Friday, January 08, 2016

SILKAIR (Singapore) PTE. LTD. vs. CIR [GR No. 166482, January 25, 2012]

ISSUE: The core issue presented is the legal personality of the petitioner to file an administrative claim for refund of excise taxes alleged to have been erroneously paid to its supplier of aviation fuel here in the Philippines

RULING: Excise taxes, which apply to articles manufactured or produced in the Philippines for domestic sale or consumption or for any other disposition and to things imported into the Philippines, is basically an indirect tax. While the tax is directly levied upon the manufacturer or importer upon removal of the taxable goods from its place of production or from the customs custody, the tax, in reality, is actually passed on to the end consumer as part of the transfer value or selling price of the goods, sold, bartered or exchanged.

Except for its bare allegation of being "placed in a very complicated situation" because Petron "for fear of being assessed by Respondent, will not allow the withdrawal and delivery of the petroleum products without Petitioner's pre-payment of the excise taxes," petitioner has not demonstrated that it dutifully complied with its contractual undertaking to timely submit to Petron a valid certificate of exemption  so that Petron may subsequently file a claim for excise tax credit/refund pursuant to Revenue Regulations No. 3-2008 (RR 3-2208). It was indeed premature for petitioner to assert that the denial of its claim for tax refund nullifies the tax exemption granted to it under Section 135(b) of the 1997 Tax Code and Article 4 of the Air Transport Agreement.

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