The Court of Tax Appeals (CTA) has rejected the P4.4-million tax refund petition of Philippine Airlines (PAL) for the importation of cigarettes and liquor for its in-flight and commissary supplies.
PAL paid the amount in 2012 and 2013, but did so under protest in order to withdraw the items at customs warehouses.
The airline company and flag-carrier claimed that its charter (Presidential Decree 1590) exempts it from all kinds of taxes, except income tax.
The court, however, said the decree has been modified by Republic Act (RA) No.9334.
It said that in this particular case, PAL is allowed to import the items without paying the excise tax on condition that they are not locally available at "reasonable prices, quality and quantity."
In a 23-page resolution written by Associate Justice Catherine T. Manahan, the court's first division said PAL failed to present sufficient and convincing evidence that the articles were indeed not available in the local market.