Shell denies report on misdeclaration of imports

MANILA, Philippines - Pilipinas Shell Petroleum Corp. denied reports yesterday that it had avoided paying the right taxes by misdeclaring its import shipments from 2005 to 2009.

Shell was responding to reports that it had defrauded the government by not paying excise and value added taxes (VAT) on imports of catalytic cracked gasoline (CCG) or light catalytic cracked gasoline (LCCG) which the company allegedly “misclassified” as tetra-propylene.

Catalytic cracked gasoline (CCG) or light catalytic cracked gasoline (LCCG) are blending components used to produce Clean Air Act compliant unleaded gasoline.

As there is no customs classification (AHTN) code for CCG/LCCG under the Tariff and Customs Code of the Philippines, Shell said it used a comparable product tariff heading –2710.11.30 (tetra-propylene) although the tariff description states that the product is CCG/LCCG.

More importantly, this classification passed through the process of assessment, review and approval by the Bureau of Customs, the oil company said.

Shell maintains that it has paid all the right taxes and strongly denies having engaged in any fraudulent activity, especially smuggling, as this is very much against its business principles.

Shell has consistently been among the Top 10 Taxpayers. Over the last five years, its tax payment averaged about P26 billion per year.

The issue surrounding the alleged non-payment of excise taxes on its 2005-2009 shipments is the subject of a pending case between Shell and Customs at the Court of Tax Appeals.

Shell said it will continue to exhaust all available legal remedies for the immediate resolution of this important issue.