BIR Ruling

March 17, 1977 Return of damaged tobacco products In reply to your letters dated November 19, 1976 and February 3, 1977, I have the honor to inform you that this Office need not be notified whenever taxpaid tobacco products are returned by dealers to your salesmen in the field, which products are either resold if in good condition, or destroyed by such salesmen or sales supervisor outside the factory promises when no longer fit for human consumption. In this connection, this Office wishes to confirm your opinion that prior notification is necessary only in cases where damaged tobacco products are physically returned to the factory, provided that such products are intended for manufacture. In such case, written permission in each case has first been obtained from the Commissioner of Internal Revenue, pursuant to Section 31 of Revenue Regulations No. V-39, as amended, which provides a follows: "SEC. 31. Return of damaged tobacco products or used containers in factory . No manufacturer shall receive or permit to remain in the factory premises any box, bundle, or package which has once been used as a container of taxpaid tobacco products until all marks and labels appearing thereon shall have been completely obliterated to avoid reuse. Neither shall any manufactured products of tobacco on which the specific tax has been paid be returned to a factory, except that spoiled or damaged tobacco products may be returned to a factory, for manufacture when permission in each case has first been obtained from the Collector of Internal Revenue . On such products no refund or rebate of taxes shall be allowed. Tobacco products which have once left the place of production taxpaid may be returned to the factory in accordance with the following procedure: (Emphasis ours) "xxx xxx xxx"