CTA partially grants geothermal firm’s tax refund claim

THE Court of Tax Appeals (CTA) has partially granted the tax refund claim of Philippine Geothermal Production Co., Inc. (PGPCI) of excess input value-added tax (VAT) traced to zero-rated sales for the first three quarters of 2016.

In a 30-page ruling on June 3, 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 P23.4 million of its P28.3-million initial claim.

“In sum, the petitioner (PGPCI) has sufficiently proven its entitlement to the refund or issuance of tax credit certificate in the reduced amount of P23.4 million,” according to the ruling written by CTA Associate Justice Jean Marie A. Bacorro-Villena.

The tax court said PGPCI presented credible official receipts to substantiate the amount entitled to it.

The company is primarily engaged in developing and exploiting geothermal energy among other products. It is likewise registered with the Department of Energy (DoE) as a developer of geothermal energy resources.

The commissioner of internal revenue argued that the company withheld documents from the BIR that should prohibit the appeal to the court.

The tribunal noted that the commissioner did not specify any of the documents allegedly withheld by the petitioner.

“It, thus, becomes imperative for the taxpayer to show the CTA that not only is he entitled under substantive law to his claim for refund or tax credit, but also that he satisfied all the documentary and evidentiary requirements for an administrative claim,” the CTA said, citing Supreme Court jurisprudence.

“Consequently, a taxpayer cannot cure its failure to submit a document requested by the BIR at the administrative level by filing the said document before the CTA.”

In a separate dissenting opinion, CTA Associate Justice Lanee S. Cui-David voted to deny the company’s claim for refund since she said its sales did not qualify for VAT zero-rating.

Ms. Cui-David cited the Renewable Energy Act of 2008, which requires a company registered as a developer of geothermal resources to secure a certificate of endorsement from the DoE to avail of a VAT zero-rating.

“The failure of petitioner to show that it was issued a certificate of endorsement by the Department of Energy on a per transaction basis, its alleged sales/receipts, if any, do not qualify for VAT zero-rating,” the magistrate said. — John Victor D. Ordoñez