Tax court turns down PAL P8-M refund claim

MANILA--THE Court of Tax Appeals (CTA) has turned down a tax claim filed by the Philippine Air Lines (PAL) for taxes it paid for cigarettes, liquor, and wines for its commissary operations in 2014.

In a 24-page decision by Associate Justice Cielito N. Mindao-grulla dated August 8, the CTA'S Second Division "denied for lack of merit" the petition for review filed by the PAL seeking the refund or issuance of a tax credit certificate in the amount of PHP8.98 million representing excise taxes imposed it paid five years ago.

"Claims for tax refunds are in the nature of tax exemptions, and as such, should be construed strictissimi juris against the taxpayers and liberally in favor of the government," the tax court said in its ruling.

PAL cited that Sec. 13 of PD 1950 provides for petitioner's exemption from the payment of all taxes, duties and other fees and charges on all importations of commissary and catering supplies for the use in its transport and non-transport operations.

On August 22, 2016, PAL filed before the Commissioner of Internal Revenue a claim for a refund for excise taxes it paid on imported various cigarette and alcohol products constituting its commissary and catering supplies for use in its international flights.

Officials of the Bureau of Internal Revenue (BIR), meanwhile, said PAL made the alleged payments on August 22, 2014, and that counting two years from then, the petition should have been filed on August 11, 2016. The petition, however, was filed only on August 22, 2016.

The BIR insists the claim for refund was filed out of time and that PAL filed the administrative claim for refund on August 22, 2016, with the BIR'S Regular Large Taxpayers Audit Division II, the same day it filed the petition for review before the CTA./PNA