CE LUZON GEOTHERMAL POWER COMPANY INC. v. COMMISSIONER OF INTERNAL REVENUE (Consolidated with Case No. 6837)

REPUBLIC OF THE PHILIPPINES Court of Tax Appeals QUEZON CITY SPECIAL SECOND DIVISION CE LUZON GEOTHERMAL C.T.A. CASE NOS. 6792 POWER COMPANY, INC., and 6837 Petitioner, Members: -versus- CASTANEDA, Chairperson, and UY, JJ. COMMISSIONER OF Promulgated: INTERNAL REVENUE, SEP 0 7 2016 / Respondent. X- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - X AMENDED DECISION UY, J.: This is an Amended Decision rendered only in CTA Case No. 6837 pursuant to the Decision of the Supreme Court in the case of "Commissioner of Internal Revenue, petitioner, v. CE Luzon Geothermal Power Company, Inc., respondent" docketed as G.R. No. 190198 promulgated on September 17, 2014 1 the , dispositive portion of which reads as follows: "WHEREFORE, the petition is PARTIALLY GRANTED. The Decision dated September 1, 2009 and the Resolution dated November 6, 2009, of the Court of Tax Appeals (CTA) En Bane in C.T.A. EB No. 474 are hereby AFFIRMED with MODIFICATION DENYING CE Luzon Geothermal Power Company, Inc.'s (CE Luzon)~ 1 Docket (CTA Case No. 6792), Vol. II, pp. 1402-1409.

Decision CTA Case Nos. 6792 & 6837 Page 2 of18 claim for refund in C.T.A. Case No. 6792 on the ground of lack of jurisdiction for being prematurely filed. On the other hand, the instant case is REMANDED to the CTA to determine the proper amount of input Value Added Tax refunded/tax credited in favor of CE Luzon in relation to its claim for refund in C.T.A. Case No. 6837. SO ORDERED." THE FACTS The instant consolidated cases involve the claims for refund or issuance of tax credit certificate of petitioner, CE Luzon Geothermal Power Company, Inc. against the Commissioner of Internal Revenue, respondent, as follows: In CTA Case No. 6792: for the amount of P2,921,085.31 representing unutilized input value-added tax (VAT) attributable to zero-rated sales for the third quarter of taxable year 2001; and In CTA Case No. 6837: for the amount P21,229,990.80 representing unutilized input VAT for the fourth quarter of taxable year 2001 and all the quarters of taxable year 2002. As mentioned earlier, this Amended Decision pertains only to CTA Case No. 6837 considering that the Petition for Review in CTA Case No. 6792 was denied by the Supreme Court on the ground of lack of jurisdiction for being prematurely filed. The pertinent facts relative to CTA Case No. 6837, as narrated in the Court in Division's assailed Decision dated November 25, 20082, remain undisturbed. We quote and incorporate the same in this Amended Decision, to wit: fl "Petitioner CE Luzon Geothermal Power Company, Inc. is a corporation duly organized and existing under 2 Decision dated November 25, 2008, ponencia of former Associate Justice Olga Palanca-Enriquez, member of the former Second Division of the Court of Tax Appeals, and concurred by Associate Justice Juanita C. Castaneda, Jr., Chairperson,.

Decision CTA Case Nos. 6792 & 6837 Page 3 of18 and by virtue of the laws of the Republic of the Philippines, with principal office at the 24th Floor, 6750 Bldg., 6750 Ayala Avenue, Makati City. Respondent, on the other hand, is the duly appointed Commissioner of Internal Revenue, vested with authority to act as such, including, among others, the power to grant refunds of unutilized input value added taxes, pursuant to the provisions of the National Internal Revenue Code. He may be served with summons and other legal processes of this Honorable Court at his office located at the Fifth Floor, BIR, National Office Building, Agham Road, Diliman, Quezon City. Petitioner is engaged in the business of power generation for which it is accredited and certified to as such by the Department of Energy, as evidenced by its DOE Certificate of Accreditation (OSAC91-12) issued on June 15, 1994. Petitioner is a registered value added taxpayer (VAT) with the Bureau of Internal Revenue, as evidenced by its Certificate of Registration with Tax Identification Number 047-003-924- 336-VAT. On June 26, 2001, RA 9136, otherwise known as the Electric Power Industry Reform Act of 2001 (hereafter 'EPIRA Law) took effect. The EPIRA Law is a legislative act which ordained reforms in the electric power industry, amending for the purpose certain laws and for other purposes. As a consequence of the effectivity of the EPIRA Law, petitioner, as one of the generating companies recognized by the DOE, treated the delivery and supply of electric energy to PNOC-EDC as VAT zero- rated. Prior to the effectivity of the EPIRA Law, such transactions were subject to 10�/o VAT and petitioner paid the corresponding output tax. For the third quarter of taxable year 2001, petitioner declared zero-rated sales in its amended quarterly VAT return in the amount of P661,007,570.05 and unutilized input VAT in the amount of P2,921,085.31. Its original quarterly VAT returns for the third and fourth quarters of taxable year 2001 was filed on October 25, 2001 and January 10, 2002, respectively, and its I' amended quarterly VAT returns for the third quarter of taxable year 2001 was filed on November 12, 2001.

Decision CTA Case Nos. 6792 & 6837 Page 4 of18 Petitioner likewise filed its original and amended quarterly VAT returns for the first, second, third and fourth quarters of taxable year 2002 on April 10, 2002, May 15, 2003, May 15, 2003 and April 1, 2003, respectively. On September 26, 2003, petitioner filed its administrative claim for refund of unutilized input VAT for the third quarter of taxable year 2001. While the administrative claim for refund of unutilized input VAT for taxable year 2002 was filed on December 18, 2003. Alleging inaction of respondent, petitioner filed a Petition For Review with this Court on September 30, 2003 for unutilized input VAT for the third quarter of taxable year 2001, docketed as C.T.A. Case No. 6792. On December 19, 2003, petitioner filed another Petition For Review with this Court, docketed as C.T.A. Case No. 6837 for unutilized input VAT for the fourth quarter of taxable year 2001 and for all the quarters of 2002 for the zero rated sales of petitioner. In C.T.A. Case No. 6792, in her Answer, respondent alleged by way of special and affirmative defenses: '4. Petitioner's claim for refund is subject to administrative investigation/examination by the respondent; 5. To support its claim, it is imperative for petitioner to prove, the following, viz: a. The registration requirements of a value-added taxpayer in compliance with Section 6 (a) and (b) of the Revenue Regulations No. 6-97 in relation to Section 4.107-1(a) of Revenue Regulations No. 7-95, and Section 236 of the Tax Code, as amended; b. The invoicing and accounting requirements for VAT registered persons, as well as the filing and payments of VAT in compliance with the provisions of~

Decision CTA Case Nos. 6792 & 6837 Page 5 ofl8 Sections 113 and 114 of the Tax Code, as amended; c. Proof of compliance with the prescribed checklist of requirements to be submitted involving claim for VAT refund in pursuance to Revenue Memorandum Order No. 53-98, otherwise, there would be no sufficient compliance with the filing of administrative claim for refund which is a condition sine qua non prior to the filing of judicial claim in accordance with the provision of Section 229 of the Tax Code, as amended. It is worthy of emphasis that Section 112 (D) of the Tax Code, as amended, requires the submission of complete documents in support of the application filed with the Bureau of Internal Revenue before the 120-day audit period shall apply, and before the taxpayer could avail of judicial remedies as provided for in the law. Hence, petitioner's failure to submit proof of compliance with the above-stated requirements warrants immediate dismissal of the petition for review; d. That the input taxes of P1,142,666.32 and P19,070,378.18 allegedly paid by the petitioner on its purchases of goods and services for the third quarter of taxable year 2001 and the fourth quarter of 2001 up to the fourth quarter of 2002, respectively, were attributable to its zero-rated sales and such have not been applied against any output tax and were not carried over in the succeeding taxable quarters; e. That petitioner's administrative and judicial claims for tax credit or refund of the unutilized input tax (VAT) was filed within two (2) years after the close of the taxable quarter when the sales were made in accordance with Sections 112 "

Decision CTA Case Nos. 6792 & 6837 Page 6 of18 (A) and (D) and 229 of the Tax Code, as amended; f. That petitioner's domestic purchases of goods and services were made in the course of its trade or business, properly supported by VAT invoices and/or official receipts and other documents, such as subsidiary purchase Journal, showing that it actually paid VAT in accordance with Sections 110(A) (2) and 113 of the Tax Code as amended, in pursuance to Section 4.104-5 (a) & (b) of Revenue Regulations No. 7-95 (Re: Substantiation of Claims of Input Tax Credit); g. The requirements as enumerated under Section 4.104-2 of the Revenue Regulations 7-95 (Re: Persons who can avail of the Input Tax Credits); 6. Furthermore, in an action for refund the burden of proof is on the taxpayer to establish its right to refund and failure to sustain the burden is fatal to the claim for refund/credit. This is so because exemptions from taxation are highly disfavored in law and he who claims exemption must be able to justify his claim by the clearest grant of organic or statutory law. An exemption from common burden cannot be permitted to exist upon vague implications (Asiatic Petroleum Co. {P.I} v. Lanes, 49 Phil. 466 cited in Collector of Internal Revenue vs. Manila Jockey Club, Inc., 98 Phil. 670); and 7. Claims for refund are construed strictly against the claimant for the same partake the nature of exemption from taxation.' In C.T.A. Case No. 6837, respondent raised the same special and affirmative defenses. ~

Decision CTA Case Nos. 6792 & 6837 Page 7 of18 On January 30, 2004, petitioner orally moved for the consolidation of both cases, which was granted by the First Division in a Resolution dated March 1, 2004. On July 21, 2004, in view of the consolidation, petitioner and respondent submitted the following Joint Stipulation of Facts: 'JOINT STIPULATION OF FACTS AND ISSUES PETITIONER and RESPONDENT, through their respective counsels, to this Honorable Court with its order during the pre- trial conference held on June 11, 2004, respectfully submit the following Joint Stipulation of Facts and Issues: I. STIPULATION OF FACTS The parties agree to the following stipulation of facts; 1. Respondent is the duly appointed Commissioner of Internal Revenue, vested with the authority to act as such, including, among others, the power to grant refunds of unutilized input value added taxes pursuant to the provisions of the National Internal Revenue Code. He may be served with summons and other legal processes of this Honorable Court at his office located at the Fifth Floor, BIR, National Office Building, Agham Road, Diliman, Quezon City. 2. Section 110 of the Tax Code provides: 'Section 110. Tax Credits- XXX XXX XXX (B) Excess output or input tax --- If at the end of any taxable quarter the output tax exceeds the input tax, the excess shall be paid by the VAT-registered person. If the input tax exceeds the output tax, the excess('

Decision CTA Case Nos. 6792 & 6837 Page 8 of18 shall be carried over to the succeeding quarter. Any input tax attributable to the purchase of capital goods or to zero rated sales by a VAT registered person may at his option be refunded or credited against other internal revenue taxes subject to the provisions of Section 112.' 4. The Supreme Court, in the case of Commissioner of Internal Revenue vs. Victorias Milling Co., Inc., 22 SCRA 12, held that: 'The claim for refund with the Bureau of Internal Revenue and the subsequent appeal to the Court of Tax Appeals must be filed within the two year period. If however, the Commissioner takes time in deciding the claim, and the period of two years is about to end, the suit or proceeding must be started in the Court of Tax Appeals before the end of the two year period without awaiting the decision of said Collector.' 5. Petitioner is a corporation duly organized and existing under and by virtue of Philippine laws; 6. Petitioner is registered as a value- added taxpayer with the Bureau of Internal Revenue; 7. Authenticity and due execution of Petitioner's BIR Certificate of Registration, dated June 25, 2004; 8. For the third quarter of taxable year 2001, Petitioner declared zero-rated sales in f. its amended quarterly VAT return in the amount of P661,007,570.05;

Decision CTA Case Nos. 6792 & 6837 Page 9 of18 9. For the third quarter of taxable year 2001, petitioner declared unutilized input VAT in the amount of P2,921,085.31; and declared the same in its quarterly VAT return for the third quarter of taxable year 2001; 11. Authenticity, due execution and filing with the Bureau of Internal Revenue of the Petitioner's original quarterly VAT returns for third and fourth quarters of taxable year 2001 filed on October 25, 2001 and January 10, 2002, respectively, and Petitioner's amended quarterly VAT returns for the third quarter of taxable year 2001 filed on November 12, 2001; 12. Authenticity, due execution and filing of the Petitioner's original and amended quarterly VAT returns for the first, second, third and fourth quarters of taxable year 2002 filed on April 10, 2002, May 15, 2003, May 15, 2003 and April 1, 2003, respectively; 13. Authenticity and due execution of the Petitioner's administrative claims for refund and/or Tax Credit Certificate (TCC) of unutilized input VAT for the third quarter of taxable year 2001, dated September 25, 2003 which was filed on September 26, 2003; 14. The administrative claim for refund of unutilized input VAT dated December 11, 2003 was filed on December 18, 2003; 15. The present claims for refund with this Honorable Court for unutilized input VAT were both filed on September 30, 2003 and December 19, 2003. Petitioner presented Ma. Mary Ann C. Capuchino, as witness, and documentary evidence, marked as Exhibits 'A' to 'JJJ~ inclusive of their submarkings, which were all admitted by the Court.~

Decision CTA Case Nos. 6792 & 6837 Page 10 of18 On the other hand, respondent presented Luzviminda G. Sabile, as witness, and Exhibits 'l'to '8~ inclusive of their submarkings, which were all admitted by the Court. On May 24, 2007, petitioner manifested that he will not present rebuttal evidence, and instead filed a Motion To Present Additional Evidence, which the Court granted. As additional witness, petitioner presented Trinity Gatuz, and after the completion of her testimony, moved for fifteen days until May 31, 2007 to file a Supplemental Offer of Evidence, which the Court granted. Respondent was granted fifteen (15) days from notice to file her comment. In a Resolution dated July 9, 2007, the Court admitted the additional exhibits, marked as Exhibits 'KKK' to 'PPP~ inclusive of their submarkings, and both parties were ordered to file their simultaneous memoranda, within thirty (30) days from notice. Both parties having complied thereto, the consolidated petitions were deemed submitted for decision on November 28, 2007." On November 25, 2008, the Court in Division promulgated the assailed Decision in CTA Case Nos. 6792 and 6837, the dispositive portion3 of which reads: "WHEREFORE, premises considered, the present Petition for Review is PARTIALLY GRANTED. Accordingly, respondent is hereby ORDERED TO REFUND OR ISSUE A TAX CREDIT CERTIFICATE in favor of petitioner the reduced amount of THIRTEEN MILLION NINE HUNDRED TWENTY-SIX THOUSAND SIX HUNDRED NINETY-SEVEN AND 51/100 PESOS (P13,926,697.51), representing the unutilized input VAT attributable to zero-rated sales for the third and fourth quarters of 2001 and all four quarters of 2002. SO ORDERED.'~ 3 Docket (erA case No. 6792), Vol. I, p. 858.

Decision CTA Case Nos. 6792 & 6837 Page 11 of18 On December 12, 2008, petitioner filed a Motion for Partial Reconsideration (Re: Decision dated November 25, 2008)4 � Subsequently, on January 5, 2009, respondent also filed a Motion for Partial Reconsideration5� In the Resolution6 promulgated on March 9, 2009, the Court denied both petitioner's and respondent's motions for partial reconsideration for lack of merit. On April 8, 2009, respondent filed a Petition for Review before the Court of Tax Appeals En Ban~ which was docketed as CTA EB No. 474. 7 The CTA En Bane promulgated its Decision8 on September 1, 2009, affirming the assailed Decision and Resolution. The dispositive portion thereof reads: "WHEREFORE, the instant Petition for Review is hereby DISMISSED. Accordingly, the Decision dated November 25, 2008 and the Resolution dated March 9, 2009 are hereby AFFIRMED. SO ORDERED." On September 28, 2009, a Motion for Reconsideration9 was filed by respondent, but the same was denied by the CTA En Bane in the Resolution10 promulgated on November 6, 2009. On January 6, 2010, respondent filed a Petition for Review11 with the Supreme Court, which was docketed as G.R. No. 190198. On September 17, 2014, the Supreme Court promulgated its Decision partially granting said Petition for Review. Thus, the Decision dated September 1, 2009 and the Resolution dated November 6, 2009, of the Court of Tax Appeals f6 (CTA) En Bane in C.T.A. EB No. 474 were affirmed with modification denying CE Luzon Geothermal Power Company, Inc.'s claim for 4 Docket (CfA Case No. 6792), Vol. I, pp. 860-876. 5 Docket (CfA Case No. 6792), Vol. I, pp. 879-885. 6 Docket (CfA Case No. 6792), vol. I, pp. 904-906. 7Commissioner of Internal Revenue, Petitioner, v. C. E Geothermal Power Company, Inc., Respondent, Docket (CfA Case No. 6792), Vol. II, pp. 913-925. 8 Ponencia of Associate Justice Lovell R. Bautista, of the former erA En Bane, concurred by Associate Justices Juanito C. Castaneda, J.; Erlinda P. Uy, Caesar A. Casanova, Olga Palanca- Enriquez; with Dissenting Opinion of former Presiding Justice, Ernesto D. Acosta; Docket (CfA Case No. 6792), Vol. II, pp. 1069-1091. 9 Docket (CfA Case No. 6792), Vol. II, pp. 1111-1122. 10 Docket (CfA Case No. 6792), Vol. II, pp. 1146-1148 11 Commissioner of Internal Revenue, Petitioner, v. CE Luzon Geothermal Power Company, Respondent, Docket (CfA Case No. 6792), Vol. II, pp. 1151-1182.

Decision CTA Case Nos. 6792 & 6837 Page 12 of18 refund in C.T.A. Case No. 6792 on the ground of lack of jurisdiction for being prematurely filed. On the other hand, CTA Case No. 6837 was remanded to this Court for determination of the proper amount of input Value Added Tax to be refunded/tax credited in favor of CE Luzon Geothermal Power Company, Inc. On February 3, 2015, the Decision of the Supreme Court promulgated on September 17, 2014 became final and executory.12 On July 10, 2015, the Special Second Division of this Court received the Entry of Judgment issued by the Supreme Court on May 15, 2015. In the Resolution13 promulgated on August 13, 2015, the CTA Special Second Division ordered the parties to file a written Manifestation alleging any supervening event that may have transpired which the parties would want to present for the Court's consideration. On September 2, 2015, respondent filed a Manifestation, submitting to the sound discretion of the Court the determination of the proper amount of input VAT refund to be credited to petitioner in CTA Case No. 6837; and requesting the Court to issue a Resolution stating that CTA Case No. 6792 has been deemed close and terminated. 14 For its part, petitioner filed its Manifestation (With Motion to Clarify)(Re: Resolution dated August 13, 2005)15 on September 24, 2015, praying that the amount of P12,906,527.15 be refunded. In the Resolution promulgated on October 5, 2015, CTA Case No. 6837 was submitted anew for decision pursuant to the Decision dated September 17, 2014 of the Supreme Court in G.R. No. 190198, which directed this Court to make a determination of the proper amount of input VAT to be refunded or credited to petitioner.16 Hence, this Amended Decision.~ 12 Entry of Judgment, docket (CTA Case No. 6792), Vol. II, pp. 1410-1411. 13 Docket (CTA case No. 6792), Vol. II, pp. 1416-1417. 14 Docket (CTA Case No. 6792), Vol. II, pp. 1421-1423. 15 Docket (CTA Case No. 6792), Vol. II, pp. 1439-1445. 16 Docket (CTA Case No. 6792), Vol. II, pp. 1448-1449.

Decision CTA Case Nos. 6792 & 6837 Page 13 of18 THE ISSUE The sole issue for determination of this Court pertains to the proper amount of excess and utilized input Value Added Tax that must be refunded/tax credited in favor of petitioner CE Luzon Geothermal Power Company, Inc. for the fourth quarter of taxable year 2001 and all four quarters of taxable year 2002 in CTA Case No. 6837. THE COURT'S RULING In the Court in Division's Decision dated November 25, 2008 pertaining to both CTA Case Nos. 6792 and 6837, this Court partially granted petitioner's claim for refund or issuance of tax credit certificate in the amount of P13,926,697.51. The amount of P13,926,697.51 is computed as follows: 17 Output VAT p 21,920,865.53 p 36,534,775.90 Less: Tax credits/payment 13,015,106.29 34,935,971.82 Creditable VAT Withheld 5,511,688,132.60 p 1,598,804.08 VAT payment- July 2001 +5,521,418,852.53 Output VAT still due 15,550,088.76 Less: Substantiated Input VAT p 13,951,284.68 Excess Input VAT Attributable to Zero- Rated Receipts 0.998237641 Multiply by the ratio of: Substantiated Zero-rated Receipts P13,926,697.51 Divided by: Total Zero-Rated Receipts Refundable Excess Input VAT Attributable to Zero-Rated Receipts The substantiated or valid input VAT of P15,550,088.76 was broken down as follows: 18 Findings Reference Valid Input VAT (Annexed to Exhibit Y19) 1. Input taxes claimed on purchases of goods Annex 4 p 14,654,160.66 and services and importation of goods which are properly substantiated for VAT purposes 17 Docket (CfA case No. 6792), Vol. I, p. 858. 18 Decision, November 25, 2008, pp. 21 to 22, Docket (CfA case No. 6792), Vol. I, pp. 853-854. 19 Docket (CfA Case No. 6792), Vol. I, pp. 124 to 254.

Decision ';), ..... CTA Case Nos. 6792 & 6837 Page 14 of18 .:.*i-".;f..: ..� 2. Input tcfxes claimed on importation of goods which are supported by the following documents: a. Importation of goods supported by a Annex 5 614 732.00 photocopy of Import Entry Internal Annex 6 201,774.00 Revenue Declaration (IEIRD) and an original BOC OR 77,231.00 ;� 2,191.10 b. Importation of goods supported by P15,550,088. 76 original IEIRDs but with no BOC ORs c. Importation of goods supported by a Annex 8 photocopy of IEIRD and an original LBP OR d. Input tax on brokerage and other service Annex 32 fees paid to brokerage companies supported by a TIN-VAT OR Total Valid Input VAT Out of the P15,550,088.76 valid input VAT, the amount of P1,021,971.46 refers to petitioner's claim covering the third quarter of 2001 in CTA Case No. 6792; while the remaining amount of P14,528,117.30 pertains to petitioner's claim covering the fourth quarter of 2001 and all four quarters of 2002 in CTA Case No. 6837, detailed as follows: Findings Reference 3rd Quarter Valid Input VAT (Annexed 2001 4th Quarter Input taxes claimed on purchases of to Exh. Y) 2001 and All goods and services and importation of CTA Case goods which are properly substantiated No.6792 Four Quarters Total 1. for VAT purposes of 2002 a. Domestic purchases of goods which CTA Case No.6837 are properly supported by VAT invoices '. b. Domestic purchases of services which are properly supported by Annex 4-1 p 439,958.97 p 3 470 190.77 p 3,910 149.74 VAT Ors c. Importation of goods which are Annex 4-2 562 171.49 8 795 520.26 9,357 691.75 properly supported by IEIRDs and BOC ORs Annex 4-3 19 841.00 39 713.00 59,554.00 Annex 4-4 1,326 765.17 d. Purchases of services from non- 1,326,765.17 residents which are properly f

Decision CTA Case Nos. 6792 & 6837 Page 15 of18 supported by withholding VAT p 1 021 971.46 p 13,632 189.20 p 14,654 160.66 certificates Annex 5 614 732.00 614 732.00 Subtotal Annex 6 201 774.00 201 774.00 Input taxes claimed on importation of Annex 8 goods which are supported by the 77 231.00 77 231.00 2. following documents a. Importation of goods supported by a 2 191.10 2 191.10 photocopy of Import Entry Internal P1,021,971.46 P14,528,117.30 P15,550,088.76 Revenue Declaration (IEIRD) and original BOC OR b. Importation of goods supported by original IEIRDs but with no BOC ORs c. Importation of goods supported by a photocopy of IEIRD and an original LBPOR d. Input tax on brokerage and other service fees paid to brokerage companies supported by a TIN-VAT OR Total Valid Input VAT The Court determined that it was in the third quarter of 2001 that petitioner incurred an output tax liability in the amount of P36,534,775.90, which was partially offset against the reported creditable VAT withheld in the amount of P21,920,865.53 and VAT payment for July 2001 in the amount of P13,015,106.29, resulting in an output tax still due of P1,598,804.08, as shown below: 20 3rd Quarter 4th Quarter Total 2001 2001 and All p 36,534,775.90 Four Quarters CTA Case No. 6792 of 2002 CTA Case No. p 36,534 775.90 6837 Output VAT p 21,920,865.53 p 21,920,865.53 Less: Tax Credits/Payment Creditable VAT Withheld VAT payment- July 2001 13,015,106.29 13,015,106.29 Total Tax Credits/Payment p 34,935,971.82 p 34,935,971.82 Output VAT Still Due P1,598,804.08 P1,598,804.08 The Court deducted the P1,598,804.08 output VAT still due against the valid input VAT of P15,550,088.76, leaving the amount of fJ P13,951,284.68 as unutilized net input VAT, as of the fourth quarter of 2002, as shown in the table below: 20 Decision, November 25, 2008, pp. 22-24, docket (CTA Case No. 6792), vol. I, pp. 854-856.

Decision CTA Case Nos. 6792 & 6837 Page 16 of18 4th Quarter 2001 and All 3rd Quarter Four Quarters of 2001 2002 CTA Case No. CTA Case No. 6792 6837 Total Valid Input VAT P1,021,971.46 p 14,528,117.30 p 15,550,088.76 Less: Output VAT still Due 1,021,971.46 576,832.62 1,598,804.08 Excess Input VAT - P13,951,284.68 P13,951,284.68 Out of the P1,598,804.08 output VAT due for the third quarter of 2001, the amount of P1,021,971.46 input VAT for the same period was deducted from the said output VAT, leaving a P576,832.62 output VAT still due. Next, the P576,832.62 output VAT still due was deducted from the P14,528,117.30 input VAT covering the fourth quarter of 2001 and all four quarters of 2002. Thus, the resulting amount of P13,951,284.68 is the excess and unutilized input VAT of petitioner for the fourth quarter of 2001 and all the four quarters of 2002. While the Court found the excess input VAT of P13,951,284.68 to be attributable to the P5,521,418,852.53 zero-rated receipts as reflected on petitioner's official receipts (ORs) for the third quarter of 2001 to the fourth quarter of 2002, the same was further reduced by the amount of P24,587.17 input VAT attributable to the zero-rated receipts of P9,730,719.93, which petitioner failed to declare in its VAT Return for the third quarter of 2001/1 to wit: 4th Quarter 3rd Quarter 2001 and All 2001 Four Quarters of 2002 CTACase CTA Case No. No.6792 6837 Total Valid Input VAT P1,021,971.46 p 14,528,117.30 p 15,550,088.76 Less: Output VAT Due for the third quarter of 2001 1,021,971.46 576,832.62 1,598,804.08 Excess Input VAT Attributable to - P13,951,284.68 p 13,951,284.68 Zero-Rated Receipts per ORs Less: Input VAT Attributable to Undeclared Zero-Rated Receipts for the third guarter of 2001 24,587.17 24,587.17 21 Decision, November 25, 2008, p. 18, docket (CTA Case No. 6792), vol. I, p. 850.

Decision - P13,926,697.51 P13,926,697.51 CTA Case Nos. 6792 & 6837 Page 17 of18 (P9,730,719.93 + P5,521,418,852.53 X P13,951,284.68) Refundable Excess Input VAT Attributable to Zero-Rated Receipts Inasmuch as the Court's determination of petitioner's refundable claim is limited only to the fourth quarter of 2001 and all four quarters of 2002 under CTA Case No. 6837, the above input VAT of P24,587.17 pertaining to the amount of P9,730,719.93 undeclared zero-rated receipts for the third quarter of 2001 shall no longer be deducted. Thus, the Court hereby finds petitioner entitled to a refundable input VAT amounting to P13,951,284.68 attributable to its zero-rated receipts in the amount of P4,850,680,562.55,22 covering the fourth quarter of 2001 and all four quarters of 2002 under CTA Case No. 6837. WHEREFORE, in light of the foregoing considerations, the Petition for Review filed by CE Luzon Geothermal Power Company, Inc. in CTA Case No. 6837 is hereby PARTIALLY GRANTED. Accordingly, respondent is ORDERED TO REFUND or TO ISSUE A TAX CREDIT CERTIFICATE in favor of petitioner in the amount of THIRTEEN MILLION NINE HUNDRED FIFTY ONE THOUSAND TWO HUNDRED EIGHTY FOUR PESOS AND SIXTY EIGHT CENTAVOS (P13,951,284.68) representing its unutilized input VAT for the fourth quarter of taxable year 2001 and all the quarters of taxable year 2002. SO ORDERED. ERLftiP. UY I CONCUR: Associate Justice >k~~ c ~/:;.-' fUANITO C. CASTANEDA, JR. Associate Justice 22 Decision, November 25, 2008, pp. 18 and 22, docket (CTA Case No. 6792), Vol. I, pp. 850 and 854.

Decision CTA Case Nos. 6792 & 6837 Page 18 of18 CERTIFICATION Pursuant to Article VIII, Section 13 of the Constitution, it is hereby certified that the conclusions in the above Amended Decision were reached in consultation before the case was assigned to the writer of the opinion of the Court's Division. QA--~~h> c .. ~~~ Q c:fUANITO c. CASTANEDA(lR. Chairperson Acting Presiding Justice