CA upholds legality of fees imposed by CDC

The Court of Appeals (CA) has declared as legal the royalty fees being imposed by the Clark Development Corporation (CDC) for regulating the flow of fuel at the Clark Special Economic Zone.

In an eight-page decision penned by Justice Rebecca de Guia, the CA’s fourth division, denied the petition of Caltex Philippines Inc. seeking to void the implementation of royalty fees on fuel deliveries inside the Clark Special Economic zone.

The CA said Caltex was not able to substantiate its accusations that the royalty fees being collected by the CDC are invalid because it has no basis, unreasonable and grossly in excess of the cost of surveillance, inspection and supervision.

Caltex claimed that CDC is not allowed to impose royalty fees on sale and delivery of fuel inside the Clark Special Economic Zone under Republic Act 7227 or the Bases Conversion and Development Act of 1992.

In its petition, Caltex said the royalty fees are unreasonable because the cost of such regulation is already covered by the accreditation, annual and gates pass fees imposed by the CDC.

In ruling in favor of the CDC, the CA cited that under Section 4 of Presidential Decree 66, the CDC can collect fees and charges for the issuance of permits, licenses and other services.

PD 66 also provides that the CDC shall have supervision and control over the movement of cargoes, wares, articles, machineries, equipment, supplies or merchandise of every type and description.

"The fact that incidentally revenue is also obtained does not make the imposition a tax as long as the primary purpose of such imposition is regulations," the CA said.