THE COURT of Tax Appeals (CTA) sitting en banc has ordered the Bureau of Internal Revenue (BIR) to refund nearly P13 million to Philippine Airlines, Inc. (PAL), affirming a ruling of the court’s first division.
The ruling covers P12,912,430.88 which was found to have been erroneously-paid excise taxes for the import of liquor, wine and cigarettes on international flights in 2006 and 2008-2012.
In a decision dated Oct. 18, the CTA en banc denied the petition for review filed by the BIR which contested the the first division ruling partly granting the refund sought by PAL. The BIR had claimed that the airline is not entitled to a refund as it was not able to prove that the prices of imported items were lower than domestic prices.
The CTA en banc, however, said PAL complied with the conditions for the tax exemption in Presidential Decree No. 1590 which granted it “a franchise to operate and maintain air transport services domestically and internationally.”
It accepted the evidence PAL presented to prove that the imported items are not locally available “in reasonable quantity, quality, or price.” The airline had submitted Philippine Wine Merchant price lists for the applicable periods.
“We agree with the findings of the Court in Division that respondent PAL was able to comply with all of the aforementioned conditions for tax exemption under P.D. 1590,” the CTA en banc said.
PAL originally claimed a refund of P30,099,193.82 which was partially granted in January 2017 as P12,912,430.88 was proven to have been exempt from excise tax. — Vann Marlo M. Villegas