Kepco Philippines Corporation v. Revenue

MENDOZA, J.:

This is a petition for review on certiorari1 under Rule 45 of the Rules of Court seeking reversal of the February 20, 2008 Decision2 of the Court of Tax Appeals En Banc (CTA) in C.T.A. EB No. 299, which ruled that "in order for petitioner to be entitled to its claim for refund/issuance of tax credit certificate representing unutilized input VAT attributable to its zero-rated sales for taxable year 2002, it must comply with the substantiation requirements under the appropriate Revenue Regulations." Petitioner KEPCO Philippines Corporation (Kepco) is a VAT-registered independent power producer engaged in the business of generating electricity. It exclusively sells electricity to National Power Corporation (NPC), an entity exempt from taxes under Section 13 of Republic Act No. 6395 (RA No. 6395).

3 Records show that on December 4, 2001, Kepco filed an application for zero-rated sales with the Revenue District Office (RDO) No. 54 of the Bureau of Internal Revenue (BIR). Kepco's application was approved under VAT Ruling 64-01. Accordingly, for taxable year 2002, it filed four Quarterly VAT Returns declaring zero-rated sales in the aggregate amount of ₱3,285,308,055.85 itemized as follows: Exhibit Quarter Involved Zero-Rated Sales B 1st Quarter ₱651,672,672.47 C 2nd Quarter 725,104,468.99 D 3rd Quarter 952,053,527.29 E 4th Quarter 956,477,387.10 Total