Tax court orders BIR to return P761M in excise tax on San Mig Light

The Court of Tax Appeals (CTA) has ordered the Bureau of Internal Revenue (BIR) to give back P761 million in overpaid excise taxes to San Miguel Brewery Inc. (SMB)

In a 33-page decision, the tax court favors SMB's petition to review the case and sought a refund of P761,067,629 in overpaid excise taxes for San Mig Light "erroneously, excessively and/or illegally collected" from January 1 to December 31, 2012.

The brewery was made to pay excise taxes on San Mig Light at P20.57 per liter.

Assistant Commissioner Leonardo Albar of the BIR Excise Tax Service granted the brewery's request to register San Mig Light as a new brand in 1999, according to the CTA.

But Assistant Commissioner Edwin Abella of the Large Taxpayers Service issued a separate notice of discrepancy against SMB saying that San Mig Light was a variant of the corporation's existing beer products, and should be subjected to a higher excise tax rate starting 2000.

The BIR argued that San Mig Light "has always been classified as a variant of an existing brand," so "there was no erroneous or illegal collection of excise taxes."

SMB, however, claimed it should have been given an excise tax assessment of P15.49 per liter as Sa Mig Light was then a new brand.

In resolving the case, the CTA Second Division noted that in four of its decisions en banc, it has consistently ruled that San Mig Light is "a new brand and not a variant, thus, subject to the excise tax rate of P15.49 per liter instead of P20.57 per liter."

"Consequently, there was an erroneous, excessive and/or illegal assessment and collection in the amount of P5.08 per liter removal of petitioner's 'San Mig Light,'" the decision read.

SMB was able to sufficiently prove that it overpaid excise taxes on San Mig Light, the court said, by presenting documentary evidence, such as movement reports, excise tax returns, and other memos, which have been examined and verified by the court-commissioned Independent Certified Public Accountant Normita Villaruz.

"Wherefore, premises considered, the instant Petition for Review is hereby granted. Accordingly, respondent (BIR) is hereby ordered to refund or to issue a tax credit certificate in favor of petitioner in the amount of P761,063,826.70 representing overpayment of excise taxes on 'San Mig Light' removals for the period January 1, 2012 to December 31, 2012," the CTA said. — VDS, GMA News