Shell seeks more time to settle back excise taxes

MANILA, Philippines - Pilipinas Shell Petroleum Corp. wants more time to settle more than P7 billion in back excise taxes, saying it might be forced to stop its local operations if compelled to pay tomorrow, Bureau of Customs Commissioner Napoleon Morales said.

“They said the time was too short considering the size of the amount and that they need to clear it with their head office in Geneva. They even said that their company would lose its profit and might lead to its closure if they would be forced to pay the P7 billion,” Morales said.

Shell President Ed Chua, in a meeting with Morales last Nov. 19, said the 10-day period within which to settle the P7 billion was not enough. The deadline is tomorrow.

Morales said he believes a shutdown is unlikely if the back taxes are paid on a staggered basis.

Earlier, Morales said he was willing to give Shell until Dec. 30 to pay the taxes.

Shell also requested during the meeting that BOC not invoke Section 1508 of the Tariffs and Customs Code and put on hold the release of future shipments of unleaded gasoline declared as Catalytic Crack Gasoline or CCG.

“Chua said that they would go to the President. Maybe they would ask for an extension of time for the payment,” Morales said.

Morales said he has directed Deputy Commissioner for Assessment and Operations Coordinating Group Reynaldo Nicholas to study the motion for reconsideration filed by the oil firm.

The BOC said he would also seek comments from Port of Batangas District Collector Juan Tan. The unpaid taxes were for shipments that arrived in the Batangas port.

“I cannot decide on it alone. It is better that the Bureau would come out with a common stand. If their motion for reconsideration is denied, then we would hold their shipment,” Morales said.

Nicolas earlier denied Shell’s appeal that it not be taxed for its CCG import. The BOC, however, insisted that excise taxes apply to all importation.

BOC said Shell was paying the corresponding excise tax for unleaded gasoline in its previous importation of CCG and that it allegedly even admitted that CCG was the same as unleaded gasoline.

The BOC ruled that under the law, excise tax is imposed on regular gasoline and unleaded gasoline. The law does not distinguish between gasoline imported for use as raw material or as blending component for the production of a finished product.

“Gasoline whenever imported shall be subject to excise tax and VAT based on the landed cost, whatever is the intention of the importer to the use thereof,” a BOC memorandum reads.