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The Bureau of Internal Revenue (BIR) is distancing from the effort of its revenue cousin, Bureau of Customs (BOC), to collect back taxes from oil player Pilipinas Shell for its import of Catalytic Cracked Gasoline (CCG) over the years contrary to the position of the revenue agency.

BIR Deputy Commissioner Nelson Aspe said the agency is standing pat on the opinion of former Commissioner Mario Buñag which exempted CCG from excise taxes, citing it as a raw material for manufacture of unleaded gas.

"That opinion of former Commissioner Buñag remains," Aspe said in an interview.

He said BIR is also supporting the previous stand of resigned BIR Commissioner Sixto Esquivias IV not to tax Pilipinas Shell or any other oil companies importing CCG pursuant to the Buñag opinion.

"It seems to be that way," Aspe said.

He said the BIR may only reconsider its position if the BOC would elevate the issue for resolution to its parent unit, the Department of Finance (DOF).

DOF Undersecretary Estela Sales earlier told a Senate budget hearing that a resolution on the matter would be forthcoming.

Esquivias, before resigning, has told the Senate sub-finance panel of Sen. Miriam Defensor-Santiago that the 2004 Buñag opinion on the tax-exempt status of CCG remains in effect and is being upheld by the agency.

The BOC has been trying to collect P21.4 billion in excise taxes plus penalties from Shell for its imports of CCG since 2004.

Esquivias told the Senate budget hearing that CCG is not yet gasoline and "only when it is used to convert gasoline that tax should fall due."

"It’s the correct legal position. The tax is on point of sale. We’d like to be fair," he has said.

That meant Pilipinas Shell was cleared of charges of mis-declaring its imports of CCG, which the BOC maintains is essentially a variant of unleaded gasoline and not merely a blending component.

The Senate, however, has ordered the BIR "resolve the issue in favor of the government when doubt arises."

Santiago, Senate finance sub-committee chair, has told Esquivias during the hearing to collect the taxes while a final ruling is being awaited.

The BOC since last year has been adamant in collecting the P21 billion assessments from Shell. The amount has been ballooning due to penalties and charges.

Finance Secretary Margarito Teves has yet to render a ruling on which of the two revenue collectors will prevail.

Last November 11, a week after the BIR leadership changed hands from Esquivias to Acting Revenue Chief Joel Tan-Torres, the BOC served a demand letter anew asking Shell to settle the amount of P7.34 million representing excise taxes and value-added tax (VAT) for importations of unleaded gasoline from 2004 up to October 2009.

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