By Roy Pelovello

THE Bureau of Customs has charged oil giant Pilipinas Shell of evading about P21 billion in taxes and penalties accrued since 2006 for unleaded gasoline imports, but a company official denied any wrongdoing at a House hearing yesterday.

Lawyer Juan Tan, customs district collector of the port of Batangas, told lawmakers that Shell had been importing unleaded gas but declaring it as catalytic crack gas?a component of unleaded gasoline?to avoid paying excise taxes.

Tan said that, based on the bureau?s computation, Shell should have paid the government about P3 billion in excise taxes for the unleaded gasoline imports and P383 million in value-added taxes.

The bureau has also applied penalties for fraud, which by law could be five to eight times the amount of revenue lost.

Shell?s country tax manager, Nigel Avila, denied Tan?s accusation and said the oil firm had paid the proper taxes.

Avila said catalytic crack gas was not a finished product but just some material blended with unleaded gasoline, so it was not proper for the bureau to impose an excise tax for its importation on the same level as unleaded gasoline.

Avila said Shell was importing 300,000 barrels of CCG a month through the port of Batangas. The product is processed at its refinery in Tabangao, also in Batangas.

But Tan said that based on the invoice from Shell?s supplier, the imported product that arrived in the port of Batangas was declared as ?unleaded gasoline? with the notation ?CCG? in parentheses.

?If it?s only CCG ,why did the invoice say it?s unleaded gasoline?? said Tan.

But Avila said that unlike unleaded gasoline, CCG by itself could not be used to run a car?s engine.

Camarines Norte Rep. Liwayway Vinzons-Chato said the bureau should take pains to establish factually if Shell was indeed importing unleaded gasoline or just CCG.

The Bureau of Internal Revenue, represented by lawyer Jethro Sabariaga, said that in 2003, CCG was exempted from excise taxes based on the recommendation of the Energy Department that it was not a finished product.

Albay Rep. Edcel Lagman said this exemption apparently worked solely for the benefit of Shell, and because no other oil firms were importing CCG to make their own brands of unleaded gasoline.

The acting chairman of the ways and means panel said they should dig deeper into the issue as it involved a huge amount of revenue for the government.

The Customs probe into Shell?s alleged tax liabilities was prompted by an informer, a certain Geronimo Pinar, who wrote Tan and told him about Shell?s alleged scheme to defraud the government out of billions of pesos in taxes.

Pinar alleged in his letter that from October 2007 to December 2008, Shell imported at least 1.6-million barrels or 257 million liters of unleaded gasoline as covered by 24 import entries, but did not pay excise tax on them.

Unleaded gasoline is subject to an excise tax of P4.35 a liter and 12-percent value-added tax.