Article 53p. 53

NATIONAL INTERNAL REVENUE CODE TAXATION, TARIFF and CUSTOMS LAWS

(b) The manner and time of payment of excise

taxes other than as herein prescribed, under a

tax prepayment, advance deposit or similar

schemes. In the case of locally produced of

extracted minerals and mineral products or

quarry resources where the mine site or place

of extraction is not the same as the place of

processing or production, the return shall be

filed with and the tax paid to the Revenue

District

Office

having

jurisdiction

over

the

locality where the same are mined, extracted or

quarried: Provided, however, That for metallic

minerals processed abroad, the return shall be

filed and the tax due thereon paid to the

Revenue District Office having jurisdiction over

the

locality

where

the

same

are

mined,

extracted or quarried.

(B) Determination of Gross Selling Price of Goods

Subject to Ad Valorem Tax. - Unless otherwise provided,

the price, excluding the value-added tax, at which the

goods are sold at wholesale in the place of production or

through their sales agents to the public shall constitute

the gross selling price. If the manufacturer also sells or

allows such goods to be sold at wholesale in another

establishment of which he is the owner or in the profits of

which he has an interest, the wholesale price in such

establishment shall constitute the gross selling price.

Should such price be less than the cost of manufacture

plus expenses incurred until the goods are finally sold,

then a proportionate margin of profit, not less than ten

percent (10%) of such manufacturing cost and expenses,

shall be added to constitute the gross selling price.

(C) Manufacturer's or Producer's Sworn Statement. -

Every manufacturer or producer of goods or products

subject to excise taxes shall file with the Commissioner

on the date or dates designated by the latter, and as often

as may be required, a sworn statement showing, among

other

information,

the

different

goods

or

products

manufactured

or

produced

and

their corresponding

gross selling price or market value, together with the cost

of manufacture or production plus expenses incurred or

to be incurred until the goods or products are finally sold.

(D) Credit for Excise tax on Goods Actually Exported. -

When

goods

locally

produced

or manufactured are

removed and actually exported without returning to the

Philippines, whether so exported in their original state or

as ingredients or parts of any manufactured goods or

products, any excise tax paid thereon shall be credited or

refunded

upon

submission

of

the

proof

of

actual

exportation

and

upon

receipt

of

the

corresponding

foreign exchange payment: Provided, That the excise tax

on mineral products, except coal and coke, imposed

under Section 151 shall not be creditable or refundable

even if the mineral products are actually exported.

SEC. 131. Payment of Excise Taxes on Imported Articles.

-

(A) Persons Liable. - Excise taxes on imported articles

shall be paid by the owner or importer to the Custom

Officers,

conformably

with

the

regulations

of

the

Department of Finance and before the release of such

articles from the customs house, or by the person who is

found in possession of articles which are exempt from

excise

taxes

other

than

those

legally

entitled

to

exemption.

In the case of tax-free articles brought or imported into

the Philippines by persons, entities, or agencies exempt

from tax which are subsequently sold, transferred or

exchanged in the Philippines to non-exempt persons or

entitles, the purchasers or recipients shall be considered

the importers thereof, and shall be liable for the duty and

internal revenue tax due on such importation.

The provision of any special or general law to the contrary

notwithstanding, the importation of cigars and cigarettes,

distilled spirits, fermented liquors and wines into the

Philippines, even if destined for tax and duty free shops,

shall be subject to all applicable taxes, duties, charges,

including excise taxes due thereon. This shall apply to

cigars and cigarettes, distilled spirits, fermented liquors

and wines brought directly into the duly chartered or

legislated freeports of the Subic Special Economic and

Freeport Zone, created under Republic Act No. 7227; the

Cagayan Special Economic Zone and Freeport, created

under Republic Act No. 7922; and the Zamboanga City

Special Economic Zone, created under Republic Act No.

7903,and

such

other freeports as may hereafter be

established or created by law: Provided, further, That

notwithstanding the provisions of Republic Act Nos. 9400

and 9593, importations of cigars and cigarettes, distilled

spirits, fermented liquors and wines made directly by a

government-owned and operated duty-free shop, like the

Duty-Free Philippines (DFP), shall be exempted from all

applicable duties only: Provided, still further, That such

articles directly imported by a government-owned and

operated duty-free shop like the Duty-Free Philippines,

shall be labeled ' duty-free ' and ' not for resale ': Provided,

finally, That the removal and transfer of tax and duty-free

goods, products, machinery, equipment and other similar

articles other than cigars and cigarettes, distilled spirits,

fermented

liquors

and

wines, from one freeport to

another freeport, shall not be deemed an introduction

into the Philippine customs territory. [89]

Cigars and cigarettes, distilled spirits and wines within

the premises of all duty-free shops which are not labeled

as herein above required, as well as tax and duty-free

articles obtained from a duty free shop and subsequently

found in a non duty-free shop to be offered for resale shall

be confiscated, and the perpetrator of such non-labeling

or re-selling shall be punishable under the applicable

provisions of this Code.

Articles confiscated shall be destroyed using the most

environmentally friendly method available in accordance

with the rules and regulations to be promulgated by the

Secretary

of

Finance,

upon

recommendation of the

Commissioners of Customs and Internal Revenue.

The tax due on any such goods, products, machinery,

equipment or other similar articles shall constitute a lien

on the article itself, and such lien shall be superior to all

other charges or liens, irrespective of the possessor

thereof.

(B)

Rate and Basis of the Excise Tax on Imported

Articles. - Unless otherwise specified imported articles

shall be subject to the same rates and basis of excise

taxes applicable to locally manufactured articles.

SEC. 132. Mode of Computing Contents of Cask or

Package. - Every fractional part of a proof liter equal to or

greater than a half liter in a cask or package containing

more than one liter shall be taxed as a liter, and any

smaller fractional part shall be exempt; but any package

of spirits, the total content of which are less than a proof

liter, shall be taxed as one liter.

CHAPTER II EXEMPTION OR CONDITIONAL

TAX-FREE REMOVAL OF CERTAIN ARTICLES

SEC. 133. Removal of Wines and distilled Spirits for

Treatment of Tobacco Leaf. - Upon issuance of a permit

from the Commissioner and subject to the rules and

regulations

prescribed

by

the

Secretary

of

Finance,

manufacturers of cigars and cigarettes may withdraw

from bond, free of excise local and imported wines and

distilled spirits in specific quantities and grades for use in

the

treatment

of

tobacco

leaf

to

be

used

in

the

manufacture of cigars and cigarettes; but such wines and

distilled spirits must first be suitably denatured.

SEC. 134. Domestic Denatured Alcohol. - Domestic

alcohol of not less than one hundred eighty degrees

(180 O ) proof (ninety percent (90%) absolute alcohol) shall,

when suitably denatured and rendered unfit for oral

intake, be exempt from the excise tax prescribed in

Section 141: Provided, however, That such denatured

alcohol shall be subject to tax under Section 106(A) of this

Code: Provided, further, That if such alcohol is to be used

© Compiled by RGL

53 of 201