Exemption from Specific Tax — Chinese Airline

September 17, 1979 BIR RULING NO. 090-79 Exemption from specific tax Chinese airline This refers to your letter dated July 20, 1979 to the Honorable, the Minister of Finance, requesting certification on the extent of the tax exemption privilege of the Chinese airline under the recently concluded RP-People's Republic of China Civil Air Transport Agreement. Paragraph 2 of Article 7 of said Agreement provides: "2. The fuel, oil, lubricants and aircraft, stores for consumption replenished to or taken on board the aircraft in the territory of the other Contracting Party by the designated airline of the First Contracting Party for operation of the specified route shall be exempted from customs duties, inspection fees and other charges." In reply, I have the honor to inform you that under the above-quoted provision of the agreement, the phrase "customs duties, inspection fees and other charges" includes the specific taxes otherwise due on petroleum products. Accordingly, aviation gasoline and other petroleum products purchased by the Chinese airline in the Philippines, are exempt from the specific taxes imposed by Section 153 of the Tax Code of 1977, as amended. Moreover, since the petroleum products will be used in international flights by the Chinese airline and considering that the People's Republic of China, the country of said airline exempts from tax petroleum products sold to Philippine carriers, said products are not subject to specific tax. (Section 134, Tax Code of 1977, as amended by Presidential Decree No. 1359) aisa dc