Prescribing the Rules Governing the Use of Official Labels and the Manner of Affixing Them To Packages or Containers of Distilled Spirits, Manufactured Liquors, and Wines.

June 1, 1990 REVENUE REGULATIONS NO. 04-90 SUBJECT : Prescribing the Rules Governing the Use of Official Labels and the Manner of Affixing Them to Packages or Containers of Distilled Spirits, Manufactured Liquors, and Wines TO : All Internal Revenue Officers and Others Concerned Pursuant to the provisions of Section 245, in relation to Section 156, both of the National Internal Revenue Code, as amended, these regulations relative to the use and manner of affixture of internal revenue labels to packages and containers of distilled spirits, manufactured liquors, wines and imitation wines, are hereby prescribed. SECTION 1 . Declaration of Policy . In accordance with the provisions of Section 156 of the Tax Code, no package or container of distilled spirits or wines shall henceforth be removed from a compounding or mixing establishment or its premises, unless marked or labelled in the manner hereinafter prescribed. SECTION 2 . Data to be shown in the official labels . There shall be two kinds of official labels, namely, (a) the regular official labels and (b) the auxiliary official labels. The regular official labels shall contain the following data to be printed, stamped, or written thereon with ink: the schedule, paragraph, and assessment number of the establishment; the words, "Internal Revenue"; the serial number of such regular official labels and the corresponding serial numbers of the auxiliary labels affixed to the inner containers. In case no auxiliary labels are required by these regulations to be affixed to certain containers, only the words "demijohn", "barrel", "keg", "jar", "tin", or whatever outer container is used may be inserted in lieu of the serial numbers of the auxiliary official labels. The number of the regular official labels must begin with the lowest serial number on hand. The regular official labels shall be dated. cdt The auxiliary official labels shall contain the following data, the schedule, paragraph, and assessment number of the compounding or mixing establishment; the words, "Internal Revenue", and the serial number of such auxiliary official labels, which serial number must begin with the lowest number on hand. Every auxiliary official label shall bear a different serial number. A compounding or mixing establishment may be authorized, on application duly approved by the Commissioner of Internal Revenue, to use an auxiliary label on which its name is printed together with the assessment number of his factory. The additional cost of the printing of the said name on the auxiliary official label shall be borne by the compounder or mixer concerned. SECTION 3 . Manner of affixture of official labels . Before domestic compounded liquors are packed in secondary containers such as cases, boxes, packages, cartons and the like, an internal revenue auxiliary label shall first be firmly affixed to each and every primary container - bottle, flask, keg, jar or tin - by pasting it midway across the opening of the said containers rendering it securely sealed thus preventing the removal of its contents without breaking the auxiliary label. The internal revenue regular label shall be firmly affixed midway across the edge of the cover flap and the side of the boxes used as secondary containers hindering the removal of its contents without breaking the said label. However, if barrels, kegs, drums, jars, demijohn or tin cans are used as primary containers of domestic compounded liquors, only the regular labels shall be affixed to each and every container in the same manner as in the case of bottled distilled spirits or wines as to seal the containers and prevent the removal of their contents without breaking the regular official label. SECTION 4 . Affixture with adhesive or paste . The regular and auxiliary labels shall be affixed to the containers with an adhesive or paste, the preparation or chemical composition of which shall be in accordance with the specification approved by the Commissioner. No adhesive or paste which does not securely and firmly affix the said labels to the containers shall be used in the affixture of labels. SECTION 5 . Internal Revenue labels broken when the container is opened and destroyed when emptied . Any compounder, mixer, wholesaler, retailer, consumer or person opening or emptying the container of domestic compounded liquor affixed with internal revenue label shall break and/or destroy the said labels. a. Break labels . Whenever the secondary container of domestic compounded liquors is opened, the internal revenue label affixed thereto shall be immediately broken in the middle. However, the broken parts of the said label attached on both sides of the secondary container shall be preserved until it is entirely emptied. When barrels, kegs, drums, jars, demijohn or tins are used as primary or original containers of domestic compounded liquors, the internal revenue regular labels affixed thereto shall also be broken partly until the entire contents are disposed of. b. Destroy labels . When the secondary container is entirely emptied, the broken and remaining parts of the internal revenue regular label shall be completely destroyed. aisa dc The broken parts of the internal revenue regular labels affixed to barrels, kegs, drums, jars, demijohns or tins used as primary containers shall be completely destroyed after the entire contents are disposed of. Unless authorized by the Commissioner, no person shall detach or cause to be detached internal revenue labels from the containers to which they are affixed, nor shall he keep in his possession internal revenue regular and auxiliary labels. No empty containers, without the internal revenue official labels affixed thereto having been completely destroyed shall be returned to any compounding establishment. SECTION 6 . Procurement of internal revenue labels . The procurement and issuance of internal revenue regular and auxiliary labels to be used by the distillers, rectifiers, repackers, compounders, bonded warehouse and importers shall be made upon a written request to purchase BIR Labels to be filed with the Alcohol Tax Division which shall process the applications. Upon approval of the application to purchase BIR Labels, the request is endorsed to the Accountable Forms Division for preparation and delivery of the approved number of BIR Labels. SECTION 7 . Penalties . Compounders or mixers who shall fail to comply with these regulations shall be liable to the penal provisions of Title X of the Tax Code relative to crimes, other offenses, and forfeiture. SECTION 8 . Repealing Clause . All regulations, rulings, and other issuances or portions thereof inconsistent with the provisions of these regulations are hereby revoked or modified. SECTION 9 . Effectivity . These regulations shall take effect as soon as this Bureau shall have stocked-up itself sufficient quantity of regular and auxiliary labels to supply the alcohol products manufacturers but not later than six (6) months after approval, whichever comes first. acd (SGD.) JESUS P. ESTANISLAO Secretary of Finance Recommending Approval: (SGD.) JOSE U. ONG Commissioner of Internal Revenue