A taxpayer is not entitled to a refund of excise taxes paid on petroleum products subsequently sold to Clark Development Corporation.

On the basis of Section 135(c) of the Tax Code, stating that petroleum products sold to entities which are exempt from direct and indirect taxes are exempt from excise taxes, taxpayer filed for a refund claim of excise taxes paid on imported petroleum products subsequently sold to Clark Development Corporation (CDC). The Court disagreed. According to the Court, there is nothing in the said provision that explicitly grants it, as seller of imported petroleum products to tax exempt entities, exemption from the payment of excise taxes paid thereon. The exemption in the provision is explicit and the taxpayer does not fall in any of the categories enumerated therein. As importer of the petroleum products sold to tax-exempt entities, taxpayer is liable to pay excise taxes due on the said importation. In its ruling, the CTA cited the case of Philippine Acetylene Co., Inc. vs. Commissioner of Internal Revenue, G.R. No. L-19707, August 17, 1967, which held that the manufacturer and seller of oxygen and acetylene gases, who sold its products to National Power Corporation, a tax-exempt entity, cannot claim exemption from the payment of sales tax simply because its purchaser, NPC, is exempt from taxation. The excise taxes imposed on the importation of petroleum products is the direct liability of the importer who cannot thus invoke the excise tax exemption granted to its buyers who are entities which are by law exempt from direct and indirect taxes. (Chevron Philippines, Inc. vs. Commissioner of Internal Revenue, CTA EB No. 965, October 14, 2013)