BIR Ruling

October 14, 1975 3rd Indorsement Returned to the Chief, Manufactured Tobacco Tax Division, Thru the Revenue Service Chief, (Specific Tax), the within papers bearing on the request of Fortune Tobacco Corporation, Parang, Marikina, Rizal, that they be authorized to manufacture the new brands of SALEM Extra King and WINSTON Lights King cigarettes, both intended to retail at the maximum price of P2.00 per pack at 20's and subject to tax at P30.00 per M, the same being of foreign brands with licensing agreement with foreign manufacturer. Section 137(b) of the Tax Code, as amended by Presidential Decree No. 755, provides among others that "there is nothing under this subsection (b) which allows any down-grade re-classification of tax rates for existing brands of cigarettes duly registered at the time the herein rates became effective". Considering that Fortune Tobacco Corporation is the registered manufacturer of existing cigarette brands, SALEM Menthol Premium Length cigarettes now subject to the highest tax of P75.00 per M; SALEM Menthol King under the P48.00 per M class; and WINSTON Filter King under the P48.00 per M Class; considering further that the alleged "new" cigarette brands and their existing brands of SALEM Menthol King and WINSTON Filter King are the same as to the design of their respective labels, to authorize the manufacture of the alleged "new" brands will result in the downgrade classification of existing brands, which is prohibited by Section 137(b) of the Tax Code. Consequently, the request of Fortune Tobacco Corporation is hereby denied. (SGD.) EFREN I. PLANA Acting Commissioner of Internal Revenue TAN-1456-040-3