Specific Taxes Shall be Paid Immediately Before Removal from the Place of Production

April 30, 1959 BIR RULING NO. 244-59 1st Indorsement Returned to the Chief, Alcohol Tax Division, B.I.R., Manila, the within papers bearing on the case of the O'Phir Drugs & Cosmetic Company. It appears that on April 7, 1954, O'Phir Drugs & Cosmetic Company of Northern Hills, Malabon, Rizal, under a previously secured authority from the Commissioner of Internal Revenue, purchased from Hind Alcohol Company 100,000 liters of denatured alcohol. The requirements for denaturation were duly complied with. The alcohol were packed in 500 drums and each drum was properly labeled. From April 14, 1954 to April 17, 1954, Mr. Benjamin Co secured the removal of these drums for and in behalf of Mr. Edward Tan, owner of O'Phir and Cosmetic Company. The sales tax on the denatured alcohol was paid. Mr. Tan was not able to account for the disposition of the alcohol, 148 drums of which even reached Iriga, Camarines Sur, but which disappeared at the Iriga Railroad Station. The main question now posed is who is liable for the specific tax on the 50 drums of alcohol. In the light of the Central Azucarera case, Mr. Tan, as owner of the denatured alcohol at the time of the removal thereof from the place of production, is liable for the specific tax thereon, much more so when the parties themselves stipulate in their contract that the payment of all internal revenue taxes shall be for the account of the buyer. The alleged loss of the denatured alcohol does not affect Mr. Tan's liability to the specific tax thereon. It should be noted that specific taxes shall be paid immediately before removal from the place of production. Mr. Tan's liability therefore attaches upon the removal of the denatured alcohol. With respect to Mr. Tan's allegations, suffice it to say that the same are untenable. The actuations of Mr. Tan are clearly tainted with fraud. cdtech He is, therefore, advised to be guided accordingly. (SGD.) JOSE ARAAS Commissioner of Internal Revenue