Specific Tax Due to a Compounder of Distilled Spirits

December 8, 1981 BIR RULING NO. 258-81 146-00 000-00 258-81 La Mac 5M Industry Bo. San Isidro Pagsanjan, Laguna Attention: Mr . Eufemio V . Macalabag, Jr . Manager Gentlemen : This refers to your letter dated February 27, 1981, requesting clarification as to the taxes payable by you and the place where it should be paid in manufacturing Lambanog bought from local outfits. It is represented that La Mac 5M Industry is a small business registered with Nacida under Application No. 517; that it buys from local distillery outfits already distilled Lambanog which is then aged with native fruits, filtered, and packed in 375 ml. bottles. The product is then sold as: a) La Mac Liquor 55 proof alcohol a light lambanog blended and aged with native fruits. b) La Mac Lambanog M(Macho) 80 proof strong palm alcoholic beverages aged with native fruits. In reply, I have the honor to inform you that by blending and aging taxpaid distilled spirits with native fruits, you are considered a compounder as defined in Section 187(d) of the Tax Code, and as such, you are subject to the annual fixed tax of Two Thousand Pesos under Section 192(3)(c) of the same Code, to be paid on or before the thirty-first day of January. Your compounded liquors, La Mac and La Mac Lambanog macho are subject to specific tax, pursuant to Section 146 of the Tax Code. However, in computing the specific tax to be paid for the product [La Mac Liquor and La Mac Lambanog (macho)] the amount of specific tax paid on the distilled lambanog used shall be credited against the tax due on the said product. The specific tax due on the compounded liquors may be paid in the place where your business establishment is located. Finally, for engaging in business as a compounder of distilled spirits, you should first secure a permit from this Office. Very truly yours, RUBEN B. ANCHETA Acting Commissioner