THE Supreme Court (SC) has granted the appeal of CBK Power Co. Ltd. o review its tax liabilities worth P50.06 million representing its creditable input taxes for the calendar year 2012.
In a 19-page decision, the High Court remanded the case to the Court of Tax Appeals (CTA) Special First Division to reassess the firm’s entitlement to the tax refund.
“Given this, the court deems it more prudent to remand the case to the CTA Special First Division for the purpose of reviewing the evidence submitted by CBK to ascertain if it has adequately established the presence of the foregoing requisites,” Associate Justice Maria Filomena D. Singh said in the ruling.
CBK manages and operates the Kalayaan II pump storage hydroelectric power plant and the New Caliraya Spillway in the province of Laguna.
The CTA full court had ruled that CBK was not entitled to its refund claim since its sales of the electricity generated through hydropower were already subject to zero-rated value-added tax (VAT).
Under the Renewable Energy Act of 2008, RE developers are entitled to a 0% VAT on purchases of domestic goods and services for the development and construction of plant facilities.
The High Court disagreed with the CTA, saying the power firm was not entitled to zero-rated sales since it had not shown that it was registered with the Department of Energy (DoE).
Citing the DoE’s implementing rules and regulations, it said RE developers with valid certificates of registration with the department can avail of fiscal incentives provided under the law.
“In fact, CBK has consistently stated in its pleadings both in the CTA and before the Court that it has not registered with the DoE and is thus not entitled to VAT at zero rate,” the high tribunal said.
“Thus, even as the Court reverses the CTA En Banc’s assailed decision and assailed resolution, it cannot make a factual and definitive finding as to whether CBK is entitled to a tax refund and if so, the amount of such refund.” — John Victor D. Ordoñez
