Shell gets favorable ruling re taxes on alkylate import

MANILA, Philippines — Shell Pilipinas Corp. has secured a favorable court ruling on the company’s petition on the taxes imposed on its alkylate importations.

In a disclosure to the Philippine Stock Exchange, Shell Pilipinas said it received a copy of the Court of Tax Appeals (CTA) Special Second Division decision dated April 27, 2023, which ruled that alkylate is not subject to excise tax.

Further, the company said the CTA granted its amended petition for review dated Oct. 5, 2012.

Shell Pilipinas said the CTA invalidated a document dated June 29, 2012 issued by the commissioner of internal revenue, as well as the letter dated Oct. 1, 2012 of the collector of customs of the Port of Batangas that sought to impose taxes on the company’s previous alkylate importations.

“Thus, the Court of Tax Appeals prohibited the government from collecting, in any manner, excise taxes and value-added tax on Shell Pilipinas’ alkylate importations,” the company said.

“Shell Pilipinas welcomes this decision rendered by the Court of Tax Appeals,” it said.

The company earlier said alkylate is a blending component used by the company to meet Philippine national standards criteria for unleaded gasoline.

It said alkylate is not a finished product, but an intermediate product, thus not subject to excise tax.

In December 2021, Shell Pilipinas, then known as Pilipinas Shell Petroleum Corp., announced that it would pay, under protest, P3.49 billion to the Bureau of Customs for alleged taxes on alkylate importations made from 2014 to 2020 to ensure continued operations, uninterrupted imported fuel supply, and welfare of  motoring public and consumers.

Shell Pilipinas posted a six percent improvement in its net income to P4.1 billion last year from P3.9 billion in 2021, driven by higher volume delivery and strong marketing performance.

At present, more than 130 of the company’s mobility stations are solar-powered reinforced with energy efficient equipment deployed in many of the mobility sites.

The company also has 217 Shell Select stores, 223 Select Express, 93 Deli2Gos and 479 Lube bays nationwide.

Meanwhile, on top of its three import terminals in Batangas, Subic and Cagayan de Oro, construction is also ongoing for Shell Pilipinas’ fourth medium-range capable import terminal in Darong, Davao del Sur, which will supply the growing energy requirements of the southern region.