The Court of Tax Appeals (CTA), as a full court, has affirmed the decision of its third division that ordered the Bureau of Internal Revenue (BIR) to refund or issue tax credit certificate for P122.6 million to San Miguel Brewery, Inc. (SMB) for overpaid excise taxes on its beer products in 2017.
The CTA’s full court decision, written by Associate Justice Lanee S. Cui-David, was promulgated on Aug. 2, 2023 and made public on Friday, Aug. 4.
Case records showed that SMB filed on Dec. 12, 2018 an administrative claim for refund of overpaid excise taxes for its “San Mig Light” and other beer products from Jan. 1 to Dec. 31, 2017 for P122,620,732.71. When it was denied, SMB filed a petition with CTA.
On Sept. 22, 2021, the CTA’s third division ruled in favor of SMB and ordered the BIR to refund the overpaid excise taxes without legal interest. When the BIR’s motion for reconsideration was denied on April 28, 2022, it filed a petition before the CTA as a full court.
In its petition, the BIR argued that the CTA has no jurisdiction over the case, and that the latter committed an error in ruling that SMB is entitled to the tax refund because there was no erroneous or illegal collection of excise tax. Since there was no reclassification of “San Miguel Light,” it remains classified as a variant of an existing brand, it said.
However, the CTA disagreed and affirmed its jurisdiction over the petition for review. The CTA likewise said that reclassification is not an issue in the case, and it found that the BIR failed to rebut SMB’s entitlement to the refund.
The CTA said:
"Respondent (SMB) claims that under Section 14368 of the NIRC of 1997, as amended by R.A. 10351, the excise tax rate that should have been imposed on its beer products for CY 20 17 is only P23.50 per liter instead of P24.07 per liter. As a result, the difference between the said amounts, i.e., P0.57 per liter that resulted in the total amount of P122,620,732.71, was erroneously, excessively and/or illegally collected by petitioner (BIR).
“Records reveal that the said amount was supported by pieces of evidence that the Court in Division thoroughly examined. As ruled by the Court in Division, respondent was able to substantiate its claim for refund.
“All told, We find that respondent was able to prove its entitlement to a refund or issuance of a tax credit certificate in the total amount of P122,620, 732.71 without legal interest.
“… Respondent is ordered to refund or issue a tax credit certificate in favor Petitioner in the amount of f'122,620,732.71, representing erroneously, excessively, and/ or illegally collected excise taxes due on the removals of ‘San Mig Light’ and ‘Other Beer Products’ for the period covering Jan. 1, 2017 to Dec.31, 2017, without legal interest thereon. So ordered.”
Presiding Justice Justice Roman G. Del Rosario and Associate Justices Ma. Belen M. Ringpis-Liban, Catherine T. Manahan, Jean Marie A. Bacorro-Villena, and Corazon G. Ferrer-Flores concurred in the decision.