San Miguel Brewery secures P83 million excise tax refund in Philippines ruling
A dispute over 2013 alcohol excise rates has ended with San Miguel Brewery retaining a court-backed refund tied to its San Mig Light products. The Supreme Court says the tax authority applied rates above those set by law, reinforcing limits on what administrative issuances can impose.
Highlights
- San Miguel Brewery secures P83,018,504.21 excise tax refund after the Supreme Court denied the Commissioner of Internal Revenue's petition and upheld the tax court ruling.
- The 2013 dispute arose when San Miguel Brewery was charged a flat P20.57 per liter excise tax on San Mig Light, exceeding the legislated P15 or P20 rates under Republic Act No. 10351.
- The Supreme Court ruled the Bureau of Internal Revenue cannot impose excise tax rates surpassing those set by Congress, clarifying tax administration limits for the alcohol industry.
Supreme Court ruling on 2013 excise rates
As reported by BusinessWorld Online, the Supreme Court's First Division denies the petition for review filed by the Commissioner of Internal Revenue and sustains a Court of Tax Appeals ruling in favor of San Miguel Brewery, Inc. The decision, promulgated on Oct. 28 and penned by Associate Justice Ramon Paul L. Hernando, affirms the brewer's entitlement to a refund or tax credit certificate worth P83,018,504.21.The case centers on excess excise taxes collected on bottled and canned San Mig Light in 2013. San Miguel Brewery pays the prescribed taxes to secure the release of its products from its breweries before later seeking a refund, arguing that the Bureau of Internal Revenue circular set rates beyond those allowed under the amended National Internal Revenue Code.
Regulatory limits and industry implications
Republic Act No. 10351, or the Sin Tax Reform Law, introduces revised excise tax rates on fermented liquors beginning Jan. 1, 2013. Under the law, products with a net retail price of P50.60 or less per liter are taxed at P15 in 2013, while those above that threshold are taxed at P20 per liter.But BIR Revenue Memorandum Circular No. 90-2012 prescribes a uniform excise tax rate of P20.57 per liter for San Mig Light products. By upholding the tax court's findings, the Supreme Court says the BIR cannot impose excise tax rates exceeding those prescribed by Congress through an administrative issuance, a ruling that clarifies the boundaries of tax administration for the alcohol sector in the Philippines.
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