The Court of Tax Appeals (CTA) has ordered the Bureau of Internal Revenue (BIR) to refund Petron Corp. P45.39 million in excise taxes paid on its June 2019 importation of alkylate.
The CTA Special Third Division directed the Commissioner of Internal Revenue to refund or issue a tax credit certificate worth P45,389,277, representing excise taxes the court found were “illegally and erroneously paid” on Petron’s alkylate imports.
The CTA said Petron timely filed its administrative and judicial refund claims within the two-year period prescribed under Sections 204 and 229 of the National Internal Revenue Code, giving the court jurisdiction over the case.
The dispute centered on whether alkylate, a gasoline blending component, is covered by the phrase “other similar products of distillation” subject to excise tax under Section 148(e) of the National Internal Revenue Code.
The CTA rejected the BIR’s position, citing a previous Supreme Court ruling that held alkylate is not subject to excise tax because it is used solely as a blending component in the production of gasoline and is not itself a product of distillation covered by the law.
The tax court also dismissed the BIR’s reliance on Section 148(f) of the National Internal Revenue Code, saying the provision imposes excise tax on unleaded premium gasoline, “and not alkylate.”
Concluding that the BIR collected the excise tax without statutory authority under Section 148 of the National Internal Revenue Code, the CTA ruled that Petron was entitled to recover the amount as taxes that were illegally or erroneously collected and ordered the BIR to refund P45.39 million or issue a tax credit certificate for the same amount.
