CIR vs. San Miguel Corp Tax Digest
Content
G.R. No. 184428 November 23, 2011 COMMISSIONER OF INTERNAL REVENUE vs.SAN MIGUEL CORPORATION
Facts acts:: Respo espond nden entt San San Migu Miguel el Corp Corpor orat atio ion, n, a dome domest stic ic corp corpor orat atio ion n enga engage ged d in the the manufacture manufacture and sale of fermented liquor, produces as one of its products "Red Horse" beer hich is sold in !#ml. and $#liter bottle variants. %n &anuar' $, $((), Republic *ct +R.*. -o. )/ or the 0a1 Reform *ct of $((2 too3 e4ect. 5t reproduced, as Section $6 thereof, the provisions of Section $ of the old -ational 5nternal 5nternal Revenue Code as amended b' R.*. -o. )/ hich became e4ective on &anuar' $, $((2. 7art of Section $6 of the 0a1 Reform *ct of $((2 reads: The excise tax from any brand of fermented liquor within the next three (3) years from the eectivity of Republic Act No !"#$ shall not be lower than the tax which was due from each brand on %ctober &' & The rates of excise tax on fermented liquor under para*raphs para*raphs (a)' (b) and (c) hereof shall be increased by twelve percent (&"+) on ,anuary &' "$$$ 0hereafter, 0hereafter, on 8ecember $9, $(((, the Secretar' Secretar' of Finance issued Revenue Revenue Regulations -o. $2#(( increasing the applicable ta1 rates on fermented liquor b' $/. 0his increase, hoever, as quali;ed b' the last paragraph of Section $ of Revenue Regulations -o. $2#(( hich reads: -rovided' however' however' that the new speci.c tax rate for any existin* brand of ci*ars' ci*arettes pac/ed by machine' distilled spirits' wines and fermented liquors shall not be lower than the excise tax that is actually being paid prior to January 1, 2000 For the period &une $, / to 8ecember 6$, /, respondent as assessed and paid e1cise ta1es amounting to 7/,/)9,)),)9$.!). Respondent, hoever, later contended that the said quali;cation in the last paragraph of Section $ of Revenue Regulations -o. $2# (( has no basis in the plain ording of Section $6 and ;led before the <5R a claim for refund or ta1 credit of the amount of 79,22),!$(.!9 as erroneousl' paid e1cise ta1es for the period of Ma' //, / to 8ecember 6$, /. =ater, said amount as reduced to 7!),/$6,/(.(/ because of prescription. prescription. %n September /9, /2, the C0* Second 8ivision granted the petition and ordered petitioner to refund 7!),/$6,/(.(/ to respondent or to issue in the latter>s favor a 0a1 Credit Certi;cate for the said amount for the erroneousl' paid e1cise ta1es. 0he C0* held that Revenue Regulations -o. $2#(( modi;ed or altered the mandate of Section $6 of the 0a1 0a1 Reform Reform *ct of $((2. 0he C0* C0* ?n <anc a@rmed the 8ecision. Hence, this petition for revie on certiorari.
5ssu 5ssue: e: Ahet Ahethe herr or not not Sect Sectio ion n $ of Reven evenue ue Regul egulat atio ions ns -o. -o. $2 $2#( #(( ( is an inva invali lid d administrative interpretation of Section $6 of the 0a1 Reform *ct of $((2.
Ruling: Bes. Section $6 of the 0a1 Reform *ct of $((2 is clear and unambiguous. 5t provides for to periods: the ;rst is the 6# 'ear transition period beginning &anuar' $, $((2, the date hen R.*. -o. )/ too3 e4ect, until 8ecember 6$, $((( and the second is the period
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thereafter. 8uring the 6#'ear transition period , Section $6 provides that "the e1cise ta1 from an' brand of fermented liquor...shall not be loer than the ta1 hich as due from each brand on %ctober $, $((9." *fter the transitor' period, Section $6 provides that the e1cise e1cise ta1 rate shall be the ;gures provided under paragraphs paragraphs +a, +b and +c of Section $6 but increased b' $/, ithout regard to hether the revenue collection starting &anuar' $, / ma' turn out to be loer than that collected prior to said date. Revenue Regulations -o. -o. $2#((, $2#((, hoever hoever,, re! re!"e "e# # ! $e% $e% "!& "!& r!"e r!"e hen it added in the last paragraph of Sectio Section n $ there thereof, of, the quali; quali;cat cation ion that that the ta1 due after after the $/ incre increas ase e become becomes s e4ective "shall not be loer than the ta1 actuall' paid prior to &anuar' $, /." 5t bears reiterating that ta1 burdens are not to be imposed, nor presumed to be impose imposed d be'ond be'ond hat hat the statut statute e e1pr e1press essl' l' and and clear clearl' l' import imports, s, ta1 statut statutes es being being construed construed strictissim strictissimii Duris Duris against against the governmen government. t. 5n case case of discrep discrepanc anc' ' beteen beteen the basic la and a rule or regulation issued to implement said la, the basic la prevails as said rule or regulation cannot go be'ond the terms and provisions of the basic la. *s there is nothing in Section $6 of the 0a1 Reform *ct of $((2 hich clothes the <5R ith the poer or authorit' to rule that the ne speci;c ta1 rate should not be loer than the e1cise ta1 that is actuall' being paid prior to &anuar' $, /, such interpretation is clearl' an invalid e1ercise e1ercise of the poer of the Secretar' Secretar' of Finance to interpret ta1 las and to promulga promulgate te rules rules and regulations regulations necessar' necessar' for the e4ective e4ective enforceme enforcement nt of the 0a1 Reform *ct of $((2.
Facts acts:: Respo espond nden entt San San Migu Miguel el Corp Corpor orat atio ion, n, a dome domest stic ic corp corpor orat atio ion n enga engage ged d in the the manufacture manufacture and sale of fermented liquor, produces as one of its products "Red Horse" beer hich is sold in !#ml. and $#liter bottle variants. %n &anuar' $, $((), Republic *ct +R.*. -o. )/ or the 0a1 Reform *ct of $((2 too3 e4ect. 5t reproduced, as Section $6 thereof, the provisions of Section $ of the old -ational 5nternal 5nternal Revenue Code as amended b' R.*. -o. )/ hich became e4ective on &anuar' $, $((2. 7art of Section $6 of the 0a1 Reform *ct of $((2 reads: The excise tax from any brand of fermented liquor within the next three (3) years from the eectivity of Republic Act No !"#$ shall not be lower than the tax which was due from each brand on %ctober &' & The rates of excise tax on fermented liquor under para*raphs para*raphs (a)' (b) and (c) hereof shall be increased by twelve percent (&"+) on ,anuary &' "$$$ 0hereafter, 0hereafter, on 8ecember $9, $(((, the Secretar' Secretar' of Finance issued Revenue Revenue Regulations -o. $2#(( increasing the applicable ta1 rates on fermented liquor b' $/. 0his increase, hoever, as quali;ed b' the last paragraph of Section $ of Revenue Regulations -o. $2#(( hich reads: -rovided' however' however' that the new speci.c tax rate for any existin* brand of ci*ars' ci*arettes pac/ed by machine' distilled spirits' wines and fermented liquors shall not be lower than the excise tax that is actually being paid prior to January 1, 2000 For the period &une $, / to 8ecember 6$, /, respondent as assessed and paid e1cise ta1es amounting to 7/,/)9,)),)9$.!). Respondent, hoever, later contended that the said quali;cation in the last paragraph of Section $ of Revenue Regulations -o. $2# (( has no basis in the plain ording of Section $6 and ;led before the <5R a claim for refund or ta1 credit of the amount of 79,22),!$(.!9 as erroneousl' paid e1cise ta1es for the period of Ma' //, / to 8ecember 6$, /. =ater, said amount as reduced to 7!),/$6,/(.(/ because of prescription. prescription. %n September /9, /2, the C0* Second 8ivision granted the petition and ordered petitioner to refund 7!),/$6,/(.(/ to respondent or to issue in the latter>s favor a 0a1 Credit Certi;cate for the said amount for the erroneousl' paid e1cise ta1es. 0he C0* held that Revenue Regulations -o. $2#(( modi;ed or altered the mandate of Section $6 of the 0a1 0a1 Reform Reform *ct of $((2. 0he C0* C0* ?n <anc a@rmed the 8ecision. Hence, this petition for revie on certiorari.
5ssu 5ssue: e: Ahet Ahethe herr or not not Sect Sectio ion n $ of Reven evenue ue Regul egulat atio ions ns -o. -o. $2 $2#( #(( ( is an inva invali lid d administrative interpretation of Section $6 of the 0a1 Reform *ct of $((2.
Ruling: Bes. Section $6 of the 0a1 Reform *ct of $((2 is clear and unambiguous. 5t provides for to periods: the ;rst is the 6# 'ear transition period beginning &anuar' $, $((2, the date hen R.*. -o. )/ too3 e4ect, until 8ecember 6$, $((( and the second is the period
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thereafter. 8uring the 6#'ear transition period , Section $6 provides that "the e1cise ta1 from an' brand of fermented liquor...shall not be loer than the ta1 hich as due from each brand on %ctober $, $((9." *fter the transitor' period, Section $6 provides that the e1cise e1cise ta1 rate shall be the ;gures provided under paragraphs paragraphs +a, +b and +c of Section $6 but increased b' $/, ithout regard to hether the revenue collection starting &anuar' $, / ma' turn out to be loer than that collected prior to said date. Revenue Regulations -o. -o. $2#((, $2#((, hoever hoever,, re! re!"e "e# # ! $e% $e% "!& "!& r!"e r!"e hen it added in the last paragraph of Sectio Section n $ there thereof, of, the quali; quali;cat cation ion that that the ta1 due after after the $/ incre increas ase e become becomes s e4ective "shall not be loer than the ta1 actuall' paid prior to &anuar' $, /." 5t bears reiterating that ta1 burdens are not to be imposed, nor presumed to be impose imposed d be'ond be'ond hat hat the statut statute e e1pr e1press essl' l' and and clear clearl' l' import imports, s, ta1 statut statutes es being being construed construed strictissim strictissimii Duris Duris against against the governmen government. t. 5n case case of discrep discrepanc anc' ' beteen beteen the basic la and a rule or regulation issued to implement said la, the basic la prevails as said rule or regulation cannot go be'ond the terms and provisions of the basic la. *s there is nothing in Section $6 of the 0a1 Reform *ct of $((2 hich clothes the <5R ith the poer or authorit' to rule that the ne speci;c ta1 rate should not be loer than the e1cise ta1 that is actuall' being paid prior to &anuar' $, /, such interpretation is clearl' an invalid e1ercise e1ercise of the poer of the Secretar' Secretar' of Finance to interpret ta1 las and to promulga promulgate te rules rules and regulations regulations necessar' necessar' for the e4ective e4ective enforceme enforcement nt of the 0a1 Reform *ct of $((2.
