Court orders BIR to return P66.3-M tax to liquor firm
The Court of Tax Appeals (CTA) has ordered the Bureau of Internal Revenue (BIR) to return P66.37 million in excises it “erroneously and illegally collected” from Ginebra San Miguel (GSM) Inc. from the imposition of higher rates before the law raising taxes on liquors took effect in February 2020.
In a 24-page decision promulgated on March 21, the court’s Third Division ruled in favor of GSM Inc., which filed a petition for review to seek a refund of the excise it “illegally” paid from Jan. 23, 2020 to Feb. 9, 2020, or 18 days before Republic Act No. 11467 officially took effect.
The law signed by President Rodrigo Duterte on Jan. 22, 2020, raised excise on distilled spirits to P42 per proof liter from the old rate of P24.34 per proof liter.
The CTA refuted the BIR’s argument, which cited its own revenue memorandum circulars (RMCs) that the publication date of the law’s digital copy on the Official Gazette website was the correct effectivity date.
“A law takes effect only after its complete publication in the Official Gazette or a newspaper of general circulation, unless a different effectivity date is explicitly provided. Administrative interpretative rules and executive issuances are not binding upon courts,” it added.
Tax deficiency notice
The BIR had pointed to its RMC No. 065-20, which declared Jan. 27, 2020, as the effectivity date, saying there was a supposed publication in a newspaper of general publication; as well as RMC No. 113-20, which amended the effectivity date of the law to Jan. 23, 2020, the day it was published digitally on the Official Gazette website.
The interpretation of the effectivity date prompted the BIR to issue an amended notice of discrepancy to GSM Inc. for a P66,370,125.28 deficiency in its basic excise for the period in question.
The gin maker paid the amount “under protest” on Dec. 29, 2020, and filed a petition in court on Dec. 28, 2022.
