Shell paying excise tax, VAT for alkylate “under protest”

Pilipinas Shell doubles net profits to P7.4 billion for 2016

Pilipinas Shell Petroleum Corporation said it is paying the Bureau of Customs (BOC) Php3.49 billion in alleged excise taxes and value-added taxes (VAT) it was supposed to remit for alkylate imports from 2014-2020, but is doing so “under protest.”

In a statement disclosed to the Philippine Stock Exchange (PSE) on Monday, Shell said the BOC recognized its intent to pay the said taxes under protest “pursuant to the demand letter of the Port of Batangas in view of the dissolution by the Supreme Court [(SC)] of the [temporary restraining order (TRO)] previously issued, as a result of the matter being remanded to the [Court of Tax Appeals (CTA)].”

Shell, the country’s second largest oil firm, previously filed a TRO with the CTA on the matter. The oil giant’s move followed the SC’s decision affirming the tax court’s decision to suspend the collection of excise taxes for the importation of alkylate from January 2010 to June 2012 worth Php1.99 billion. The high court then ruled that alkylate, a product of distillation, is subject to excise tax under Section 148 of Republic Act 8424 or the National Internal Revenue Code of 1997.

Alkylate is a petroleum additive used as a blending component to produce unleaded gasoline.

“Taking into consideration the current economic challenges of the country as well as ensuring continued operations, uninterrupted imported fuel supply and welfare of our motoring public and consumers, SHLPH will remit a total of [Php3.49 billion], under protest,” Shell said.

SHLPH is Shell’s trading symbol in the PSE.

“This will allow us to continue to provide to our customers and to the general public who rely on our products and mindful of the thousands of Filipinos whose livelihood depends on our ability to maintain our operations,” the oil giant added.

“The case on whether [alkylate] is subject to excise tax is yet to be decided by the courts,” Shell emphasized.