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THE Court of Tax Appeals (CTA) En Banc upheld two First Division rulings granting Petron Corp. partial refunds of excise taxes on petroleum products sold to tax-exempt entities after denying separate appeals filed by the oil company and the Commissioner of Internal Revenue (CIR).<\/span><\/p>\n In two separate decisions, each promulgated on July 2, the tax court upheld a refund of P727.33 million out of Petron\u2019s roughly P773.90-million claim for excise taxes paid on locally produced unleaded gasoline and diesel fuel sold to Micro Dragon Petroleum, Inc. (MDPI), a Subic Bay Freeport enterprise.<\/p>\n It also upheld a refund of P2.77 million out of the corporate\u2019s P9.55-million claim covering imported lubricating oils and additives that formed a part of finished products later sold to tax-exempt entities.<\/span><\/p>\n In the primary case, the CIR argued that Petron was not entitled to a refund because MDPI allegedly didn’t satisfy a condition in its Subic Bay Metropolitan Authority (SBMA) registration limiting sales inside the customs territory to 30% of its total income.<\/p>\n The En Banc rejected the argument, ruling that the 30% threshold pertains only to income tax and doesn’t affect MDPI\u2019s entitlement to an excise tax exemption under Section 135 of the National Internal Revenue Code.<\/span><\/p>\n The court, nonetheless, affirmed the disallowance of P46.57 million of Petron\u2019s refund claim after finding that portions of the claimed diesel fuel removals couldn’t be reconciled with the supporting documents, including SAP-generated Official Registry Books (ORBs) and excise tax returns.<\/span><\/p>\n The court said tax refund claims are strictly construed against the taxpayer and have to be supported by documentary evidence establishing entitlement to the refund.<\/p>\n Within the second case, the En Banc affirmed the refund of P2.77 million but denied Petron\u2019s bid to get better an extra P3.73 million, ruling that the corporate couldn’t expand its refund claim beyond the Aug. 1 to Dec. 31, 2019 period identified in its petition.<\/p>\n The court said granting relief beyond the period specifically pleaded would violate the CIR\u2019s right to due process since the tax agency prepared its defense based on the refund period identified by Petron.<\/span><\/p>\n The En Banc also rejected the CIR\u2019s appeal, reiterating that while excise taxes are imposed upon production or importation, manufacturers and importers may get better excise taxes paid on petroleum products sold to entities exempt under Section 135 of the Tax Code, consistent with the Supreme Court\u2019s rulings in Chevron Philippines, Inc. vs. Commissioner of Internal Revenue and Pilipinas Shell Petroleum Corp. vs. Commissioner of Internal Revenue. \u2014 Mark Joseph M. Sanchez<\/b><\/p>\n<\/p><\/div>\n <\/p>\n","protected":false},"excerpt":{"rendered":" PETRON.COM THE Court of Tax Appeals (CTA) En Banc upheld two First Division rulings granting Petron Corp. partial refunds of excise taxes on petroleum products sold to tax-exempt entities after denying separate appeals filed by the oil company and the Commissioner of Internal Revenue (CIR). In two separate decisions, each promulgated on July 2, the […]<\/p>\n","protected":false},"author":1,"featured_media":363993,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7],"tags":[50798,31179,2598,36663,16187,53717,2780,5149,18028],"class_list":["post-363992","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","tag-cta","tag-excise","tag-partial","tag-petron","tag-refunds","tag-rulings","tag-tax","tag-twin","tag-upholds"],"aioseo_notices":[],"aioseo_head":"\n\t\t\n\t\n\t\n\t\n\t\n\t\n\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t