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CTA en banc upholds San Miguel refund decision

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Court of Tax Appeals-CTA

THE Court of Tax Appeals (CTA) rejected a Bureau of Internal Revenue (BIR) appeal against an excise tax refund claim filed by San Miguel Brewery, Inc. in connection with its San Mig Light brand amounting to P761 million.

In a three-page resolution on March 8, the CTA, sitting en banc, denied for lack of merit the BIR’s motion for reconsideration.

“A careful perusal of the petitioner’s Motion for Reconsideration shows that the arguments raised therein are a mere reiteration of matters which have already been specifically considered, weighed and resolved in the assailed Decision,” the CTA ruled.

“Finding no compelling reason to reconsider, modify or reverse our decision, we shall no longer belabor in this Resolution, to repeat the disquisitions made therein,” it added.

The BIR argued that San Miguel Brewery Inc., a subsidiary of listed San Miguel Corp. (SMC), is not entitled to a tax refund and the court has no jurisdiction over the company’s petition.

In its Oct. 11, 2018 decision, the CTA upheld the decision of its second division in June 2017 that San Mig Light is a new brand and not a variant of an existing product, and thus, “subject to the excise tax rate of P15.49 per liter instead of the P20.57 per liter.”




San Miguel Brewery said that it started paying P20.57 per liter on excise tax for San Mig Light products in 2012, when it should have been paying P15.49.

In ruling that the product is a new brand, the court cited a Supreme Court decision which states that a variant carries the same logo or its name is formed by either a prefix or suffix of its parent brand.

The CTA also said that “San Mig Light” was registered as new brand on Oct. 27, 1999 and was listed in the “Master List of Registered Brands of Locally Manufactured Alcohol Products” as new brand. It also said that SMC received a letter from the BIR Large Taxpayers Assistance Division II Acting Chief Conrado P. Item on Feb. 7, 2002 confirming that the product was registered as a new brand.

The BIR on May 28, 2002 issued a notice of discrepancy to SMC stating that “San Mig Light” is a variant of an existing beer product. — Vann Marlo M. Villegas

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