Shell seeks Court of Appeals intervention over taxes

MANILA, Philippines - Oil refiner Pilipinas Shell Petroleum Corp. (PSPC) has petitioned the Court of Appeals to prevent the Bureau of Customs (BOC) from collecting P7.34 billion in alleged back taxes.

The BOC is forcing Shell to pay P7.34 billion in excise taxes from the shipments of catalytic cracked gasoline (CCG) and light catalytic cracked gasoline (LCCG) from 2004 to 2009.

Shell said the fuel type is used for the production of unleaded premium gasoline. The amount also covers penalties for alleged misdeclaration of the fuel shipment.

The local unit of the Anglo-Dutch oil giant said the CCG and LCCG are intermediate products or raw materials and still have to go through a refinement process before they can be sold locally as unleaded premium gasoline.

In a 57-page petition, Shell said the BOC has no jurisdiction to issue the questioned tax assessment since “the Bureau of Internal Revenue (BIR), the government agency tasked by law to collect all national internal revenue taxes and to interpret provisions of the National Internal Revenue Code (NIRC) has previously ruled that such importations are not subject to said taxes.”

Shell said the BIR has not issued any tax assessment under the NIRC covering the importations and that the BIR “has ruled that Shell’s importations of CCG and LCCG, being intermediate products or raw materials, are not subject to excise taxes.”

Shell also contended that the BIR has authorized the release of imported goods to the BOC since 2004, directing that the importations are not subject to excise tax.