alleged that the tracing of petitioner's Quarterly VAT Returns for the TY 2018 and subsequent returns filed with the BIR in TYs 2019 and 2020 (Annexes "F" and "G") shows that while petitioner reported its purchases allocated to zero-rated sales in its VAT Returns 97 Exhibits "P-I 0" to "P-13", Docket, pp. 2451 to 2458. TY 2018 Amount 1st Quarter p 581,897.49 9S znd Quarter 3rd Quarter 575,648.60 Exhibit 643,541.68 fLine 198, Docket- Vol. V, no. 2451 to 2458.) 41h Quarter 516,880.83 1'2,317,968.60 "P-10" "P-11" "P-12" "P-13" Output VAT per amended Quarterly VAT Returns 99 1'8,446,334.93, Line 20A, Exhibit "P-I 0", Docket. pp. 2451 to 2452.

DECISION CTA Case No. 10303 Rema Tip Top Philippines, Inc. vs. Commissioner of Internal Revenue x------------------------------------------------------------------------------------x (Line 21N), the corresponding amount of input tax on said purchases (Line 21 0) allocated to zero-rated sales for each period and the carry-over from the previous period (Line 20E) were deducted as VAT Refund in said VAT Returns (Line 23D). The net effect of this computation is zero. Thus, the ICPA asserts that it can be said that the amount of input tax allocated to zero-rated sales in TY 2018 was not utilized by petitioner in TYs 2019 and 2020.100 A perusal of petitioner's Quarterly VAT Returns for TYs 2018 and 2019 shows that petitioner habitually carried over the cumulative amount of "VAT Re.fund/TCC Claimed" (Line 23D) from the previous period as allowable input tax "Others" for the succeeding period (Line 20E). Simultaneously, the sum of the previous period's "VAT Re.fund/TCC Claimed" (Line 23D) or each quarter's "Others" (Line 20E) and each quarter's input tax allocated to zero-rated sales ("Others," Line 210) was reported as a deduction from input tax as "VAT Re.fund/TCC claimed" (Line 23D) for the current quarter, from one period to another, detailed as follows: Amended Quarterly VAT Returns forTY 2018: Exhibit No. "P-10" �P-11" "P-12" "P-13" 2453-2454 2455-2456 2457-2458 Docket- Vol. V pp. 2451-2452 3"d Quarter 4�� Quarter 2�� Quarter p 643,541.68 p 516,880.83 TY2018 l�t Quarter p 575,648.60 I' 8,057,337.89 I' 7,642,122.50 Output Tax Due p 581 897.49 I' 8,074,557.43 (Line 19B) - Less: Allowable Inout Tax 8 292 359.03 Input Tax P16 366 916.46 Carried p 1 125,000.00 Over from Previous Period (Line 20A) I' 8,446 334.93 Input Tax Deferred on Capital Goods Exceeding !'!Million from Previous Quarter (Line 20B) - 56 250.00 56,250.00 9 893 715.78 10 997 107.00 Others (Line 20E) 7 275 535.75 P18 007,303.67 P18 695 479.50 Total (Line 20F) (Sum of Items 20A, 20B& 20EJ P15,721,870.68 Current Transactions Purchase of Capital Goods exceeding !'!Million I' - I' - I' - (Line 21D) 100 No. 17, Exhibit "P-120", Docket, pp. 2310 to 2311.

DECISION CTA Case No. 10303 Rema Tip Top Philippines, Inc. vs. Commissioner of Internal Revenue x------------------------------------------------------------------------------------x Domestic 25 720.75 12 837.98 35,667.65 13,196.92 Purchases of 81,095.17 30,498.28 Goods 66,711.98 421,884.88 55,313.47 41,034.21 Other than Capital 117,687.26 67,456.20 Goods (Line 21 Fl Importation of Goods Other than Capital Goods (Line 21H) Domestic Purchase of Services {Line 21J) Others {Line 21 OJ 1 016 823.28 1 601 356.75 1 103 391.22 712 959.45 P19 595,452.27 P19,282 771.18 P19 493 168.36 Total Available p 1,068 750.00 Input Tax {Line 9,893 715.78 22} {Sum ofItems P10 962,465.78 p 8 632,986.49 20F, 21D, 21F, P(8,057,337.89) 21H 21J & 210} P16 948 813.95 Less: Deductions from Input Tax Input Tax on Purchases of Capital Goods exceeding !'!Million deferred for the succeeding period - - . {Line 23A) I' - I' I' VAT Refund/ TCC claimed {Line 8 292 359.03 10 997 107.00 1L710 066.46 23DI P10,997, 107.00 P11,_710,066.46 Total {Line 23F} p 8,29~359.03 {Sum ofItems p 8,656,454.92 p 8,285 664.18 p 7 783 101.90 23A &23D} P(8,074,557.43) P(7,642,122.50) P(7 266,221.07) Total Allowable Input Tax {Line 24) {Item 22 less Item 23F) Tax Overpayment {Lines 25, 27 & 29} {Item 19B less Item 24} Amended Quarterly VAT Returns forTY 2019: Exhibit No. "P-94" "P-95" "P-96" �P-97" 2632-2633 2634-2635 2636-2637 Docket-Vol. V, pp. 2630-2631 2nd Quarter 3rd Quarter p 675,202.18 p 427 165.62 4th Quarter TY2019 1st Quarter p 667 443.14 1'7,263 932.66101 p Output Tax Due p 450 755.27 7,332,206.1 )102 p 7,143 316.02 (Line 19B} Less: Allowable Input Tax Input Tax Carried Over from Previous Period (Line 20A) p 7,266,221.07 101 With PO.Ol difference from previous quarter's tax overpayment. 102 With P0.01 difference from previous quarter's tax overpayment.

DECISION CTA Case No. 10303 Rema Tip Top Philippines, Inc. vs. Commissioner of Internal Revenue Page 63 of68 x------------------------------------------------------------------------------------x Input Tax 56,250.00 56 250.00 56,250.00 56,250.00 Deferred on Capital Goods Exceeding !'!Million from Previous Quarter (Line 20B) Others !Line 20EJ 11 710 066.46 13 262 694.77 14 407 043.09 16 020 993.31 P20 582 877.43 P21 795 499.20 P23 220 559.33 Total (Line 20F} (Sum of Items 20A, 20B& 20E) P19 032 537.53 Current Transactions Purchase of Capital Goods exceeding !'I Million p - p - I' - I' - (Line 21D} Domestic Purchases of Goods Other than Capital 51,756.86 340,200.29 Goods (Line 21 F) 18,537.06 30,006.80 17,257.82 540,670.47 122,336.01 97,699.75 Importation of 116,548.36 42,431.70 Goods Other than Capital Goods (Line 21H) 327,818.22 Domestic Purchase of Services (Line 21J) 45,861.58 Others !Line 210) 1 552,628.32 1,144 348.31 1,613 950.22 1 160 500.00 P22 414 451.37 P23,591 474.95 P24 870 716.23 Total Available Input Tax (Line 22} (Sum of Items 20F, 21D, 21F, 21H, 21J & 2101_ P20,977L382,71 Less: Deductions from Input Tax Input Tax on Purchases of Capital Goods exceeding 1'1 Million deferred for the succeeding period p - - (Line 23A)- - I' - I' I' VAT Refund/ TCC claimed {Line 13 262 694.77 14 407 043.09 16,020 993.31 17 181 493.30 23D) P14 407 043.09 P16 020,993.31 P17,181,493.30 Total (Line 23F} (Sum of Items 23A & 23D) P13,262 694.77 Total Allowable Input Tax (Line 24) (Item 22 p 7 570,481.64 p 7,689 222.93 less Item 23F) p 7,714,687.94 p 8,007,408.28 Tax Overpayment (Lines 25, 27 & 29) (Item 19B less Pl7 143,316.02) Pl7,021 779.79) Item 24) Pl7 263 932.67) P17,332 206.10)

DECISION CTA Case No. 10303 Rema Tip Top Philippines, Inc. vs. Commissioner of Internal Revenue Page 64 of68 x------------------------------------------------------------------------------------x From the foregoing, the cumulative figures of "VAT Refund/TCC claimed" (Line 23D) reported for TYs 2018 and 2019 included the input VAT claim of P4,434,530.00 which was deducted as part of the "VAT Refund/TCC Claimed" for the four quarters of TY 2018. Said amount is determined as follows: 103 Exhibit TY 2018 VAT Refund/ Less: VAT Refund/ No. 1" Quarter TCCclaimed Others TCC claimed 2nd Quarter (Line :ZOE} for the quarter "P-10" 3�d Quarter (Line 23D} I' 7,275,535.75 I' 1,016,823.28 "P-11" 4th Quarter 8,292,359.03 "P-12" 1'8,292,359.03 9,893 715.78 1,601,356.75 "P-13" 9,893,715.78 10,997 107.00 I, 103,391.22 Total 10,997,107.00 11,710,066.46 712,959.46 1"4,434,530.71 Based on petitioner's amended Quarterly VAT Returns, as mentioned earlier, the tax overpayment for each quarter to be carried over to the succeeding quarter matched from the 1st quarter ofTY 2018 to the 4th quarter ofTY 2019. However, the tax overpayment in the amount of P7,021,779.79 104 for the 4th quarter of TY 2019 does not tally with the reported "Input Tax Carried Over from Previous Period" in the amount of P16,542,149.83105 for the 1st quarter of TY 2020. The "Input Tax Carried Over from Previous Period" for the 1st quarter of TY 2020 is way higher than the tax overpayment from the 4th quarter ofTY 2019 by P9,520,370.04106, shown as follows: Exhibit No. �P-97" "P-3796" Docket-Val. V, pp. 2636-2637 USB Period Output Tax Due (Line 19B} 4th Quarter l�t Quarter Less: Allowable Input Tax ofTY 2019 ofTY2020 p 667,443.14 p 576,445.77 Input Tax Carried Over from Previous Period (Line I' 7,143,316.02 I" 16 542 149.83 20Aj 56,250.00 56,250.00 Input Tax Deferred on Capital Goods exceeding 16,020 993.31 11,710,066.46 1'1 Million P23 220 559.33 p 28 308 466.29 from Previous Quarter (Line 20B) p - p - Others (Line 20E) Total !Line 20FJ (Sum ofItems 20A 20B and 20EJ 51,756.86 19,930.80 Current Transactions 340,200.29 99 789.35 Purchase of Capital Goods exceeding P1 Million (Line 21D) Domestic Purchases of Goods Other than Capital Goods (Line 21F) Importation of Goods Other than Capital Goods (Line 21Hi Domestic Purchase of Services (Line 21J) 97,699.75 120,086.86 103 With rounding-off difference of PO. 71: Docket. pp. 2451 to 2458. 104 Line 29, Exhibit "P-97", Docket, p. 2637. 105 Line 20A, Exhibit "P-3796", Exhibit "P-129" (USB flash drive). 106 1'16,542, 149.831ess 1'7.021,779.79.

DECISION CTA Case No. 10303 Rema Tip Top Philippines, Inc. vs. Commissioner of Internal Revenue x------------------------------------------------------------------------------------x Services Rendered by Non-residents (Line 21L) - 180,205.71 Others !Line 21 OJ I 638,277.08 1,160,500.00 Total Available Input Tax (Line 22) P24,870 716.23 p 30,366,756.09 {Sum ofItems 20F, 21D, 21F, 21H, 21J, 21L & - - 210) 17 181,493.30 13 348,343.62 Less: Deductions from Inout Tax P17 181,493.30 p 13 348 343.62 PInIpMuitllTioanxdoenfePrruerdchfoarsethseofsuCcacpeietadlinGgopoedrsioedxc(eLeindeing p 7 689 222.93 p 17 018 412.47 23A) 1'17 021 779.791 Pjl6,441 966.701 VAT Refund/TCC claimed [Line 23D) Total (Line 23F) (Sum o.f Items 23A & 23DJ Total Allowable Input Tax (Line 24) (Item 22 lessltem 23FJ Tax Overpayment (Lines 25, 27 & 29) litem 19B less Item 24 The ICPA noted that the amount of VAT refund carried over in the 1st quarter of TY 2020 (Line 20E) pertains to the amount of VAT refund per VAT Return for the 4th quarter ofTY 2018 instead of the amount of VAT refund per VAT Return for the 4th quarter of TY 2019. Petitioner claims that this was their presentation since it will no longer claim for VAT refund the input VAT for zero-rated sales for the TY 2019. 107 Moreover, the ICPA points out that the input tax allocated to zero-rated sales, first presented in Line 20E "Others" of the 1st quarter VAT Return forTY 2019, amounted to P11,710,066.46. This amount consists of P7,275,535.75, which is the amount of input tax allocated to zero-rated sales as of the 4th quarter of TY 2016, and P4,434,530.71, which is the amount of input tax allocated to zero-rated sales for TY 2018 and the subject matter of this Petition.I08 Nevertheless, the Court cannot ascertain whether the discrepancy in the amount of P9,520,370.04 between the tax overpayment ofP7,021,779.79109 for the 4th quarter ofTY 2019 vis-a-vis the "Input Tax Carried Over from Previous Period" of P16,542,149.83110for the 1st quarter ofTY 2020 does not include the claimed amount of P4,434,530.00. Albeit the input VAT claimed amount of P4,434,530.00 formed part of the cumulative figures of both "Others" (Line 20E) and "VAT Refu.nd/TCC claimed" (Line 23D), in the respective amounts of P11,710,066.46 and P13,348,343.62, for the 1st quarter of TY 2020, nonetheless, the "Input Tax Carried Over from Previous Period" of P16,542,149.83III for the 1st quarter of TY 2020 remains excessive. Moreover, even if the input VAT allocated 107 No. 18, Exhibit ''P-120", Docket, p. 2311. 108 No. 19, Exhibit "P-120". Docket. p. 2311. 109 Line 29, Exhibit "P-97", Docket, p. 2637. 110 Line 20A, Exhibit "P-3796", Exhibit "P-129" (USB flash drive). 111 Line 20A, Exhibit "P-3796", Exhibit "P-129" (USB flash drive).

DECISION CTA Case No. 10303 Rema Tip Top Philippines, Inc. vs. Commissioner of Internal Revenue Page 66 of68 x------------------------------------------------------------------------------------x for zero-rated sales for TY 20 19 in the total amount of P5,471,426.85 112 is to be added back to the overpayment of P7,021,779.79 113 for the 4th quarter of TY 2019, the resulting amount of P12,493,206.64 114 is still lower than the actual "Input Tax Carried Over from Previous Period" in the amount of P16,542,149.83 115 for the l�t quarter of TY 2020 by P4,048,943.19.1 16 Hence, the subject claim may still form part of the Pl6,542,149.83 carried over to the l�t quarter of TY 2020 and, consequently, be applied to the output VAT liability in the said quarter and the succeeding taxable quarters. In sum, notwithstanding that out of the total claim of P4,434,530.00, petitioner was able to prove that the amount of P1,017,115.41 represents unutilized input VAT attributable to its zero-rated sales/receipts for the TY 2018, the latter amount cannot be granted since petitioner failed to establish that it was not carried-over nor applied against any output tax in the succeeding quarters. It bears to stress that statutes that grant tax exemptions are construed strictissimi juris against the taxpayer and 117 Tax refunds in liberally in favor of the taxing authority. tax exemptions. 118 relation to the VAT are in the nature of Thus, the taxpayer claiming the tax credit or refund has the burden of proving that he/she is entitled to the refund or credit, in this case, input VAT, by submitting evidence that he/she has complied with the requirements laid down in the Tax Code and the BIR's Revenue Regulations under which such privilege of credit or refund is accorded.1 19 However, in this case, petitioner failed to discharge the said burden fully. WHEREFORE, premises considered, the instant Petition for Review is DENIED for lack of merit. '"Sum ofPI,552,628.32; 1'1,144,348.31; 1'1,613,950.22; and, 1'1,160.500.00; "Others" (Line 210), Exhibits "P-94" to "P-97", Docket, pp. 2630 to 2637. '"Line 29, Exhibit "P-97", Do eke~ p. 2637. '" Sum of1'5,47 I,426.85 and 1'7,02 I, 779.79. '" Line 20A, Exhibit "P-3796", Exhibit "P-I 29" (USB flash drive). "'PI 6,542, I49.83 less PI 2,493,206.64. 117 rnmmissioner nf!nterna! Revenue vs. Seagate Technoln[zy (Philippines.). G.R. No. 153R66. February 11.2005. 118 Panasonic Communication Imaging Corporation of the Philippines (formerly Matsushita Business Machine Corporation ofthe Philippines) vs. Commissioner ofInternal Revenue, G.R. No. 178090, February 08,2010. 119 Microsoft Philippines, Inc. vs. Commissioner ofInternal Revenue, G.R. No. 180173, April 06,2011.

DECISION CTA Case No. 10303 Rema Tip Top Philippines, Inc. vs. Commissioner of Internal Revenue X------------------------------------------------------------------------------------X SO ORDERED. ~dAtA~ LANEE S. cui~DAVID Associate Justice I CONCUR: � ATTESTATION I attest 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. � JEANMA

DECISION CTA Case No. 10303 Rema Tip Top Philippines, Inc. vs. Commissioner of Internal Revenue X------------------------------------------------------------------------------------X CERTIFICATION Pursuant to Section 13, Article VIII of the Constitution, and the Special 2nd Division Chairperson's Attestation, 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. ROMAN G. DEL ROSARIO Presiding Justice