CLP Group (its holding company is CLP Holdings Ltd) is an electricity company in Hong Kong with businesses in a number of Asian markets and Australia. Incorporated in 1901 as China Light & Power Company Syndicate, its core business remains electricity generation, transmission, and retailing.
CLP to get huge refund from government after tax appeal win
The city's largest electricity supplier has won an appeal over tax valuations that might involve hundreds of millions of dollars overcharged by the government.
The Lands Tribunal ruling clears uncertainty over a power tariff rebate that CLP Power offers to its users, since the company has been giving the rebate on the assumption it would ultimately win the case against the Rating and Valuation Department.
A CLP spokeswoman said the ruling meant they had been overcharged in rents and rates. "We will review the judgment in detail to assess its impact on CLP and our next steps," she said. It also means the department's actual refund to the firm depends on the valuation method favoured by the tribunal. Even before the case concluded, the government had refunded CLP HK$1.6 billion by the end of last year.
Yesterday, tribunal president Mr Justice Au Hing-cheung ruled that a rate and rent valuation method used by the department made rating values "incorrect". "The real debate in these appeals is what methodology of valuation should be adopted in assessing the rateable value of the tenement," the judgment read. The rateable value referred to a yearly rent from the rental of tenements such as lands or buildings.
Au favoured a rating method proposed by the firm that took more factors into consideration.
CLP, the supplier of power to areas other than Hong Kong and Lamma islands, lodged an appeal to the tribunal over rate and rent valuations for the 10 years from 1999/2000. Hongkong Electric has been refunded at least HK$140 million. The government is expected to refund the firm HK$1 billion eventually.