Tax court orders P302-M PAL refund

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The Court of Tax Appeals’ (CTA) Third Division has ordered the Bureau of Internal Revenue (BIR) and the Bureau of Customs (BoC) to refund or issue a tax credit certificate in favor of Philippine Airlines, Inc. (PAL) in the amount of P302.01 million representing excise taxes paid for PAL’s importations of jet fuel for its domestic operations in 2008.

In a 40-page decision promulgated on July 17, the tax court granted PAL’s petition for review. The company sought tax exemption on its importations on August 8, August 9, August 23, September 24, and October 22, 2008.

PAL was able to prove that the imported fuel was not locally available in reasonable quantity and price at the time, the ocurt said.

“In the case of Jet A-1 fuel for the year 2008, the Demand in the amount of 8,850 MB clearly exceeds the Total Local Available Supply of 6,050 MB. As the Jet A-1 fuel petitioner imported was not locally available in reasonable quantity, this gives rise for petitioner’s entitlement to the tax exemption because it is sufficient for petitioner to be able to prove even just one qualification,” it said.


The court also found that PAL was able to prove that its basic corporate income tax and value-added tax liabilities were paid and that the imported fuel was used for its transport operations.

“ Accordingly, co-respondents Commissioner of Internal Revenue and Commissioner of Customs are ordered to refund or issue a tax credit certificate in favor of petitioner Philippine Airlines, Inc. in the amount of P302,012,195.86, representing excise taxes paid for petitioner’s importations of Jet A-1 fuel for its domestic operations for the period August 2008 to October 2008,” it said.

Associate Justice Ma. Belen Ringpis-Liban penned the ruling that was concurred in by Associate Justice Lovell Bautista, who leads the CTA’s Third Division, and by Associate Justice Esperanza Fabon-Victorino.

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