CTA orders BIR to refund Petron P45.39M in alkylate excise tax

The Court of Tax Appeals (CTA) has ordered the Bureau of Internal Revenue (BIR) to refund Petron Corp. P45.39 million in excise taxes paid on its June 2019 importation of alkylate, according to BusinessWorld.

In a 12-page decision, the CTA ruled that alkylate, a petroleum blending component used to increase octane, is not subject to excise tax under the National Internal Revenue Code because it is not among the enumerated petroleum products specifically taxed. The court held that the BIR erred in treating alkylate as a finished product subject to excise duties.

The ruling provides clarity on the tax treatment of blending components and may set a precedent for similar claims by other petroleum companies. The refund covers the excise tax paid on four alkylate shipments imported in June 2019.