MANILA – The Court of Tax Appeals (CTA) has turned down a petition for review filed by petroleum giant Petron Corp. seeking an almost PHP56-million tax refund for taxes it paid in 2012 for the importation of alkylate, a blending component for the manufacture of ethanol-blended motor gasoline.
In a 23-page decision dated October 22, the tax court’s second division through Associate Justice Juanito Castaneda “denied for lack of merit” the firm’s claim.
“There is no double taxation,” the CTA ruled.
It added that Petron’s claim that the excise tax on the imported alkylate and upon lifting of the motor gasoline to which such alkylate was blended is tantamount to double taxation is likewise devoid of merit. “For double taxation in the objectionable or prohibited sense to exist, the same property must be taxed twice when it should be taxed but once,” it said.
“The subject matter of the tax imposed in this case is on the importation of alkylate; while the excise tax imposed on the alleged use of alkylate as a blending component or raw material to produce another taxable article or goods is a different subject matter altogether,” the court added.
The court denied the firm’s plea for the refund or issuance of a tax credit certificate of its excise tax payment on the importation of alkylate in the amount of PHP55,691,571 for June 2012.
The court also said that since tax refunds are in the nature of tax exemptions which represent a loss of revenue to the government, these exemptions “must not rest on vague, uncertain or indefinite inference, but should be granted only by a clear and unequivocal provision of law on the basis of language too plain to be mistaken”.