Home » Aviation, Breaking News » PAL shouldn’t pay excise tax on imported fuel — court

PHILIPPINE Airlines should not pay excise taxes on imported aviation fuel, according to a recent Court of Appeals ruling.

The Philippine government wanted to exact the tax on the basis of a Department of Energy (DOE) certification issued on Dec. 20, 2002 which said aviation gas, fuel and oil needed by domestic airlines were locally available.

The Court of Appeals order, which upheld the decision of a Pasay City regional trial court, agreed with the flag carrier’s claim that the DOE order could not be used by the Bureau of Internal Revenue (BIR) to collect excise taxes from imported Jet A-1.

PAL said its imports of aviation fuel had been approved by the Civil Aviation Authority of the Philippines.

The flag carrier is exempt from paying excise tax if aviation fuel is not obtained locally and if the importation is used exclusively for operations.

In a 22-page ruling penned by Associate Justice Franchito Diamante, the court said, “Clearly, the questioned certification is not in the nature of taxes, in the sense of being the lifeblood of the national economy, such that its enforcement cannot be enjoined.

“Thus, suspending the collection of excise taxes on PAL’s importation of aviation fuel will not cripple the government and enjoining the reliance on the DOE certification would not necessarily drain the national coffers.”

 

Photo by kamerakamote

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