In its recent 26-page decision written by presiding justice Roman Del Rosario, the CTA’s First Division directed the BIR to issue a tax credit certificate to Petron.
Petron claimed that alkylate is not a product of crude oil distillation and is used as a blending component for the production of gasoline.
Thus, imposing excise taxes on both imported alkylate and finished gasoline results in double taxation.
BIR officials argued that they have the power to interpret the laws on taxes and that claims for refund are strictly construed against the claimant and liberally in favor of the taxing authority.
In ruling that alkylate is not subject to excise taxes, the tax court noted that the relevant provisions of the tax law imposed excise tax only and particularly to “naphtha, regular gasoline and other similar products of distillation”.
“Anything that is not included in the enumeration is excluded therefrom and a meaning that does not appear nor is intended or reflected in the very language of the statute cannot be placed therein,” it said.
The CTA ruled that alkylate cannot be classified under the catch-all item “other similar products of distillation” although one of the raw products of alkylate, isobutane, can be a product of distillation. via (PNA)