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

II REPUBLIC OF THE PHILIPPINES COURT OF TAX APPEALS Quezon City Third Division REMA TIP TOP PHILIPPINES, INC., CTA CASE NO. 9794 Petitioner, -versus- Members: UY, Chairperson, RINGPIS-LIBAN, and MODESTO-SAN PEDRO,JJ. COMMISSIONER OF INTERNAL Promulgated: REVENUE, JAN 2 4 2022 Respondent. x--------------------------------------------------------- ~---~~- ~~-~-:~--~ ------x DECISION RINGPIS-LIBAN, J. THE CASE The Petition for Review prays that the Court render judgment ordering respondent to refund petitioner the amount of !>1 ,377,618.64, allegedly representing input value added tax (VAT) attributable or properly allocated to zero-rated sales made in the 41h quarter of the taxable year 2015.1 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 N umber (TIN) 008- 042-655-000, with address at Unit 502 Richmonde Plaza, Ortigas, San Miguel Ave., Brgy. San Antonio, Ortigas Center, Pasig.3 ~ 1 Summary of the Case, Pre-Trial Order dated November 5, 2018, Docket- Vol. 3, p. I063 ; and Summary of the Case, Amended Pre-Trial Order dated March 4, 2019, Docket - Vol. 3, p. 13 17. 2 Exhibits " P-1 7'' and " P-17-a", Docket - Vol. 3, pp. 1416 to 1447. 3 Exhibit " P-15", Docket - Vol. 3, p. 1409.

CTA Case No. 9794 Rema Tip Top Philippines, Inc. vs. Commissioner ofInternal Revenue Respondent is the Commissioner of Internal Revenue, who is the officer duly appointed and empowered by law to act on claims for refund or credit, with office address at the S'h Floor, BIR National Office Building, Agham Road, Dillman, Quezon City.4 ANTECEDENTS (ADMINISTRATIVE LEVEL) On December 27, 2017, petitioner filed its Application for Tax Credits I Refunds (BIR Form No. 1914), with Revenue District Office (RDO) No. 43 in the amount of !'1,377,618.64, for the period from October 1, 2015 to December 31, 2015, pursuant to Section 112(A) of the Tax Code.5 Subsequently, on March 2, 2018, petitioner received a Notice of Denialfor VAT Refund I Credit of even date issued by Revenue District Officer Rufo B. Ranario,6 informing petitioner that the claim for refund on input tax allowable on local purchases and importation is denied for failure to comply with some of the requirements listed under Annex "A" of Revenue Memorandum Circular (RMq No. 54-2014: (1) Certified true copy of Audited Financial Statements; (2) Schedule of zero-rated sales with complete details; (3) Certified true copy of import entry and internal revenue declarations duly validated by bank with official receipt (OR); and (4) Certified true copy of Bureau of Customs (BOq receipts. PROCEEDINGS BEFORE THIS COURT Petitioner filed the present Petition for Review on April2, 2018.7 On June 11, 2018, respondent filed his Answer.8 The Pre-Trial Conference was set and held on September 18, 2018.9 Petitioner's Pre-Trial Brief and Respondent's Pre-Trial Brief were both filed on September 17,2018.10 On October 3, 2018, the parties presented their Joint Stipulation of Facts and Issues. 11 The Pre-Trial Order was subsequently issued on November 5, 20181 / 4 Par. 1.01, Joint Stipulation of Facts and Issues (JSFI), Docket- Vol. 3, p. 1044. 'Exhibits "P-1" and "P-1-A", Docket- Vol. 3, p. 1373. 6 Exhibit "P-36", Docket- Vol. 3, p. 1457. 7 Docket- Vol. I, pp. 10 to 38. 8 Docket- Vol. 2, pp. 995 to 999. 9 Notice of Pre- Trial Conference dated June 21, 2018, Docket - Vol. 3, pp. I002 to I003; Minutes of the hearing held on, and Order dated, September 18, 2018, Docket- Vol. 3, pp. I041 and 1043, respectively. 10 Docket- Vol. 3, pp. 1008 to 1035, and 1038 to 1040, respectively. 11 Docket- Vol. 3, pp. 1044to 1057.

CTA Case No. 9794 Rema Tip Top Philippines, Inc. vs. Commissioner ofInternal Revenue Respondent transmitted the BIR Records for this case on November 6, 2018. 13 Petitioner posted a Motion for Correction ofPre-Trial Order on November 12, 2018.14 Respondent failed to file his comment thereon.15 In the Resolution dated February 22, 2019,16 the Court granted the said Motion for Correction and ordered the amendment of the Pre-Trial Order dated November 5, 2018. Thus, the Amended Pre-Trial Order was issued on March 4, 2019.17 During trial, petitioner presented documentary and testimonial evidence. It offered the testimonies of the following individuals, namely: (1) Ms. Jennilyn U. Gaanan,18 a Director, Treasurer, and Chief Financial Officer of petitioner; and (2) Ms. Ma. Theresa Romey Dela Roca,19 the Court-commissioned Independent Certified Public Accountant (ICPA) 20 The !CPA's Report was submitted on February 4, 2019. 21 Petitioner filed its Formal Oj(er of Documentary Exhibits on April 4, 2019.22 Respondent, however, failed to file his comment thereon.23 In the Resolution dated June 26, 2019,24 the Court admitted petitioner's exhibits, except for: (1) Exhibit "P-2", for failure of the document formally offered and identified, to correspond with the document actually marked; and (2) Exhibits "P-8" and "P- 8-1", for failure to present originals for comparison. Petitioner filed its Motion on July 12, 2019/5 praying that the original printout of BIR Payment (BIR Form 0605) for Annual Registration Fee for 2015 of petitioner, attached and marked as "Exhibit P-2" be admitted as evidence for the purposes for which it is being offered. Respondent failed to ftle his comment on the said Motion. 26 In the Resolution dated December 13,,.v" 12 Docket- Vol. 3, pp. 1063 to 1069. 13 Docket- Vol. 3, p. 1078. 14 Docket- Vol. 3, pp. 1086 to 1088. 15 Per Records Verification Report dated January 28, 2019 issued by the Judicial Records Division of this Court, Docket- Vol. 3, p. 1218. 16 Docket- Vol. 3, pp. 1274 to 1275. 17 Docket- Vol. 3, pp. 1317 to 1323. 18 Exhibit "P-41", Docket- Vol. 3, pp. 1128 to 1149; Minutes of the hearing held on, and Order dated, January 24, 2019, Docket- Vol. 3, pp. 1216 to 1217. 19 Exhibit "P-50", Docket- Vol. 3, pp. 1279 to 1307; Minutes of the hearing held on and Order dated, March 5, 2019, Docket- Vol. 3, pp. 1324, and 1326 to 1327, respectively. 20 Oath ofCommission dated December 4, 2018, Docket- Vol. Ill, p. 1113; Minutes of the hearing held on, and Order dated, December 4, 2018, Docket- Vol. Ill, pp. 1112, and 1114 to 1115, respectively. 21 Exhibit "P-42", Docket- Vol. 3, pp. 1220 to 1240. 22 Docket- Vol. 3, pp. 1351 to 1370. 23 Per Records Verification Report dated May 3, 2019 issued by the Judicial Records Division ofthis Court, Docket- Vol. 3, p. 1498. 24 Resolution dated June 26,2019, Docket- Vol. 4, pp. 1501 to 1503. 25 Docket- Vol. 4, pp. 1521 to 1524. 26 Per Records Verification Report dated September 20, 2019 issued by the Judicial Records Division of this Court, Docket- Vol. 4, p. 1543.

CTA Case No. 9794 Rema Tip Top Philippines, Inc. vs. Commissioner ofInternal Revenue 2019,27 the Court granted petitioner's Motion and accordingly admitted Exhibit "P-2". On October 6, 2020, respondent posted a Manifestation/8 whereby his counsel waived the right to present witness in this case, and in line therewith, averred that the case be submitted for resolution. Correspondingly, in its Resolution dated October 13, 2020,29 the Court cancelled the presentation of respondent's evidence, and granted the parties thirty (30) days from notice to file their respective memorandum. Petitioner's Memorandum was posted on December 9, 2020.30 Respondent, however, failed to ftle his memorandum.31 On January 15,2021, this case was deemed submitted for decision.32 THE ISSUES RAISED BY THE PARTIES The parties have agreed that the issues to be resolved by this Court are as follows: "2.01. Whether or not the Honorable Court of Tax Appeals has jurisdiction over the case. 2.02. Whether or not Petitioner is entitled to a refund of Input VAT attributable or properly allocated to zero-rated sales made in the fourth quarter of taxable year 2015 in the aggregate amount of One Million Three Hundred Seventy-Seven Thousand Six Hundred Eighteen and 64/100 Pesos (P1,377,618.64) pursuant to Section 112 of National Internal Revenue Code of 1997."33 Petitioner's arguments: Petitioner argues that it is entitled to a refund of input VAT attributable to zero-rated sales made in the 4'h quarter of taxable year 2015, based on the following grounds: (a) the instant petition was filed within the reglementary period under Section 112(C) of the Tax Code; (b) under Section 106(A)(2)(a)(5) # 27 Docket- Vol. 4, pp. 1545 to 1546. 28 Docket- Vol. 4, pp. 1553 to 1554. 29 Docket- Vol. 4, p. 1557 to 1558. 30 Docket- Vol. 4, pp. 1559 to 1590. 31 Per Records Verification Report dated January 12,2021 issued by the Judicial Records Division of this Court, Docket- Vol. 4, p. 1596. 32 Resolution dated January 15, 2021, Docket- Vol. 4, p. 1598 33 Statement of the Issues, JSFI, Docket- Vol. 3, pp. 1044 to 1045.

CTA Case No. 9794 Rema Tip Top Philippines, Inc. vs. Commissioner ofInternal Revenue of the Tax Code, sales by a VAT-registered taxpayer to enterprises registered with the Philippine Economic Zone Authority (PEZA) or the Board of Investments (BOI) are subject to zero-rated VAT; and (c) petitioner has complied with the requirements for the claim for refund under Section 112(A) of the Tax Code. Additionally, petitioner contends that in any case, the purpose of the submission of the documents is to allow respondent to determine whether it is entitled to a refund; that it is the taxpayer who has the right and the burden of proving any and all documents that would support his claim for tax credit or refund; and that as long as the requisites to be entitled to a tax credit certificate or refund of excess input VAT attributable to zero-rated sales are present, such application should be granted. Respondent's counter-arguments: Respondent counter-argues that there is no valid claim for refund due to the non-submission of complete documents under RMC No. 54-2014, and in the absence of a valid claim for refund, there is nothing for the respondent to act on, and consequently, there is also nothing to appeal before the Court; that the Petition for Review was filed out of time; that assuming m:guendo that there is a valid claim for refund, it is imperative for the petitioner to prove its compliance with the requirements for tax credit/refund of unutilized input VAT under the National Internal Revenue Code (NIRC) of 1997, as amended; that tax refunds are in the nature of tax exemptions and are to be construed strictissimi juris against the entity claiming the exemption; and that petitioner failed to sufficiently prove and demonstrate that the subject tax was erroneously or illegally collected. THE COURT'S RULING Requisites under the law for the refund or issuance of tax credit certificate ofinput VAT Pursuant to the provisions of Section 112(A) and (C) of the National Internal Revenue Code (NIRC) of 1997, as amended by Republic Act (RA) No. 9337 34 jurisprudence has laid down certain requisites which must be complied , with by the taxpayer-applicant to successfully obtain a credit/refund of input VAT. Said requisites are classified into certain categories, to wit: ~ 34 AN ACT AMENDING SECTIONS 27, 28, 34, 106, 107, 108, 109, 110, 111, 112, 113, 114, 116, 117, 119, 121, 148, 151,236,237 AND 288 OF THE NATIONAL INTERNAL REVENUE CODE OF 1997, AS AMENDED, AND FOR OTHER PURPOSES.

CTA Case No. 9794 Rema Tip Top Philippines, Inc. vs. Commissioner ofInternal Revenue As to the timeliness ~(the filing qfthe administrative andjudicial claims: 1. the claim is filed with the BIR within two years after the close of the taxable quarter when the sales were made;35 2. that in case of full or partial denial of the refund claim, or the failure on the part of the Commissioner to act on the said claim within a period of 120 days from the date of submission of complete documents in support of the application, the judicial claim must be filed with this Court, within 30 days from receipt of the decision or after the expiration of the said 120-day period;36 With r~ference to the taxpq_ver's registration with the BIR� 3. the taxpayer is a VAT-registered person;37 In relation to the taxpqJer's output VAT: 4. the taxpayer is engaged in zero-rated or effectively zero-rated sales;38 5. for zero-rated sales under Sections 106(A)(2)(a)(1), (2) and (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;39 As regards the taxpqJer's input VAT being r~funded: 6. the input taxes arc not transitional input taxes;40 7. the input taxes arc due or paid;41 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 direcdy and entirely attributable to any of these sales, the input taxes shall be proportionately allocated on the basis of sales volume;42 a n y 35 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 of Internal Revenue, G.R. No. 182364, August 3, 2010. 36 Steag State Power, Inc. (Formerly State Power Development Corporation) vs.Commissioner ofInternal Revenue, G.R. No. 205282, January 14, 20 19; Rohm Apollo Semiconductor Philippines vs. Commissioner ofinternal Revenue, G.R. No. 168950, January 14,2015. 37 Intel Technology Philippines, Inc. vs. Commissioner of Internal Revenue, supra; San Roque Power Corporation vs. Commissioner of Internal Revenue, supra; and AT&T Communications Services Philippines, Inc., supra. 38 /d. 39 /d. 40 /d. 41 /d. 42 Intel Technology Philippines, Inc. vs. Commissioner of Internal Revenue, supra; and San Roque Power Corporation vs. Commissioner of Internal Revenue, supra.

CrA Case No. 9794 Rema Tip Top Philippines, Inc. vs. Commissioner ofInternal Revenue 9. the input taxes have not been applied against output taxes dun.ng and 1. n the succeedm' g quarters.43� Relative thereto, it must be emphasized that in cases ftled before this Court, which are litigated de novo, party-litigants must prove every minute aspect of their case.44 Thus, it behooves petitioner to show compliance with each of the foregoing requisites. As a corollary, the absence of any of the said requisites is a valid ground to deny the refund claim. Petitioner's administrative and judicial claims were timely filed. The first requisite pertains to the filing of 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 zero-rated sales were made. Thus, petitioner's last day for filing of its administrative claim for the 4'h quarter of 2015 fell on December 31, 2017. Records show that petitioner filed its Application for Tax Credits I Refunds (BIR Form No. 1914) on December 27, 2017.45 Hence, petitioner complied with the said first requisite. The second requisite is to the effect that in case of full or partial denial of the refund claim rendered within a period of one hundred twenty (120) days from the date of submission of the official receipts or invoices and other documents in support of the application, the judicial claim shall be ftled with this Court within thirty (30) days from receipt of the decision. Notably, respondent is deemed to have acted on petitioner's administrative claim within the said one hundred twenty (120)-day period from December 27, 2017 (which should have ended on April 27, 2018), when the BIR, Revenue District Officer Rufo B. Ranario, issued Notice of Denialfor VAT Refund I Credit dated March 2, 2018. Considering that petitioner received the ,..v' 43 Intel Technology Philippines, Inc. vs. Commissioner of Internal Revenue, supra; San Roque Power Corporation vs. Commissioner of Internal Revenue, supra; and AT&T Communications Services Philippines, Inc., supra. 44 Edison (Bataan) Cogeneration Corporation vs. Commissioner of Internal Revenue, etseq., G.R. Nos. 201665 and 201668, August 30, 20 17; Commissioner of Internal Revenue vs. Philippine National Bank, G.R. No. 180290, September 29, 2014; Commissioner of Internal Revenue vs. United Salvage and Towage (?hils.), Inc., G.R. No. 197515, July 2, 2014; Dizon vs. Court of Tax Appeals, eta/., G.R. No. 140944, April 30, 2008; Atlas Consolidated Mining and Development Corporation vs. Commissioner of Internal Revenue, G.R. No. 145526, March 16, 2007; and Commissioner of Internal Revenue vs. Manila Mining Corporation, G.R. No. 153204, August 31, 2005. 45 Exhibits "P-1" and "P�l�A", Docket- Vol. 3, p. 1373.

CTA Case No. 9794 Rema Tip Top Philippines, Inc. vs. Commissioner ofInternal Revenue said Notice on the date it was issued,46 the former had until May 27, 2018, within which to appeal the same. The present Petition for Review was ftled on April 2, 2018.47 Therefore, the Court has jurisdiction over the present case. Petitioneris a VAT-registeredperson. As for its compliance with the third requisite, petitioner has fulfilled the same by presenting its BIR Certificate of Registration No. OCN 3RC0000758904 with TIN 008-042-655-000, indicating that it is liable to VAT, among other taxes. 48 Petitioner had zero-rated sales or effectively zero-rated sales during the 4h quarter of2015. The fourth and fzfth 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), (2) and (b), and 108(B)(1) and (2) of the Tax Code, the acceptable foreign currency exchange proceeds have been duly accounted for in accordance with the Bangko Sentra! ng Pi!ipinas (BSP) rules and regulations. In its amended Quarterly VAT Return49 for the 4'h quarter of 2015, petitioner reported total sales/receipts in the amount of !>18,861,067.96, which included zero-rated sales/receipts in the amount ofP14,548,005.68, as follows: Vatable Sales/Receipts p 4,313,062.28 Zero-Rated Sales/Receipts Total Sales/Receipts 14,548,005.68 p 18,861,067.96 Petitioner claims that the bulk of its reported zero-rated sales is composed of sales to enterprises registered with PEZA and BOI; and the rest thereof are sales made to non-resident foreign corporations (NRFC) in foreign currency, and in exchange for transportation equipment. 5~ 46 Par. 3.09, Petition for Review, Docket- Vol. I, p. 13; Annex "A", Petition for Review, Docket- Vol. I, pp. 30 to 3 I; Q&A Nos. 23 to 26, Exhibit "P-453", Docket- Vol. II, pp. 608 to 609. 47 Docket-Vol. l,pp. 10to38. 48 Exhibit "P-I 5'', Docket- Vol. 3, p. 1409. 49 Exhibit "P-3", Docket- Vol. 3, pp. 1382 to 1383. 50 Refer to No.3 lA, Exhibit "P-50", Docket- Vol. 3, p. 1292.

CTA Case No. 9794 Rema Tip Top Philippines, Inc. vs. Commissioner ofInternal Revenue In her Report, the Court-commissioned ICPA, Ms. Ma. Theresa R. DeJa Roca of Dela Roca & Associates, CPAs, accounted petitioner's total zero-rated sales in the amount of P14,548,005.68, as follows: 1 5 Zero-rated Sales Amount Sales to BOI-registered entity Sales to PEZA-registered entities p 44,855.96 Sales to NRFC 13,792,692.39 52 Net gain on the exchange of a transportation equipment54 Total 170,091.1753 540,366.16 P14,548,005.68 Sales of goods and services to entities registered with PEZA and BOI whose products are 100% exported Petitioner maintains that its sales of goods and services to entitles registered with PEZA and BOI during the 4'h quarter of 2015 are subject to zero percent (0%) VAT, pursuant to Section 106(A)(2)(a)(S) of the NIRC of 1997, as amended. Section 106(A)(2)(a)(S) of the NIRC of1997, as amended, states: "SEC. 106. Value-Added Tax on Sale ofGoods or Properties.- (A) Rate and Base ofTax.- 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 51 Table IX of No. 14, Exhibit "P-42", Docket- Vol. 3, p. 1233. 52 Coral Bay Nickel Corporation I' 920,197.48 Taganito HPAL Nickel Corporation 12,872,494.91 Total sales to PEZA-re2istered entities 1'13,792,692.39 53 1'122,008.10 Evonik Methionine Sea Pty Ltd 3,100.35 Tip Top Japan, Inc. Veolia Water TechnoJoaies Deutschland 44,982.72 Total sales to NRFC P170,091.17 54 No. 17, Exhibit "P-42", Docket- Vol. 3, p. 1234. /V'

CTA Case No. 9794 Rema Tip Top Philippines, Inc. vs. Commissioner ofInternal Revenue (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 (c) 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." (Boldfming supplied) Relative thereto, the applicable provision of law on petitioner's sale of services to PEZA registered entities is Section 108(B) (3) of the NIRC of 1997, as amended, which provides as follows: "SEC. 108. Value-added Tax on Sale ofServices and Use or Lease ofProperties. - (A) Rate and Base ofTax.- xxx XXX XXX XXX (B) Transactions Subjed 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) Relative thereto, Sections 4.106-5(a)(5) and 4.108-5(b)(3) of Revenue Regulations (RR) No. 16-2005, as amended by RR No. 4-2007, also provide: - "SEC. 4.106-5. Zero-Rated Sales ofGoods or ProDerties. -XXX The following sales by VAT-registered persons shall be subject to zero percent (0%) rate: (a) Export sales.- 'Export Sales' shall mean: XXX XXX XX~

CTA Case No. 9794 Rema Tip Top Philippines, Inc. vs. Commissioner ofInternal Revenue (5) 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, fitrther, That pursuant to EO 226 and other special laws, even without actual exportation, the following shall be considered constructively exported: (1) sales to bonded manufacturing warehouses of export-oriented manufacturers; (2) sales to export processing zones pursuant to Republic Act (RAJ Nos. 7916, as amended, 7903, 7922 and other similar export processing zones; (3) sale to enteprises du!J registered and accredited with the Subic Bqy Metropolitan Authority pursuant to RA 7227; (4) 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); (5) 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% exported are considered export sales. A certification to 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 (c) Sales to Persons or Entities Deemed Tax-exempt under Special Law or International Agreement" - Sales of goods or property to 1'11'

CTA Case No. 9794 Rema Tip Top Philippines, Inc. vs. Commissioner ofInternal Revenue persons or entities who are tax-exempt under special laws, e.g. sales to enterprises duly registered and accredited with the Subic Bay Metropolitan Authority (SBMA) pursuant to R.A. No. 7227, sales to enterprises duly registered and accredited with the Philippine Economic Zone Authority (PEZA) or international agreements to which the Philippines is signatory, such as, Asian Development Bank (ADB), International Rice Research Institute (IRRI), etc., shall be effectively subject to VAT at zero-rate." (Emphases added) "SEC. 4.108-5. Zero-Rated Sale ofServices.- XXX XXX XXX (b) Transactions Subject to Zero Percent (0%) VAT 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;" (Bol4facing supplied) One of the special laws mentioned in the above proVlS!On, which specifically applies to this case, is RA No. 7916, as amended by RA No. 8748, otherwise known as "The Special Economic Zone Act of 1995". Sections 8 and 24 thereof respectively provide as follows: "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. 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." (Emphases supplied) "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 busines/

CTA Case No. 9794 Rema Tip Top Philippine~ Inc. vs. Commissioner ofInternal Revenue establishments operating within the ECOZONE. , XXX. (Emphases 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 exports to a foreign country subject to 0% VAT. This was elucidated by the Supreme Court in the case of Commissioner ofInternal Revenue vs. Toshiba Information Equipment (Phils.), Inc.,55 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. 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. rl 55 G.R. No. 150154, August 9, 2005.

CTA Case No. 9794 Rema Tip Top Philippines, Inc. vs. Commissioner ofInternal Revenue 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.56 (Emphases added) On the other hand, pursuant to Revenue Memorandum Order (RMO) No. 9-2000,57 sales of goods, properties or services made by a VAT-registered supplier to a BOI 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, vir: "SECTION.3. Sales of goods, properties or services made lry a VAT registered supplier to a BOI registered exporter shall be accorded automatic zero-rating, i.e., without necessity of app!Jing for and securing approval ofthe application for zero-rating as provided in Revenue Regulations No.l-95, sttbjert to the following amditions: (1) The supplier must be VAT-registered; (2) The BOT-registered buyer must likewise be VAT- registered; (3) The buyer must be a BOT-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 HOI-registered buyer shall furnish each of its suppliers with a copy of the aforementioned BOI Certification which shall serve as authority for the supplier to avail of the benefits of zero-rating for its sales to said HOI-registered buyers; and /Y 56 Now at I2% VAT rate. 57 SUBJECT: Tax Treatment of Sales of Goods, Properties and Services Made by VAT-registered Suppliers to SOl-registered Manufacturers-Exporters With 100% Export Sales.

CTA Case No. 9794 Rema Tip Top Philippine~ Inc. vs. Commissioner ofInternal Revenue (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 added) 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 108(B)(3) of the NIRC of 1997, as amended, and as implemented by Sections 4.1 06-5(a) (5) and 4.108-5 of RR No. 16-2005, as amended. A. Sales to HOI-registered entity. Petitioner avers that its sales to FCF Minerals Corp., an enterprise registered with the BOI and whose products are 100% exported are subject to 0% VAT, pursuant to Section 106(A)(2)(a)(5) of the NIRC of 1997, as amended, in relation with Section 4.106-5 of RR No. 16-2005 and Section 3 of RMO No. 9-2000. As extracted from petitioner's Schedule of Sales,58 the zero-rated sales in the amount of 1'44,855.96, as detailed below, pertains to its sales of goods to FCF Minerals Corp.: Sales Invoice (SI) Customer Name No. Date Amount Exhibit FCF Minerals Corp. p 38,308.00 "P-953" FCF Minerals Corp. 1022 November 2, 2015 "P-964" 6,547.96 Total 1040 December 1, 2015 P44,855.96 However, as ascertained by the ICPA, the petitioner was unable to secure an original copy or a certified true copy but obtained only a photocopy of the BOI Certification59 for FCF Minerals Corp. as support for zero-rating.60 Examination of petitioner's formally offered exhibits disclosed that the same was among those denied61 admission by the Court through Resolution62 dated June 26, 2019./ "Annex A, Exhibit "P-42-2", Docket- Vol. 3, pp. 1466 to 1467. 59 Exhibits "P-8" to "P-8-1 ", Docket- Vol. 3, pp. 1395 to 1397; "P-906" to "P-906-B". 60 No. 13, Exhibit "P-42", Docket- Vol. 3, p. 1233. 61 Exhibits "P-8" to "P-8-1 ", Docket- Vol. 3, pp. 1395 to 1397. 62 Par. 2, Docket- Vol. 4, pp. 1501-1503.

CTA Case No. 9794 Rema Tip Top Philippines, Inc. vs. Commissioner ofInternal Revenue Moreover, further perusal of the denied BOI Certificate shows that the exported sales of FCF Minerals Corp. pertains to its sales for the year 2014 which was prior to the period of claim despite its validity for the year 2015.63 Hence, the whole amount of P44,855.96 pertaining to its sales without BOI Certification to the effect that FCF Minerals Corp. is a BOT-registered entity whose products are 100% exported for the 4'h quarter of 2015, 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 4'h quarter of 2015, with the corresponding proof of VAT zero-rating: Name of Client ProofofVAT Exhibit64 Certification zero-rating "P-9", "P-9-A", Period Coral Bay Nickel Corporation (CBNC) Certificate No. and "P-9-B" for the year 2015 Taganito HPAL Nickel 2015-1214 Corporation (THPAL) ((P-1 0" for the year 2015 Certificate No. 2015-0414 Accordingly, petitioner's sales to the aforementioned entities for the 4'h quarter of 2015 qualify for VAT zero-rating pursuant to Sections 106(A)(2)(a)(5) and 108(B)(3) of the NIRC of 1997, as amended, provided that the same are properly supported by VAT zero-rated Sis [for sales of goodsJ 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. Invoiling and Accounting Requirements for VAT- registered Persom. - (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. ~ 63 Exhibits "P-8-1 ",Docket- Vol. 3, pp. 1396 to 1397; "P-906-A" to "P-906-B". 64 Docket- Vol. 3, pp. 1398 to 1402.

CTA Case No. 9794 Rema Tip Top Philippines, Inc. vs. Commissioner ofInternal Revenue (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 prominendy 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 prominendy 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. (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." The foregoing provisions are further implemented by Section 4.113-1 (A) and (B) of RR No. 16-2005, as amended, which are all quoted hereunder: "SEC. 4.113-1. Invoicing Requirements. /

CTA Case No. 9794 Rema Tip Top Philippines, Inc. vs. Commissioner ofInternal Revenue (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 rontained 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 is 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; (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 ,.#

CTA Case No. 9794 Rema Tip Top Philippines, Inc. vs. Commissioner ofInternal Revenue 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 (P1,000.00) 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, viz: "SEC. 237. lJsuance 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 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 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 law and regulations, petitioner submitted various Sis in support of its zero-rated sales to PEZA-registered entities, which were duly examined by the ICPA, extracted and summarized from petitioner's Schedule of Sales,65 as followsjv' 65 Annex A, Exhibit "P-42-2", Docket- Vol. 3, pp. 1466 to 1467.

CfA Case No. 9794 Rema Tip Top Philippines, Inc. vs. Commissioner ofInternal Revenue Name of Customer No. SI Amount Exhibit Coral Bay Nickel 0900 Corporation 0907 Date I' 400,000.00 "P-934" Coral Bay Nickel 1002 October 12, Corporation 1003 27,890.80 "P-940" Coral Bay Nickel 1013 2015 Corporation 1039 October 21, 37,029.30 "P-941" Coral Bay Nickel 1050 Corporation 1052 2015 24,045.00 "P-942" Coral Bay Nickel 0825 October 26, Corporation 0848 184,368.00 "P-946" Coral Bay Nickel 0850 2015 Corporation 0875 October 26, 102,111.10 "P-963" Coral Bay Nickel 0884 Corporation 0891 2015 44,625.28 "P-973" Coral Bay Nickel 0892 to October 29, Corporation 0895 100,128.00 "P-974" Taganito Hpal Nickel 1030 2015 Corporation BS 0008 December 1, 840,000.00 "P-912" Taganito Hpal Nickel Corporation 2015 1,538,311.93 "P-913" Taganito Hpal Nickel December 18, Corporation 1,150,000.00 "P-914" Taganito Hpal Nickel 2015 Corporation December 19, 1,477,292.73 "P-918" Taganito Hpal Nickel Corporation 2015 1,352,376.25 "P-924" Taganito Hpal Nickel Corporation Aug~ust 28, 2015 814,514.00 "P-929" Taganito Hpal Nickel September 14, 3,212,318.00 "P-930" to Corporation "P-930-C" Taganito Hpal Nickel 2015 Corporation September 14, 587,682.00 "P-956" Taganito Hpal Nickel Corporation 2015 1,900,000.00 "P-975" October 12, P13, 792,692.39 TOTAL - 2015 October 19, 2015 October 15, 2015 October 13, 2015 November 23, 2015 November 5, 2015 Upon examination of the submitted sales invoices in support of petitioner's sales of goods and services to PEZA-registered entities, the amount of P11,470,298.91, as detailed below, shall be denied VAT zero-rating due to the following reasons: Name of Customer No. SI Amount Exhibit Date Sales ofservices not supported bv VAT OR; SI dated ryriorto period ofclaim Taganito Hpal Nickel Corporation 0825 August 28, 2015 I' 840,000.00 "P-912" "P-913" Taganito Hpal Nickel September 14, "P-914" Corporation 0848 2015 1,538,311.93 Taganito Hpal Nickel September 14, Corpora cion 0850 2015 1,150,000.00 Sale of;roods/services supported b unreadable Sis Taganito Hpal Nickel "P-930" to 3,212,318.00 "P-930 C" Corporation 0892-0895 October 13, 2015 Sale ofservices not supported by VAT OR /V il

CTA Case No. 9794 Rema Tip Top Philippines, Inc. vs. Commissioner ofInternal Revenue Taganito Hpal Nickel Corporation 0875 October 12, 2015 1,477,292.73 "P-918" "P-924" Taganito Hpal Nickel 1,352,376.25 "P-975" Corporation 0884 October 19,2015 1,900,000.00 P11,470,298.91 Taganito Hpal Nickel November 5, Corporation BS 0008 2015 Total Zero-rated Sales Not Properly Substantiated Thus, out of the zero-rated sales to PEZA-registered entities in the total amount of P13,792,692.39, only the amount of P2,322,393.48,66 qualify for VAT zero-rating pursuant to Section 106(A)(2)(a)(S) of the 1997 NIRC, in relation to Sec. 4.106-S(c) ofRR No. 16-2005. C. Sales to NRFC. Petitioner states that for sales to NRFC, one of the requirements to qualify as zero-rated sale is that the payments by or collections from these NRFC pertaining to the sale should be made in foreign currency.67 Pertinent to the determination of whether the sale of services to 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 ofServices and Use or Lease of Properties.- 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 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);" 66 1'13,792,692.39 less 1'11,470,298.91. 67 No. 15, Exhibit "P-42", Docket- Vol. 3, p. 1233.

CTA Case No. 9794 Rema Tip Top Philippines, Inc. vs. Commissioner ofInternal Revenue Based on the foregoing provision, certain essential elements must be present in order for a sale or supply of services to be subject to VAT rate of 0% under Section 1OS(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;68 2. The services fall under any of the categories under Section 108(B)(2),69 or simply, the services rendered should be other than "processing, manufacturing or repacking goods"/0 3. The services must be performed in the Philippines71 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.72 Relative to the .first essential element, to prove that its clients are NRFC for purposes of VAT zero-rating under Section 1OS(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 business in the Philippines. To be sure, there must be sufficient proof of both of these requirements to establish that the clients are foreign corporations AND are not doing business in the Philippinesn 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.74 68 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 ofInternal Revenue, G.R. No. 190102, July 11,2012. 69 Commissioner of Internal Revenue vs. American Express International, Inc. (Philippine Branch), G.R. No. 152609, June 29, 2005. 7� Commissioner of Internal Revenue vs. Burmeister and Wain Scandinavian Contractor Mindanao, Inc., supra. 71 Commissioner of Internal Revenue vs. Burmeister and Wain Scandinavian Contractor Mindanao, Inc., supra; Commissioner C!f Internal Revenue vs. American Express International, Inc. (Philippine Branch), supra. 72 Commissioner of Internal Revenue vs. Burmeister and Wain Scandinavian Contractor Mindanao, Inc., supra; Commissioner ~f Internal Revenue vs. American Express International, Inc. (Philippine Branch), supra. 73 Commissioner of Internal Revenue vs. Deutsche Knowledge Services Pte. Ltd., G.R. No. 234445, July 15, 2020. 74 !d.

CTA Case No. 9794 Rema Tip Top Philippines, Inc. vs. Commissioner ofInternal Revenue 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) conditions necessary to establish the NRFC status of a client. Upon review of the records, it is shown that petitioner failed to present the two (2) required documents to prove the NRFC status of its foreign clients. Thus, petitioner failed to comply with the first essential element. With regard to 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 are not in the same category as "processing, mantifacturing or repacking rf goods". 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, peuuoner presented bank statements from HSBC, payment advice and an emaif5 purportedly showing the foreign currency remittances of its clients to petitioner. Section 113(A)(2), (B)(1), (2)(c) and (3) of the NIRC of 1997, as amended, as implemented by Section 4.113-1 (A)(2), (B)(1) and (2)(c) of RR No. 16-2005, provides that a VAT taxpayer, like herein petitioner, shall for every lease of goods or properties and for every sale, barter or exchange of services, issue BIR-registered VAT official receipt. Pursuant thereto, the foreign currency payments referred to under Section 1OS(B) (2) of the NIRC of 1997, as amended, must be supported by BIR-registered VAT zero-rated official receipts. In the instant case, the alleged sales of services to NRFC were either supported by VAT zero-rated OR, but dated outside the period of claim, or not supported by VAT zero-rated ORs in violation with Section 113(A)(2) of the NIRC of 1997, as amended, in relation to Section 4.113-1(A)(2) of RR No. 16- 2005. As such, it cannot be verified whether the purported foreign currency remittances actually pertain to the alleged zero-rated sales of services. Thus, petitioner, likewise, failed to comply with the fourth essential element that the ~ 75 Exhibits "P-I 085" to "P-I 087".

CTA Case No. 9794 Rema Tip Top Philippines, Inc. vs. Commissioner ofInternal Revenue services were paid in acceptable foreign currency and accounted for 1n accordance with the rules and regulations of the BSP. Considering the foregoing, petitioner fell short of establishing that the amount of 1'170,091.17 declared sales of services to NRFC76 for the 4'h quarter of 2015, as detailed below, qualify for VAT zero-rating under Section 108(B)(2) of the NIRC of 1997, as amended: Name of Customer Reference Date Amount Exhibit Evonik Methionine Sea Pty Ltd. Sl No. 0883 October 13, 2015 I' 122,008.10 "P-923" Tip Top Japan Inc. SINo. 1038 December 1, 2015 "P-962" Veolia Water Technologies Deutschland OR No. 1012 January 18,2016 3,100.35 "P-977" 44,982.72 TOTAL 1'170,091.17 D. Net gain on the exchange of a transportadon equipment The ICPA's verification disclosed that the alleged zero-rated sale in the amount of 1'540,366.16 pertains to the net gain on the exchange of a transportation equipment with Mr. Joseph Antonio Tomas Cruz77 As correctly pointed out by the ICPA, the nature of the sale or exchange transaction in the amount of 1'540,366.16 does not qualify as a zero-rated sale.78 In sum, out of the total reported zero-rated sales ofP14,548,005.68, only the sales of goods to PEZA-registered entities in the amount of 1'2,322,393.48, as computed below, qualify for VAT zero-rating for the 4'h quarter of taxable year 2015: Zero�rated Sales Per Return Disallowance Valid Zero-Rated Sales Sales to BOI-registered entity I' 44,855.96 I' 44,855.96 13,792,692.39 11,470,298.91 I' . Sales to PEZ.-\-registered entities 170,091.17 170,091.17 2,322,393.48 - Sales to NRFC 540,366.16 1'14,548,005.68 Net gain on the exchange of a transportation equipment 540,366.16 - P12,225,612.20 Total --�� - P2,322,393.48 - Thus, for purposes of the fourth requisite, the Court finds that petitioner had VAT zero-rated sales, but only in the said amount of 1'2,322,393.48 for the 4'h quarter of taxable year 2015j/ 76 Table IX of No. !4, Exhibit "P-42", Docket- Vol. 3, p. 1233. 77 No. 17, Exhibit "P-42", Docket- Vol. 3, p. 1234; Exhibits "P-978" to "P-978-C". 78 No. 18, Exhibit "P-42", Docket- Vol. 3, p. 1234.

CTA Case No. 9794 Rema Tip Top Philippines, Inc. vs. Commissioner ofInternal Revenue 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)(1), (2) and (b), and 108(B)(1) and (2), all of the NIRC of 1997, as amended, since the legal basis for petitioner's zero-rated sales of 1'2,322,393.48 is Section 106(A)(2)(a)(S) 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 services qualify for VAT zero-rating under Section 108(B)(2) of the NIRC of 1997, as amended. Having found that petitioner had valid zero-rated sales on!J in the total amount of 1'2,322,393.48 for the subject period of claim, the Court shall proceed to determine whether petitioner complied with the following remaining requisites: a. sixth requisite: the input taxes are not transitional input taxes; 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. The input VAT being claimed do not appear to be transitionalinput taxes The claimed input taxes do not appear to be transitional input taxes, as understood under Section 111 (A) of the NIRC of 1997, as amended, to wit: "SEC.111. 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, ~

CfA Case No. 9794 Rema Tip Top Philippines, Inc. vs. Commissioner ofInternal Revenue materials and supplies, whichever is higher, which shall be creditable against the output tax." Transitional input tax credit operates to benefit newly VAT-registered persons, whether or not they previously paid taxes in the acquisitions of their beginning inventory of goods, materials and supplies. During the period of transition from non-VAT to VAT status, the transitional input tax credit serves to alleviate the impact of the VAT on the taxpayer.79 Since there is no showing that the claimed input taxes are transitional input taxes, petitioner has complied with the sixth requisite for the grant of an input VAT refund. Not ail ofthe input VAT being claimed are due orpaid. The seventh requisite for the successful prosecution of an input VAT refund claim is to the effect that the input VAT being refunded should be due or paid. The fulftllment of this requisite is fully dependent on the compliance with the invoicing and substantiation requirements under the law, as earlier quoted. Petitioner submitted various invoices, ORs and importation documents80 to support the payment of input taxes. Said documents were examined by the ICPA in order to verify petitioner's compliance with the said substantiation and invoicing requirements. For the 4'h quarter of taxable year 2015, petitioner claims a total amount of P1,574,758.55 allowable input VAT arising from its domestic purchases and importation of goods other than capital goods, and domestic purchases of services. Summarized below are petitioner's domestic purchases and importation of goods other than capital goods and domestic purchases of services in the total amount of P13,122,987.83, and the corresponding input taxes, for the 4'h quarter of taxable year 2015 in the total amount of P1 ,574,758.55: Amount of Amount of I Purchases and Input VAT Importations p 10,604.84 I Domestic Purchases of Goods Other p 88,373.65 105,908.30 than Capital Goods (Line 21E/F) Importation of Goods Other than 882,569.15 y 80,626.77_ Capital Goods (Line 21 G /H) Domestic Purchase of Services 671,889.72 (Line 21I/J) 79 Fort Bonifacio Development Corporation vs. Commissioner of Internal Revenue, G.R. Nos. 158885 and 170680, April 2, 2008. 80 Exhibits "P-I 00" to "P-880" and submarkings.

CTA Case No. 9794 Rema Tip Top Philippines, Inc. vs. Commissioner ofInternal Revenue Others (Line 21 N/0) 11,480,155.31 1,377,618.6481 Total P13,122,987.83 P1,574,758.55 Petitioner claims that out of the total domestic purchases and importation of goods other than capital goods, and domestic purchases of services in the total amount of :P13,122,987.83, with corresponding input VAT in the amount of :P1,574,758.55, domestic purchases and importations as reflected in "Others (Line 21 N/0)" of the Quarterly VAT Return for the 4'h quarter of taxable year 2015 in the total amount of :P11,480,155.31, with corresponding input VAT amount of :P1,377,618.64 should be granted for refund. Domestic purchases and importation of goods other than capital goods, and domestic purchase of services in the total amount of :P11,480,155.31, with corresponding input VAT of :P1,377,618.64 as reported in "Others (Line 21 N/0)" in the Quarterly VAT Return for the 4'h quarter of taxable year 2015 was determined by petitioner82 to be composed of purchases directly attributable to zero-rated sales, and purchases allocable to zero-rated sales, as follows: 4�� Quarter of 2015 Purchases Input VAT Allocated to Zero-Rated Sales 1."11,244,780.48 1."1,349,373.66 Directly Attributable to Zero-Rated Sales Total attributable or allocated to Zero- 235,374.83 28,244.98 Rated Sales 1."11,480,155.31 1."1,377 ,618.64 However, upon verification by the Court, it is found that petitioner failed to prove that certain domestic purchases and importation of goods other than capital goods, and domestic purchase of services in the total amount of :P235,374.83, with corresponding input VAT amount of :P28,244.98, were "direct!J attributable" to zero-rated sales made during the 4'h quarter of taxable year 2015. Thus, the Court is constrained to consider the whole amount of :P13,122,987.83 as petitioner's total domestic purchases and importation of goods other than capital goods, and domestic purchase of services, with corresponding input VAT amount of :P1,574,758.55, subject to proportional allocation between VATable, VAT-exempt and VAT zero-rated sales pursuant to Section 112(A) of the NIRC of 1997, as amended, as will be determined momentarily. Of the total amount of :P1,574,758.55 input VAT arising from domestic purchases and importation of goods other than capital goods, and domestic purchases of services subject to allocation, the ICPA was only able to vouch input VAT in the amount of :P1,556,546. 94, as shown belowjv" 81 No figures reported in the Quarterly VAT Return for the 4'h quarter of TY 2015. Amounts were computed by the undersigned. 82 Paragraphs 17 and 18, Petition for Review, Docket- Vol. I, pp. 18 to 19.

CTA Case No. 9794 Rema Tip Top Philippines, Inc. vs. Commissioner ofInternal Revenue Input VAT on vouched purchases I" 375,410.9483 ln__Q]Jt VAT on importations 1,181,136.0084 Total vouched input VAT on purchases and importations by the !CPA Less: Reported input VAT on domestic purchases and importations 1"1,556,546.94 Unaccounted input VAT 1,574,758.55 I" 18,211.61 Therefore, the unaccounted input VAT amounting to P18,211.61, which were not supported with VAT ORs or invoices, shall be disallowed for failure to substantiate the same. As per ICPA's Schedules of Vouched Purchases85 and Importations86, out of the P1,556,546.94 total vouched purchases and importations, the input VAT in the amount of P33,546.05 shall be disallowed for failure to meet the invoicing 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, summarized by the Court as follows: Exhibit 87 Payee Amount of Amount Date Purchases/ of Importations input VAT I. Input VAT on domestic Purchases of Goods and Services I 1. Supported by out ofperiod OR, collection receipts, cash slip or service invoice "P-728" 09/23/2015 KIMLY MERCHANDISING p 223.25 p 26.79 "P-729" METRO SURIGAO SHOPPING 6,014.00 721.68 09/26/2015 CENTER "P-246" 09/30/2015 K1MLY MliRCIL\NDISING 107.17 12.86 1.28 "P-256" 09/28/2015 PI JILIPPINI�: PORTS AUTI IOR!lY 10.67 2,413.04 "P-103" 07/18/2015 GAC PI IILJPPINI�:S INC 20,108.67 I' 3,175.65 Subtotal 1'26,463. 76 2. Supported by undated Sis or parking ticket "P-798" NO DATI�: S,\NI'ORD M.\RKI'.'l'INC p 442.42 p 53.09 C!JitP<liL\TION 8.92 "P-358" NO DATE KI~!III�:I�: RE,\I."IY CORPORATION 8.92 1.07 "P-370" NO Di\TE KIMIJJ�:I�: Rl�:.ll."IY CORI'OR,\TION 66.09 1.07 "P-87t"HH NO DATE I'ETRON 8.92 7.93 435.75 1.07 "P-458" NO DAm CEHU PORT AUTHORITY I' 971.02 52.29 I' 116.52 "P-371" NO DA'J'J�: COODHOPE I IARDWARE Subtotal 3. Supported by documents other than S/ or OR "P-632" 10/26/2015 RN G!ISOI.INI�: SERVICE STATION p 133.92 p 16.07 "P-287" 10/08/2015 TETRt\ SAI.I�:S ,\ND SERVICES INC 17,155.83 2,058.70 "P-320" 10/10/2015 1'1 Ill. SP,\N ,\SL\ C\RRJI-:R CORP 514.17 61.70 "P-247" 10/06/2015 KIMI.Y MI-:RC:IIANDISING 2,227.67 267.32 83 Total "AMOUNT OF INPUT" Column, Annex C, Exhibit "P-42-4", Docket~ Vol. 3, p. 1477. /1 84 Total "INPUT VAT AMOUNT" Column, Annex D, Exhibit "P-42-5", Docket~ Vol. 3, p. 1478. 85 Annex C, Exhibit "P-42-4", Docket~ Vol. 3, pp. 1471 to 1477. 86 Annex D, Exhibit "P-42-5", Docket~ Vol. 3, p. 1478. 87 Expressed in month/day/year. 88 Actual exhibit pertains to a different transaction.

CTA Case No. 9794 Rema Tip Top Philippines, Inc. vs. Commissioner ofInternal Revenue "P-321" 10/02/2015 i\fi_..:TRO SURJ(Jr\0 SHOPPING 7,910.92 949.31 10/03/2015 CI'.NTER INC "P-857" to 2,043.16 245.18 "P-857-C" SMART COM~!UNIC:.\T10NS INC "P-858" to 4,807.00 576.84 "P-858-1 I" 10/03/2015 SMART COMMUNIC\'J'JONS INC "P-869" to 4,978.33 597.40 "P-869-C" 10/03/2015 SMART COMMUNICATIONS INC "P-860" to 1,071.43 128.57 "P-860-H" 10/03/2015 SMART COMMUNICATIONS INC 1,325.58 159.07 11/20/2015 1,660.75 199.29 "P-61 t" 11/05/2015 D' MOTORISTS PITSTOP, INC. 11/18/2015 D MICIJAEL CO INDUSTRIM. 67.83 8.14 "P-619" 11/23/2015 SUPPLY CORP. 1,607.17 192.86 11/12/2015 ZEUGINY ENTERPRISES INC 30,288.58 3,634.63 "P-851" 11/02/2015 DIDIPIO COMMUNITY 4,464.29 535.71 DIO:V/�:J.OPi\fEN'J' CORPORATION "P-510" PLDT 714.29 85.71 1,718.60 206.23 "P-854" SMART C()~vfMUNICr\TJC)NS INC 4,978.33 597.40 "P-861 '' to 4,945.98 593.52 "P-861-C" 11/02/2015 SMART COMMUNICATIONS INC 4,464.29 535.71 "P-862" to 1,228.42 147.41 "P-862-H" 11/02/2015 SMclltT COMMUN!CJ\'J'JONS INC 1"98,306.54 1"11,796.77 11/02/2015 SMART COMMUNJC,\TJONS INC "P-863" 11/02/2015 SM,\RT COMMUNICATIONS INC "P-864" 11/02/2015 SMART COMMUNICATIONS INC "P-865" 12/01/2015 RN GASOLINE SERVICE STATION "P-866" "P-612" Subtotal 4. Supported by SI with stamped "This document is not valid for claiming input taxes." "P-211" 10/06/2015 ISJDR,\ C. OTAILI I' 223.25 I' 26.79 12.21 "P-537" 11/16/2015 c:c; & 1�: Sl 11�:1.1. SI�:I.I�:C'I' 101.75 CONVI�:NJL\NCl�: STOJU�: f> 39.00 Subtotal f> 325.00 5. Supported by photocopy documents only "P-172"/ MI�TRO SURIGACJ SIJOI'I'ING I' 5,970.33 I' 716.44 "P-172-.\" 10/23/2015 CI-:N'l'l-:rt INC 2,592.83 311.14 8,660.49 "P-606" 11/16/2015 TOYOTA Sllc\W INC 1,039.26 584.83 "1'-669"/ 11/20/2015 METRO SURIC:ACJ SIJOPPINC: 70.18 "1'-669-,\" CENTI'.R, INC. 8,266.67 992.00 "P-680" 11/05/2015 METRO SURIC:ACJ Sl lOPPING 6,051.75 CI�:NTFR, INC. 12,053.58 726.21 1,446.43 "1'-681 "/ Mi;'J'RO SURJG,\0 SI-JOPI'ING 6,612.92 "P-681-A" 11/05/2015 CENTER, INC. 793.55 6,702.17 "1'-693"/ 11/13/2015 MF:J'l\0 SUR!Gi\0 SIJOI'PING 804.26 "P-693-l\" CENTI�:J\, INC. 7,150.33 780.00 858.04 "P-694" 11/04/2015 'J'I IE BELLI\VUfi MriNJLA 93.60 40,000.00 "P-342"/ 12/12/2015 METRO SURJC:ACJ SIIOI'I'ING 1"105,425.90 4,800.00 "P-342-,-\" CI�:N'I'fo:R f>12,65U1 "P-351 "/ 12/18/2015 MI�:'J'RO SURIGACJ SHOPPING "P-351-,\" 12/04/2015 n:N'J'I-:rt "P-350" I METRO SURJC;,\0 SIIOI'I'INC C:EN'J'I�:J\ "P-350-,\" "P-469" 12/05/2015 TCJYO'L\ ~L\N[),\LJI�: "P-474" 12/18/2015 UY & DE c;U/,lVLIN LAW OFFICI>: Subtotal 6. VAT-exempt transactions "P-631" 10/23/2015 CCG GRAI'I IIC J)I�:SJGN STUDIO I' 55.00 I' "P-766" 10/19/2015 TOP SPRING I'URIFIICD 200.00 - DRINKJNC; W;\'I'I'.R & Dl'l' "P-792" 10/22/2015 s1mv1n:s 400.00 'J'OI' SPRING I'URII'JI.;]) DRINKING Wii'J'ER & DIS'!' SERVICfo:S ~

CTA Case No. 9794 Rema Tip Top Philippines, Inc. vs. Commissioner ofInternal Revenue "P-296" 10/21/2015 SAGUISr\'S EATERY 120.00 - ''P-120" 10/17/2015 SURIGAO lllCKSMITII "P-212" 10/15/2015 INQUIRER PUHLIC\'J'IONS INC 80.00 "P-161" 10/02/2015 "P-165" 10/23/2015 KIMPIT DEPO IC!i AND WATER 488.00 "P-563" 11/04/2015 STATION 70.00 "P-569" 11/04/2015 JJK STORE MS i'OOD G,\LLERY 135.00 "P-638" 11/09/2015 TOP SPRING PURIFIED DRINKING WATER & DIST 90.00 - "P-587" 11/26/2015 SERVICES TOP SPRINC PURII'IED 400.00 "P-553" 11/16/2015 DRINKINCi WA'J'I-:R & DIST "P-507" 11/17/2015 SERVICES 235.00 TOP SPRIN(; PURII'II<Jl "P-658" 11/21/2015 DRINKINC WATER & DIS'!' 170.00 - SERVICJ<:S "P-540" 11/20/2015 LUCKY G.MA ENTERPRISE 125.00 - "P-521" 11/21/2015 JIIESS ,\ND KIL\TE "P-665" 11/24/2015 1-:J.EC'J'RON!CS REP,\IR SfiOP 140.00 - "P-675" 11/13/2015 COODWILL SUBDIVISION 3 100.00 - "P-708" 11/13/2015 JIOMI�:OWN!-:R'S .\SSOCIATION, INC. 2,289.00 - "P-401" 12/31/2015 "P-4..J-8" 12/13/2015 Kc\IL HUGO CAI'I'. HOIIEMIAN 450.00 - "P-334" 12/19/2015 ASic\LINK ,\LJTO SUPPLY "P-338" 12/12/2015 Ti\GANITO HAKEilAUZ & 275.00 - "P-344" 12/18/2015 GENERAL MERCHANDISE "P-347" 12/08/2015 205.00 - MS FOOD GAJJ.I-:RY "P-354" 12/04/2015 70.00 - GOODWILL SUHDJ\'IS!ON 3 "P-424" 12/01/2015 HOMEOWNER'S ASSOCIATION, 350.00 "P-475" 12/01/2015 INC:. "P-425" 12/03/2015 6,000.00 "P-365" 12/07/2015 SJ�:HY'S I�:NTI�:RPRISI'.S 100.00 - "P-456" 12/09/2015 NJ�:W DAYWAN RICE MILL& "P-216" 10/08/2015 H,\SJC J',\RM I'IU lllUCJ'S 740.00 - "P-241" 10/14/2015 "P--1-67" 12/03/2015 CIIRCJMIUM DRUG 325.00 "P-439" 12/16/2015 "P-414'' 12/14/2015 ]\' HULALO & CALDERITA 426.00 - "P-405" 12/03/2015 SPI�:C:IAJ:J'Y "P-105" 09/23/2015 440.00 - "P-232" 09/23/2015 MS I'OOD G,\1 U'.RY "P-233" 09/23/2015 ENDJ�:J' (;J�:NEIL\L 335.00 - ~11-:ItCI L\NDISE JV HUL\LO & C\LDJ-:1\I'L\ 2,300.00 - SPJ�:CJ,\J:IY 540.00 TOP SPRING PU!tli'IED DRINKINC WATf'.R 270.00 - !'LOR'S MERCIIANDISING 300.00 - S,\VEMCJRE 540.00 - TOP SPRING PURII'IED DRINK INC; WATER 2,825.00 - TOP SPRING PURIFIED 9,600.00 DRINKING WATER SANI'CJRD ~L\RKf�:TING CORP 540.00 - s,\NI'ORD MARKF:J'ING CORP TNT EXI'IWSS WORLDWIDE 350.00 SAVE1\IORE PURII'WD DRINKING 565.00 - ANJA C~CHOJ TAN IJ,\S'J'IS GRILl. AND SEAFOOD 689.00 - Rl 'S rA UR.\N' r 180.00 Sc\NHIRD ~L\RKJ�:TINC CORP 644.26 - SANI'CJRD MARKETING CORP I" 34,156.26 I" - Subtotal Total-Domestic Purchases of Goods and Services 1'265,648.4889 # p 27,779.05 89 Net Amount of Purchases- Not Valid to Claim Input VAT of1'265,648.44 per Annex C, Exhibit "P-42- 4", Docket- Vol. 3, p. 1477; 1'0.04 rounding-off difference.

CTA Case No. 9794 Rema Tip Top Philippines, Inc. vs. Commissioner ofInternal Revenue I I I I II. Input VAT on Importations I 1. Supported by photocopy ofInformal Import Declaration and Entry/BOG Fonn No. 38-AT T T "P-877" to I' 48,058.33 "P-877-1�:" 12/03/2015 HIDROS spA I' 5,767.00 p 5,767.00 Total-Importations 1'48,058.33911 p 33,546.05 p 313,706.81 TOTAL I I I 1 In addition to the above disallowances, the input VAT in the amount of Pl ,290,986. 71 shall, likewise, be disallowed for failure to meet the substantiation and invoicing requirements under the aforementioned VAT law and regulations, to wit: Payee Reference 91 Amount of Exhibit Date Input VAT I. Input VAT on Domestic Purchases of Goods and Services 1. Supported by VAT Invoice/OR wherein the VAT amount is not separately/properly indicated QUADJ(U CORNEJ.IO l'CXJD VENTUJ(ES 1367 08-0ct-15 I' 39.64 "P-215" I�:SPRUTINC;Kl.E GAS AND SERVICJo: 202.88 "P-785" 159.19 "P-483" INC: 33251 21-0ct-15 "P-308" I 1'.\J(KW.I Y 21550 30-0ct-15 "P-308-A" XI'.NTIUX SOLUTIONS INC: 85593 22-()ct-15 1,817.14 "P-193" Ci' II. Cl ISIS DJ�:VELOPMENT CORP. 50345 06-0ct-15 101.79 "P-261" ON I: .IND ONLY M.\RKIUINC; 0048 11-0ct-15 48.64 "P-164" IRON CI'IY CM.TEX 04261 25-0ct-15 187.50 "P-166" IR< lN CITY CIJ:J'Jo:X 04221 23-0ct-15 186.42 "P-167" IRON CITY C.\1 :rEX 03807 11-0ct-15 182.14 "P-168" IR< JN CITY C.\J:J'I�:X 3946 14-0ct-15 189.99 J�:SPRL!TINC;Kl.E GAS AND SERVIG: "P-270" INC 45271 12-0ct-15 10.71 "P-271" PI J>J�:J.JN 1�: I�:NTI-:J\PIUSI':S 120702 12-0ct-15 18.43 ESI'I\LITJN(;J<J.J' c;.\S AND SERVICJ�: "P-186" INC 45436 09-0ct-15 205.31 QU.IDI\0 C:OI\NJ�:J.IO HlOD "P-279" VJ�:NTUIU�:S 01332 08-0ct-15 17.68 QLJ,IJ)R() CllJ(NELIO FOOD "P-220" VENTL:Rl�:S 01345 02-0ct-15 59.46 Mi\NDAUJ�: STAR OIL GASOLINE "P-568" ST.\'liON & CON\'I�:NJENCJ�: S'J'ORE 43121 04-Nov-15 67.50 TYT.INS I'ROI'I\RTII�:S .IND "P-570" DJ�:I'I:J.C li'MJ�:NT INC. 3550 04-Nov-15 160.71 J�:SI'I\LI'liNC KI.E G.IS & SERVICE "P-623" INC:. 48459 05-Nov-15 201.01 ~!CDON,\I.D'S- GOLDEN ,\RCIIJ�:S "P-522" DF\'I�:J .( lP~!I'NT COI\POR!ITJON 049711 10-Nov-15 57.00 "P-589" I'YI�:/:.1 I'.IJ(TS DEPOT INC. 275515 07-Nov-15 6.43 "P-634" J�:SI'JUlJINC;KJ.J�: c;,ls & SJ�:RVICJ�: 43305 11-Nov-15 10.29 "P-635" 1895008 15-Nov-15 37.50 INC:. "P-558" Cl I<)( )KS TC) C.iO 83379 27-Nov-15 151.23 "P-645" Jl�TJ' 0 lNSTRUCJ'ION ,\ND 32648 28-Nov-15 107.14 EJ.I�:CJ'JUC.II. :;,; "P-648" 47146 18-Nov-15 10.71 ESPJ(LJTINGKJ.J�: c;,\s & SERVJCJo: INC:. L�:SI'IWTINGKJ.E GAS & SERVICE INC. 90 Net Amount of Importations- Not Valid to Claim Input VAT of1'48,058.33 per Annex D, Exhibit "P- 42-5", Docket- Vol. 3, p. 1478. 91 Expressed in day-month-year.

CTA Case No. 9794 Rema Tip Top Philippines, Inc. vs. Commissioner ofInternal Revenue CONSUl .JDATED GJ .ORAL 0595 26-Nov-15 96.43 "P-654" IMPORTS, INC. 6026 18-Nov-15 72.00 "P-595" MSD CODSPEED I�:XHIBITS CORP. 7780 24-Nov-15 112.50 "P-604" Till�: I IOTEL ,\NDREA 11915 25-Nov-15 79.50 "P-605" THE JJOTI�:I. ANDREA lll'l'IMUS SJ lEI J. SERVICE 22348 10-Nov-15 10.71 "P-579" CORPORA'J'JClN 5230 22-Nov-15 215.16 "P-545" IRON CITY C:AI TEX STATION 9583 22-Nov-15 10.61 "P-544" JIONEYLI�:MON FOODS INC. 21687 20-Nov-15 187.04 "P-666" PARK W,\Y 05512 27-Nov-15 124.29 "P-575" IRON CI'IY C:,\J.l'J�:X STATION 21763 27-Nov-15 135.65 "P-671" PI\RK \Xi,\Y 21583 05-Nov-15 67.78 "P-683" PARK Wi\Y 4995 16-Nov-15 119.44 "P-548" IRON CITY C\J:l'J�:X S'L\'l'ION 21658 13-Nov-15 150.43 "P-692" PARK WAY 06568 21-Dcc-15 107.14 "P-325" IRON C:J'JY C\LTEX STATION 9881 26-Dec-15 "P-420" IIONJ�:YLEMUN HJODS INC 00383 24-Dcc-15 10.28 "P-329" ROSJ�: H.\KJ�:SIICJP 20.36 NEW I'AMILY DRUC; ,\ND 628320 12-Dcc-15 "P-450" CENI-:JL\L MERC:I 1,\NDISE 06254 15-Dcc-15 670.18 "P-418" IRON CITY C,\J:rEX STATION 21869 17-Dcc-15 138.21 "P-332" P,\RK\'1/.\Y 06426 17-Dec-15 131.79 "P-333" IRON CITY C�\1 :rEX ST,\TION 00205 19-Dcc-15 123.00 "P-335" IRON CITY CALTEX STATION None 12-Dcc-15 138.21 "P-337" NICKEl. SALES CTNTER None 12-Dec-15 "P-339" IRON CITY C:.\1 TEX STATION 22882 12-Dec-15 19.07 "P-340" PARK\'\/.\ Y 22883 12-Dcc-15 136.93 "P-341" P:\RK\V.\ Y 21881 18-Dcc-15 533.38 "P-343" Pi\ l~K\X'.\ Y 198.80 NEW 1'.\WJ.Y DRUc; ,\ND 621599 04-Dcc-1 5 "P-451" C J�:NJm \I. Mlo](C:J LIND IS!' 05902 05-Dcc-15 53.68 "P-345" IRON CITY C.\I:I'FX STATION 05901 05-Dcc-15 "P-346" IR< lN CITY C,\J :n�:X S'L\'l'ION 05476 09-Dcc-15 599.57 "P-348" IRON CITY C.\LTJ�:X STATION 05819 03-Dcc-15 253.61 "P-352" lltON CITY C:AI.'l'J�:X STATION 22868 04-Dcc-15 133.29 "P-452" PARK\Xl:\ Y 133.71 TYT.\NS PROPERTIES ,\ND 4160 18-Dec-15 125.92 "P-472" Dl �:\' 1�:1.< lP~!L�:NT 561.33 TYLINS PltOPER'l'IJ�:S AND 4061 18-Dcc-15 "P-471" DJ�:\'J�:J /WMENT 42.86 TYT. INS l'ltOPJm'l'JES ,\ND 4159 18-Dcc-15 "P-473" Dl.:Vl�:J .OPi\fi�:N'J' 33579 19-Dec-15 176.79 "P-356" CJo:HU'S ORIGINAL LECHON HEI.LY 11230 15-Dec-15 "P-441" MJM I'II.Clll. 37.50 J�:SPI\l!'l'INGKJ.E GAS AND SERVICE 47719 02-Dcc-15 37.50 "P-361" INC 070340 03-Dcc-15 12.32 "P-466" 'JN'l' J�:XPIU�:SS WORLDWJDE 004182 05-Dcc-15 "P-444'' ~101tl '.!JON I�: VJo:NTURI �:S 1,043.36 J�:SPilll'l'INC;KJ.J�: c;,\S AND SERVICE 47957 07-Dcc-15 310.24 "P-366" INC: 236850 10-Dcc-15 637.50 "P-403" COK.\LIC lNG Sllli'PINC; 430161�\ 14-Dec-15 "P-455" SKY Jl.\CJI'IC CATV 44893 16-Dcc-15 202.50 "P-440" ~!.\Nll.\l!J�: S'l'.\R 56.25 J�:SI'J(LJ'l'JNC;KJ.J�: c;,\S AND SERVICE 31111 16-Dcc-15 "P-374" INC: 016726 17-!Jcc-15 133.61 "P-399" AERO I' I lONE 18-Dcc-15 74.36 "P-379" 1370 I'OClDS INC 1417 18-Dcc-15 "P-429" K .\ND S I IOTI�:J. 16274,\ 11-llcc-15 129.64 "P-411" MC!JON.\LDS CEHU 0011221 09-!Jcc-15 107.14 "P-388" J..\1',\YI�:TJ�:, INC 00114 11-Dcc-15 "P-389" J.M c;RJLJ. CJ�:Hu 08-Dcc-15 62.68 "P-390" KNOXPOKI' INC 3371 11-Dcc-15 176.78 "P-413" MCDONAJ.IJSCEBU 12216 10-Dcc-15 22.50 "P-428" JONAS FOOD CORPORATION 054224 10-Dcc-15 21.86 "P-465" ST,\. I.UCJ,\ 1�:,\ST SUPERMARKET 16269 11-Dcc-15 62.68 "P-445" Mil. KIMBOH CO 175987 ~!.\JOlt SIIOPPIN(; MANAGEMENT 4248 16-Dec-15 10.61 "P-438" C:Oitl' 03-Dcc-15 32.79 "P-416" MC!l< lN.\LDS CJ�:BU 025800 04-Dcc-15 10.61 "P-406" CJ'IY C:IIIX INC:ORP< lRXJ'Jm 0120533 166.35 Subtotal 11186.\ 10.61 ~ 214.29 33.00 30.00 I' 13,562, 77

CTA Case No. 9794 Rema Tip Top Philippines, Inc. vs. Commissioner ofInternal Revenue I I I 2. Supported by VAT Invoice/OR wherein TIN and or address are not indicated, incomplete or unreadable G:Hu HI�:J.MONT INC 00011435 21-0ct-15 I' 554.19 "P-790" ACJ�: I L\llllWARE l'IIIL!l'l'INES INC: 49288 09 Oct-15 7.45 "P-130" LHC: I�:XI'I\I�:SS 44027 02-0ct-15 19.82 "P-177" l.BC liXl'RESS 20486 06-0ct-15 15.54 "P-181" l.HC: I'.Xl'RI �:SS 10917 11 Oct-15 19.82 "P-178" l.HC: EXPRESS 187034 16-0ct-15 19.29 "P-173" l.HC: I�:Xl'RI�:SS 033579 16 Oct-15 16.07 "P-856" l.HC: I�:Xl'RESS 85973 09-0ct-15 15.54 "P-182" "P-859" to SM,\RT COMMUNJC,\TIONS INC 0196408273 03-0ct-15 535.71 "P-859B" LHC EXPRI'.SS 21937 14 Oct-15 12.32 "P-846" l.HC: I�:Xl'RESS, INC. 45097 04-Nov-15 16.07 "P-616" l.HC EXPRESS, INC. 153262 03-Nov-15 19.82 "P-622" CONCORD!-: CAR ACCESSORIES 2006395 17-Nov-15 14.97 "P 513" l.BC I�:XPIU�:SS, INC. 153926 09-Nov-15 19.82 "P-637" SIJ.ICON Y.\l.l.I'Y COMPUTER GR< )LJP PJ Ill ,S., INC. 00141 16-Nov-15 373.93 "P-641" l.HC: I�:Xl'RI�:SS, INC. 155143 21-Nov-15 17.14 "P-642" l.HC: I�:Xl'RESS, INC. 155349 23-Nov-15 16.07 "P-643" l.HC I�:Xl'RI'.SS, INC. 155748 27-Nov-15 16.07 "l'-557" l.BC I�:XI'IU�:SS, INC. 15590 24 Nov-15 19.82 "P-668'' l.HC I�:Xl'RI�:SS, INC. 45410 15-Nov-15 16.07 "P-685" l'l.DT 287920655 12-Nov-15 364.83 "P-484" l.BC I�:Xl'lll�:SS, INC. 28788 11 Nov-15 12.32 "P-714" SM,\RT COMMUNICATIONS INC 0192251871 02-Nov-15 497.03 "P-867" SM.\1\T COMMUNICATIONS INC 0194274790 02-Nov-15 116.13 "P-868" l.BC EXI'IU�:SS, INC 46231 21-Dec-15 19.82 "P-324" Ci\H,\DH.IR.IN SIIFI.l. SERVICE S'J'.ITH lN 048795 29-Dcc-15 105.31 "P-400" l.HC: l�:Xl'RESS, INC 11506 15-Dcc-15 19.82 "P-431" LHC: liXl'RI,SS, INC 11213 08-Dec-15 16.07 "P-432" l.HC I�:XI'RI�:SS, INC 45882 04-Dcc-15 19.82 "P-433" l.BC: I�:Xl'RI�:SS, INC 157868 17-Dec-15 19.82 "P-434" l.BC I�:Xl'RESS, INC 156339 03-Dcc-15 19.82 "P-435" !.BC I�:XI'RI'.SS, INC 43414 14-Dcc-15 74.89 "P-437" c:r�:HU .\lit INC 3741318 10Dcc-15 175.45 "P-402" I'IRST .\SL\ RI�:ALIY 0012337 11-Dcc-15 5.36 "P-446" PLDT 0291690616 10-Dcc-15 364.83 "P-609" Subtotal 1" 3,576.85 bY 3. s-;;;;;;orted out ofperiod SI, OR or collection receipt D \IICI L\1'.1. CO INDUSTRIAl. "P-515" I SUPPI ,Y C( mP. 1999 01-Scn-15 1'18,970.71 "P-515-A" 02-Scp-15 184.29 "P-853" (;()( llll I< ll'J�: I IAIUJWAIU�: 32791 11-Scp-15 110.68 "P-721" GOClDIIOI'E !IARDW,\RJ�: 33311 18-Sen-15 "P-723" SYT C;J..ISS CJ-:NTER INC 4964 1,429.20 Cl-:HLI \JMI' GLASS ,-\ND ALUMINUM 14-Scp-15 SUPPI.Y 23480 16-Sco-15 925.99 "P-724" j;\SI'I-:R Gl..\SS & Hllii.DI�:RS COR!' 11662 21-Scp-15 22.30 "P-725" ATJ.,\NTIC I!AilllWARI�: 9247 29-Scp-15 "P-852" 25-Sco-15 402.15 "P-727" I'UIU�:CO!.D !'RICE CI.UH, INC. 31170 16-Scp-15 226.36 "P-730" 26-Scp-15 186.50 "P-731" IRON CITY Crii.TEX S'LITION 3312 1,296.20 "P-732" /ASI'I-:R CLASS & HUll .IW.RS CORP 11661 23-Scp-15 66.43 ,\SYA GL\SS PHILIPPJNES 20165r\ 24-Sco-15 SANI,.ORD MAH.Kl.':"I"ING 12623 16.87 "P-733" C:C lRI'C lRATION 12651 15-Scp-15 S.\NI'ClRD \l.\1\KI�:TING 25-Sco-15 93.46 "P-734" U lHI'OIL\TION 26 Scp-15 SANI'ClRD \1.\RKI�:TINC; 13011 27-Scp-15 11.22 "P-735" C:ORI'C llt.ITIC lN 9,642.86 "P-737" 10-Scr-14 "P-739" SO UTI 11-:RN STAR Al.UMINIM 7431 04-Scp: 15 171.43 (;()()J)I 101'1�: I IARDWARI�: 34024 30-Seo-15 SAN I:< )IU) Mr\RKE"l'JN<; 24.75 "P-741" C:ClRI'C J](,\'J'JON 13017 D'I�:X<:J'.I.INTI-:RNATICJN,\1. I'CJRW.IIllli�:R INC 0161 2,887.76 "P-745" lli'RI�:Jc;l IT 1'1 IlLS 1132415 891.17 "P-748" 96.32 tv1AND1\RlN 4417 "P-749" #

CTA Case No. 9794 Rema Tip Top Philippines, Inc. vs. Commissioner ofInternal Revenue GRACE! fiLL 1\CONOSUITES 5280 23-Sep-15 160.71 "P-106" DALES FOOD HAUS 20970 30-Sep-15 78.75 "P-107'' TIU OKTO SIIELI, (;,\SOl JNE "P-291"/ ST,\TION 10526 22-Scp-15 107.14 "P-292" 22012 23-Scp-15 168.80 "P-119" JOLLY U. ZAPATA WILCON DEPOT BUILDERS DEPOT 44257 29-Sep-15 429.04 "P-303" INC WILCON DEPOT llUJLDL-:1\S DEPOT 44317 30-Sep-15 1,433.08 "P-304" INC PRUDI�:N"l"L\1, CUSTC lMS 268792 28-Scp-15 17.57 "P-198" HROKI�Jt.\CE SJ�:R\'ICI�:S INC 16797 30-Scp-15 320.89 "P-284" TORN Sl 290171 26-Scp-15 176.81 "P-144" HIU�:NT OIL CORP XI'RI�:SSI�II.!, STATION SUC,\T 24298 04-Scp-15 53.57 "P-155" HJL\NCII XPRI�:SSI'II ,L STATION SUCAT 25147 18-Sep-15 214.30 "P-156" HIL\NC:II XPRJ�:SSI'ILI, STATION SUC\T 25206 22-Scp-15 123.25 "P-157" HIL\NCII D ~!ICI L\I�J, CO INDUSTRI,\1. 1888 01-Scp-15 13,312.57 "P-315" SUPPLY CORP 128022 30-Scp-15 57.86 "P-160" CJ'J'J IIARIJWARE H,\COJ.OD INC: NI�:W SURIGAO PAINT! li\US AND 5741 30-Scp-15 26.79 "P-257" 1\UTO PARTS GEN MDSE CITRA MJ�:TRO MANILA TOLLWAYS 29332 28-Scp-15 214.29 "P-197" CORP. CITRA MJ�:J'RO MANIL\ "l'OLLW:\YS 2879896 16-Scp-15 214.29 "P-194" ccmP. None 04-Sep-15 10.72 "P-184" unreadable 04-Scr-15 4.71 "P-183" I�:SPRUTINC;KU�: G.\S AND SERVICE INC 41915 29-Scp-15 10.71 "P-278" 7-I -:1.1-:V I�:N non<: 29-Scp-15 203.57 "P-188" ESPRL1'l'JNCKLE Cr\S AND Sl.;H.\'JCJ�: INC 1329 28-Scp-15 17.68 "P-286" I�:SI'I\LJTINl;KLE CAS AND SJ�:RVICL�: 13018 28-Scp-15 36.96 INC 12683 29-Scp-15 24.11 "P-285" C~U.\IJRO CORNEl.IO I�"OOD 12684 29-Scp-15 18.80 "P-224" VI:N"I'LIRI�:S 12692 30-Scp-15 302.68 "P-225" 12698 30-Scp-15 50.49 SUI'I-:1\ Sf lOPPING MARKET INC 12693 30-Scp-15 16.77 "P-221" S.\NI'OilD MARKI�:TING CORP 6324726 03-Jun-15 1,261.59 "P-222" S,\NHlilD MARKI�:TINC; CORP "P-223" 1805 18-Jul-15 7,164.64 "P-104" S,\NI'ORIJ MARKETING CORP 23953 22-Jul-15 143.57 "P-744"/ SANHlRD MARKETING CORP 23455 04-Jul-15 991.61 "P-744-A" S,\NI'ORIJ MARKETING CORP 64471 30-Jul-15 214.30 "P-108" CI-:HU PORT AUTIIORI'J"Y 17007 25-I\ug-15 645.77 "P-109" "P-113" DMC 24-,\ug-15 518.25 "P-100" 10-Aug-15 10,074.34 "P-112"/ OI'I'ICE HASICS CORPORATION "P-112-A" CJFI'ICE HASICS CORPORATION 26-;\ug-15 128.58 "P-114" PRIMEit.\ CJ.ASE GAS STATION INC ,\,\11'1111. 1'00() C:ONCI�:I'l"S INC 07-Aug-15 "P-293"I U I'RJ<:I(JI IT PI fiLIPPINI�:S INC 66957 24-;\ug-15 "P-294" U I'Iti�:IGIIT l'IIIJ.IPI'1NI~S INC 1130867 "J'RI OKTO SIIELL c;ASOLINE 28-Aug-15 166.81 "P-158" S"J'.\"J'It 1N 9996 Xl'lti�:SSI'Il.J. S'L\'J'ION SUC.\T 29157 28-Aug-15 144.65 "P-159" Hlt.\NCII 23461 Xl'ltl �:SSI'll .I, STATION SLJC\T 23516 30-0ct-15 116.79 "P-154" HIL\NCII 2774929 15-0ct-15 XI'IU�:SSFIJ.L STATION SLIC.I'J' 23-0ct-15 214.29 "P-196" HILINC:I! I' 77,248. 75 CITRA ~11-:"J'RO M,\NIL\ 'J'OJ.LW:\YS C:CliU'l)R,\T10N Subtotal 4. Supported by documents other than SI or OR MI�:TRO SLIRIGNl SIIOPPING "P-719"/ p 989.48 "P-719-A" CENTER, INC:. 7381 Wll.CON HUILDI-:RS DI,POT INC 42656 41.71 "P-751" WIJ.CON HLIIJ.!WltS DI,:I'ClT INC 25818 "P-808" -;..; 77.25

CTA Case No. 9794 Rema Tip Top Philippines/ Inc. vs. Commissioner ofInternal Revenue CITRA ~WrRO MANILA TOLLWAYS 3072069 27-0ct-15 214.29 "P-505" CORP. PI IlLIPPINE LON(; DISTANCE 284225739 05-0ct-15 706.09 "P-110" TI~LEPI TONI�: COMP.\NY 95426 06-0ct-15 235.69 "P-111" CI-:HU HI�:LMONT INC 127605 12-0ct-15 419.57 "P-117" HI�:LMONTH IIARDWARE DEPOT 10616 12-0ct-15 "P-118" 130931 22-0ct-15 267.00 Cl-:HU HELMONT INC 201839 13-0ct-15 341.79 "P-259" OFFICE WAREHOUSE INC. "P-242" OI'I'IC:E WAREHOUSE INC. 48133 17-<Jct-15 74.46 OCTAGON COMPUTER 96988 02-0ct-15 SUPI�:ItS'I'(lltE 556.07 "P-272" SIIOPPING CENTER INC 47940 06-0ct-15 831.01 "P-122" OCL\(;ON COMPUTER 36317 04-0ct-15 SUPI-:RSTORE 15681 09-0ct-15 741.43 "P-273" METRO SUPERMARKET llANIL-\D 324900 07-0ct-15 63.92 "P-252" CUll IX Ol'l'ICE INC 2133162 02-0ct-15 30.21 "P-200" PROTON MICROSYSTEMS 758827 30-0ct-15 2,673.21 "P-274" AH,\CUS HOOK AND CARD CORP 115.93 "P-152" RICIIMONDE IIOTEL 7263 17 -Oct-15 "P-267'' ML�:TRO SURIGM) SIIOPPING 8.04 Cl-:N"rL-:R INC: 271131 20-0ct-15 "P-322" to CITRA \!l�:TR< l MANII.i\ TOLLWAYS 342375 20-0ct-15 819.66 "P-322-B" CORP. 271857 20-0ct-15 SO UTI! LUZON TOLW,\Y 9.00 "P-189" 232363 16-0ct-15 1.29 "P-190" SO UTI I LUZON TOLWA Y 14.25 "P-191" CITRA MI�:TitO M.-\NILA HJLLW,\YS 305010 16-0ct-15 CORP. 14.25 "P-253" SOUTII LUZON TOLLWAY 34625 19-0ct-15 C<lRP(JitA1'1<lN 1.61 "P-254" C:!Tlt.\ MI�:TRO M.-\NIL\ TOLLW,\YS 190913 16-Clct-15 CORP. 214.29 "P-195" C:ITR.\ \!ETRO MANILA TOLLW.-\YS 75808 16-0ct-15 CORP. 9.00 "P-175" STATION SQUARI�: E,\ST 48393 04-Nov-15 CC)Mi\11-:H. Cir\J, CORP 4.29 "P-174" OC'L�\GON COMPUTER 285531 09-Nov-15 SUPL�:RS"l'ORE 741.43 "P-615" CITRA METRO MAN !LA TOLLWAYS 41290 15-Nov-15 CORP. 9.00 "P-625" M,\NIL,\ INTI�:RNATION.-\L 134504 10-Nov-15 AlltPORT AUTHORITY 4.29 "P-495" Grit.\ MI�:TRO MANII.A TOLI.WAYS 3195753 10-Nov-15 CORP. 53.57 "P-499" C:IT1t.\ \!I�:TR<l M,\NII ..\ TOLLW.-\YS 468831 25-Nov-15 CORP. unreadable 15-Nov-15 53.57 "P-503" \!.\NIL.\ IN'I'J-:RNAIKlNAL 11-Nov-15 AIRPORT ALITIIORITY 1059593 4.29 "P-504" 7 l�:u�:n:N 26-Nov-15 18.96 "P-636" N,\TIONAL !lOOK STORE unreadable 116.73 "P-639" OCL\C;CJN COMPUTER 19-Nov-15 SUI'I�:RSTORE 137655 17-Nov-15 185.36 "P-588" PIZZA I JUT- PI IILJPPINE PIZZr\ None 20-Nov-15 INC:. 0122541 89.68 "P-647" LHC L;Xl'RESS, INC:. 13-Nov-15 19.82 "P-649" TAl-PAN DEVELOPMENT INC. 48522 13-Nov-15 44.11 "P-667" OCL\GON COMPUTI'.R None 16-Nov-15 SUPI-:RSTORI�: 73809 16-Nov-15 1,612.50 "P-677" PARKWAY 73811 16-Nov-15 46.41 GLOHI�: TI�:LJ-:CCJM INC. 73810 16-Nov-15 160.54 "P-891" GLOHI�: TELECOM INC. 73812 16-Nov-15 383.78 "P-696" GLOHE TELECOM INC. 73808 02-Nov-15 "P-849" GLOHL�: TI�:LECOM INC. 71375 12-Dcc-15 419.68 "P-697" Gl.OHI�: TI�:J.l-:C:OM INC 133977 01-!Jcc-15 160.54 "P-848" (;J.Olll�: TI�:Ll�:C:O~! INC:. 8521560 02-!Jec-15 336.47 "P-698" 73372 04-Dcc-15 535.50 "P-206" ern I L\ltDWARI�: H.-\COLOIJ INC 6947 04-Dec-15 616.49 "P-449" 6930 10-Dec-15 30.16 "P-422" Si\VJ�:i\f()H.E 1752479 09-!Jcc-15 "P-360" 590003 5.33 "P-436" ,\CJ-: I L\RIJWARI�: 34.93 "P-436-A" 7.71 c;oc llJI Hll'E IIARDWARE "P-372" 5.36 C:OCllJIIOPE IIARIJWAIU�: 8.68 "P-479" PLII'.RTCl SI-:RVICIO ~ 7 ELEVEN

CTA Case No. 9794 Rema Tip Top Philippines_ Inc. vs. Commissioner ofInternal Revenue Gl.OBE TELECOM 38492 23-Dcc-15 4,109.10 "P-844" vCITRA METRO M,\NILA 217846 01-Dcc-15 "P-498" TOLL\V,\YS CORP. 214.29 I' 19,503.07 Subtotal 5. Purchase ofservices supported by documents other than OR PINEDA c;ASOLINE STATION 30010 05-0ct-15 I' 10.71 "P~282" LAVENDER SIIELL SERVICr�: "P-243" S'IATION & GEN MDSE 105116 04-0ct-15 192.84 "P-247" "P-610" LAVENDER SIIELI, SERVICE "P-613" STATION & c;EN MDSE 105091 07-0ct-15 184.29 119.07 "P-614" XPIU�:SSI'Il.L STATION 109676 09-Nov-15 PRIMERA CJ.1\SE GAS STATION, "P-624" INC 69996 02-Nov-15 165.53 "P-501" V,\J.UCORE HUSINI�:SS VI�:NTURES 4193 16-Nov-15 123.41 "P-581" C( ll\l'CJR,\'I'ICJN "P-561" C\PITOL 8 c;AS & I'UI�:J. STATION, 68951 09-Nov-15 128.57 "P-593" INC:. "P-660" C\PITOL 8 (;AS & I'LJI-:1. STATION, "P-566" "P-711" INC. 69404 25-Nov-15 77.37 "P-149" TONNI�:J.'S PI�:TRON SI�:RVICE 15706 22-Nov-15 111.64 "P-421" STATION "P-326" SOL,\ NO l'ETRON SI-:RVICI' "P-454" "P-415" CENTI-:It 111660 25-Nov-15 62.14 58.71 XPIU�:SSf'll J, STATION 108833 06-Nov-15 12.86 PIN F.D,\ GASOLINE STATION 30919 02-Nov-15 LAVENDER SIIEI J, SERVICE STATION & GEN.MDSE. 110907 23-Nov-15 136.87 18.21 LAMUAN SIIELL GAS STATION, INC. 853446 27-Nov-15 7.98 JERICK PETRON SERVICE CENTER 1068905 10-Nov-15 L\VJ�:NDF.R SIIEJ.J. SI-:RVICE S'L\TION & GEN. MERCHANDISE 112721 26-Dcc-15 96.43 L\ VJ�:NDER SJ IEJ.J. SERVICE STATION & GI�:N. MERCIIANDISE 112560 19-Dcc-15 107.14 107.14 NORTI 11-:JlN STAR I�:NI-:RGY 40990 18-Dcc-15 5.36 l'INI�:JJA GASCJI.INI'. ST.\TION 33342 02-Dcc-15 ,. 1,726.27 Subtotal Total-input VAT on domestic purchases of goods and services 1'115,617' 71 II. Input VAT on Importations 92 Input VAT on importations supported by photocopied Statement ofSettlement ofDuties & Taxes/Assessment Notice/BOG Single Administrative Document/Temporary Assessment Notice and computert:enerated bank statement "P-872" to Rn~L\ TIP TOP AG I' 178,392.00 "P-872-1-I" TIP HlP OHERI'LAC:I II�:NSHU'J'Z "P-873" to I'.I.BI�: 462,603.00 "P-873-E" "P-874" to REJ\.L\ TIP TOP ,\G 132,659.00 "P-874-F" "P-875" to GM.-\ GARNET GROUP 59,251.00 "P-875-D" 'I'll' HlP OHERFLACIIENSI lUTZ "P-876" to J�:LHI�: 214,016.00 "P-876-C:" "P-878" to .1~!1�: INTERNXI'ION,\1. 27,673.00 "P-878-D" TIP TOP )1\PAN "P-879" to 80,265.00 "P-879-F" REMA TIP TOP TIANIIN RUBBER "P-880" to TI�:CII 20,510.00 "P-880-D" Total-input VAT on importations P1,175,369.00 TOTAL P1,290,986.71 In sum, out of the reported input VAT of P1,574,758.55 for the 4'h quarter of 2015, only the amount of P232,014.18, as computed below, represents petitioner's valid input VAT/V' 92 "PHOTOCOPY/ORIGINAL" Column, Exhibit "P-42-5", Docket- VoL 3, p. 1478.

CTA Case No. 9794 Rema Tip Top Philippines, Inc. vs. Commissioner ofInternal Revenue Reported Input VAT p 18,211.61 1'1,574,758.55 33,546.05 Less: Disallowances 1,342,744.37 1,290,986. 71 P232,014.18 Unaccounted/unsubstantiated input VAT Per !CPA Report Per Court's further verification Valid Input VAT Since there are both zero-rated or effectively zero-rated sales and taxable sales subject to 12% VAT, the valid input VAT of P232,014.18 shall be proportionately allocated on the basis ofsales volume. To reiterate, the eighth requiSite is to the effect 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 on the basis of sales volume. As stated earlier, for the subject period of claim, there exist taxable sales subject to twelve percent (12%) and 0% rates, to wit:93 Particulars Amount Vatable Sales/Receipts p 4,313,062.28 Zero-Rated Sales/Receipts Total Sales/Receipts 14,548,005.68 p 18,861,067.96 Since petitioner's input VAT cannot be directly or entirely attributed to any of the transactions, the valid input VAT of P232,014.18 shall be allocated proportionately on the basis of the volume of petitioner's total sales, as shown below: Taxable Sales subject to 12% VAT for the 4'' quarter of2015 p 4,313,062.28 Divided by the Total Sales for the 4'' quarter of 2015 18,861,067.96 Multiplied by Total Valid Input VAT Validinput VAT allocated to sales subject to 12% VAT 232,014.18 p 53,055.94 Zero-Rated Sales for the 4'' quarter of 2015 1'14,548,005.68 Divided by the Total Sales for the 4'' quarter of 2015 18,861,067.96 Multiplied by Total Valid Input VAT 232,014.18 Valid input VAT allocated to zero-rated sales p 178,958.24 93 Exhibit "P-3", Docket- Vol. 3, pp. 1382 to 1383. /�"

CTA Case No. 9794 Rema Tip Top Philippines, Inc. vs. Commissioner ofInternal Revenue Thus, for purposes of, and with regard to petitioner's compliance with the eighth requisite, only the amount of I'178,958.24 represents valid input VAT attributable to total reported zero-rated sales. Petitioner has no excess input VAT available for refund Having determined that petitioner had valid input VAT attributable to its zero-rated sales, the Court shall now determine whether the same was not applied against its output VAT liability during and in the succeeding quarters, relative to the ninth requisite for the successful prosecution of an input VAT refund claim. After deducting the input VAT attributable to taxable sales subject to 12% VAT in the amount of I'53,055.94 from its output VAT liability of I'517,567.4794 on the said sales, petitioner still has a net output VAT payable of I'464,511.53, as computed below: Output VAT per Return p 517,567.47 Less: Input VAT allocated to 12% Vatable Sales 53,055.94 Net Output VAT Payable P464,511.53 Since the valid input VAT attributable to 12% vatable sales is not enough to cover its output VAT liability, the valid input VAT attributable to total reported zero-rated sales in the amount of I'178,958.24 shall be utilized against the remaining output VAT liability of I'464,511.53. However, the input VAT attributable to zero-rated sales of I'178,958.24 is lower than the net output VAT payable of I'464,511.53. Consequendy, petitioner still has net output VAT due off'285,553.29, computed as follows: Net Output VAT Payable p 464,511.53 Less: Input VAT attributable to Zero-rated Sales 178,958.24 Net Output VAT Still Due p 285,553.29 Although petitioner's amended Quarterly VAT Return for the 4'h quarter of taxable year 2015 reflected the amount of I'4,696,993.6095 as "Input Tax Carried Over from Previous Period", petitioner failed to substantiate the same. Needless to say, petitioner failed to prove that it has excess input VAT carried over from previous period;/ 94 Exhibit "P-3" (Line 15B), Docket~ Vol. 3, p. 1382. 95 Exhibit "P-3" (Line 20A), Docket- Vol. 3, p. 1382.

CTA Case No. 9794 Rema Tip Top Philippines, Inc. vs. Commissioner ofInternal Revenue Accordingly, the input tax carries over of P4,696,993.60, cannot be validly applied against petitioner's output tax pursuant to Section 110(A) in relation to Section 11 O(B) of the NIRC of 1997, as amended, which states: "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: XXX XXX XXX (B) Excess Output or Input Tax. - If at the end of any taxable quarter the output tax exceeds the input tax, the excess shall be paid by the Vat-registered person. If the input tax exceeds the output tax, the excess shall be carried over to the succeeding quarter or quarters: xxx." Based on the foregoing provision, it is worthy to stress that in claiming excess or unutilized input VAT from zero-rated transactions, it is the excess input tax over the output tax which should be refunded to the taxpayer or credited against other internal revenue taxes. Hence, it is important for the taxpayer to prove that it has enough prior year's excess input tax credits to cover its output tax liability for the current taxable year. To repeat, in cases filed before this Court, which are litigated de novo, party-litigants must prove every minute aspect of their case.96 Consequently, petitioner failed to fulfill the ninth requisite, i.e., that the input taxes have not been applied against output taxes during the quarter. Its failure to substantiate that it has sufficient input taxes to offset its output taxes due for the period covered merits the denial of its claim for refund. With the foregoing disquisitions, there is no showing that petitioner fully complied with the requisites to successfully obtain a refund of input VAT. In fine, considering that petitioner failed to show that its administrative claim should not have been denied in the first place, as earlier discussed, and since it likewise failed to sufficiently prove its entitlement to a refund of its~ 96 Edison (Bataan) Cogeneration Corporation vs. Commissioner of Internal Revenue, et seq., G.R. Nos. 201665 and 201668, August 30, 2017; Commissioner of internal Revenue vs. Philippine National Bank, G.R. No. 180290, September 29, 2014; Commissioner of Internal Revenue vs. United Salvage and Towage (?hils.), Inc., G.R. No. 197515, July 2, 2014; Dizon vs. Court of Tax Appeals, eta/., G.R. No. 140944, April 30, 2008; Atlas Consolidated Mining and Development Corporation vs. Commissioner of Internal Revenue, G.R. No. 145526, March 16, 2007; and Commissioner of Internal Revenue vs. Manila Mining Corporation, G.R. No. 153204, August 31, 2005.

CTA Case No. 9794 Rema Tip Top Philippines, Inc. vs. Commissioner ofInternal Revenue input VAT for the 4th quarter of taxable year 2015, the instant claim for refund must perforce be denied. It must be emphasized that actions for tax refund or credit, as in the instant case, are in the nature of a claim for exemption and the law is not only construed in strictissimijuris against the taxpayer, but also the pieces of evidence presented entitling a taxpayer to an exemption is strictissimi scrutinized and must be duly proven.97 Thus, the burden is on the taxpayer to show that it has strictly complied with the conditions for the grant of the tax refund or credit.98 In this case, petitioner failed to discharge the said burden warranting the denial of its claim for refund or issuance of tax credit certificate. WHEREFORE, in light of the foregoing considerations, the instant Petitionfor Review is DENIED for lack of merit. SO ORDERED. ~. ~ ~<..._ MA. BELEN M. RINGPIS-LIBAN Associate Justice WE CONCUR: ERL~UY Associate Justice 97 Atlas Consolidated Mining and Development Corporation vs. Commissioner ofInternal Revenue, G.R. No. 159490, February 18,2008. 98 Commissioner of Internal Revenue vs San Roque Power Corporation, G.R. Nos. 187485, February 12, 2013.

CTA Case No. 9794 Rema Tip Top Philippines, Inc. vs. Commissioner ofInternal Revenue 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. ERL~UY Associate Justice Chairperson CERTIFICATION Pursuant to Article VIII, Section 13 of the Constitution, and the Division Chairperson's Attestation, is it hereby certified that the conclusions in the above decision were reached in consultation before the case was assigned to the writer of the opinion of the Court. Presiding Justice