Manila: The Court of Tax Appeals (CTA) has partially granted the petition of Shell Pilipinas Corp. (SPC) for a refund of about PHP89.3 million in excise taxes 'illegally or erroneously collected' from the oil firm in 2020 for the sale of its bunker fuel to a tax-exempt entity.

According to Philippines News Agency, the company was originally seeking a PHP90.73 million refund, representing the excise taxes it paid to the Bureau of Internal Revenue (BIR) on the 14,884,000 liters of fuel oil that it imported and subsequently sold and delivered to Pioneer Float Glass Manufacturing, Inc. (PFGMI), a Philippine Economic Zone Authority-registered company, from January to June 2020.

In a 25-page decision dated July 17, the CTA's 3rd Division stated that the excise taxes paid on imported fuel oil sold to PFGMI, a PEZA registered entity, were 'erroneously or illegally collected.' The court explained that upon the sale of petroleum products to entities exempt from direct and indirect taxes by law, the status of the sold petroleum product as tax-exempt solidifies. Consequently, the excise taxes previously paid on these petroleum products became erroneously or illegally collected taxes that are subject to a claim for refund or credit.

The court further stated, "Accordingly, the present Petition for Review is partially granted. Respondent (BIR) is ordered to refund or issue a tax credit certificate in favor of petitioner in the reduced amount of PHP89,304,000.00, representing excise taxes paid by petitioner on fuel oil sold and delivered to PFGMI."