THE Court of Tax Appeals (CTA) affirmed the P302-million tax refund claim of Philippine Airlines, Inc. (PAL) on excise taxes it paid to import jet fuel used in its domestic operations.
In a 23-page decision on May 10, the CTA, sitting en banc, denied for lack of merit the separate petitions for review of the Bureau of Internal Revenue (BIR) and the Bureau of Customs, affirming the 2017 decision and resolution of the court’s third division.
“This Court En Banc sees no reason to modify much more to reverse the assailed Decision of the Court in Division in granting PAL a refund or issuance of a tax credit certificate in the amount of P302,012,195.86, representing excise taxes paid on its importation of Jet A-1 Fuel for use in its domestic operations for the period August 2008 to October 2008” the CTA ruled.
The court upheld the finding of its division that PAL was able to prove that the Jet A-1 fuel it imported was used in its domestic importations, which is a requirement for an excise tax exemption.
Section 13 of Presidential Decree No. 1590, PAL’s franchise, as amended by Letter of Instruction 1483, provides for PAL to be tax exempt on aviation fuel importation for use in domestic operations.
“PAL has proven, by the required quantum of evidence, that the imported Jet A-1 fuel was used for its domestic operations,” the court said, adding that among the pieces of evidence include testimony and the final report of the independent certified public accountant and Authority to Release Imported Goods.
The Court also said that the BIR and BoC failed to dispute the evidence submitted by PAL. It also said the bureaus denied the claim for refund of PAL in their answers filed to the court in division but did not raise it in their specific and affirmative defenses.
“Nowhere in their Answers, specifically in their Specific and Affirmative Defenses, did the CIR or the CoC raised as a defense that PAL is not entitled to a refund because it did not actually use the imported Jet A-1 fuel in its operations,” it said.
The CTA also ruled that PAL is not guilty of forum shopping, saying PAL’s filing of administrative claim with the BIR after the BoC failed to act on its protests “is procedurally appropriate” as it is within the BIR’s power to refund internal revenue taxes.
The decision was written by Presiding Judge Roman G. del Rosario. — Vann Marlo M. Villegas