The Bureau of Internal Revenue collected P83.5 billion in July, again falling short of its monthly target.
MANILA, Philippines—The Court of Tax Appeals ordered the Bureau of Internal Revenue (BIR) to refund or issue a tax credit certificate worth over P926 million to San Miguel Corporation.
In a 17-page decision made public Thursday, the Tax Court dismissed the appeal filed by the BIR for lack of merit.
“Accordingly, petitioner [BIR] is ordered to refund or issue a tax credit certificate in favor of respondent in the amount of P926, 169,056.74 representing erroneously, excessively and/or illegally collected and overpaid excise taxes on ‘San Mig Light’ during the period Dec. 1, 2005 to July 31, 2007,” the Tax Court said in a decision penned by Presiding Justice Ernesto Acosta.
In 1999, SMC sought the registration and authority from the BIR to manufacture San Mig Light to be taxed at P12.15 per liter which was granted. It was taxed as a new brand.
However, in 2002, the BIR issued a notice of discrepancy saying that San Mig Light is a mere variant of one of SMCs products thus, it should be subjected to a higher excise tax rate.
SMC complied paying a higher tax rate while they are appealing the BIRs decision for reclassification.
In 2005, SMC filed its first claim for refund with the BIR. A second claim for refund was filed in 2007 for P926 million. However, the BIR filed to act on their claim prompting SMC to take the case to the Tax Court.
The BIR argued that SMC can no longer question the classification of San Mig Light after it started paying a higher excise tax rate for its reclassification. It added that SMC itself admitted, in its statements that San Mig Light is a mere variant of its Pale Pilsen.
But the Tax Court said with the enactment of Republic Act 9334 or the law increasing the excise tax rates imposed on alcohol and tobacco products and the BIRs Revenue Regulations Code 3-2006, any reclassification of new brands can be done through “an act of congress.”
“There being none, the classification of ‘San Mig Light’ as a new brand remained in force, notwithstanding the subsequent issuance of the subject preliminary assessment notices, formal letters of demand with accompanying assessment notices, and the denial of petitioner’s request for reconsideration of the said assessment notices,” the Tax Court said.