THE Court of Tax Appeals (CTA) denied for lack of merit the P50-million tax refund claim of CBK Power Co. Ltd for 2012, ruling that it is not entitled to such a refund.
In a 16-page decision dated Feb. 20, the CTA, sitting en banc, affirmed a 2017 decision and resolution of its special first division that initially denied CBK its tax refund claim, which the company said represented unutilized or excess input taxes on its purchases of goods and payments for services.
The CTA said CBK, a hydroelectric company based in Kalayaan, Laguna, is not entitled to a tax refund as its local purchases of goods to be used in plant facilities are zero-rated.
The court cited Section 15 (g) of Republic Act (RA) No. 9513 or the Renewable Energy (RE) Act of 2008 and a Department of Energy Circular in 2009 which state that renewable energy developers like CBK are entitled to zero-rated value-added tax on purchases of domestic goods and services for the development and construction of plant facilities.
“Based on the foregoing discussions, CBK cannot seek a refund from the BIR (Bureau of Internal Revenue) of its unutilized input taxes because under RA No. 9513, its purchases of local supply of goods, properties and services needed for the development, construction and installation of its plant facilities as well as the whole process of exploring and developing renewable energy sources up to its conversion into power are zero-rated,” the CTA said.
“The CTA Division is correct in its conclusion ‘that since no input VAT should be paid by petitioner, it is not, therefore entitled to a refund, or issuance of TCC (tax credit certificate) from its purchases of goods and services needed for the development, construction, and installation of their plant facilities as well as to the whole process of exploration and development of RE sources up to its conversion into power,’” it added.
The court also said CBK claimed that it is not covered by RA No. 9513 “without showing proof.”
It also rejected the argument of the company that the CTA division violated the Constitution by not observing its right to due process, saying the court gave the corporation “enough opportunity to defend its case during the trial and even during the filing of the motion for reconsideration in compliance with the due process requirement.”
CBK operates the Caliraya, Botocan, Kalayaan I and Kalayaan II hydroelectric power plants and their related facilities in Laguna.
The decision was written by Associate Justice Juanito C. Castañeda, Jr. — Vann Marlo M. Villegas
