BIR Ruling

February 2, 1970 3rd Indorsement Returned to the Revenue Operations Head (Specific Tax) the attached papers bearing on the proposed specific tax assessment in the amount of P6,325.00 against San Miguel Corporation of Jose P. Laurel St., Manila, hereinafter referred to as the Corporation. Recommendation has been made to assess the Corporation in the said amount for the 230 hectoliters of beer lost due to spillage thereof from the tank in one of the Corporation plant's cellars. In its letter dated July 29, 1969, taxpayer corporation informed this Office that the said loss will be reflected in their brewery report at the end of the month. casia The investigation of the premises concerned revealed the following findings: that the loss was due to the leakage of the beer caused by the breakage of the bolts holding the bottom of the tank containing it, the breakage resulting from the strong pressure and weight of its contents. A large crack thereby formed at the corner of the tank spilling the 230 hectoliters of beer. In other words, at the time of loss, the said quantity of beer had not yet left the place of production. Section 124 of the Tax Code provides that the specific taxes on domestic products shall be paid by the manufacturer, producer, owner, or person having possession of the same immediately before removal from the place of production. In this instant case, as the quantities of beer lost had not left the place of production, no specific tax had accrued thereon. Section 133 of the Tax Code does not apply in this case because the same refers to distilled spirits. As stated in the preceding indorsement of that Department, beer is not a distilled spirit. cdta In view thereof, it is the opinion of this Office as it hereby holds, that the proposed assessment has no legal basis. Very truly yours, MISAEL P. VERA Commissioner of Internal Revenue