The said hearing was conducted to look into the alleged unpaid taxes of PSPC to the Bureau of Customs for the importation of catalytic cracked gasoline (CCG).
PSPC explained that catalytic cracked gasoline is an unleaded gasoline component that is blended to produce the finished product unleaded premium gasoline being sold to the public. This finished product meets the Philippine National Standards for unleaded premium gasoline.
Catalytic cracked gasoline is exempt from excise tax since it is merely a blending component and not used for consumption. This is based on a ruling from the Bureau of Internal Revenue (BIR) in March 2004 by Commissioner Mario Bunag that imported CCG, “being intermediate goods not intended for domestic sale or consumption but are going to be used as additional components in the production of gasoline, are not subject to excise tax”. The ruling was supported by a certification from the Department of Energy that CCG is used as a blendstock in the production of Clean Air Act compliant unleaded premium gasoline.
“Shell complies with the 2004 ruling of the BIR that the importation of CCG is exempt from excise tax. However, when CCG is blended to produce unleaded premium gasoline, Shell pays the Bureau of Internal Revenue the corresponding excise tax and value added tax upon withdrawal from the refinery,” Bobby Kanapi, Shell Vice President for Communications, explained.
Shell likewise thanks the House Committee on Ways and Means for giving it the opportunity to clarify this matter.
“In line with Shell’s General Business Principles, we always comply with local laws and regulations,” Kanapi added.
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