Shell awaits formal notice of tax court ruling on refund

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Pilipinas Shell Petroleum Corporation said it is awaiting the copy of the Court of Tax Appeals’ (CTA) recent ruling upholding its earlier granting of an excise tax refund to the company worth Php56.8 million, it said in a disclosure to the Philippine Stock Exchange.

Based on the CTA’s resolution dated December 21, 2020, the court, sitting en banc, denied the Bureau of Internal Revenue’s (BIR) motion for reconsideration regarding the tax refund.

The BIR claimed that the CTA made an error in its previous ruling that Shell is entitled to the refund representing excise taxes it paid on Jet A-1 fuel it sold to tax-exempt international carriers from August 12 to December 31, 2013.

The tax court ruled this time around that the BIR’s arguments were “mere restatements” of its original petition.

Back in June 2020, the CTA denied the BIR’s petition for review, upholding a 2018 decision and resolution by its special third division granting Shell a refund of Php56.8 million out of its original Php61.5-million claim.

In its previous decision, the court cited Section 135(a) of Republic Act 8424 or the National Internal Revenue Code of 1997, which states that fuel products sold to international carriers of either local or foreign registry on their use or consumption outside the country are exempted from excise tax.

“[Shell] will continue to exercise available legal remedies to support its claims,” the disclosure further read.