VAT of 10% on the Importation of Alcohol-Free "Clausthaler"Beer

July 24, 1989 BIR RULING NO. 153-89 101 (a) 000-00 153-89 Gentlemen : This refers to your letter dated April 6, 1989 requesting a ruling whether your importation of alcohol-free "Clausthaler" beer is subject to excise tax as wine or fermented liquor. BIR Laboratory report indicates that samples of the "Clausthaler" beer indeed are non-alcoholic. In reply, please be informed that the wines and fermented liquor which are contemplated to be subject to excise tax under Section 139 and 140 respectively of the Tax Code, as amended by Executive Order No. 273, are alcohol products as shown by the fact that they are placed under Chapter 3, Title VI of the Tax Code bearing the subheading "Excise Tax on Alcohol Products". Since "Clausthaler" beer is confirmed to be non-alcoholic in nature, it is not an alcohol product; hence, not subject to excise tax under Sections 139 or 140 of the Tax Code. However, your importation thereof is subject to the value-added tax of 10% based on the total value used by the Bureau of Customs in determining tariff and customs duties, plus customs duties. cd Very truly yours, (SGD.) EUFRACIO D. SANTOS Deputy Commissioner