CTA junks PAL's petition for P20-M tax refund


The Court of Tax Appeals (CTA) has denied the petition of Philippine Airlines, Inc. (PAL) which sought a refund of more than P20 milion it paid under protest in 2019 for excise taxes on imported liquor and tobacco products.

In a decision promulgated last Jan. 24, the CTA as a full court rules that PAL failed to present enough evidence that the imported liquor and tobacco products were not available locally at reasonable quantity, quality and price.

In May and October 2023, the CTA's first division denied PAL's petition for refund.  The case was elevated to the CTA as a full court.

Case records showed that from August 2014 to February 2018, PAL imported various kinds of liquor and tobacco products as part of its in-flight and commissary supplies. 

The Bureau of Customs (BOC) demanded payment of excise taxes amounting to P20,059,948.44. PAL paid the taxes under protest on Aug. 3, 2019. Later, PAL filed a letter request for the refund or the issuance of a tax credit certificate before the Bureau of Internal Revenue (BIR). It was denied.

The case was brought to the CTA on Aug. 3, 2020, with PAL insisting that the evidence it presented sufficiently established that the imported liquor and tobacco products are not locally available. 

With the denial of its petition by the CTA's first division, PAL elevated the case to the CTA as a full court on Nov. 22, 2023.

The CTA as a full court denied the petition.  It ruled:

"All told, petitioner has not presented any argument that convinces this Court to reverse or modify the findings of the Court in Division that denied petitioner's claim for refund. 

"For having failed to present sufficient and convincing evidence to prove that the imported subject products were not locally available in reasonable quantity, quality, or price at the time of importation, petitioner failed to fulfill all conditions to be entitled to the tax exemption granted under Section 13 of Presidential Decree No. 1590.

"Consequently, the Court finds no erroneous or illegal excise taxes to be refunded in favor of petitioner (PAL)."

The 17-page decision was written by Associate Justice Henry S. Angeles with the concurrence of Presiding Justice Roman G. Del Rosario and Associate Justices Ma. Belen M. Ringpis-Liban, Catherine T. Manahan, Jean Marie A. Bacorro-Villena, Maria Rowena Modesto-San Pedro, Marian Ivy F. Reyes-Fajardo, Lanee S. Cui-David, and Corazon G. Ferrer-Flores.