The Court of Tax Appeals (CTA) has rejected a petition for review filed by oil giant Petron Corporation, which sought to refund Php56 million of taxes it paid in 2012 for the importation of alkylate, a blending component used to manufacture ethanol-blended motor gasoline.
Based on a 23-page decision handed down on October 22, the CTA’s second division chaired by Justice Juanito Castaneda denied the firm’s claim for lack of merit, saying there is no double taxation.
Petron had also claimed that the excise tax on the imported alkylate and upon lifting of the motor gasoline to which alkylate was blended is tantamount to double taxation. However, this was also negated by the court.
“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,” the CTA decision stated.
“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 likewise said that since tax refunds are in the nature of tax exemptions, which represent a loss of revenue to the government, the 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.”
Photo from CTA website.