Grant of Request to Claim Tax Credit/Refund of Excise Taxes Paid on Petroleum Products Sold to Tax-Exempt Entities

April 19, 1999 BIR RULING NO. 051-99 135-000-00-051-99 Petron Corporation 7901 Makati Avenue 1200 Makati City Attention: Atty . Luis A . Maglaya Legal Counsel Gentlemen : This refers to your letter dated November 16, 1998 requesting for a ruling that Petron Corporation (Petron) be allowed to claim a tax credit/refund of the excise taxes paid on petroleum products sold to tax-exempt entities or agencies. It is represented that Petron sells finished petroleum products to several tax-exempt customers who enjoy exemption from indirect taxes such as specific taxes on their purchases of petroleum products by virtue of international agreements based on international law principle of reciprocity; that Petron has delivered to these tax-exempt entities tax-paid petroleum products; and that by virtue of the tax-exempt privilege enjoyed and invoked by these customers, they are billed net of the specific tax on such tax-paid petroleum products. dctai In reply, please be informed that since your petroleum product withdrawals are for use by entities or agencies exempt from excise tax under Section 135 of the Tax Code of 1997, and that the petroleum products are to be delivered to the tax-exempt entities within ten (10) days (for the period January 1, 1998 to June 30, 1998); within five (5) days (for the period July 1, 1998 to December 31, 1998) from the date of removal of such products; and before removal from the place of production of such products (from January 1, 1999 and thereafter), you are allowed to claim a tax credit/refund of the excise taxes paid on petroleum products sold to tax-exempt entities or agencies, subject to the two-year prescriptive period under Section 229 of the Tax Code of 1997. Furthermore, the excise taxes paid on petroleum products sold and physically delivered to tax-exempt entities beyond ten (10) days (for the period January 1, 1998 to June 30, 1998); five (5) days (for the period July 1, 1998 to Dec. 31, 1998) after date of refinery withdrawal shall be recovered by you by filing claims for tax credit/refund with the Appellate Division, this Bureau. Very truly yours, (SGD.) BEETHOVEN L. RUALO Commissioner of Internal Revenue