The Court of Tax Appeals (CTA) has turned down the P55.6 million tax refund claim of Petron Corporation for importing alkylate chemical that is used in the manufacture of gasoline.
(MANILA BULLETIN)
The court's Second Division shrugged off the argument of the oil company that subjecting the raw material and finished product gasoline to separate excise tax is tantamount to double taxation.
Named respondents to the civil case were the Bureau of Internal Revenue and the Bureau of Customs which collected the tax on behalf of the former for the year 2011.
In a 23-page resolution, the court explained that importation and production are two separate subject matters.
It said excise tax is collected for importing the said chemical additive and when the finished product gasoline is moved out from the production site, the same tax is also imposed.
The resolution, penned by Associate Justice Juanito Castaneda, Jr., also ignored the position of Petron that the importation of alkylate is tax exempt as it was not mentioned in Section 148(e) of the Tax Code as among the items subject to the said tax.
"Tax exemption should be granted by a clear and unequivocal provision of the law," it added.