Exemption from the Requirement of Affixture of Labels

March 28, 1988 BIR RULING NO. 122-88 152-00 000-00 122-88 S i r : This refers to your series of Memoranda dated January 12, 1988, February 15, 1988 and March 2, 1988 objecting to and requesting modification of BIR Ruling No. 100-000-00-005-88 reading: cdt xxx xxx xxx "Please be informed that your client, the BAR Beverage Corporation, is no longer subject to the 4% ad valorem tax but to the 10% value-added tax under Section 100 of the Tax Code, as amended by Executive Order No. 273, which took effect January 1, 1988. Such being the case, it is no longer required to affix the BIR strip stamps on secondary labels on its products in view of the repeal of the excise tax provision on compounded liquors by Executive Order No. 273." The implications of said ruling are as follows: 1. Since locally compounded liquor is no longer subject to specific or ad valorem taxes, the manufacturers thereof are likewise exempt from the requirement of affixture of labels as indicated in Section 140 (now Section 156) of the Tax Code, as amended. Indeed, the aforesaid ruling is in accordance with the power vested in the Commissioner under Revenue Regulations No. 3 and 88, as cited in your Memorandum dated February 5, 1988. On the other hand, since imported distilled spirits remain subject to specific tax, for control purposes, the requirement of the affixture of labels on imported distilled spirits is still in force as prescribed by Revenue Regulations No. V-21 and in accordance with then Section 140 (now Section 156) of the Tax Code, as amended. 2. Since rectifier remain subject to specific tax, the Specific Tax Service will continue to supervise the operations of rectifiers. Movement or transfer of stocks by a rectifier-compounder from the rectifier's tank to the compounder's tank will still be monitored. 3. Approval of plat and plan and issuance of permit to operate will still be necessary to insure sanitary output as required under Section 152 (then Section 136) of the Tax Code. 4. Rectifier-compounder will still be subject to the manufacturer's bond, because insofar as his operation as a rectifier is concerned, the Specific Tax Service shall continue to exercise supervision, pursuant to Section 160 (then Section 144) in relation to Section 132 (then Section 136) of the Tax Code, as amended. 5. Approval of packaging and brand of compounded liquors will no longer be necessary pursuant to Section 156 (then Section 140) of the Tax Code. 6. In the meantime, supervision for purposes of insuring sanitary output as required under Section 152 (then Section 136) of the Tax Code, as amended, will be exercised by the Specific Tax Service through the Alcohol Tax Division. cdtech Very truly yours, (SGD.) EUFRACIO D. SANTOS Deputy Commissioner