SOLICITOR GENERAL AGREES TO SHELL'S SURETY BONDS FOR TAX DEFICIENCY


MANILA, MARCH 11
, 2010 (MALAYA) BY JOHN POQUIZ (OSG to Customs: Youíre now telling us how to do our job?)

Solicitor General Alberto Agra yesterday expressed surprise that the Bureau of Customs is questioning his acceptance of Pilipinas Shell Petroleum Corp.ís posting of a P7.3 billion surety bond to answer for a questioned tax deficiency assessment.

"Basically, my basis for agreeing is No. 1, public interest, and No. 2, there is no prohibition in any law," he said.

Agra agreed to the posting of the surety bond to prevent a possible closure of Shellís refinery in the face of a Customs threat to seize Shellís import shipments.

Customs earlier said Agra, being knew to the job, lacked detailed knowledge of the case and was acted irresponsibly in accepting the offer without consulting the lawyers under him who handled the case.

Agra said that Customs and Shell, "in effect, agreed to foreclose any attempt of seizure."

Agra, as chief lawyer of government, had manifested before the Court of Tax Appeal that Customs was agreeable to the posting of surety bond.

Customs officials said their understanding was that Shell would deposit P7.3 billion in an escrow.

Agra said that there is a precedent for allowing the posting of a surety bond. Anyway, the government can still forfeit the bond in the event that Shell loses its case before the Court of Tax Appeal.

"What we agreed to is no seizure, no hold on products. We did not abandon our position in so far as saying that Shell is liable and that there is no double taxation," he said.

"Itís up to the CTA to decide." Agra said.

Customs claimed that Shellís imports of catalytic cracked gasoline are subject to the oil excise tax.

It based its position on an opinion issued by Internal Revenue Commissioner Joel Tan-Torres last December that his predecessors erred in saying that the excise tax was due at the point of sale of the final blend of gasoline.

Tan Torres said the tax deficiency was retroactive to 2004 when Shell secured the original opinion that catalytic cracked gasoline was blending material in the production of clean air act-compliant fuel.

Shell went to the Court of Tax Appeal.

Government and Shell entered into an interim compromise so a shortage in gasoline could be averted if its imports were seized. Shell corners 30 percent of the local market. It owns one of the two refineries in the country. Petron owns the other.


Chief News Editor: Sol Jose Vanzi

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