PAL gets P302-M tax refund

The Court of Tax Appeals has granted a P302.01-million tax refund to Philippine Airlines (PAL) Inc. for the excise taxes it paid for the importation of jet fuel in 2008.

The Bureau of Internal Revenue levied the excise tax on the flag carrier’s jet fuel imported from August to October 2008.

The court’s Third Division ruled that PAL complied with the requisites to avail of the tax exemption under Presidential (PD) Decree No. 1590, which granted the airline company its franchise.

Section 13 of PD 1590 waives the excise tax if PAL could get the supply of fuel at a cheaper price abroad.

In arguing its case, PAL cited certifications from the Civil Aviation Authority of the Philippines and data from the Department of Energy showing that only 6,050 MB (thousand barrels) was locally available, less than the flag carrier’s demand of 8,850 MB.

A court-commissioned independent certified public accountant also concluded that imported jet fuel was consistently cheaper than the fuel purchased from Petron Corp. or Pilipinas Shell Petroleum Corp. in the country.

“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,” the court said in its July 17 decision.

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