The
importation of ethyl alcohol or ethanol intended for re-sale or for the manufacture
of compounded liquors is subject to excise tax unless the importer thereof is a
holder of permit to operate as importer of ethyl alcohol or ethanol or as a
manufacturer of compounded liquors, as the case may be, duly issued by the BIR
and has posted a surety bond, in addition to the importer’s bond.
In case of
domestic sale of ethyl or ethanol by duly registered manufacturers thereof,
otherwise known as distilleries, the sale and delivery of ethyl alcohol or ethanol
directly to manufacturers of compounded liquors shall be subject to excise tax,
unless a surety bond shall be posted by the distillery, in addition to the manufacturer’s
bond.
As regards
removal of ethyl alcohol from distilleries for purposes other than the manufacture
of compounded liquors, such as for use as blending component for gasoline under
RA 9367 (Biofuel Act of 2006), or for industrial and pharmaceutical purposes,
the same shall be denatured according to existing rules and regulations on
denaturation in order that the same shall not be subject to excise tax.
However, the removal of ethyl alcohol or ethanol from distilleries for purposes
of rectification shall be conditionally tax-exempt and the excise tax due on
the rectified alcohol shall be paid by the rectifier.
Duly
registered importers of ethyl alcohol or ethanol intended for resale shall be
liable to the excise tax on sale and delivery thereof to persons or entity other
than to manufacturers of compounded liquors. The excise tax due on sale to
non-manufacturers of compounded liquors shall be paid simultaneous to the
payment, if any, of the excise tax not covered by the surety bond.
(Revenue Memorandum Circular No. 18-2013, February 15, 2013)
Tax Brief – March 2013
Punongbayan and Araullo
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