Shell reverses P1.36 B in books after favorable SC tax case ruling

Pilipinas Shell Petroleum Corp. is cancelling its financial exposure amounting to P1.36 billion after the Supreme Court junked its tax case.

In a statement, Shell said it welcomes the finality of the positive decision issued by the SC.

“Shell extols the rule of law in the country as it continues to work hand in hand with the government as part of its commitment to nation building,” it said.

Since June 30, 2016, Shell has made provisions in the amount of P1.36 billion to cover its financial exposure if the final decision is not in the company’s favor.

“With this development, [Shell] is in the process of reversing the provisions made in the amount of P1,360.4 Billion,” it said.

In a disclosure to the Philippine Stock Exchange yesterday, the oil firm said it received the high court’s decision to reject the motion of the Bureau of Customs (BOC) to collect nearly P1 billion in duties and taxes on crude imports.

In its resolution, the SC said Shell was not guilty of fraud and the BOC could no longer collect the amount since the one-year prescription period, under Section 1603 of the Tariff and Customs Code of the Philippines has lapsed.

The high court said BOC’s appeal lacked merit as it did not raise new arguments to warrant the reversal of the earlier decision.

The SC decision was a reversal of the May 13, 2010 ruling issued by the Court of Tax Appeals which directed Shell to pay the specified amount plus an additional legal interest of six percent per annum on the total dutiable value.