BIR Ruling [UN-411-95]

November 21, 1995 BIR RULING [UN-411-95] 1st Indorsement Returned to Chief, Regulatory Operations Monitoring Division, the within papers bearing on her request for a clear cut opinion regarding the issue as to whether or not an international carrier of domestic registry is subject to the excise taxes on petroleum products purchased for its use or consumption outside the Philippines. The request for opinion has arisen in view of the divergent positions taken on one hand by then Head Revenue Executive Assistant Antonio J. Ortega and on the other by the Legal Service. Mr. Ortega contends that Section 132 of the Tax Code, as amended, is only applicable to foreign international carriers while we have opined that a Philippine carrier is exempt from paying the specific tax on petroleum products which it purchased for its use in international operations. It is observed however, that the position taken by Mr. Ortega in the case of Loadstar International Shipping, Inc., as embodied in his Memorandum dated July 20, 1992, is a mere opinion without citing any established precedent or jurisprudence as basis thereof. While the said opinion has the concurrence of former Commissioner Ong per his marginal note thereon, the same was never transformed into a formal BIR Ruling and, therefore, cannot be considered to have revoked unnumbered BIR Ruling dated September 12, 1978 which we cited as precedent in Unnumbered BIR Ruling No. 168-94 issued to Pacific East Cargo Airlines, Inc. (PEAC). In short, Unnumbered BIR Ruling dated September 12, 1978, which states in the dispositive portion that ". . . the above quoted provision of law (now Section 132, Tax Code, as amended) does not distinguish between an international carrier of domestic registry and an international carrier of foreign registry. Hence, a Philippine international carrier is exempt from paying the specific tax on petroleum products which it purchased for use in international operations. Moreover, to conclude otherwise would create a situation wherein domestic corporations would be discriminated in favor of foreign nationals for no apparent reason at all." still stands in the absence of a formal BIR Ruling expressly revoking the same. Accordingly, Unnumbered Ruling No. 168-94 dated May 30, 1994 which merely reiterated the aforequoted ruling to the effect that a Philippine International carrier can claim exemption from paying excise tax on petroleum products it purchased for international operations should prevail over that of the Memorandum dated July 20, 1992 of former HREA Antonio I. Ortega. cdtech ALICIA P. CLEMENO Assistant Commissioner (Legal Service)