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    Batangas City vs. Shell 187631

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    magen
    The Supreme Court ruled that Batangas City does not have the power to collect business taxes from Shell Petroleum Corporation for its manufacture and distribution of petroleum products at its Tabago Refinery. Batangas City sent notices of assessment to Shell demanding over P400 million in business taxes and permit fees. However, the Local Government Code explicitly states that LGUs do not have the power to levy taxes or fees on petroleum products. Therefore, the general taxing powers of LGUs cannot override this specific exemption for petroleum products under the Local Government Code.

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    Batangas City vs. Shell 187631

    Uploaded by

    magen
    966 views1 page
    The Supreme Court ruled that Batangas City does not have the power to collect business taxes from Shell Petroleum Corporation for its manufacture and distribution of petroleum products at its Tabago Refinery. Batangas City sent notices of assessment to Shell demanding over P400 million in business taxes and permit fees. However, the Local Government Code explicitly states that LGUs do not have the power to levy taxes or fees on petroleum products. Therefore, the general taxing powers of LGUs cannot override this specific exemption for petroleum products under the Local Government Code.

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    Taxation Law 2

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    The Supreme Court ruled that Batangas City does not have the power to collect business taxes from Shell Petroleum Corporation for its manufacture and distribution of petroleum products at its Tabago Refinery. Batangas City sent notices of assessment to Shell demanding over P400 million in business taxes and permit fees. However, the Local Government Code explicitly states that LGUs do not have the power to levy taxes or fees on petroleum products. Therefore, the general taxing powers of LGUs cannot override this specific exemption for petroleum products under the Local Government Code.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    966 views1 page

    Batangas City vs. Shell 187631

    Uploaded by

    magen
    The Supreme Court ruled that Batangas City does not have the power to collect business taxes from Shell Petroleum Corporation for its manufacture and distribution of petroleum products at its Tabago Refinery. Batangas City sent notices of assessment to Shell demanding over P400 million in business taxes and permit fees. However, the Local Government Code explicitly states that LGUs do not have the power to levy taxes or fees on petroleum products. Therefore, the general taxing powers of LGUs cannot override this specific exemption for petroleum products under the Local Government Code.

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    © All Rights Reserved
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    Batangas City, Maria Teresa Geron, in her capacity as City Treasurer

    Of Batangas City and Teodulfo A. Deguito, in his capacity


    as Legal Officer of Batangas City versus Shell Petroleum Corporation
    G.R. No. 187631, July 08, 2015
    Third Division, Peralta, J.

    Facts: Batangas City sent Shell Petroleum Corporation (Shell) a notice of


    assessment demanding the payment of business taxes for manufacturing
    petroleum products, and mayors permit fee based on the gross sales of its
    Tabago Refinery. The liabilities were in amounts around 92MPhp and around
    312MPhp for the business taxes, the amount of around 4MPhp as Mayor's
    Permit Fee. Shell paid under protest arguing that it is not liable to pay the
    amount demanded, and that the Mayor's Permit Fees are exorbitant,
    confiscatory, arbitrary, unreasonable, and not commensurable with the cost
    of issuing a license. The assessment was pursuant to Section 134 of the LGC,
    and section 23 of its Batangas City Tax Code of 2002. Batangas City filed a
    petition for review with the Regional Trial Court (RTC)of Batangas City which
    granted the petition. In the Court of Tax Appeals(CTA), it was held that Shell
    was not liable for the subject business taxes, and reduced the mayors permit
    finding the same as excessive. Upon elevation to the CTA En Banc, the petition
    was dismissed for lack of merit. Hence the present recourse to the Supreme
    Court.

    Issue(s): Does Batangas have the power to collect taxes from Shell on its
    manufacture and distribution of petroleum products?

    Decision: No, Batangas does not have said power under the Local
    Government Code (LGC.) The LGC is explicit in Section 133 that they shall have
    no power to levy taxes, fees or charges on petroleum products. Thus, the
    omnibus grant of power to LGUs under Section 143(h) of the LGC cannot
    overcome the specific exception or exemption in Section 133(h) of the same
    Code.

    Page 21 of 30

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