THE COURT of Tax Appeals (CTA) has voided the Bureau of Internal Revenue (BIR)’s tax assessment on independent power producer Kepco Ilijan in consideration of payments made during its sale to a Government-Owned and Controlled Corporation (GOCC). The First Division of the CTA, in a decision dated July 24, granted Kepco Ilijan’s Petition for Review on the cancellation and withdrawal of BIR’s Final Decision on Disputed Assessment on the company’s deficiency Value Added Tax (VAT) worth almost P34.3 million. Weighing on the merits of the case, the CTA sided with the petitioner on its argument that the it already paid its VAT due on its sales of electricity to the National Power Corporation-Power Sector Assets and Liabilities Management Corporation (NPC-PSALM), a GOCC. The Court then held: “[T]he Formal Letter of Demand dated June 23, 2015 and the Final Decision on Disputed Assessment dated Oct. 7, 2015 are hereby canceled and set aside.” The 15-page decision was penned by Presiding Justice Roman G. del Rosario. Concurring are Associate Justice Erlinda P. Uy and Cielito N. Mindaro-Grulla. — Kristine Joy V. Patag

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