CBK Power Company Limited vs. Commissioner of Internal Revenue

AMENDED DECISION

COTANGCO -MANALASTAS ,~:

Submitted anew for decision arc the consolidated Petitions for Review docketed as CTA Case Nos. 7771 & 7814, pursuant to the ruling of the Supreme Court dated September 30, 2014 in G.R. No. 205353 remanding these cases to the

Court of Tax Appeals (CTA)

for the determination and computation or the amounts valid for refund or the issuance or a tax credit certificate.

The consolidated Petitions for Review pray for the issuance of tax credit certificates (TCC) allegedly representing unutilizcd input value-added taxes (VAT). For CTA Case No. 7771, petitioner's tax credit claim amounts to P7 ,559,943.4-4 covering period ,January 1, 2006 to March 31, 2006; 1 and for CTA Case No. 7814, petitioner claims the amount of P36,246,606.28 covering the period April 1, 2006 to December 31, 2006.2 v

THE FACTS

The Court reiterates the relevant facts of the case as follows:

Petitioner is a VAT-registered partnership organized and existing under and by virtue of the Philippine laws. The sole purpose of which is to engage in all aspects of (a) design, financing, construction, testing, commissioning, operation, maintenance, management and ownership of Kalayaan II pumped-storage hydroelectric power plant, the new Caliraya Spillway, and other assets located in the Province of Laguna, and (b) rehabilitation, upgrade, expansion, testing, commissioning, operation, maintenance and management of the Caliraya, l3otocan and Kalayaan I hydroelectric power plants and their related facilities, located in the Province of Laguna.3 On March 17, 2006, RIR issued RIR Ruling No. DA- 146-2006, confirming petitioner's claim that as an entity engaged in hydropower generation, its billings/fees for the sale of electricity to NPC are subject to VJ\.T at zero percent (0%) rate, under Section 108 (R)(7) of the Tax Code of 1997, as amended by Nepublic/\ct 9337(RJ\. 9337). 4 Petitioner filed with the Bureau of Internal Revenue (UIR) its Monthly VJ\.T Declarations and Quarterly VJ\.T Returns for the period January 1, 2006 to December 31, 2006 on the following dates:J

Original VAT Return

(Date filed) April 25, 2006 July 25, 2006

Amended VAT Return

(Date filed) December 28, 2007 March 31, 2008 April 18, 2008 May 7, 2008 ,July 21, 2008 3 Docket, CTA Case No. 7771, Vol. 1, Joint Stipulation of Facts and Issues (JSFI)-Facts Admitted, Pars. 5 and 9, pp. 231-232. 4 Docket, CTA Case No. 7771, Vol. 1, ,JSFI Facts Admitted, Par. 11, pp. 232 233. s Docket, CTA Case No. 7771, Vol. 1, ,JSFI Facts Admitted, Pars. 7 8, pp. 231 232.

AM.E:NDED DJ:<:CISION CTJ\ Case Nos. 7771 and 7814

Page 3 of 20

2006

Taxable

Quarter

Petitioner's Amended Quarterly VAT Returns for

the four quarters of 2006 reported the following input tax credits:6 exceeding

P1Million

Input Tax Credits for the period January 1 to December 31, 2006 Domesti~"~Jimport~tl~~-~ Servi·c···e--~s····-·T-···T··-o·t~a .. l. -ln.-p ... u .. t··· i Purchases of

II

of Goods

Purchase of

Rendered by

Tax Credits

· Goods Other

Other than

Services

Non-

than Capital

Capital

Residents

Goods

I

Goods

1,199,547.36 1 10,704,981.94 ~ . -~, -'-~~'~'-"'''~"~- if-r~-~--~,--~~ 10,921,541.86 1 302,627.14 I 16,458,560.8 ---~--~····-"····---.,~~-··1····-··-~···~~-·-·-··t·~---~~·~ 86,528.36 \ 1,608,644.90 12,814,984.35 !

Also, the Amended Quarterly VAT returns for 2006 reported zero-rated sales as follows:'/ Zero-Rated Sales for the period January 1 to December 31, 2006 ~ -•••-~~•••-••••••~-·~-.,.---~"""'"~'~-·••"-'"'"""'-''''•w••" ••••••••-·---••••••-·•~

2006 Taxable Quarter

Zero-Rated Sales/ Receipts

---- 1,583,390,407.46 1,648, 748,033.50 1,599,882,354.64 -- -- -· 1,547,858,529.27

TOTAL

------------ --- --------~----- -- --------------- "----------!

-··-··-· ··························--~~~?.~~.!Z.~:-~~!:.~.?J Out of the reported total input tax for the period January 1 to December 31, 2006, amounting to P49,347,433.70, petitioner is seeking issuance ofTCCs in the amount of P43,806,549.72 (i.e. ?7,559,943.44 for CTA Case No. 7771, and P36,216,606.28 for CTA Case No. 7811) On

March

31, 2008, petitioner filed an administrative claims with the UIR. Revenue District Office (RDO) No. 55 of Laguna for the issuance of a TCC in the total amount of P7,559,943.44, allegedly representing its unutilized input taxes for the period January 1, 2006 to March 31, 2006, pursuant to Section 112 (A) of the NIRC of 1997, as amended by H.A. 9337.9 v

6 Exhibits "H-1" to "H-10"

7 Supra Note 5.

8 Exhibit "¹\"

9 Docket, CTJ\ Case No. 7771, Vol. 1, ,JSFI Facts 1\dmiitcd, Par. 12, p. 235.

AMENDED DB~CISION

Petitioner filed on April 23, 2008 a Petition for ~eview1o with the CTJ\, docketed as CTJ\ Case No. 7771, alleging inaction of respondent on its administrative claim.11 On July 23, 2008, petitioner filed another administrative claim12 with the BIR RDO No. 55 of Laguna for the issuance of a TCC in the amount of P36,246,606.28, allegedly representing its unutilized input. taxes for the period April 1, 2006 to December 31, 2006, pursuant to Section 112 (1\) of the NI~C of 1997, as amended hy N./L 9337.13 The following day, July 24, 2008, petitioner filed a Petition for ~eview1 4 with the CTJ\, docketed as CTJ\ Case No. 7814, involving its tax credit claim in the amount of P36,246,606.28.15 The CTA Former Third Division resolved t.o consolidate CTJ\ Case Nos.

7771 and 7814 on November 27, 2008. Petitioner presented and offered its pieces of evidence and witnesses during trial, while respondent rested its case without presenting any evidence or witnesses.

On December 3, 2010, the CTJ\ Former Third Division dismissed the consolidated Petitions for Review for having been prematurely filed 16 applying

the Supreme Court Decision in Commissioner of

Internal ~evenue vs. 1\ichi Forging Company of 1\sia, Inc. (Aichz) dated October 6, 2010.1·1 Petitioner's Motion for Reconsideration was denied for lack of merit on April 7, 20 11.

Petitioner appealed the above decision with the CTJ\ En lJanc by way of a Petition for ~eview docketed as EB Case No. 758.

the 10 Supra, Note 1.

On October 4, 2012, the CTJ\ En lJanc denied Petition for lack of merit.. 18 The Court Rn Ranc r 11Docket, CTA Case No. 7771, Vol. 1, JSFI- Facts Admitted, Par. 11, p. 235.

12 Exhibit "B"

13 Docket, CTA Case No. 7771, Vol. 1, JSFI- Facts Admitted, Par. 13, p. 235. 14 Supra, Note 2.

likewise denied Petitioner's Motion for Reconsideration for lack of merit on January 15, 2013.19 Petitioner challenged the denial of its claim by filing before the Supreme Court a Petition for Review on Certiorari docketed as G .R. No. 205353,20 consolidated with another Petition for Review on Certiorari docketed as G.R. No. 20206621.

Meanwhile, on February 12, 2013, the Supreme Court issued its decision on the consolidated cases of Commissioner of Internal Revenue vs. San Roque Power Corporation; Taganito Mining Corporation vs. Commissioner of Internal Revenue; and Philex Mining Corporation vs. Commissioner of Internal Revenue,22 (San Roque) wherein it affirmed with qualification the decision in the Aichi case. The Supreme Court held therein that compliance with the 120-day and the 30-day periods under Section 112 of the National Internal Revenue Code of 1997 (1 997 NIRC) is mandatory and jurisdictional, save for those VAT refund cases that were prematurely filed (i.e., before the lapse of the 120-day period) with the CTA between December 10, 2003 (when the BIR Ruling No. DA- 489-03 was issued) and October 6, 2010. Effectively, the San Roque case created a window period (i.e., from December 10, 2003 to October 6, 2010), where judicial claims that did not comply with the mandatory 120- day period, but still within the 2-year prescriptive period, shall be entertained.

Since the instant judicial claims were filed within the window created in San Roque, the Supreme Court issued a Decision on September 30, 20 14, remanding the above- captioned consolidated cases to the CTA, the dispositive portion of which reads:

"WHEREFORE, the petitions docketed as G.R. Nos. 202066 and 205353 are GRANTED. 1\ccordingly, the Court of Tax Appeals En Bane's February 1, 2012 decision and May 24, 2012 resolution assailed in the petition docketed as G.R No. 202066 and the Court of Tax Appeals En l3anc's October 4, 2012 decision and January 15, 2013 resolution v 19 Docket, CTA EB Case No. 758.

20 Docket, CTA Case No. 7771, Vol. 2, pp. 959-1011. 21 Pertaining to CTA Case No. 7887 (CTA :EB Case No. 760). 22 G.R. No. 187485, 196113 and 197156, February 12,2013.

AMENDJ:<~D DECISION

assailed in the petition docketed as G.R. No. 205353 are REVERSED and SET ASIDE.

The consolidated cases arc REMANDED to the Court of Tax Appeals for the determination and computation of the amounts valid for refund or the issuance of a tax credit certificate."23 On March 24, 2015, this Court received an Entry of Judgment. issued by the Supreme Court. stating that. the September 30, 2014 Decision in the cases docketed as G.R. No. 202066 and 205353 has become final and executory on November 4, 2014.

On ~January 22, 2016, this Court directed the parties to submit.

a manifestation informing this Court.

of any supervening event which may have transpired that would affect the disposition of the consolidated cases; and whether there is a need to conduct further proceedings. 2'1Petitioncr filed its Manifest.at.ion25 on February 1 1, 2016. Respondent. failed t.o file her Manifestation. 26 Hence, the consolidated cases docketed as CTA Case Nos. 7771 and 7814 were submiUed anew for decision on February 23, 2016, in compliance with the ruling of the Supreme Court dated September 30, 2014 in G.R. No. 205353 remanding the above-captioned cases t.o the CTA for the determination and computation of the amounts valid for refund or the issuance of a t.ax credit. certificate.

ISSUE

Whether petitioner is ent.it.led t.o the issuance of a TCC in the total amount of P43,806,549.72, representing unutilized input. VAT on local purchases and/or importation of goods and services and payments for services rendered by non-residents and purchases of capital goods aUribut.able t.o its zero-rated sales for the period ,January 1, 2006 to December 31, 2006. v 23 Docket, CTA Case No. 7771, Vol. 2, pp. 1223-1221. 24 Docket, CTA Case No. 7771, Vol. 2, pp. 1228-1230. ~ 5 Docket, CTA Case No. 7771, Vol. 2, pp. 1231 1239. 26 Docket, CTA Case No. 7771, Vol. 2, p. 1241.

/\MENDED DECISION

RULING OF THE COURT

Under Section 112(A) of the National Internal Revenue

Code of 1997, as amended by R.A. 9337, and numerous jurisprudence, following arc the requisites for tax refund or issuance of TCC for unutilized input VAT provided: ( 1) the taxpayer is VAT registered;

(2) the taxpayer is engaged in zero-rated or effectively zero-rated sales;

(3) the input taxes were incurred or paid;

(4) the input taxes have not been applied against output taxes during and in the succeeding quarters;

(5) the input taxes claimed are attributable to zero-rated or effectively zero-rated sales;

(6) the claim is filed within the prescriptive period. The sixth requisite pertaining to the timeliness of petitioner's input VAT claims shall no longer be discussed in view of the ruling of the Supreme Court finding the instant petitions to have been filed within the window created in San Roque, and thus, exempted from the strict application of the 120-day mandatory period under Section 112 of the 1997 NTRC.

Anent the first requisite, it is undisputed that, as agreed by the parties in their ~Joint Stipulation of Facts and Tssues27 which was approved by this Court on February 9, 2009, petitioner is registered as a value-added tax entity with TIN/VAT No. 205-760-474 in accordance with the NTRC of 1997, as amended, and was issued BTR Certificate of Registration OCN 1 RC0000050243 dated April 10, 2000 by the BIR Revenue District Office No. 55 (San Pablo City, Laguna), which was updated on May 11, 2005, and as a consequence, petitioner was issued BIR Certificate of Registration OCN TRCOOOO 1 95405. v 27 Docket, pp. 229 238.

AMENDED DJ:<-:CISION

With regard to the second requisite, pertinent is the prov1s1on under Section 1 08(B)(7) of the NIRC of 1997, as amended by Republic Act 9337 (R.A. 9337), which provides that. sale of power generated through sources or energy is among the transactions subject to zero percent (Oo/o) VAT rate, t.o wit.:

"(7) Sale of power or fuel generated through renewable sources of energy such as, but not limited to, biomass, solar, wind, hydropower, geothermal, ocean energy, and other emerging energy sources using technologies such as fuel cells and hydrogen fuels.

Also, Section 4.1 08-5(b)(7) of Revenue Regulations No. 16-2005, which implements the above-quoted provisions, qualified the applicability of such zero-rating as follows: SEC.4.108-5. Zero-Rated Sale of Services

XXX

(b) Transactions Subject to Zero Percent (0%) VAT Rate. - The following services performed in the Philippines by a V./\T-registered person shall be subject to zero percent (0%) V .1\T rate:

XXX

(7) Sale of power or fuel generated through renewable sources of energy such as, but not limited to, biomass, solar, wind, hydropower, geothermal and steam, ocean energy, and other emerging sources using technologies such as fuel cells and hydrogen fuels; Provided, however, that zero-rating shall apply strictly to the sale of power or fuel generated through sources of energy, and shall not extend to the sale of services related to the maintenance or operation of plants generating said power.

The parties have settled in their ~Joint Stipulation of Facts and lssucs28 that: petitioner is a special purpose entity, the sole purpose of which is t.o engage in all aspects of (a) the design, financing, construction, testing, commissioning, operation, maintenance, management. and ownership of Kalayaan II pumped-storage hydroelectric power plant, the new Caliraya Spillway, and other assets located in the Province of Laguna, and (b) the rehabilitation, upgrade, expansion, testing, commissioning, operation, maintenance and management of the Caliraya, Botocan and Kalayaan I hydroelectric power plants and their related facilities located~ ).8 Docket, pp. 229 238

AMENDr:D DECISION

in the Province of Laguna, as shown by petitioner's SEC Registration and Amended Articles of Partnership29; the Energy Regulatory Commission (ERC) issued Certificates of Compliance to petitioner as a generation company pursuant to the Implementing Rules and Regulations of R.A. 9136, otherwise known as the "Electric Power Industry Reform Act of 2007" (EPIRA)30; the respondent BIR issued BIR Ruling No. DA- 146-2006 confirming that the billings of the petitioner, an entity engaged in hydropower generation, to National Power Corporation (NPC) for the sale of electricity generated through hydropower, are subject to VAT at zero percent (0°/o) under Section 1 08(B)(7) of the NIRC of 1 997, as amended by R.A. 9337, viz:31 "From the foregoing circumstances, there is no dispute that Cl3K is primarily organized to engage in power generation business, specifically in hydropower generation, i.e., generating/ supplying electric power generated through hydropower, a renewable source of energy. This is fortified by the Certificate of Compliance issued by the Energy Regulatory Commission (ERC) that CRK is indeed a hydropower generation company. Thus, the billings of CUK for its sale of electricity to NPC, designated under the l3ROT Agreement as Capital Recovery Fees and O&M Fees, arc subject to zero percent (0%) V/\T." There is no doubt that petitioner qualifies as a taxpayer engaged in zero-rated or effectively zero-rated sales pursuant to Section 1 08(B)(7) of the NIRC of 1997, as amended by R.A. 9337.

In its Original and Amended Quarterly VAT Rcturns32 for the four quarters of taxable year 2006, petitioner reported zero-rated sales/receipts of P6,379,879,324.87. As verified from the supporting Schedules of Sales33 to and Collections34 from NPC and the corresponding VAT zero-rated sales invoices35 and official receipts36 (ORs), petitioner's zero-rated sales/receipts of P6,379,879,324.87 were duly substantiated, hence, the amount of input VAT attributable to the entire zero-rated sales shall be considered for refund. v

Per its Amended Quarterly VAT Returns for the four quarters of 2006, petitioner reflected input VAT in the total amount of P44,005,101.83, broken down as follows:

1* Quarter 2°° Quarter 3° Quarter 4'" Quarter

Particulars (Exhibit H-3) (Exhibit H-5) (Exhibit H-7) (Exhibit H-10) Total

Input Tax Deferred on Capital

Goods Exceeding P1M from Previous Quarter (Line 20B) | ®_-1,746,591.87 | P 3,447,878.52 | P _4,560,382.07 | P _7,170,871.97 | P 16,925,724.43

Add: Input Tax on Purchases of

Capital Goods Exceeding

P1M (Line 21D) 1,870,700.70 1,346,348.83 2,998,466.11 344,377.46 6,559,893.10 Total P 3,617,292.57 | P 4,794,227.35 | P 7,558,848.18 | P 7,515,249.43 | P 23,485,617.53

Less: Input Tax on Purchases of

Capital Goods exceeding P1M deferred for the | __succeeding period (Line 23A) | 3,447,878.52 | _4,560,382.07 | __7,170,871.97 |_7,088,923.74 Amortization of Input tax on

Purchases of Capital Goods

exceeding P1M P 169,414.05 P 233,845.28 P 387,976.21 P 426,325.69 P 1,217,561.23 Add: Input taxes on Current

Purchases

Domestic Purchases of Goods

22,268,056.30 _ Other than Capital Goods ftine 21F) 1,8 21,359.38 | 1,209,055.08 | 1,425,019.73 | 1,620,670.63 | __6,076,104.82 _

Importation of Goods Other |

____than Capital Goods(Line 21H) 556,816.00 | 1,152,424.00 | 810,906.00 654,763.00 | ___3,174,909.00 DomesticPurchasesof | »»8| fo pe __. Services (Line2U) | 4, 151,387.81 | 5,797,606.67 | 10,921,541.86 | 8,586,528.36 | 29,457,064.70_ Services rendered by Non- ___ residents (Line 21L) 968,642.68 1,199,547.36 302,627.14 1,608,644.90 4,079,462.08 Total Input Tax on current _ Se OO purchases | P7,498,205.87 | P9,358,633.11 | 13,460,094.73 | P12,470,606.89 | P42,787,540.60 | Total Input Tax forthe period |_-P7,667,619.92 | #9,592,478.39 | P13,848,070.94 | 12,896,932.58 | 44,005,101.83 As regards the third requisite, pctitioncr submitted various suppliers’ invoices, official receipts, and other related documents3’ to prove that it incurred/ paid the aforementioned input VAT. Upon examination of the said documents, the Court-commissioned Independent CPA (ICPA), Constantino Guadalquiver & Co. through its partner, Mr. Edwin F. Ramos, noted the folowing exceptions:

Amount of Input Reference

Findings VAT (ICPA Report)

A. Exceptions on input VAT on current purchases of goods/services other than capital goods Annex 1-10-C-1;

® | Annex 1-2Q-C-1;

108,111.88 | Annex 1-3Q-C-1;

_ Annex 1-4Q-C-1 ft Domestic purchases of goods and services 1 | supported by VAT invoice/OR with incorrect/incomplete/erased TIN

Domestic purchases of goods and services 2 supported by VAT invoices/DRs with erasure on the date/name/address 3 Domestic purchases of goods supported by documents other than VAT invoices 4 Domestic purchases of goods supported by VAT invoices but not the original copy Domestic purchases of goods supported by VAT 5 invoices issued in the name of CBK, CBK-New Spillway, CBK-PCL 6 Domestic purchases of services supported by documents other than VAT ORs 7 Domestic purchases of services supported by VAT ORs but not the original copy 8 Domestic purchases of services supported by VAT ORs not issued in the Company's name c------ ------------- --- -- -- -- -- -- Domestic purchases of services supported by VAT 9 ORs issued in the name of CBK, CBK-New Spillway,

CBK-PCL

10 Domestic purchases of services supported by tape receipts without the Company's name and/or TIN 11 Importations of goods supported by documents other than the original copy of IEIRDs Domestic purchases of goods supported by TIN# 12 only, TIN-V;TAN-V;TAN-VAT;TIN-NV/NON VAT; stamped/handwritten TIN-V/VAT invoices 13 Domestic purchases of goods supported by tape receipts without the Company's name and/or TIN .

·- ... ·- --- ------ ·-·· -- ------ ·-·· .. - -··· ··-··- - - ---- -- .. ---- -------- -- ---- 14 Domestic purchases of goods supported by VAT invoices but without invoice date Domestic purchases of goods supported by VAT 15 invoices but not dated within the VAT-taxable year --- ------------------------------ --------------------- -- -- 16 Domestic purchase of goods supported by VAT invoice but is not ATP registered Domestic purchases of services supported by TIN# 17 only, TIN-V;TAN-V;TAN-VAT;TIN-NV/NON VAT ORs; stamped/handwritten TIN-V/VAT 18 Domestic purchases of services supported by VAT Annex 1-10-C-2;

5,958.49 Annex 1-30-C-2;

Annex 1-40-C-2

62,181.50 120,925.38 -- -------~-- 220,266.58 1,676,677.11 4,856.58 8,473.18 Annex 1-10-C-3;

Annex 1-20-C-2;

Annex 1-30-C-3;

Annex 1-40-C-3

Annex 1-10-C-4;

Annex 1-20-C-3;

Annex 1-30-C-4;

Annex 1-40-C-4

Annex 1-10-C-5;

Annex 1-20-C-4;

Annex 1-30-C-5;

Annex 1-40-C-5

Annex 1-10-C-6;

Annex 1-20-C-5;

Annex 1-30-C-6;

Annex 1-40-C-6

Annex 1-10-C-7;

Annex 1-40-C-7

Annex 1-10-C-8;

Annex 1-20-C-6;

Annex 1-30-C-7;

Annex 1-40-C-8

------- ---------------- -----~---- -------- - 1,108,041.97 Annex 1-10-C-9;

Annex 1-20-C-7;

Annex 1-30-C-8;

Annex 1-40-C-9

-- - -- -- ------- ---- - --- - 30,381.63 275,131.00 54,306.62 Annex 1-20-C-8;

Annex 1-30-C-9;

Annex 1-40-C-10

Annex 1-10-C-10

Annex 1-10-C-11;

Annex 1-20-C-9;

Annex 1-30-C-10;

Annex 1-40-C-11

38,088.61

Annex 1-40-C-12

5,703.97

Annex 1-10-C-12

-- ---- -- -- - ------ ----------------- -- Annex 1-10-C-13;

80,330.08 Annex 1-30-C-11;

Annex 1-40-C-13

48.21

Annex 1-20-C-10

390,608.61 152,606.56 Annex 1-10-C-14;

Annex 1-20-C-11;

Annex 1-30-C-12;

Annex 1-40-C-14

Annex 1-10-C-15

ORs but without OR date 19 Domestic purchases of services supported by VAT ORs not dated within the VAT-taxable year Domestic purchases of services supported by VAT 20 ORs with alterations in the name of the Company without countersignature 21 Domestic purchases of services supported by VAT ORs but is not ATP registered 40,209.94 5,160.00 110,845.61 Annex 1-30-C-13;

Annex 1-4Q-C-15

Annex 1-4Q-C-16

Annex 1-10-C-16;

Annex 1-20-C-12;

Annex 1-30-C-14;

Annex 1-40-C-17

-------- --- --- -- -- ---------------------------------------------- ------- --- ----- Importations of goods supported by originaiiEIRDs 22 and/or original BOC ORs and/or original LBP ORs but with no date indicated 23 Overclaimed input tax on domestic purchases of goods/services due to erroneous computation Foreign exchange on foreign currency 24 denominated purchases of goods and services- overstatement Domestic purchases of goods supported by VAT 25 invoices with alteration in the amount written in the invoices . ----------------------------- ----------- ----.

Domestic purchases of goods supported by VAT 26 invoices with alteration in the date written in the invoices --- ------------- -- --·· -------------- ---- ------- 27 Domestic purchases of services supported by VAT ORs with alteration in the date written in the ORs -- ---- ------ ------------ -------------------------------- ------ 28 Domestic purchases of goods supported by VAT invoices not issued in the Company's name Domestic purchases of goods supported by VAT 29 invoices issued in the Company's name without its TIN and/or address Domestic purchases of services supported by VAT 30 ORs issued in the Company's name without its TIN and/or address - -- --1-· ----- 31 Unclaimed input VAT on domestic purchases of goods and services ------ -- 32 Supporting documents not available

Total

73,785.00

Annex 1-10-C-17

------ -- -- -- ------------------------------ 10,034.66 101,839.59 32,496.98 2,588.68 Annex 1-1Q-C-18;

Annex 1-2Q-C-13;

Annex 1-30-C-15;

Annex 1-40-C-18

Annex 1-10-C-19;

Annex 1-20-C-14;

Annex 1-30-C-16;

Annex 1-4Q-C-19

Annex 1-1Q-C-20;

Annex 1-2Q-C-15;

Annex 1-3Q-C-17;

Annex 1-40-C-20

-------------------- -- ·- Annex 1-1Q-C-21;

Annex 1-4Q-C-21

66,875.61

Annex 1-1Q-C-22

4,687.49

Annex 1-40-C-22

570,580.32 4,176,615.84 198,552.10 445,141.74 p 10,182,111.52 Annex 1-10-C-23;

Annex 1-20-C-16;

Annex 1-30-C-18;

Annex 1-4Q-C-23

Annex 1-10-C-24;

Annex 1-2Q-C-17;

Annex 1-3Q-C-19;

Annex 1-4Q-C-24

Annex 1-1Q-C-25;

Annex 1-2Q-C-18;

Annex 1-3Q-C-20;

Annex 1-4Q-C-25

Annex 1-10-C-26;

Annex 1-20-C-19;

Annex 1-3Q-C-21;

Annex 1-40-C-26

B. Exceptions on input VAT on current purchases of capital goods exceeding P1M -v ----------- ------------ -- ---- -- - -- ------------ ---------- ----------- ·-- --- -

AM~:NDED DECISION

1 Domestic purchases of capital goods supported by documents other than VAT invoices 2 Domestic purchases of capital goods supported by VAT invoices but not the original copy 3 Domestic purchases of goods supported by documents other than VAT ORs 225,637.11 622,155.68 25,689.76

Annex 2-3Q-C-1

Annex 2-1Q-C-1;

Annex 2-3Q-C-2

Annex 2-2Q-C-1

------- ------~-- --- -- ------------------- ----------- -- -- --------------- --------------- 4 Domestic purchases of capital goods supported by VAT ORs without OR dates 38,640.00 1----t---------------- - -- --- --- --- ---------------- ----------- ------- Domestic purchases of capital goods whose input 5 VAT is claimed in the quarter ahead of the actual quarter the OR is dated r------------------- -- - ·- ---- Domestic purchases of capital goods supported by 6 VAT invoices issued in the Company's name without TIN and/or address Domestic purchases of capital goods supported by 7 VAT ORs issued in the Company's name without TIN and/or address 51,428.58 1,416,697.00 2,449,121.50 1.60 8 Overclaimed input tax on domestic purchases of capital goods due to erroneous computation r- ------ ---- -- - --- -- - --- -· --- - --- - -- -- -- --- ---- --- ----- Effect of foreign exchange difference on foreign 9 currency denominated purchases of capital goods- 22,132.77 overstatement

Annex 2-3Q-C-3

Annex 2-3Q-C-4

Annex 2-1Q-C-2;

Annex 2-2Q-C-2;

Annex 2-3Q-C-5;

Annex 2-4Q-C-1

Annex 2-1Q-C-3;

Annex 2-2Q-C-3;

Annex 2-3Q-C-6;

Annex 2-4Q-C-2

Annex 2-1Q-C-4

Annex 2-1Q-C-5;

Annex 2-2Q-C-4

--- -------- - ---- --- ----------------------------------------- ---- ------------- ------------------ 10 Supporting documents not available 48,214.29

Annex 2-4Q-C-3

----r--------- ---------- ----- ------ ------------------------------------------------------------------

Total

p 4,899,718.29 The Court subscribes to the exceptions found by the ICPA on the input VAT on current purchases of goods/ services other than capital goods (item A above) in the amount of P1 0, 182,111.52 for non-compliance with the substantiation requirements prescribed under Sections 11 O(A), 113(A) and (B), 237 and 238 of the NIRC of 1997, as amended, in relation to Sections 4.110-1, 4.110-2, 4.110-8 and 4.113-1 of RR No. 16-05.

With respect to the P4,899,718.29 exceptions on input VAT on current purchases of capital goods exceeding P1M, the ovcrclaimcd input VAT due to erroneous computation of Pl.60 (item B.8 above) shall be disallowed instantaneously. As to the remaining amount of P4,899,716.69, only the amortized portion for 2006 in the amount of P617 ,032.24 shall be disallowed from petitioner's claim pursuant to Section 11 O(A) of the NIRC of 1997, as amended, and as implemented by Section 4.110-3 of RR No. 16-2005. Below is the breakdown of the P617 ,032.24 amortized input VAT from items B. 1 to B. 7 & B.9 to B.1 0 above: v

Input VAT Amortized

Findings Amount Input VAT?

B41 Domestic purchases of capital goods supported P 225,637.11| ® 22,563.71 |_| by documents other than VAT invoices a Domestic purchases of capital goods supported 2 622,155.68 96,240.50 ____| by VAT invoice but not the original copy _ _ - 3 Domestic purchase of goods supported by _ 25,689.76 2,997.14 Domestic purchase of capital goods supported — 4 by VAT OR without OR date 38,640.00 3,220.00 Domestic purchase of capital goods whose input 5 | VAT is claimed in the quarter ahead of the actual 51,428.58 3,428.57 quarter the OR is dated Domestic purchase of capital goods supported 6 | by VAT invoice issued in the Company's name 1,416,697.00 144,706.54 without TIN and/or address Domestic purchase of capital goods supported 7 | by VAT OR issued in the Company's name 2,449,121.50 338,565.41 __| without TIN and/or address | fo Effect of foreign exchange difference on ‘foreign 9 | currency denominated purchases of capital 22,132.77 3,703.23 | | goods-overstatement > oe a ft 10 | Supporting documents not é available _ 48,214.29 | oe 4, 607. 14 Total P4,899,716.69 | 617,032.24 In addition, the following input VAT claim in the amount of P1,726,336.53 (P1,359,061.58 plus P367,274.95) shall also be disallowed for petitioner’s failure to meet the substantiation requirements prescribed under the above-mentioned laws and regulations:

Exhibit | TG Rfinvoic | OR/Invoice | |

a Vendor Name e No. _____ Date Input VAT 1) Input VAT supported b by VAT ‘invoices and ORS wherein the VAT amount was not : separately in indicated — 7 10-148 © | GLUCS Business Enterprises | ae —_ 0304 _ cL _ 3/16/2006 ~ e 2 006. 79 10-164 |HighGripAutoCenter | 2736 4/7/2006 | «565.71 | 10-243 Molina General Builders _ a / 7 701 | 1/31/2006 : 5,910.29 10-244 | MolinaGeneral Builders —sé‘iYSsCD 1/31/2006 | 12,769.85. 10-245 |MolinaGeneral Builders = | 703 | 2/16/2006 | —_—i5,493.78 | 10-744 | Top-rigid Ind Safety. Supply Inc 7 - | 12764 1/30/2006 — - 36, 136. 36 | 10-746 | TwinVTechSystems&Services § | —*«||_~—-024_—s*zfs «2/10/2006 | —= 14,300.46 4Q-61 |ColedanEngineering = = 0001 | 11/7/2006 | ~—_—_9,600.00 40-87 | Eagle Star Ind Sales Corp _ | 24473 | 12/8/2006 9,852.00 4Q-221 | Industrial $ Solutions & Technical services Corp ft 0682 - 12/15/2006 . ___ 8,040.00 subtotal 104,675.24 _2) Input VAT on domestic purchases of goods supported by VAT invoices issued not in the name | of petitioner _

10-89 & Eastern Aluminum Glass Supply

Eastern Aluminum Glass Supply

11108 10891 39 See Annex A of this Decision for the detailed computation.

2/22/2006 — 1/25/2006 10,283.57

10-428 & . .

10-717 Rich Hope Enterprises 0611 1/11/2006 770.00

Ty |

top & Royal Star Appliance Marketing Inc 10146 1/17/2006 2,763.64 tage & VMA home Appliance, Co. 18344 1/18/2006 2,448.18 10-481 & VMA home Appliance, Co. 18663 2/15/2006 231.43 10-753 10-406 & . . . .

10-706 R. Ong Shell gasoline Station various various 9,875.20 20-248 & .

2 428.57 20-598 Novee Merchandise 137799 5/8/2006 28.5 20°373 & Reign-NAN Sales Industry 3742 4/11/2006 9,000.00

2Q-639

20°374 & Reign-NAN Sales Industry 3741 4/10/2006 12,780.00

2Q-640

20-441 & a V .

20-676 elphram Distributors 1058 4/21/2006 1,056.36 2Q-442 & we 20-676 Velphram Distributors 1964 4/5/2006 720.00 20-443 & .

V .

20-677 elphram Distributors 1069 5/10/2006 948.64 20-444 & .

20-678 VMA home Appliance, Co. 18947 4/21/2006 964.29 20°365 & R. Ong Shell gasoline Station various 7/3/2006 8,652.59

2Q-630

20. 631 & R. Ong sl Shell ll gasoline Station | various _ 6/16/2006 5,614.43 70368 & R. Ong s Shell gasoline Station various 6/22/2006 7,014.44 20-298 | oe :

20-472 Bien Venue General supplies & Contractors 13707 3/28/2006 28,313.34 a 8 Holland Blooms Flower er Shops, | Inc 17741 8/15/2006 267.86 tO) a Modern Supreme Smart Shop Inc 25042 10/17/2008 253.93 AQ-355& | ee ee a 4Q-787 _ Nowe Merchandise TB | Saae008 | 786.00 40-356 & 40-788 Novee Merchandise 143682 | 11/6/2006 _ 996.00 40-357 & 7 0 .

40-788 | Novee Merchandise | 1458 5871 . /10/8/2 06 | 7 549.00

4Q-65:

a 9& VMA Home e Appliance, Co. 20381 14/24/2006 407.14 | 4Q-859 | a : fo oe 40-391 & P.| General Merchandise 29448 “1027/2006 669.64 40-801 | a J. -

4Q-393 & |

4Q- go2_| P! General Merchandise ee 5529 ; prone | a 669.64 40-654 & a:

40-857 Velphram Distributors oe . 2166 | 10/17/2006 — us 40-655 _| Velphram Distributors (2172 | (11/8/2006 | 4,261.61 4Q-486 & . .

40-871 ROn ones Shell li gasoline Station : a __ various | various i 8,335.17 4Q-487 & . .

5 7 40:8 872 R. Ong Shell gasoline Station oe in various |. various 10,568.9 | 40-4 -498 rz _R. Ong Shell gasoline Station eevee wets ne se _various | various | 84017 0 t

40-874 subtotal 138,425.24 3) Input VAT on domestic purchases of services supported by VAT ORs issued not in the name of petitioner 10-34 & tosis. City Service Corporation 146107 3/6/2006 38,280.52 10-82 & ; / 10-524 Donna Carlos Fashions & collections 1583 3/7/2006 17,475.00 10-119 & .

10-556 Functional Inc 119107 2/24/2006 1,567.28 lossy & Harty Incorporated Philippines 304 2/9/2006 6,455.06 toss & Hearth & hastings Philippines Inc 3384 1/13/2006 1,909.08 -18 so.se8 & Infinity Security & Investigation Services 2865 2/27/2006 98,832.24 10-203 & 10-613 KPI Elevators inc 6792 1/5/2006 6,266.18 10-204 & 10-614 KPI Elevators Inc 6795 1/5/2006 12,532.36 10-2 oeao & Nu-print Philippines printer and Trader 9371 2/17/2006 1,909.09 10-297 eat & Nu-print Philippines printer and Trader 9622 3/29/2006 1,665.28 10-431& |.

10-721 Rizalnet Enterprises 0363 3/29/2006 612.86 10-441 & 10-726 Sards Construction 0087 3/31/2006 96,695.94 10-439 & 10-727 Sards Construction 0084 3/17/2006 27,452.57 10-440 & Sards Construction 86 3/23/2006 32,451.43 10-728 | 20-27 & 20-471 Best travel 36705 5/24/2006 3,086.20 20-400 & 20-655 Sards Construction 0010 5/31/2006 8,099.99 20-404 & 20-656 Sards Construction 0208 5/24/2006 37,440.00 20-401 & 20-657 Sards Construction 0012 7/6/2006 65,520.00 30-29 & B 14/2 .

30-574 est travel 9/14/2006 3,035.66

4Q-33 &

40-688 Best travel

4Q-358 &

12/14/2006 40-790 Nu-print Philippines printer and Trader 9333 10/13/2006 192.00 10.791 & Nu-print Philippines printer and Trader 1034 10/20/2006 135.00 10.799 & Nu-print Philippines printer and Trader 0571 12/21/2006 171.00 10783 & Nu-print Philippines printer and Trader 0572 12/21/2006 214.00 toe & Reign-NAN Sales Industry 3212 12/14/2006 40,714.29

40-545 & ;

40-833 Sards Construction 0089 | 10/12/2006 19,381.59 40-546 & ;

40-834 Sards Construction 0024 10/20/2006 18,381.59 40-547 & ;

40-835 Sards Construction 0026 10/27/2006 6,321.43

4Q-548 &

40-836 Sards Construction 0027 11/10/2006 10,221.43

4Q-549 &

40-836 Sards Construction 0034 11/23/2006 126,321.43

4Q-

Q°550 & Sards Construction 0035 11/29/2006 40,714.29 40-837

4Q-551 &

40-837 | Sards Construction 0036 11/29/2006 9,107.14 40-552 & j + 40-839 Sards Construction 11/16/2006 40,714.29 40-553 &

Sards Construction

4Q-840

40-2 & ae

4Q-687 Airfreight 2100 Inc

12/20/2006 294,750.00 103058 11/3/2006 19.66 40-3 & . .

40-688 Airfreight 2100 Inc 103081 11/16/2006 9.78

4Q-396

Q-396 & Pagsanjan Medical Clinic 329845 10/13/2006 | 26.79 40-803

4Q-22

taco Banahaw Telephone Corp 34946 12/24/2006 235.71 40-23 & Banahaw Telephone Corp 34798 11/28/2006 235.71

4Q693 | _ a

aa. seo | & P.C c Magri Eng’ g. Enterprises 2492 _ 10/31/2006 1,607.14 4 . ee — as en an © — es | 405158 | 8 Reign-NAN Sales Industry 3163 10/13/2006 8,672.34 | ss subtotal - ee I oe a= 1,084,645.39 4) Input VAT on domestic purchase of service supported by VAT OR without OR date 10-435 & 10-722 | Rodler Engineering & S & Supplies ; : canal subtotal 31,315.71 Grand Total P 1,359,061.58 Amortized Input VAT on Capital Goods exceeding ®1M purchased in 2005 without supporting documents ; ist Quater 2nd Quater 3rd Quater 4th Quater Date H-3, H-5, H-7, H-10, ___Description —'|_- Purchased — pp.5-6 =| ~— pp. 5-6 pp. 5-6 p. 3 _ Total | Platform 11/5/2005 | ® 996.42| PB 996-41 | —P 996.42] P 996.39] P 3,985.64 “Insulation Resistence aa fo fo oe ee ee Tester = ———s|.-: 11/10/2005 _ 1,355.49 | 1,355.49 1,355.49| 1,355.49} 5,421.96 | | DucterMegger ——|-'11/10/2005 | _—s 1,138.92] 1,138.91] —«.1,138.92| 1,138.89] 4,555.64 [| RoofCover ——*«|-11/22/2005 | 1,375.74] “1375. 74| ~—-1,375.74| 1,375.74] 5,502.96 Garage ————s|-:12/7/2005 | ~—S— 295.50] —- 295.50 295.50; 295.50; 1,182.06 [Garage ————|_-12/20/2005 | —1,375.74| —1,375.74| 1,375.74 1,375.74| 5,502.96 Office softwares _—'||_: 11/3/2005 | _—2,663.64 | 26 663.64 —2,663. el 2,663.64} 10,654.56 | _Local Area network | 11/24/2005 2, 210. 04 — 2,210.0: 04 2, 210.04 | — 2,210.04 a _ 8,840. 16 ‘Metal fiberglass | 11/23/2005 i 2,727.27| 2,727.27; 2,727.27| 2,727.27 10,909.08 | enclosure

Rainwise Weather

station 12/6/2005 612.03 612.03 612.03 612.03 2,448.12 Engineering service 11/17/2005 3,661.71 3,661.71 3,661.71 3,661.71 14,646.84

Computer

11/12/2005 1,016.67 1,016.67 1,016.67 1,016.67 4,066.68

Slope Protection

11/18/2005 6,316.02 6,316.02 6,316.02 6,316.02 25,264.08

Gantry Crane

11/18/2005 496.68 496.68 496.68 496.68 1,986.72

Earthing and Lighting

Protection

11/18/2005 170.25 170.25 170.25 170.25 681.00 Cable tray 11/18/2005 627.57 627.57 627.57 627.57 2,510.28

Lumot Morning Glory

Fence

11/18/2005 95.52 95.52 95.52 95.52 382.08 Emergency saddle spillway road 11/18/2005 620.58 620.58 620.58 620.61 2,482.35

Perimeter Fence

12/9/2005 12,525.42 12,525.42 12,525.42 12,525.42 50,101.68 Emergency saddle spillway road 12/8/2005 867.90 867.90 867.90 867.90 3,471.60

Computers

12/28/2005 4,861.89 4,861.89 4,861.89 4,861.89 19,447.56

Retention

12/21/2005 36,116.49 36,116.49 36,116.49 36,116.49 144,465.96

Guesthouse

11/22/2005 6,493.56 6,493.56 6,493.56 6,493.56 25,974.24

Garage

11/14/2005 371.58 371.58 371.58 371.58 1,486.32

Garage

12/5/2005 371.94 371.94 371.94 371.94 1,487.76

Axial Blower

11/3/2005 1,897.83 1,897.83 1,897.83 1,897.83 7,591.32 multi Gas Detector 11/7/2005 556.35 556.35 556.35 556.35 2,225.40 ------- ~-- - " --·---------- -·· -- ------------------------ - --- - ------------------------- ----- --- ····- -·-· ·-- ·-· ------------

TOTAL

-- P91,818.75 P91,818.73 P91,818.75 P91,818.72 P367,274.95 Accordingly, out of petitioner's reported input VAT of P44,005, 101 .83 for 2006, only the amount of P31 ,4 79,619.94 represents petitioner's valid input VAT, computed as follows:

Input VAT per Returns

p 44,005,101.83

Less: Disallowances

--- ----- --------- -- ------------- Per ICPA Report (P10,182,111.52+P1.60) Per Court's further verification ----------- ---------·· - ------ - --------- Amortized input VAT on current _____ p~~ch~ses_o_f ~(l_pit<l_l_~~~~exceeding_!_~l\,ll____ _ __ Additional disallowances

Substantiated Input VAT

P10,182,113.12 617,032.24 1,726,336.53 12,525,481.89 p 31,479,619.94 Proceeding to the fourth and fifth requisites, since petitioner's reported sales for 2006 were all zero-rated, there is no output VAT to speak of. Thus, the substantiated input VAT of P31,479,619.94 is entirely attributable thereto.

Furthermore, the claimed unutilized input VAT for taxable year 2006 in the amounts of P7,559,943.441JO for the first quarter and P36,246,606.2841 for the last three quarters were not carried over to the succeeding taxable quarters since the same were deducted as "VAT Refund/TCC claimed" in the First and Fourth Quarterly VAT Returns of 2006, respectively.v

In sum, pet.it.ioner has sufficiently proven compliance with the requisites for the refund of unutilizcd input VAT at.tribut.able t.o it.s zero-rat.ed sales for t.he period January 1, 2006 to December 31, 2006, but only to the extent of P31,479,619.94 out of the total claimed input VAT of P43,806,549. 72.

WHEREFORE, premises considered, the instant Petition for Review is PARTIALLY GRANTED. Accordingly, respondent. Commissioner of Internal Revenue is ORDERED TO ISSUE A TAX CREDIT CERTIFICATE in favor of pet.it.ioner CBK Power

Company

Limited

in t.he amount.

of P31 ,4 79,619.94 representing petitioner's unut.ilized input. VAT at.tribut.able t.o its zero-rated sales for the period <January 1, 2006 to December 31, 2006.

I CONCUR:

/ ~ ~ ;./(..-.. . ..,/~ AMELIA R. COTANGCO-MANALASTAS Associate <J usticc LOVELL R. BAUTISTA

Associate Justice

AMI<~NDED DECISION

ATTESTATION

I attest that the conclusions in the above Decision were reached in consultation before the case was assigned to the writer of the opinion of the Court's Division.

LOVELL ~UTISTA

Associate Justice

Chairperson

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution and the Division Chairperson's Attestation, it is hereby certified that the conclusions in the above Decision were reached in consultation before the case was assigned to the writer of the opinion of the Court. ~~d;: ~. QJ-~ot..~ Ci JiJANITO C. CASTANEJ1A, JR.

Acting Presiding Justice

CBK POWER COMPANY LIMITED vs CIR

Schedule of amortized input VAT on current purchases of capital goods exceeding PlM No. of Est. life in months

Amortized

Date

Input VAT

months amortized Input VAT for

Purchased

Description

Amount (A)

(B)

(C)

2006 (A/B*C)

B.1

7/11/2006 Dehumidifier

225,637.11 60 6 22,563.71 subtotal 22,563.71 2

1/25/2006 Service Vehicle

160 000.00 60 12 32,000.00

3/17/2006 Service Vehicle

145,714.00 60 10 24,285.70

3/16/2006 Service Vehicle

102,428.40 60 10 17,071.70

3/6/2006 SCADA Network

22,227.28 60 10 3,704.50

7/18/2006 Service Vehicle

191,786.00 60 6 19,178.60 subtotal '!:lb1.L4U.:::tU 3

6/27/2006 Wave Breaker

25,689.76 60 7 2,997.14 subtotal 2,997.14 4

8/1/2006 Power Supply

38,640.00 60 5 3,220.00 subtotal 3,220.00 5

9/26/2006 Load Weights

51,428.58 60 4 3,428.57 subtotal ;j,42H.:,/ 6

3/22/2006 SCADA Network

37,127.79 60 10 6,187.96

3/17/2006 SCADA Network

11,677.66 60 10 1,946.28

4/27/2006 Wave Breaker

111,554.64 60 9 16,733.20

6/27/2006 SCADA Network

26,196.43 60 7 3,056.25

6/28/2006 SCADA Network

37,127.79 60 7 4,331.58

7/17/2006 Caliraya Spillway

1,090,262.69 60 6 109,026.27

11/20/2006 Service Vehicle

102,750.00 60 2 3,425.00 subtotal 144,706.54 7

1/16/2006 Perimeter Fence

64,956.76 60 12 12,991.35

1/23/2006 Perimeter Fence

44,050.18 60 12 8,810.04

1/6/2006 Perimeter Fence

99,542.67 60 12 19,908.53

1/11/2006 Thrust Bearing

205,265.45 60 12 41,053.09

1/19/2006 Slope Protection

256,443.58 60 12 51,288.72

1/6/2006 Repair of Leak

131,841.48 60 12 26,368.30

3/15/2006 Wave Breaker

76,517.95 60 10 12,752.99

5/19/2006 Wave Breaker

41,557.18 60 8 5,540.96

5/17/2006 Slope Protection

112,103.97 60 8 14,947.20 5/5/2006 Plugging and concreting 286,141.58 60 8 38,152.21

Annex A

Reference

Annex 2-3Q-C-1;

Exh. H-7, p. 4 of 8 Annex 2-1Q-C-1;

Exh. H-3, p. 4 of 7 Annex 2-1Q-C-1;

Exh. H-3, p. 4 of 7 Annex 2-1Q-C-1;

Exh. H-3, p. 4 of 7 Annex 2-1Q-C-1;

Exh. H-3, p. 4 of 7 Annex 2-3Q-C-2;

Exh. H-7 p. 4 of 8 Annex 2-2Q-C-1;

Exh. H-5, p. 4 of 7 Annex 2-3Q-C-3;

Exh. H-7, p. 4 of 8 Annex 2-3Q-C-4;

Exh. H-7, p. 4 of 8 Annex 2-1Q-C-2;

Exh. H-3, p. 4 of 7 Annex 2-1Q-C-2;

Exh. H-3, p. 4 of 7 Annex 2-2Q-C-2;

Exh. H-5, p. 4 of 7 Annex 2-2Q-C-2;

Exh. H-5, p. 4 of 7 Annex 2-2Q-C-2;

Exh. H-5, p. 4 of 7 Annex 2-3Q-C-5;

Exh. H-7, p. 4 of 8 Annex 2-4Q-C-1;

Exh. H-10, p. 3 of 4 Annex 2-1Q-C-3;

Exh. H-3, p. 4 of 7 Annex 2-1Q-C-3;

Exh. H-3, p. 4 of 7 Annex 2-1Q-C-3;

Exh. H-3, p. 4 of 7 Annex 2-1Q-C-3;

Exh. H-3, p. 4 of 7 Annex 2-1Q-C-3;

Exh. H-3, p. 4 of 7 Annex 2-1Q-C-3;

Exh. H-3, p. 4 of 7 Annex 2-1Q-C-3;

Exh. H-3, p. 4 of 7 Annex 2-2Q-C-3;

Exh. H-5, p. 4 of 7 Annex 2-2Q-C-3;

Exh. H-5, p. 4 of 7 Annex 2-2Q-C-3;

Exh. H-5, p. 4 of 7

CBK POWER COMPANY LIMITED vs CIR

Schedule of amortized input VAT on current purchases of capital goods exceeding P1M

Annex A

No. of Est. life in| months Amortized Date Input VAT months | amortized | Input VAT for

Purchased Description Amount (A) (B) (C) 2006 (A/B*C)

Reference

6/14/2006|Communication Equip 135,359.40 60 15,791.93 Annex 2-2Q-C-3;

Exh. H-5, p. 4 of 7 6/14/2006|Communication Equip 136,620.31 60 15,939.04 Annex 2-2Q-C-3;

Exh. H-5, p. 4 of 7 6/27/2006} Plugging and concrcting 301,930.83 35,225.26 8/10/2006|Load Weights 205,714.29 17,142.86 Annex 2-2Q-C-3;

Exh. H-5, p. 4 of 7 Annex 2-3Q-C-6;

Exh. H-7, p. 4 of 8 9/6/2006] Guesthouse 21,157.69 1,410.51 Annex 2-3Q-C-6;

Exh. H-7, p. 4 of 8 9/11/2006 | Dehumidifier 180,509.69 12,033.98 Annex 2-3Q-C-6;

Exh. H-7, p. 4 of 8 9/4/2006|Garage 31,178.57 2,078.57 Annex 2-3Q-C-6;

Exh. H-7, p. 4 of 8 9/13/2006}Cable Anchor 73,102.50 4,873.50 Annex 2-3Q-C-6;

Exh. H-7, p. 4 of 8 10/27/2006|Dchumidificr 45,127.42 2,256.37 Annex 2-4Q-C-2;

Exh. H-10, p. 3 of 4 1/16/2006) Perimeter Fence 2,020.45 Annex 2-1Q-C-5;

Exh. H-3, p. 4 of 7 1/23/2006|Perimeter Fence 30.19 Annex 2-1Q-C-5;

Exh. H-3, p. 4 of 7 1/6/2006] Perimeter Fence 878.23 175.65 Annex 2-1Q-C-5;

Exh. H-3, p. 4 of 7 3/15/2006}Wave Breaker 907.56 151.26 Annex 2-1Q-C-5;

Exh. H-3, p. 4 of 7 1/6/2006|Repair of Leak 5,570.76 1,114.15 Annex 2-1Q-C-5;

Exh. H-3, p. 4 of 7 1/19/2006|Slope Protection 4,408.64 881.73 6/14/2006}Communication Equip 8,316.94 970.31 Annex 2-1Q-C-5;

Exh. H-3, p. 4 of 7 Annex 2-2Q-C-4;

Exh. H-5, p. 4 of 7 3,703.23 10} 11/16/2006/Load Weights 48,214.29 | 1,607.14 Annex 2-4Q-C-3;

Exh. H-10, p. 3 of 4 subtotal 1,607.14 617,032.24 rand Total