THE COURT OF Tax Appeals (CTA) partially granted the tax refund claim of Philippine Geothermal Production Company, Inc. (PGPCI) of excess and unutilized input value-added tax (VAT) traced to zero-rated sales for 2014.

In a 35-page ruling dated Nov. 18, the court’s second division ordered the Bureau of Internal Revenue (BIR) to refund or issue a tax credit certificate to the company in the amount of P4.2 million out of its P31.7-million initial claim.

The court said the company reported total sales of P4.9 billion but only the amount of P3.7 billion qualifies as valid zero-rated sales as some were supported by official receipts but with unreadable details.

The court said it was unable to recognize if they were actually declared in VAT returns because of absence of supporting documents on the reversal and accrual of the said zero-rated sales.

Out of the P31.7-million tax refund claim, only the amount of P29.8 million represents valid VAT but “the same is not entirely attributable to zero-rated sales since petitioner also had VATable sales.”

“Due to the BIR’s previous partial approval of petitioner’s claim up to the amount of P21,223,062.08, the excess input VAT attributable to valid zero-rated sales of P25,466,789.58 should be further reduced,” the court said.

“Hence, petitioner is entitled to a lesser input VAT claim of P4,243,727.50 after taking into consideration the partial grant of its claim,” it added.

The court also said the company did not have output liabilities in the first and fourth quarters, and the output liability for the second and third quarters did not exceed the input tax incurred or paid.

The company was claiming for a refund, anchoring on the law that states that renewable energy developers are entitled to zero-rating treatment of its sale of fuel or power generated from renewable resources of energy and its purchases of local supply of goods, properties and services related to development of its power facilities.

PGPCI for the first quarter of 2014 filed an administrative claim refund of P5.3 million for that period and then elevated it to the court after the BIR failed to act on its claim within the prescribed period.

For the second quarter, it claimed a refund of P5.1 million and was granted the amount of P559,550.49. It was then raised to the court.

It was granted P16.58 million out of its P16.91-million claim for the third quarter and appealed to the court the disallowed amount.

For the fourth quarter of 2014, it claimed a refund for the amount of P4.4 million and was granted P3.85 million. It also raised the partial grant to the court.

The BIR, on the other hand, claimed that PGPCI failed to present certain documents before the BIR for its administrative claim and the computations of its claimed amount of unutilized input VAT is erroneous.

The court cited a Supreme Court ruling saying a taxpayer “cannot cure its failure” to submit a document requested by the BIR at the administrative claim by filing it before the court but said that the BIR did not specify what documents were withheld from it. — Vann Marlo M. Villegas

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