Prescribing the Procedures in the Return of Taxpaid Tobacco Products to the Factory Either for the Purpose of Destruction, Remanufacture or Repacking

February 7, 1984 REVENUE MEMORANDUM ORDER NO. 04-84 SUBJECT : Prescribing the Procedures in the Return of Taxpaid Tobacco Products to the Factory Either for the Purpose of Destruction, Remanufacture or Repacking TO : All Internal Revenue Officers Concerned The return to the factory of spoiled or damaged taxpaid tobacco products either for the purpose of destruction, remanufacture or repacking is allowed under Revenue Regulations V-39 and Revenue Regulations V-72. To provide for more effective safeguards and to achieve a more efficient monitoring of the data that may be used as inputs in tax investigations, the following procedures are hereby prescribed: A. Return of tobacco products for destruction. - Spoiled or damaged taxpaid tobacco products which are no longer fit for human consumption may be allowed to be returned to the factory for the purposes of destruction in accordance with the following procedure. 1. Before the return of the taxpaid tobacco products to the factory, a prior notice to return the same together with the request for destruction shall be filed with the Commissioner, Attn.: Revenue Service Chief (Specific Tax), copy furnished the Zone-in-Charge, stating among others, the brands and quantity of cigarettes or tobacco products to be returned and the names and addresses of dealers and/or agents returning said tobacco products. 2. Upon receipt of the tobacco products, the revenue officer assigned at the factory shall submit a report to the Manufactured Tobacco Tax Division thru the Revenue Service Chief (Specific Tax) within 24 hours from receipt thereof, stating among others, the date of receipt, the brands, quantity and condition of the returned cigarettes or tobacco products. cdt 3. Upon issuance of the corresponding permit by the Commissioner, the destruction by burning shall be effected immediately under the supervision of a revenue inspector assigned by the Chief, Manufactured Tobacco Tax Division and witnessed by the representative of the Specific Tax Office; provided, however , that before destruction, the stamps affixed to the packs of cigarettes or tobacco products shall be detached for proper accounting. 4. The report on the destruction shall be submitted to the Revenue Service Chief (Specific Tax) within two (2) days after destruction stating among others, the brands and quantity of cigarettes or tobacco products actually destroyed and enclosed with the report are the stamps detached from said products. B. On taxpaid tobacco products returned to the factory for remanufacture or repacking, the following procedure shall be followed: 1. Before the return of the taxpaid tobacco products, a prior notice to the Commissioner, Attn.: Revenue Service Chief (Specific Tax), copy furnished the Zone-in-Charge, shall be given by the manufacturer stating among others, the purpose, the brands and quantity of cigarettes or tobacco products and the names and addresses of the dealers/agents returning the said products; 2. Upon receipt of the tobacco products, the revenue officer assigned at the factory shall submit a report to the Manufactured Tobacco Tax Division thru the Revenue Service Chief (Specific Tax) within 24 hours from receipt thereof, stating among others, the date of receipt, the brands, quantity and condition of the returned cigarettes or tobacco products. 3. Upon issuance of the corresponding permit by the Commissioner, the detaching of strip stamps, the ripping of the cigarettes in case of remanufacture and the breaking up of labels in case of repacking, shall be effected immediately under the supervision of a revenue inspector assigned by the Chief, Manufactured Tobacco Tax Division and witnessed by a representative of the Revenue Service Chief (Specific Tax). 4. In case of remanufacture of the tobacco products, the actual net weight of the cut leaf tobacco (hebra) shall be entered in the L-7 official register book and cigarette paper waste be credited in the cigarette paper account after same is destroyed by burning. If the purpose is to repack the tobacco products, the same shall be taken up in the proper official register, Schedule A. 5. A report on the remanufacture and repacking shall be submitted to the Revenue Service Chief (Specific Tax) within two (2) days after completion thereof and enclosed with the report are the strip stamps detached from cigarettes or tobacco products for proper accounting. C. All returned tobacco products shall be deposited at a warehouse separate from the place of production and shall be placed under special custody of the revenue inspector assigned thereat. In all cases of destruction, remanufacture or repacking of cigarettes, a certificate thereof shall be issued by the revenue inspector assigned to supervise and attested to by the witness designated by the Revenue Service Chief (Specific Tax). No refund or rebate of the value of the strip stamps detached from the cigarettes or tobacco products shall be allowed. casia Strict compliance with the provisions of this Revenue Memorandum Order is hereby enjoined. (SGD.) RUBEN B. ANCHETA Acting Commissioner