Pilipinas Shell Petroleum Corp. is reviewing its legal options after the Court of Tax Appeals ordered the oil refiner to pay excise taxes worth P3.5 billion on imports of raw gasoline materials between 2006 and 2009.
“We will avail all legal remedies available to us,” Shell manufacturing communications and social performance manager Cesar Abaricia told reporters Friday.
The CTA issued a decision modifying a previous resolution of its third division stopping the Bureau of Internal Revenue and the Bureau of Customs from collecting the excise taxes from Shell.
Shell filed in 2009 a petition asking the court to nullify the payment demand of the BIR. The BIR at that time sought payment of about P7 billion in excise and value added taxes for the importation of catalytic cracked gasoline and light catalytic cracked gasoline used as raw materials for gasoline from 2004 to 2009.
Shell has repeatedly said the materials were not finished products and should not be slapped with an excise tax
The company also stressed it paid excise tax for the finished product made from CCG and LCCG. It claimed that paying excise tax on the raw material and finished product would result in double taxation
Shell said that both CCG and LCCG must go through a refinement process before they can be sold locally as unleaded premium gasoline.
Shell, a unit of Royal Dutch/Shell Group, owns an oil refinery in the Philippines with a capacity of 110,000 barrels per day located in Batangas.
The company’s oil operations in the Philippines has been fraught with challenges in recent years, such as its tax issues and the removal of its operations from the Pandacan depot.
Shell, however, said it would continue to invest in its operations in the country. It is nearing completion of its refinery upgrade and an oil depot in Mindanao.
The company plans to conduct an initial public offering next year to comply with the directive of the Oil Deregulation Law of 2008.
The company also raised concerns on the decision of the Commission on Audit imposing P53.14 billion in taxes on the contractors of the Malampaya gas-to-power project in northwest Palawan.
Shell was also forced to shut down its oil depot in Pandacan to comply with a Supreme Court ruling directing the oil companies to move out of the Manila residential district.
“We want to settle amicably. We are also looking at all the legal remedies and obviously, the consortium will go through the legal remedies,” Shell Philippines Exploration B.V. managing director Sebastian Quiniones earlier said.
Quiniones said talks were ongoing between the Malampaya consortium and the Energy Department on how to settle the issue.