BIR ordered to refund nearly P900M to PAL

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THE Court of Tax Appeals (CTA) ordered the Bureau of Internal Revenue (BIR) to refund Philippine Airlines, Inc. (PAL) nearly P900 million in taxes on jet fuel imports.

In a 23-page decision dated April 3, the CTA Third Division ruled in favor of PAL, which had maintained its importation of Jet A-1 fuel from February 2003 to December 2004 was covered by Section 13 of Presidential Decree (PD) No. 1590 and therefore exempted from taxes.

“(PAL) was able to comply with all the requisites under Section 13 of PD No. 1590 for it to be exempt from payment of the specific taxes on its importations of Jet A-1 used for its transport operations, but in the reduced amount of P897,445,271.84,” the resolution read.

PD No. 1590 “allows an exemption from all taxes due on all importation subject to the following conditions: (1) articles or supplies or materials are imported for the use in its transports and non-transport operation and other activities incidental thereto; and (2) not locally available in reasonable quantity, quality or price,” the resolution explained.

PAL had originally sought a refund of P953,820,553.84, but the CTA disallowed P56,375,282 in Jet A-1 excise tax that was not supported with any Import Entry Internal Revenue Declarations.

The CTA Third Division’s ruling reversed and set aside a Oct. 22, 2014 court decision that denied PAL’s petition.

Meanwhile, the CTA’s Second Division denied for lack of merit tobacco manufacturer Philip Morris Philippines Manufacturing, Inc.’s (PMPMI) petition asking the court to refund its alleged advanced payment of excise tax on tobacco products amounting to P204,477,118.07 for the period of Jan. 7, 2010 until Dec. 31, 2012.

The tax court ruled that PMPMI’s claim for refund was filed out of time, saying “(PMPMI) only had until Jan. 7, 2012 to March 31, 2014 to file both its administrative and judicial claims for refund of said taxes.”

“However, based on records, (PMPMI) files its administrative claim… only on Dec. 4, 2015, while the judicial claim was subsequently filed on Jan. 4, 2016,” the CTA said. — Dane Angelo M. Enerio