CTA grants most of Petron’s claim for tax refund

THE COURT of Tax Appeals (CTA) granted Petron Corp.’s P459.96-million tax refund as part of its claim for erroneously paying excise taxes on petroleum products sold in 2017.

In a 32-page decision dated Dec. 5, the CTA Special First Division determined that only the specified amount from Petron’s tax refund claim of P465.65 million can be granted after an examination of the documents submitted by the oil company.

The ruling consolidated separate petitions for the excise taxes paid on the importation of Jet A-1 fuel supplies that were either locally produced, worth P10.5 million, or imported, worth P455.14 million.

Petron claimed that it was entitled to a refund under Section 135 of the revised tax code, which states that petroleum products sold to international carriers are exempt from the payment of excise tax. It first filed a request to the Bureau of Internal Revenue on June 22, 2018.

The appellate court ruled that the company has met the conditions for tax exemption stipulated in the law, such as the sales of petroleum products to international carriers and tax-exempt entities.

“When it is shown that the tax-paid petroleum products have become tax-exempt within the context of Section 135 of the Tax Code, the excise taxes which were previously paid thereon shall then be regarded as ‘erroneously or illegally collected,’ and thus subject to refund,” read part of ruling penned by Associate Justice Marian Ivy F. Reyes-Fajardo.

Petron is the country’s largest oil company and the only one with a refinery. It also does business in Malaysia. The company has a combined refining capacity of 268,000 barrels per day and produces a full range of fuels and petrochemicals.

Its regional operations cover about 40 terminals and around 2,700 service stations where it retails gasoline and diesel.

For nine months through September this year, Petron recorded a consolidated net income of P9.5 billion, up 16% from P8.2 billion a year ago.

During the period, it registered a consolidated sales volume of 93.6 million barrels, up 16% from the 80.4 million barrels sold in the same period last year. — Jomel R. Paguian