QuestionsQuestions (BOC MEMORANDUM)
It addresses the tax treatment—specifically, liability for customs duties/VAT exemption and liability for excise tax—on PAL’s importation of Aviation Turbo Fuel or Jet A-1 Fuel, in light of PAL’s tax-exempt status under Presidential Decree No. 1590 and issues being resolved by the Bureau of Customs.
Presidential Decree (PD) No. 1590.
Section 131 of Republic Act (RA) 8424 (Comprehensive Tax Reform Program).
For use in international operations, the aviation fuel is “exempted” from excise tax; for use in domestic operations, it is “subject to payment of excise tax.”
It states that, consistent with information from PAL management that all imports are for domestic operation, excise tax must be paid on such importations.
The memorandum notes that PAL management informed the Bureau that all importations of Jet A fuel are for domestic operation, which supported the Bureau’s conclusion that excise tax should be collected.
Excise tax shall be collected upfront or prior to the release of the importation from the port of discharge.
It means the excise tax is to be paid at the time of importation and must be settled before the Bureau allows the imported goods to be released from the port.
Yes. It recognizes excise tax exemption for aviation fuel used in international operations.
Yes. The memorandum reiterates that excise tax is subject to payment for domestic operations, pursuant to RA 8424 and prior BOC memos.
It serves as the statutory basis for imposing excise tax on items like aviation fuel when used for domestic operations, notwithstanding franchise-based claims of exemption.
It orders strict compliance with the stated rules on collection of excise tax for PAL’s aviation fuel importations.
It is an internal BOC memorandum directing enforcement and collection—specifically, the upfront collection of excise tax prior to customs release based on the intended use (international vs domestic).