EDC BURGOS WIND POWER CORPORATION v. COMMISSIONER OF INTERNAL REVENUE

REPUBLIC OF THE PHILIPPINES COURT OF TAX APPEALS QUEZON CITY SPECIAL THIRD DIVISION EDC BURGOS WIND POWER CTA CASE N O. 9446 (CTA EB No. CORPORATION, 2548) Petitioner, Mem b er s: - versus - RINGPIS-LIBAN, P.J. & Chairperson, MODESTO-SAN PEDRO, and FERRER-FLORES, JJ. COMMISSIONER OF INTERNAL Promulgated: REVENUE, Respondent. JUL 0 3 2026 x----- - ----- --- ----------------- - - -- - ------- - ------ - - -- ~- - ~~~~Ji~ ~: -------- -- -- ------- x RESOLUTION For resolution is the taxpayer's Manifestation and Submission (Re: Manifestation dated June 18, 2025), without respondent's comment despite notice per Records V erification Report dated May 13, 2026. O n May 19, 2025, it will be recalled that after the Court En Bane remanded the case for the determination o f the refundable / creditable amount due to the taxpayer, the Court issued a decision which partiai!J granted the taxpayer's petition and ordered the reftmd or issuance a tax credit certificate in the amount of P hP3,114,588.48 representing its excess and unutilized input VAT attributable to its zero-rated sales for the 1sr quarter of Calendar Year (CY) 2015. O n June 9, 2025, respondent ftled a Motion for Partial Reconsideration ~e: Decision p romulgated 19 M qy 2025) with the taxpayer's Comment (Re: M otion for Partial Reconsideration datedJune 9, 2025) ftled on June 25, 2025. On N ovember 5, 2025, the Court issued a Resolution denying respondent's motion for lack of merit. On December 3, 2025, the taxpayer filed a NlanifeJtation and Submission Jv . (Re: Manifestation datedJune 18, 2025), disclosing that it had filed a paper copy of its Motion for Partial Reconsideration (Re: Decision dated May 19, 2025) on J une

RESO LUTION CTA Case No. 9446 (CTA EB No. 2548) 2025, but had inadvertently used the wrong docket number- CTA Case No. 942.6 instead of CTA Case No. 9416, the correct docket of this case. The taxpayer apologized for the oversight and, consequently, posited that the Court's November 5, 2025 Resolution had been issued without considering its motion, which had been ftled under a different docket. In its attached Motion for Partial Reconsideration (Re: Decision dated Mcry 19, 2025), the taxpayer argues: first, that its excess and unutilized input VAT for the 1sr and 2nd quarters of CY 2015 were duly incurred or paid and, pursuant to Section 112(A) of the Tax Code, should be refunded by respondent; and, second, that it has neither the legal basis nor the right of action to refund its input VAT from its local suppliers, especially considering that these taxes have been remitted to respondent. The Court is not persuaded. First, this is a remanded case. The taxpayer has already had its day in Court --- both during trial and on appeal before the Court En Bane --- and was afforded ample opportunity to present its cause and argue its case. Second, even if the Court's November 5, 2025 Resolution may not have considered the arguments raised in the taxpayer's motion ftled on June 9, 2025, the taxpayer had nonetheless flied a Comment (Re: Motion for Partial Reconsideration . dated June 9, 2025) to respondent's motion. That comment was noted, and the arguments therein were fully considered when the Court issued its November 5, 2025 Resolution. Moreover, the taxpayer's Comment (Re: Motion for Partial Reconsideration dated June 9, 2025) contended that it had "sufficiently established that the input taxes it paid or incurred on its purchases of goods and services, as well as its importation of goods" are attributable to its zero-rated sales of power and, that it "presented sufficient evidence to prove its compliance with the requisites for granting VAT refund", thus, it is "entitled to the refund sought." These contentions clearly overlap with arguments n ow raised in the taxpayer's Motion for Partial Reconsideration (Re: Decision dated Mqy 19, 2025 --- a motion that was misftled in the docket of another case due to the taxpayer's inadvertence. Third, the taxpayer zeroes in on the input VAT amounting to PhP39,375 and PhP30,041,628.19, which it paid to its local suppliers of goods or services.1 It concedes that it paid these amounts on local purchases used for the development, construction, and installation of its Renewable Energy (RE) plant facilities, notwithstanding " the entitlement of these purchases to VAT zero- rating under the RE law."2 Nonetheless, it maintains that whether "these input taxes were rightly or wrongly paid by Petitioner to its local suppliers, the fact remains that these input taxes became due from and were paid by Petitioner." It adds that Section 112(A) of the Tax Code "does not distinguish between tt/ 1 See t axpayer's Motion for Partial Reconsideration (Re: Decision dated May 19, 2025}, pp. 3-9. 2 Id., p. 4.

RESOLUTION CTA Case No. 9446 (CTA EB No. 2548) input taxes that were correctly or incorrectly paid" nor does "it limit the refund entitlement to input taxes that were rightfully paid." On this basis, the taxpayer concludes that it is entitled to a refund or tax credit of the same, given that these input taxes were remitted to the respondent. The assailed decision squarely resolved this issue. It ruled that Section 15(g) of Republic Act N o. (RA) 9513, otherwise known as the Renewable E nergy Act of 2008, gran ted the taxpayer, as an RE developer, a tax incentive of zero VAT on its local purchases of goods and services needed for the development, construction, and installation o f its plant facilities - and therefore, the taxpayer should not have paid these input taxes in the first place: " For the 1" and 2"d quarters o f CY 2014, petitioner allegedly paid inpu t taxes on its do mes tic purchases o f goods and services, importation o f non-capital good s and o n payments for services rendered b y non-residents in the aggregate amount o f P 33,903,404. 70, broken down as follows:3 Unutilized Input T ax T axable D omestic Im p orta tion of Domestic Services T otal Input T ax Quarte r Purchases of Goods other Purchase of Rendered by Cla im than Capital No n-reside n ts Goods Services p 11,298,816.73 Goods p 601,044.51 22,604,587.97 1" p 39,375.00 p 10,658,397.22 p 601,044.51 p 33,903,404.70 2"" p 39,375.00 T otal p 3,221,357.00 19,383,230.97 p 3,221,357.00 p 30,041,628.19 P etitioner states that these input taxes are attribu table to its zero- rated sales o f electricity power generated from renewable sources o f energy.4 In this regard. Sectio n 15(g) o fRA No. 9513 d eclares that an RE D eveloper's purchases o f local supply o f goods. properties. and services needed for the development. construction and installation o f its plant facilities and the whole process of exploring and developing renewable energy sources up to its conversion into power. including, but no t limited to. the services performed by subcontractors and / or contractors. shall be entitled zero percen t (0%) VAT: "CHAPTER VII GENERAL INCENTIVES Section 15. Incentives for Renewable Energy Projects and A ctivities. - RE d evelop e rs of renewable en ergy facilities , including hybrid systems, in proportion to and to the extent of the RE component, for bo th power and non-power applications, as duly certified by the DOE, in consulta tion with the BOI, shall be e ntitled to the fo llowing ince ntives: XXX XXX XXX (g) Zero Percen t Value-Added Tax Rate.- xx~ ----------------------- 3 Par. 9, petitioner's Memorandum, Docket- Vol. 3, p. 1295. 4 Par. 48, petitioner's Memorandum, Docket - Vol. 3, p. 1302.

RESOLUTION CTA Case No. 9446 (CTA EB No. 2548) All RE D evelopers shall be entitled to zero-rated value added tax on its purchases of local supply of goods, properties and services needed for the development, construction and installation of its plant facilities. This provision sh all also apply to the whole process of exploring and developing renewable energy sources up to its conversion into power, including but not limited to the services p erformed by subcontractors and/or contractors." (Emphases added) Being an RE developer. petitio ner is entitled to zero-rated purchases from its local suppliers of goods. properties and services needed fo r the development. construction. and installation of its plant facilities and for the whole process of exploration and develo pment o f RE sources up to its convers10n mto power. As such. petitio ner sho uld no t have paid the claimed input taxes of P39.375.00 and P30.041 .628.19 on its local purchases of goods and services. respectively. Hence, petitioner canno t be entitled to claim a tax refund or credit on the said purchases. If peti tioner had actually paid the correspo nding input taxes of P39,375.00 and f->3 0,041,628.19, petitio ner's proper recourse is not against the BIR but against the seller who had erroneously shifted to it the output VAT. T his is in line with the Supreme Court ruling in the analogous case of Com/ Bqy Tickel Corporation vs. Commissioner ofInternal Revenue (Coral Bqy),5 wherein the Supreme Court found that the taxpayer is a domestic corporation registered with Philippine E conomic Zone Authority (PEZA) as an E cozone Export E nterprise whose purchases were subject to zero-percent VAT under Revenue Memorandum Circular No. 74-99 co nsistent with the Cross Border D octrine and the D estinatio n P rinciple of the Philippine VAT System. The Supreme Court held, therefore, that the taxpayer was no t entitled to ftle a claim fo r refund o f input VAT: "The petitio ner's principal office was located in Barangay Rio Tuba, Bataraza, Palawan. Its plant site was specifically located inside the Rio Tuba Expo rt Processing Zone - a special economic zone (ECOZONE) created by Proclamation No. 304, Series o f 2002, in relatio n to Republic Act o. 7916. As such, the purchases of good s and services by the petitioner that were destined for consumption within the E COZONE should be free of VAT; hence, no input VAT should then be paid on such purchases, rendering the p etitioner n ot entitled to claim a tax refund or credit. Verily, if the petitioner had p aid the input VAT, the CTA was correct in holding that the p etitioner's proper recourse was not against the Government but against the seller wh o h ad shifted to it the output VAT following RMC No. 42-03, which provides: In case tl1e supplier alleges that it reported such IV' sale as a taxable sale. the substantiation o f remittance of _ _ _ _ __ _ _ th_e_ o_u_tp_u_t taxes o f the seller (input taxes of s G.R. No. 190506, June 13, 2016.

RESOLUTION CIA Case No. 9446 (CIA EB No. 2548) exporter-buyer) can only be established upon the thorough audit of the suppliers' VAT returns and corresponding books and records. It is, therefore, imperative that the processing office recommends to the concerned BIR Office the audit o f the records of the seller." In the meantime, the claim for input tax credit by the exporter-buyer should be denied without prejudice to the claimant's right to seek reimbursement of the VAT paid, if any, from its supplier." (Emphasis added) In the recent case of H edcor, Inc. vs. Commissioner ifInternal Revenue,6 the Supreme Court emphasized the applicability of the above-quoted ruling in the Coral Bqy case to RE Developers, such as petitioner: "In Contex Corp. v. Commissioner rif Internal Revenue (Contex Cotp.),7 the Court held that w here a taxpayer should not have been liable for the VAT erroneously passed on to it by its supplier-since the same was a zero-rated sale on the part of the said supplier, and a zero-rated purchase on the part of the taxpayer-it is the supplier, and not the taxpayer, who is the proper party to claim such VAT refund. T his is further explained in Coral Bqy--the case cited by the CTA Divisio n and EB-where the Court held that ' [w]e should also take into consideration the nature of VAT as an indirect tax. Although the seller is statutorily liable for the payment of VAT, the amount of the tax is allowed to be shifted or passed on to the buyer. H owever, reporting and remittance of the VAT paid to the BIR remained to be the seller/ supplier's obligation. Hence, the proper party to seek the tax refund or credit should be the suppliers[.)' Although the foregoing cases involved entities situated in freep orts a nd ecozon es, the same principle m ay b e applied to RE d evelopers who are similarly situated. Like entities within the ecozones, the sale of suppliers to R E develop ers m ay be zero-rated sales (from the point of view of the supplier) and zero-rated purchases (from the point of view of the RE developer) . Thus, following Contex Corp. and Coral Bay, if the taxpayer with zero-rated purchases- such as RE developers or entities within ecozones-mistakenly pays input VAT on its purch ases, the prop er recourse of the said taxp ayer is not to file an administrative or judicial claim for refund under Section 112, b ut to claim reimbursement from its suppliers of goods and services w ho mistakenly sh ifted output VAT." (Emphases a~ 6 G.R. No. 250313, July 22, 2024. 7 477 Ph i. 442 (2004) [Per J. Quisumbi ng, Second Division].

RESOLUTION CTA Case No. 9446 (CTA EB No. 2548) underscoring added)" (Underscoring supplied; fo otnotes retained but remtmbered) The taxpayer cannot benefit from a refund or tax credit of input VAT it paid incorrectly knowing that it contravenes Section 15(g) of RA 9513. Acts executed against the provisions of mandatory or prohibitory laws are void, except when the law itself authorizes their validity.8 Neither may the taxpayer invoke Section 112 (A) of the Tax Code alone, in isolation from other relevant provisions of the Tax Code and laws applicable to this case, i.e. RA 9513 and the Civil Code. As the Supreme Court has held, the "rule is that a statute should be so construed not only to be consistent with itself but also to harmonize with other laws on the same subj ect matter, as to form a complete, coherent and intelligible system. The rule is expressed in the maxim, interpretare et concordare leges legibus est optimus interpretandi modus, or every statute must be so construed and harmonized with other statutes as to form a uniform system of jurisprudence."9 The foregoing considered, and there being no new matter or substantial issue raised, the Court finds no compelling reason to reverse or modify the assailed decision. ACCORDINGLY, petitioner's Manifestation and Submission (Re: Manifestation dated June 18, 2025) is NOTED and the attached Motion for Partial Reconsideration (Re: Decision dated May 19, 2025) is DENIED for lack of merit. t, ~)"'-._ MA. BELEN M. RINGPIS-LIBAN Associate Justice We Concur: MARIARO s 8 Article 51 Civil Code; Commissioner ofInternal Revenue v. San Roque Power Corp., G.R. Nos. 187485, 196113 & 197156, February 12, 2013, Supreme Court En Bane. 9 Grand Development Corp. v. Franklin Bake0 Inc., G.R. No. 251463, August 2, 2023 citing Agpalo.