The Court of Tax Appeals (CTA) has stood by its decision to refund Petron Corp.’s tax liabilities worth P64.33 million epresenting ts wrongly paid excise taxes on the importation of alkylate gas in 2016.
In a 20-page decision dated June 6 and made public on June 8, the CTA full court said the firm was able to back its claim for a refund by submitting documents required under the country’s tax code.
“The findings of fact by the CTA in Division are not to be disturbed without any showing of grave abuse of discretion considering that the members of the Division are in the best position to analyze the documents presented by the parties,” Associate Justice Maria Belen M. Ringpis-Liban said in the ruling.
The tribunal agreed with its First Division that Petron’s importations of alkylate are not subject to excise tax. Citing the Tax Code, it said alkylate cannot be classified as a raw material that is a product of distillation that can be subjected to excise tax.
The law imposes taxes on naphtha gas, regular gasoline and other similar products of distillation, but not on the ingredients or raw materials that compose the said gases.
“Thus, the petitioner’s (Petron) payments of excise taxes in 2016 for its importation of alkylate are considered erroneous and can be the proper subject of refund,” the CTA said.
Petron was able to submit single administrative documents, customs payment receipts, commercial invoices, and Bureau of Customs certifications to back its entitlement to the refund, the tribunal noted.
In March, the Supreme Court granted a separate claim of Petron to refund its wrongly paid excise taxes for its importation of alkylate gas worth P219.15 million paid in 2012.
The High Court likewise ruled no law imposed an excise tax on alkylate gas, saying the CTA incorrectly dismissed the firm’s refund claim.
“Although one of the raw materials of Alkylate — Isobutane — can be a product of distillation, this does not justify the imposition of excise tax thereon,” the tax court said. — John Victor D. Ordoñez