By Jun Ramirez
The Court of Tax Appeals (CTA) has turned down the P219 million excise tax refund petition of Petron Corporation for importing alkylate used in the manufacture of unleaded gasoline.
The oil company argued that the importation should be tax-exempt as it was just a raw material and not for domestic sale.
It said subjecting it to excise tax was tantamount to double taxation as the finished product gasoline is subject to the same tax.
Petron added that alkylate is not among petroleum products mentioned under Section 148 subject to excise tax.
But the court’s Third Division sided with the BIR’s position that the substance is raw gasoline possessing octane and aromatics that meet gasoline requirement.
The court said alkylate is a blending component in the production of motor and aviation gas.
It said alkylate is similar to naphta that is also subject to excise tax under the Tax Code.