BOC MEMORANDUM

: The subject is the excise tax on the importation by Philippine Airlines (PAL) of aviation turbo fuel or Jet A-1 fuel in relation to its legislative franchise under Presidential Decree No. 1590.
: Yes, PAL is exempted from payment of customs duties and VAT on the importation of aviation turbo fuel or Jet A-1 fuel.
: PAL is exempt from excise tax for aviation fuel imported for use in international operations.
: PAL is required to pay excise tax on imported aviation fuel used for domestic operations.
: Section 131 of Republic Act 8424 (Comprehensive Tax Reform Program) mandates the payment of excise tax.
: The Bureau of Customs is required to collect excise tax upfront or prior to the release of the imported aviation fuel from the port of discharge.
: No, the franchise allows exemption only for aviation fuel used in international operations. Use in domestic operations is subject to excise tax.
: PAL Management volunteered that all importations of Jet-A fuel by the firm are for domestic operations, prompting enforcement of excise tax collection.
: Guillermo L. Parayno, Jr., Commissioner of the Bureau of Customs.
: It emphasizes that the directive on excise tax collection must be strictly followed without exceptions or delays.