REVENUE MEMORANDUM CIRCULAR NO. 62-2012 issued on October 26, 2012 clarifies the reporting of gross receipts relative to power generation and distribution.
     Under the new process, which shall take effect beginning billing period August 26 to September 25, 2012, the VAT on the sale of electricity and ancillary services shall be paid by the Distribution Companies and Electric Cooperatives, together with the generation and other fees. Such VAT paid may not be claimed as input VAT by the Distribution Companies and Electric Cooperatives as these are mere pass through charges. The amount paid for electricity and ancillary services, including the VAT thereon, may be offset against the amount collected from the end-user by the Distribution Companies and Electric Cooperatives.
          All outstanding deferred VAT (VAT on generation and other VATable power related charges where the charges were already paid by the Distribution Companies and Electric Cooperatives to the Generation Companies, Aggregators, Market Operators, Retail Electricity Suppliers and other suppliers of electricity) 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 November 20, 2012.
          The Distribution Companies and Electric Cooperatives are required to remit the VAT on their purchases prior to August 25, 2012 to the Generation Companies, Aggregators, Market Operators, Retail Electricity Suppliers and other suppliers of electricity on or before November 15, 2012, to allow the Generation Companies, Aggregators, Market Operators, Retail Electricity Suppliers and other suppliers of electricity to remit the same to the Bureau of Internal Revenue within the prescribed period. Failure on the part of the Distribution Companies, Electric Cooperatives, Generation Companies, Aggregators, Market Operators, Retail Electricity Suppliers and other suppliers of electricity to remit the VAT within the prescribed dates shall warrant the imposition of penalties, surcharges and interest as provided for under the National Internal Revenue Code of 1997, as amended, and its implementing rules and regulations.