Vladimir Karl A.

Tolentino
Taxation 1

EXCISE TAX:

G.R. No. 188497 February 19, 2014

COMMISSIONER OF INTERNAL REVENUE vs. PILIPINAS SHELL PETROLEUM

CORPORATION

Facts:

Respondent argues that a plain reading of Section 135 of the NIRC reveals
that it is the petroleum products sold to international carriers which are exempt from
excise tax for which reason no excise taxes are deemed to have been due in the first
place. It points out that excise tax being an indirect tax, Section 135 in relation to
Section 148 should be interpreted as referring to a tax exemption from the point of
production and removal from the place of production considering that it is only at that
point that an excise tax is imposed. The situation is unlike the value-added tax (VAT)
which is imposed at every point of turnover – from production to wholesale, to retail
and to end-consumer. Respondent thus concludes that exemption could only refer to
the imposition of the tax on the statutory seller, in this case the respondent. This is
because when a tax paid by the statutory seller is passed on to the buyer it is no
longer in the nature of a tax but an added cost to the purchase price of the product
sold.

Issue: Whether or not Shell is entitled to refund for the payment of the excise tax.

Held: Yes, the exemption from excise tax of aviation fuel purchased by international
carriers for consumption outside the Philippines fulfills a treaty obligation pursuant to
which our Government supports the promotion and expansion of international travel
through avoidance of multiple taxation and ensuring the viability and safety of
international air travel.

G.R. No. 215705-07 February 22, 2017

COMMISSIONER OF INTERNAL REVENUE AND COMMISSIONER OF

CUSTOMS vs. PHILIPPINE AIRLINES, INC.

Facts:

The controversy in this case revolves around the interpretation of the

provisions of Presidential Decree No. 1590 (PD 1590), otherwise known as "An Act
Granting a New Franchise to Philippine Airlines, Inc. to Establish, Operate, and
Maintain Air Transport Services in the Philippines and Other Countries" vis-a-vis
Republic Act No. 9334 (RA 9334), otherwise known as "An Act Increasing the Excise
Tax Rates Imposed on Alcohol and Tobacco Products, Amending for the Purpose
Sections 131, 141, 142, 145, and 228 of the National Internal Revenue Code of
1997." PD 1590 was enacted on June 11, 1978, while RA 9334 took effect on
January 1, 2005. On September 5, 2008, PAL paid under protest. On March 5, 2009,
PAL filed an administrative claim for refund of the excise taxes it paid with the
Bureau of Internal Revenue (BIR) contending that it is entitled to tax privileges under
Section 13 of PD 1590. The CTA Second Division found that PAL was able to
sufficiently prove its exemption from the payment of excise taxes pertaining to its
importation of alcoholic products, and since, it already paid the disputed excise taxes
on the subject importation, and therefore, it is entitled to refund. However, the tax
court ruled that, with respect to its subject importation of tobacco products, PAL
failed to discharge its burden of proving that the said product were not locally
available in reasonable quantity, quality or price, in accordance with the
requirements of the law. Thus, it is not entitled to refund for the excise taxes paid on
such importation.

Issue: Whether PAL's alcohol and tobacco importations for its commissary supplies
are subject to excise tax.

Held: No. It is a basic principle of statutory construction that a later law, general in
terms and not expressly repealing or amending a prior special law, will not ordinarily
affect the special provisions of such earlier statute.

G.R. No. 192024 July 1, 2015

FORTUNE TOBACCO CORPORATION vs. COMMISSIONER OF INTERNAL

REVENUE

Facts:

Petitioner is the manufacturer/producer of, among others, the following

cigarette brands, with tax rate classification based on net retail price prescribed by
Annex "D" to Republic Act (R.A.) No. 4280. Immediately prior to January 1, 1997, the
above-mentioned cigarette brands were subject to ad valorem tax pursuant to then
Section 142 of the Tax Code of 1977, as amended. However, on January 1, 1997,
R.A. No. 8240 took effect causing a shift from the ad valorem tax (AVT) system to
the specific tax system. As a result of such shift, the aforesaid cigarette brands were
subjected to specific tax under Section 142 thereof, now renumbered as Section 145
of the Tax Code of 1997. The excise tax from any brand of cigarettes within the next
three (3) years from the effectivity of R.A. No. 8240 shall not be lower than the tax,
which is due from each brand on October 1, 1996. Provided, however, that in cases
where the excise tax rate imposed in paragraphs (1), (2), (3) and (4) hereinabove will
result in an increase in excise tax of more than seventy percent (70%), for a brand of
cigarette, the increase shall take effect in two tranches: fifty percent (50%) of the
increase shall be effective in 1997 and one hundred percent (100%) of the increase
shall be effective in 1998.

Issue: Whether or not there is sufficient evidence to warrant the grant of petitioner’s
claim for tax refund.

Held: No, the denial of petitioner’s claim for tax refund in this case is based on the
ground that petitioner failed to provide sufficient evidence to prove its claim and the
amount thereof.

G.R. No. 210836 September 1, 2015

CHEVRON PHILIPPINES INC. vs. COMMISSIONER OF INTERNAL REVENUE

Facts:

Chevron sold and delivered petroleum products to CDC in the period from
August 2007 to December 2007.5Chevron did not pass on to CDC the excise taxes
paid on the importation of the petroleum products sold to CDC in taxable year
2007;6 hence, on June 26, 2009, it filed an administrative claim for tax refund or
issuance of tax credit certificate in the amount of P6,542,400.00.7Considering that
respondent Commissioner of

Internal Revenue (CIR) did not act on the administrative claim for tax refund or tax
credit, Chevron elevated its claim to the CTA by petition for review on June 29,
2009.8 The case, docketed as CTA Case No. 7939, was raffled to the CTA’s First
Division.

Issue: Whether or not Chevron was entitled to the tax refund for the payment of
excise tax.

Held: Yes, accordingly, the excise taxes that Chevron paid on its importation of
petroleum products subsequently sold to CDC were illegal and erroneous, and
should be credited or refunded to Chevron in accordance with Section 204 of the
NIRC.

G.R. No. 198759 July 1, 2013

PHILIPPINE AIRLINES, INC. vs. COMMISSIONER OF INTERNAL REVENUE

Facts:

For the period July 24 to 28, 2004, Caltex sold 804,370 liters of imported Jet
A-1 fuel to PAL for the latter’s domestic operations.4 Consequently, on July 26, 27,
28 and 29, 2004, Caltex electronically filed with the Bureau of Internal Revenue
(BIR) its Excise Tax Returns for Petroleum Products, declaring the amounts of
₱1,232,798.80, ₱686,767.10, ₱623,422.90 and ₱433,904.10, respectively, or a total
amount of ₱2,975,892.90, as excise taxes due thereon. On August 3, 2004, PAL
received from Caltex an Aviation Billing Invoice for the purchased aviation fuel in the
amount of US$313,949.54, reflecting the amount of US$52,669.33 as the related
excise taxes on the transaction. This was confirmed by Caltex in a Certification dated
August 20, 2004 where it indicated that: (a) the excise taxes it paid on the imported
petroleum products amounted to ₱2,952,037.90, i.e., the peso equivalent of the
abovementioned dollar amount; (b) the foregoing excise tax payment was passed on
by it to PAL; and (c) it did not file any claim for the refund of the said excise tax with
the BIR.

Issue: Whether PAL has the legal personality to file a claim for refund of the passed
on excise taxes.

Held: Yes, the Court finds that the evidence on record shows that PAL was able to
sufficiently prove its entitlement to the subject tax refund.