New rules on remittance of VAT on power generation
Under previous rules, the distribution companies remit the VAT to the generation companies only after these are collected from the end-users, even if the generation and other fees have already been paid in advance.
On the part of the distribution companies and electric cooperatives, such power generation and other related charges, including the VAT, shall continue to be treated as only pass-through charges. Hence, as in previous rules, these shall not form part of their gross receipts. The distribution companies and electric cooperatives can neither claim as input the VAT paid by end users on such pass-through charges.
The new procedures shall take effect beginning the billing period August 26 – September 25, 2012.
Transition rules: All outstanding deferred VAT in the books of generation companies, aggregators, market operators, retail electricity suppliers, and other suppliers of electricity up to billing period ending August 25, 2012 shall be remitted on or before the due date for the October VAT return which is on November 20, 2012.
Distribution companies and electric cooperates are required to remit to generation companies on or before November 15, 2012 the VAT on their purchases prior to August 25, 2012 to enable the generation companies to meet the November 20 deadline. Applicable penalties shall be imposed on failure to remit the VAT within the prescribed period.