ORBs of petroleum products

THE Bureau of Internal Revenue (BIR) issued Revenue Memorandum Circular (RMC) No. 24-2012 clarifying the issue on the maintenance and submission of official register books (ORBs) on tax-paid petroleum products stored on formerly bonded storage facilities.

Under previous issuances, certain storage facilities and/or terminals like the Joint Oil Companies Aviation Fuel Storage Plan, and the Pandacan Oil Depot, including the blending facilities located therein for the manufacture of lubricating oil and grease owned and operated by the oil companies were required to maintain ORBs and to submit, on a regular basis, the transcripts sheets thereof to the BIR.

However, subsequent issuance of certain tax laws and tax regulations such as Republic Act No. 8424, imposing excise tax on the major raw materials for lubricating oil and grease effectively rendering the finished products no longer subject to excise tax.

The promulgation of Revenue Regulations No. 8-2006, introducing the Product Replenishment Scheme which effectively unbonded formerly bonded storage facilities, also seemed to have created the impression that the maintenance of ORB and submission of the transcripts sheets thereof is no longer required.

Based on the RMC, the imposition of the requirements contemplates the monitoring of two aspects of the facilities: First, movements of untaxed or bonded products, if the facilities are bonded; and Second, the entire operation of the facilities, whether or not the facilities are bonded.

Hence, while taxes on products stored in the facilities may have been paid already, or is subject to P0 rate, there is still a need to ensure that taxes on all products stored within and handled by the facilities are properly paid in order to protect the revenues due to the government.

Considering that these administrative requirements are duly prescribed by revenue issuances and permits and remained in effect, as no revoking issuance has been issued, continued compliance thereto should be strictly observed by concerned taxpayers.

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