THE COURT of Tax Appeals (CTA) has granted part of CBK Power Co. Ltd.’s refund claim worth P10.14 million representing its domestic purchases of services exceeding P1 million traced to zero-rated sales for the period January to March 2017.
In a 31-page decision, the CTA First Division said the firm complied with invoicing requirements under the law to prove its entitlement to the amount.
The power firm initially sought a P10.33-million refund.
The court said CBK Power’s input taxes on local purchases may be subject to a claim for a value-added tax (VAT) refund.
Input tax is VAT due or paid by a VAT-registered entity on the importation of goods or local transactions of goods, properties, or services in the courts of its business.
“To prove that petitioner (CBK Power) incurred or paid the input taxes for the 1st quarter of CY 2017, petitioner offered in evidence various invoices, official receipts, Bureau of Internal Revenue Forms 1600, and other documents which were examined by the independent certified public accountant,” it said.
The CTA said it disallowed a portion of the firm’s transactions that failed to meet invoicing requirements under the National Internal Revenue Code of 1997.
Under the Tax Code, registered taxpayers are entitled to zero-rated sales that do not translate to any output tax. The term “zero-rated sale” must be written on the firm’s official invoices.
CBK Power finances, maintains, and operates the Kalayaan II pumped-storage hydroelectric power plant in Laguna.
The tribunal noted that the firm’s transactions stemmed from its build-rehabilitate-operate-transfer agreement with the National Power Corp.
“It bears noting that the reported zero-rated sales represent the petitioner’s sales of electricity generated through hydropower to the National Power Corp under the BROT agreement,” the tax court said. “The VATable sales pertain to the penalties imposed by the petitioner on its suppliers.” — John Victor D. Ordoñez