Appeal Court orders tax refund for San Miguel

The CTA Second Division’s 33-page decision dated June 9 is the latest ruling in favor of the San Miguel Corp subsidiary, which contests the BIR’s imposition of a higher tax on its San Mig Light product.
The BIR had considered San Mig Light a “variant” of the older Pale Pilsen brand and obliged SMB to pay a tax of 20.57 peso per litre. SMB argued San Mig Light should have been taxed as a “new brand” at only 15.49 peso per litre.
The tax court did not even have to elaborate why SMB was entitled to the refund on the excessive tax payments. It had issued at least four en banc decisions in favor of SMB from September 2012, the decision noted.
“It has been consistently ruled that ‘San Mig Light’ is a new brand and not a variant… Consequently there was an erroneous, excessive and/or illegal assessment and collection in the amount of 5.08 peso per litre removal of petitioner’s ‘San Mig Light’,”
SMB was bound to get such a hefty refund because it shipped out a total of 149.82 million litres from its five plants nationwide in 2012.
Previous rulings explained that reclassifying San Mig Light as a “variant” would violate Republic Act No. 9334, which prohibits the BIR from revising the classification of brands registered from 1997 to 2003.
Since the BIR initially granted San Mig Light’s registration as a new brand in October 1999, only Congress can reclassify the beer for taxation purposes. The court previously ruled that San Mig Light should not be considered a variant of “Pale Pilsen” – an older brand of beer with more calories but with the same 5 percent alcoholic content – because these words were not contained in the former’s name.