MANILA, Philippines - San Miguel Brewery Inc. (SMB) scored a major victory after the Court of Tax Appeals (CTA) directed the Bureau of Internal Revenue to refund the liquor firm P1.67 billion representing overpaid excise taxes in 2007, 2008 and 2011.
In two separate rulings, the CTA said the BIR erroneously and excessively collected excise taxes from San Miguel for its San Mig Light, which had originally been classified as a new brand.
The CTA affirmed SMB’s position that “San Mig Light”, being a new beer brand, should have been subjected to lower excise tax rates or remained in the original classification made by the BIR as of Dec. 2003.
San Mig Light fell under the classification of a “new and medium-priced brand” in October 1999.
The CTA struck down BIR’s claim that while the “San Mig Light” brand had originally been registered as a new brand in 1999, such registration was erroneous and not binding.
The tax court noted that Pale Pilsen and San Mig Light are two separate brands with marked differences in their label designs.
“It will be recalled that these brands were already classified by the BIR based on their current net retail prices in 1999 through a market survey.
Consequently, their upward reclassification in 2003 by the BIR through another market survey is a prohibited reclassification,” the CTA pointed out.
The CTA added that the claim of overpayment was substantiated by SMB and verified by the ourt commissioned independent Certified Public Accountant.
The BIR, however, is expected to contest the CTA’s ruling and elevate it to a higher court.