Tuesday 22 January, 2019
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Light tax for light beer: BIR loses appeal versus P761M tax refund for San Miguel Brewery

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The Court of Tax Appeals (CTA) has denied the Bureau of Internal Revenue’s (BIR) petition against the P761.06-million refund granted to San Miguel Brewery, Inc., (SMB) for the overpayment of excise taxes on its San Mig Light product for 2012.

In a recent 14-page en banc decision, the CTA upheld its 2nd Division’s June 9, 2017 ruling in favor of SMB, which contested the BIR’s imposition of a higher tax on San Mig Light.

The BIR had imposed a tax of P20.57 per liter on San Mig Light, because it considered it a “variant” of Pale Pilsen brand.

The court, however, agreed with SMB’s position to tax San Mig Light as a “new brand” at only P15.49 per liter.

It said the Supreme Court itself, in a January 2017 decision, settled the dispute in favor of San Mig Light being considered a “new brand.”

“Plainly stated, ‘San Mig Light’ cannot be treated as a variant of ‘Pale Pilsen’ because they do not share a root word; and neither is there an existing brand called ‘San Mig’ to arrive at the conclusion that the suffix ‘Light’ renders ‘San Mig Light’ as its variant,” read the decision penned by Associate Justice Erlinda Uy.

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