The Court of Tax Appeals has junked Tanduay Distillers Inc.’s claim for a refund of P1.01 billion in excise taxes it had paid to the Bureau of Internal Revenue.
In its petition for review, Tanduay said the amount was erroneously or illegally collected by the BIR.
The Philippines restructured the excise tax on alcohol and tobacco products on Jan. 1, 2013.Under its transitory provisions, it disallowed the tax crediting of excise taxes paid under the old law on the raw materials inventory and both ethyl alcohol and compounded liquor were deemed to be distilled spirit products that are separate taxable items under the law.
The BIR issued Revenue Memorandum 18-2013 which allowed for the non-payment of excise tax on ethyl alcohol that were purchased after the circular’s issuance that deemed ethyl alcohol and compounded liquor as distilled spirit products that are separate taxable items.
In the 54-page decision issued on Feb. 7, 2019, Associate Justice Catherine Manahan said Tanduay failed to prove that it had factual basis to claim the tax refund.
“Petitioner has the burden of proof to establish the factual basis of its claim for tax refund,” Manahan said.
Manahan said there were no documents to prove that the amount of raw material or ethyl alcohol for which Tanduay was seeking a refund for was the amount required to produce the finished goods for the period.
The court also found a disparity between the finished goods and the raw materials inventory.
“The fact that the quantity of finished goods removed from January 2013 and July 2013 is greater than the combined ending inventories as of Dec. 31, 2012 and the additional tax-paid raw materials purchases during January to February 2013 means that a certain portion of finished goods removed already made use of raw materials purchases that were not subjected to excise taxes,” Manahan said. (Eileen Mencias)