Tax court junks another Shell refund plea

Posted on September 16, 2013

PILIPINAS Shell Petroleum Corp.’s (Shell) petition for a P91.656-million refund of excise taxes on jet fuels has been denied by the Court of Tax Appeals (CTA) for lack of merit.

The CTA ruled in a 22-page decision promulgated on Sept. 9 that the issues of Shell’s petition were the same as those covered by a 2012 Supreme Court (SC) first-division ruling that the company was not entitled to a refund of excise taxes it paid on Jet A-1 fuel, sold to international carriers from February to April 2006.

“This court cannot and should not shirk away in performing its duty. Since the Supreme Court is the undisputed final arbiter of all questions of law, this court is obliged to follow the ruling of the Supreme Court,” read the CTA decision, penned by Presiding Justice Roman G. Del Rosario.

In the SC first division decision promulgated in April 2012, the court ruled that the exemption from excise tax payments on petroleum products under the National Internal Revenue Code applies to international carriers that purchased the oil for use or consumption outside the Philippines.

“The excise tax imposed on petroleum products... is the direct liability of the manufacturer who cannot thus invoke the excise tax exemption granted to its buyers who are international carriers,” the SC ruled.

In this month’s decision, the CTA also disagreed with Shell’s contention that the SC ruling does not set a precedent for the firm’s tax case since the said ruling still on appeal.

“This court cannot just sit idly and wait for petitioner’s appeal to be resolved. To do so would set a bad precedent and create a vacuum where courts would wait for an issue to be resolved by the Supreme Court before rendering judgment,” the CTA noted.

The case stemmed from Shell’s request before the Bureau of Internal Revenue (BIR) in 2007 for the recovery of the P91.656-million excise taxes. After the BIR failed to act on Shell’s request, the oil company went to the CTA.

In July, citing similar grounds, the tax appellate court denied a similar plea from Shell for a tax refund on P59.277 million in excise taxes from the period of March 18 to April 20, 2008. -- MFEF