Refund of Tax Paid on the Sales of Oxygen and Acetylene Gases to the NAPOCOR

September 25, 1959 BIR RULING NO. 479-59 Mr. Jose W. Diokno Attorney-at-Law 332 Regina Building Escolta, Manila S i r : This is with reference to your letter dated February 17, 1959, requesting for a reconsideration of the ruling of the Regional Director, B.I.R. Regional District No. 1, Baguio City, dated February 2, 1959 denying your client's claim for refund of the seven percent sales tax paid by them on the sales of oxygen and acetylene gases to the National Power Corporation and its agent Philippine Engineer's Syndicate, Inc. for the month of October, 1958. cdtech In your said letter dated February 17, 1959, you quoted therein the opinion of the Secretary of Justice dated May 14, 1954, declaring among other things that the National Power Corporation was exempt from the payment of direct as well as indirect taxes, by virtue of the exempting provisions of Republic Act No. 358. It should be noted, however, that the aforesaid opinion of the Secretary of Justice was, on February 26, 1955, reversed by the Cabinet, pertinent parts of which are quoted hereunder: "The Cabinet at its meeting yesterday considered your letter of December 16, 1954 for a resolution of the question as to whether or not petroleum products purchased by the National Power Corporation are exempted from the payment of specific tax pursuant to the provisions of Republic Act No. 358 in the light of Opinion No. 106, s. 1954 of the Secretary of Justice. The Cabinet, after a discussion on the stand of the Secretary of Justice as embodied in said opinion and the views of the Collector of Internal Revenue and the exemption granted by Republic Act No. 358 applied only to direct taxes but does not extend to indirect taxes. This view is supported by opinions Nos. 224 (s. 1939), 251 (s. 1951), 339 (s. 1951), and 299 (s. 1952) of the Secretary of Justice, holding that the doctrine of tax immunity is not applicable where the tax is an indirect collectible from manufacturer, producer or importer. In view of the above action of the Cabinet, petroleum products purchased by the National Power Corporation from the Standard Vacuum Company are subject to specific tax." In view of the foregoing, your request for a reconsideration of the above-mentioned ruling of the Regional Director cannot be granted. cdta Very truly yours, (SGD.) MELECIO R. DOMINGO Commissioner of Internal Revenue