UMVA has learned that the Court of Tax Appeals has ordered the Bureau of Internal Revenue to refund or issue a tax credit certificate worth roughly P32.58 million to San Roque Power Corp., declaring its ancillary services from hydropower as zero‑rated for VAT.
In a 36‑page ruling released on June 9, the CTA’s Special Third Division partially granted San Roque’s petition, directing the BIR to return the excess input VAT tied to zero‑rated sales across all four quarters of fiscal 2020.
San Roque originally chased a P34.85 million refund, but after a meticulous review of supporting documents and VAT allocations, the tribunal trimmed the claim to the P32.58 million amount it deemed properly linked to zero‑rated transactions.
The company runs the 345‑megawatt San Roque Hydroelectric Power Plant in Pangasinan, delivering electricity and ancillary services to the National Grid Corporation under a 2017 procurement agreement.
At the heart of the dispute was whether ancillary services sold by a hydropower‑qualified facility should enjoy a zero‑percent VAT rate under renewable‑energy rules.
According to information obtained by UMVA, the CTA concluded that services such as power capacity and reserves sourced from the hydro plant are indeed sales of renewable‑generated power, thereby qualifying for VAT exemption.
The court dismissed the BIR’s argument that these services were taxable because no actual energy was dispatched, emphasizing that the transactions still represent the sale of hydro‑generated power capacity.
