THE Court of Tax Appeals (CTA) upheld a P74.5-million tax refund granted to Air Philippines Corp. (APC), now known as PAL Express, on taxes paid on imports of aviation fuel between March and October 2008.
In a nine-page resolution dated Nov. 13 and written by Associate Justice Cielito N. Mindaro-Grulla, the CTA, sitting en banc, denied the separate motions of the Bureau of Internal Revenue (BIR) and the Bureau of Customs (BoC) for lack of merit.
“There is no compelling reason to reverse or modify the assailed Decision as far as the CIR (commissioner of internal revenue) is concerned. Records reveal that the arguments raised by the CIR are a mere rehash of his arguments before the Court in Division and which have been exhaustively passed upon and resolved by said Court in Division, as well as in the assailed Decision,” it said.
The CTA upheld its May 21, 2018 decision affirming the tax refund first upheld by its third division in 2016, which found that APC proved that Jet A-1 aviation fuel was not available locally at a reasonable price during the time of importation, by comparing the cost of importation and domestic prices cited in a quotation issued by Pilipinas Shell Petroleum Corp. and the Independent Certified Public Accountant’s financial and supplemental reports.
Republic Act No. 8339 grants APC the same tax-exempt privileges enjoyed by Philippine Airlines, provided that the materials it imports are not “locally available in reasonable quantity, quality, or price.”
The CTA also rejected the argument raised by the BIR that the court was mistaken in relying on Air Transportation Office certifications with regard to the local availability of Jet A-1, claiming that the authority to make such declarations falls upon the Department of Energy.
Citing a previous decision, the tax appellate court held that the Department of Finance has stated that “ATO certification is deemed sufficient for purposes of the tax exemption.”
The court also said the duties of the Civil Aeronautics Administration were transferred to the ATO and were later assumed by Civil Aviation Authority of the Philippines include the “authority to take charge of the technical and operational phase of civil aviation matters.”
The CTA, meanwhile, dismissed a motion for reconsideration by the BoC due to lack of jurisdiction because it failed to file an appeal within the prescribed period of 15 days upon the promulgation of the decision.
“It is elementary that failure to file an appeal within the reglementary period renders the decision final and executory against the party who failed to appeal,” it said. — Vann Marlo M. Villegas
