The Court of Tax Appeals (CTA) in Manila has ordered the Philippines' Bureau of Internal Revenue (BIR) and the Bureau of Customs (BOC) to return PHP235 million peso (USD4.48 million) in excise duties to Air Philippines (2P, Manila Ninoy Aquino Int'l).

The money had been erroneously charged for the importation of aviation fuel for the period May 2013 to December 2014, according to the Manila Bulletin.

The BIR had ordered Air Philippines Corporation to pay the duty to the BOC on the basis of a section in the tax code, as well as a Department of Energy (DOE) memorandum, stating that the carrier should pay excise tax on Jet A1 fuel, as it had been available on the local market.

However, the airline argued that under a presidential decree it was allowed to import fuel on a tax-free basis if it was not available locally “at reasonable quantity, quality, and price”. It also secured a document from the Civil Aviation Authority of the Philippines (CAAP) supporting this claim.

The court ruled that the DOE was not the competent authority but the CAAP, one of whose mandates was “to take charge of technical and operational phases of aviation matters”.