The Court of Tax Appeals has ordered the Bureau of Internal Revenue (BIR) to return to San Miguel Corporations (SMC) the erroneously collected P740 million excise tax through misclassifications of one of its popular products.
In a 35-page decision, the court en banc upheld the earlier resolution of its Second Division that San Mig Light (SML) is a brand new product and not a variant of San Miguel Pale Pilsen (SMPP) that required payment of higher excise tax schedule.
The BIR imposed the higher valuation in 2011 classifying SML as a variant of SMPP.
The court explained that when SML was introduced in 1999 it was classified as a new fermented liquor of SMC, stressing that it was not one of those mentioned prior to the effectivity of Republic Act 8240 listing all existing liquor brands.
The court said SML is not a variant of the existing brand because it has different logo, design and packaging and therefore should be taxed according to the current net retail price of P1 per liter, instead of P13 for variant varieties.
It said SML is in tall slender and transparent bottle, whereas SMPP is in steiny container.
It also noted that SML was originally classified as new brand when SMC registered it with the excise tax division of the BIR. (J. Ramirez, mb)
