TITLE VI

EXCISE TAXES ON CERTAIN GOODS [4]

CHAPTER I

GENERAL PROVISIONS

SEC.129. Goods and Services Subject to Excise Taxes. - Excise taxes apply to

goods manufactured or produced in the Philippines for domestic sales or consumption
or for any other disposition and to things imported as well as services performed in the
Philippines.[127] The excise tax imposed herein shall be in addition to the value-added tax
imposed under Title IV.

For purposes of this Title, excise taxes herein imposed and based on weight or volume
capacity or any other physical unit of measurement shall be referred to as 'specific tax'
and an excise tax herein imposed and based on selling price or other specified value of
the good or service performed [127] shall be referred to as 'ad valorem tax.'

SEC. 130. Filing of Return and Payment of Excise Tax on Domestic Products. –

(A) Persons Liable to File a Return, Filing of Return on Removal and Payment of
Tax. -

(1) Persons Liable to File a Return.- Every person liable to pay excise tax imposed
under this Title shall file a separate return for each place of production setting forth,
among others the description and quantity or volume of products to be removed, the
applicable tax base and the amount of tax due thereon: Provided, however, That in the
case of indigenous petroleum, natural gas or liquefied natural gas, the excise tax shall
be paid by the first buyer, purchaser or transferee for local sale, barter or transfer, while
the excise tax on exported products shall be paid by the owner, lessee, concessionaire
or operator of the mining claim.

Should domestic products be removed from the place of production without the payment
of the tax, the owner or person having possession thereof shall be liable for the tax due
thereon.

(2) Time for Filing of Return and Payment of the Tax. - Unless otherwise specifically
allowed, the return shall be filed and the excise tax paid by the manufacturer or
producer before removal of domestic products from place of production: Provided, That
the excise tax on locally manufactured petroleum products and indigenous petroleum
levied under Sections 148 and 151(A)(4), respectively, of this Title shall be paid within
ten (10) days from the date of removal of such products for the period from January 1,
1998 to June 30, 1998; within five (5) days from the date of removal of such products for
the period from July 1, 1998 to December 31, 1998; and, before removal from the place
of production of such products from January 1, 1999 and thereafter: Provided, further,
That the excise tax on nonmetallic mineral or mineral products, or quarry resources
shall be due and payable upon removal of such products from the locality where mined
or extracted, but with respect to the excise tax on locally produced or extracted metallic
mineral or mineral products, the person liable shall file a return and pay the tax within
fifteen (15) days after the end of the calendar quarter when such products were
removed subject to such conditions as may be prescribed by rules and regulations to be
promulgated by the Secretary of Finance, upon recommendation of the Commissioner.
For this purpose, the taxpayer shall file a bond in an amount which approximates the
amount of excise tax due on the removals for the said quarter. The foregoing rules
notwithstanding, for imported mineral or mineral products, whether metallic or
nonmetallic, the excise tax due thereon shall be paid before their removal from customs
custody.

(3) Place of Filing of Return and Payment of the Tax. - Except as the Commissioner
otherwise permits, the return shall be filed with and the tax paid to any authorized agent
bank or Revenue Collection Officer, or duly authorized City or Municipal Treasurer in
the Philippines.

(4) Exceptions. - The Secretary of Finance, upon recommendation of the

Commissioner may, by rules and regulations, prescribe:

(a) The time for filing the return at intervals other than the time prescribed in the
preceding paragraphs for a particular class or classes of taxpayers after considering
factors such as volume of removals, adequate measures of security and such other
relevant information required to be submitted under the pertinent provisions of this
Code; and

(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 nothwithstanding 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 de 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