Pilipinas Shell Petroleum Corp. said over the weekend it will remit “under protest” P3.49 billion to the Bureau of Customs, representing supposed excise and value added taxes on fuel blending components used in refinery operations from 2014 to 2020.
The country’s second biggest oil company said the BOC recognized Pilipinas Shell’s intent to pay under protest the excise tax and VAT relative to alkylate importations.
Pilipinas Shell made the statement following the demand letter issued by the Port of Batangas in view of the dissolution by the Supreme Court of the temporary restraining order it earlier issued, after the case was remanded to the Court of Tax Appeals.
Pilipinas Shell said it would remit the amount under protest, “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.”
“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 company said.
Pilipinas Shell said the case on whether alkylate is subject to excise tax remains to be decided by the courts.
The company is importing alkylate as a blending component for unleaded gasoline.
Pilipinas Shell said in an earlier disclosure that it would continue to preserve and protect its rights and remedies under the law.
Presidential spokesperson Harry Roque said in a previous briefing the government was expecting to collect P41 billion from Pilipinas Shell, including a principal amount P3 billion to P4 billion which reportedly ballooned to P41 billion, including penalties and interests.
Roque said the P41-billion tax windfall could be used by the government in its fight against COVID-19.
Pilipinas Shell reported a net income of P3.4 billion in the first nine months, a turnaround from a P13.9-billion loss in the same period last year.
The company booked the recovery despite the mobility slowdown resulting from the two-week enhanced community quarantine implemented in the national capital region and select provinces in August, and the succeeding Alert 4 restriction.
The company posted a net income of P1.14 billion in the third quarter, reversing the loss of P7.13 billion year-on-year.
“Our renewed strategy has been proven effective for our business to thrive amidst the resurgence of selected lockdowns in the country. We are continuously growing our capacity for the remainder of 2021, to prepare for the near and medium-term demand pick-up as active new COVID cases decline, vaccination programs accelerate, and travel restrictions ease,” said Pilipinas Shell president and chief executive Cesar Romero in a statement.