Shell to contest SC decision on tax refund

MANILA, Philippines—Pilipinas Shell Petroleum Corp. is set to file a motion for reconsideration on or before May 22 this year to contest the Supreme Court decision that junked the oil firm’s petition to get a tax refund amounting to P95 million.

Roberto S. Kanapi, vice president for communication at Shell, said that there is a specific tax ruling—previously upheld by the appellate court—that allows Pilipinas Shell to claim a refund for the excise taxes it had paid to the Bureau of Internal Revenue (BIR).

Under this ruling, fuel that is produced locally but exported is exempted from local excise taxes, he claimed.

Kanapi was referring to Section 135 (a) of the National Internal Revenue Code of 1997, which provides for excise tax exemption to international carriers for their purchases of locally manufactured petroleum products such as those by Pilipinas Shell, one of two oil refiners in the country.

The Supreme Court recently rejected Pilipinas Shell’s claim for refund of more than P95 million in excise taxes, citing another provision under the law, which states that petroleum products must be subjected to excise taxes prior to being removed from their production site.