THE COURT of Tax Appeals (CTA) directed the Bureau of Internal Revenue (BIR) to refund or issue a tax credit certificate to San Miguel Brewery, Inc. for P55.8 million due to erroneously-collected excise tax on the removals of “San Mig Light” (SML) in 2014.

In a 40-page decision dated April 11, the CTA special third division partially granted the initial P60.5 million tax refund claim of San Miguel Brewery as it was only able to establish its entitlement for a refund in the amount of P55.8 million.

“In fine, petitioner was able to establish that it is entitled to a refund or issuance of tax credit certificate corresponding to its erroneously, excessively, and/or illegally collected excise taxes due on the removals of SML in bottles and in cans for the period January 2, 2014 to December 29, 2014, but in the reduced amount of P55,797,176.63,” the CTA ruled.

San Miguel Brewery filed the petition with the Court, claiming that it overpaid the amount of P0.39 per liter for SML in bottle and can form and P4.29 per liter for SML in kegs after the BIR imposed a P21.39 per liter excise tax rate when it should have only paid P21 and P17 per liter on fermented liquor as stated in the Tax Code.

Under Section 143 of the Tax Code, Effective 2014, an excise tax of P17 per liter is imposed on fermented liquors with net retail price of P50.60 or less and P21 for those priced at more than P50.60.

San Miguel Brewery said it paid P20.57 excise tax rate for SML in 2013 as the BIR classified it as a variant of an existing product and a high-priced beer, under Revenue Memorandum Circular No. 90-2012, when it should have been paying P15.49 per liter only as a new brand. The BIR increased the tax rate to P21.39 in 2014 or an add-on of 4% as the required increase in the Tax Code.

The CTA noted that Supreme Court has previously ruled the SML is a “new brand” and not a “variant of an existing brand,” Pale Pilsen.

“Clearly, the previous classification of SML as a high-priced brand was invalid. Consequently, the imposition of P21.39 excise tax rate per liter on SML for the year 2014, based on the excise tax rate of high-priced brands of fermented liquor, was likewise erroneous,” the CTA ruled.

The CTA disallowed the alleged excise tax in the amount of P4.7 million representing SML in kegs because San Miguel Brewery failed to submit sworn statements, in the format required by existing rules and regulations, which declared its net retail price as basis for excise tax rate.

“Petitioner’s Schedule of Net Retail Price of SML Products did not qualify as the Sworn Statement as required under the rules, hence, the same could not be utilized as basis of the NRP of SML in kegs,” the court said.

“As discussed, the total excise tax claim on SML in kegs in the aggregate amount of P4,673,023.31 is disallowed; thus, only the excise tax claim on SML in bottles and cans in the sum of P55,797,176.63 may be refunded,” it added.

The decision was written by Associate Justice Esperanza R. Fabon-Victorino and concurred in by Associate Justice Ma. Belen M. Ringpis-Liban. — Vann Marlo M. Villegas

THE Court of Tax Appeals (CTA) affirmed a December 2018 decision partially granting the tax refund claim of Taganito Mining Corp. concerning excess input value added tax (VAT) for 2014 worth P25.95 million.

In a seven-page resolution on April 12, the CTA special second division denied for lack of merit the separate motions for partial reconsideration filed by Taganito Mining and the Bureau of Internal Revenue (BIR).

“Wherefore, finding no cogent reason to reverse the ruling in the assailed Decision, petitioner’s Motion for Partial Reconsideration with Manifestation and Comment to Respondent’s Motion for Partial Reconsideration posted on December 28, 201(8) and respondent’s Motion for Partial Reconsideration filed on December 20, 2018 are denied for lack of merit,” the CTA ruled.

The CTA on Dec. 6, 2018 partially granted Taganito’s initial P28.9 million tax refund claim of excess VAT attributable to zero-rated sales in 2014, saying only the amount of P25.95 million was properly documented.

The tax appellate court denied the motion of Taganito which had asked the court to reconsider the disallowances by allowing it to present new evidence through a new trial. The mining company claimed that it did not have enough time to go over the findings of the independent certified public accountant (ICPA).

“To come now to the Court and request for a new trial to present additional evidence that may possibly result in the grant of the entire amount claimed is without legal basis as the petitioner was already given ample opportunity to present evidence to support its cause of action,” the court said.

Under the Revised Rules of Court, the grounds for filing a motion for new trial or motion for reconsideration are fraud or mistake that could have aggrieved one of the parties’ rights, and newly discovered evidence and be supported by affidavits of merits.

The CTA said that while Taganito submitted an affidavit, it did not meet the two grounds for the motion for new trial and reconsideration. It also found in the affidavit that it sought to present additional evidence due to “mere oversight” as some documents were not included in the supporting documents submitted by the ICPA.

“This Court finds that this would constitute ‘forgotten evidence’ which petitioner would like to present only after obtaining a partial grant of its claim for refund,” the CTA said. “Forgotten evidence is not a valid ground for a new trial as held by the Supreme Court.”

In denying the motion for reconsideration of the BIR, the CTA said the motion is similar to reading a discussion or lecture on requirements for claiming refund. It also said the BIR did not specify alleged errors in the decision or clarified his points, aside from stating that the court erred in partially granting the taxpayer’s claim.

“The scant contents of respondent’s Motion for Partial Reconsideration which did not provide the details of his plea for reconsideration nor pointed out the specific errors allegedly made by the Court, fails to pass the above test, hence it is considered pro forma and deserves little or no consideration by this Court,” it said.

The decision was penned by Associate Justice Catherine T. Manahan and concurred in by Associate Justice Juanito C. Castañeda, Jr. — Vann Marlo M. Villegas