CTA upholds Toyota’s multi-million-peso tax refund claim

The Court of Tax Appeals (CTA) said Friday, Dec. 2, that it has turned down the petition of the Bureau of Customs (BOC) to deny the multi-million peso duties and tax refund petition of Toyota Motor Philippines for the importation of selected vehicles from Japan.

Court of Tax Appeals

The court en banc upheld the decision of its First Division that Toyata is exempted from paying customs duties, value-added and excise taxes for the importation of completely built and knocked down motor vehicles with cylinder capacity of over 3,000 cubic centimeters under Executive Order No. 905.

The tax exemption also included spare parts and accessories for these types of vehicles.

However, the refund petition sought by the motor was reduced from the original amount of P231.6 million to P119.8 million for the year 2010.

The 19-page decision said the executive order implemented the Japan and Philippines Economic Partnership Agreement (JPEPA).

It explained that the bilateral treaty "eliminates, or reduces the duties and charges imposed in connection with the importation of specified goods originating from the other country."

The resolution written by Associate Justice Jean Marie A. Bacorro-Villenna ignored the stand of the BOC that the Toyata's petition should be denied as the latter did not exhaust administrative remedies before elevating the case of the tax court.

The customs bureau said the tax exemption violates certain provisions of the tariff and customs law that fixes the tax rates of imported goods.