AN ACT AMENDING
THE NATIONAL INTERNAL REVENUE CODE, AS AMENDED,
AND FOR OTHER
PURPOSES
TITLE VI
EXCISE TAXES
ON CERTAIN GOODS
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 (180O)
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 for automotive power, it shall be taxed
under Section 148(d) of this Code: Provided, finally, That any alcohol,
previously rendered unfit for oral intake after denaturing but subsequently
rendered fit for oral intake after undergoing fermentation, dilution, purification,
mixture or any other similar process shall be taxed under Section 141 of
this Code and such tax shall be paid by the person in possession of such
reprocessed spirits.
SEC.
135. Petroleum Products Sold to International Carriers and Exempt Entities
or Agencies. -Petroleum products sold to the following are exempt from excise tax:
(a) International
carriers of Philippine or foreign registry on their use or consumption
outside the Philippines: Provided, That the petroleum products sold
to these international carriers shall be stored in a bonded storage tank
and may be disposed of only in accordance with the rules and regulations
to be prescribed by the Secretary of Finance, upon recommendation of the
Commissioner;(b) Exempt entities
or agencies covered by tax treaties, conventions and other international
agreements for their use or consumption: Provided, however, That
the country of said foreign international carrier or exempt entities or
agencies exempts from similar taxes petroleum products sold to Philippine
carriers, entities or agencies; and(c) Entities which
are by law exempt from direct and indirect taxes.SEC.
136. Denaturation, Withdrawal and Use of Denatured Alcohol.
- Any person who produces, withdraws, sells, transports or knowingly uses,
or is in possession of denatured alcohol, or articles containing denatured
alcohol in violation of laws or regulations now or hereafter in force pertaining
thereto shall be required to pay the corresponding tax, in addition to
the penalties provided for under Title X of this Code.
SEC.
137. Removal of Spirits Under Bond for Rectification.-
Spirits requiring rectification may be removed from the place of production
to another establishment for the purpose of rectification without prepayment
of the excise tax: Provided, That the distiller removing such spirits
and the rectifier receiving them shall file with the Commissioner their
joint bond conditioned upon the payment by the rectifier of the excise
tax due on the rectified alcohol: Provided, further, That in cases
where alcohol has already been rectified either by original and continuous
distillation or by redistillation, no loss for rectification and handling
shall be allowed and the rectifier thereof shall pay the excise tax due
on such losses: Provided, finally, That where a rectifier makes
use of spirits upon which the excise tax has not been paid, he shall be
liable for the payment of the tax otherwise due thereon.
SEC.
138. Removal of Fermented Liquors to Bonded Warehouse.
- Any brewer may remove or transport from his brewery or other place of
manufacture to a bonded warehouse used by him exclusively for the storage
or sale in bulk of fermented liquors of his own manufacture, any quantity
of such fermented liquors, not less than one thousand (1,000) liters at
one removal, without prepayment of the tax thereon under a permit which
shall be granted by the Commissioner. Such permit shall be affixed to every
package so removed and shall be cancelled or destroyed in such manner as
the Commissioner may prescribe. Thereafter, the manufacturer of such fermented
liquors shall pay the tax in the same manner and under the same penalty
and liability as when paid at the brewery.
SEC.
139. Removal of Damaged Liquors Free of Tax.
- When any fermented liquor has become sour or otherwise damaged so as
to be unfit for use as such, brewers may sell and after securing a special
permit from the Commissioner, under such conditions as may be prescribed
in the rules and regulations prescribed by the Secretary of Finance, remove
the same without the payment of tax thereon in cask or other packages,
distinct from those ordinarily used for fermented liquors, each containing
not less than one hundred seventy-five (175) liters with a note of their
contents permanently affixed thereon.
SEC.
140. Removal of Tobacco Products Without Prepayment of Tax.
- Products of tobacco entirely unfit for chewing or smoking may be removed
free of tax for agricultural or industrial use, under such conditions as
may be prescribed in the rules and regulations prescribed by the Secretary
of Finance. Stemmed leaf tobacco, fine-cut shorts, the refuse of fine-cut
chewing tobacco, scraps, cuttings, clippings, stems, or midribs, and sweepings
of tobacco may be sold in bulk as raw material by one manufacturer directly
to another without payment of the tax, under such conditions as may be
prescribed in the rules and regulations prescribed by the Secretary of
Finance.
"Stemmed leaf tobacco",
as herein used, means leaf tobacco which has had the stem or midrib removed.
The term does not include broken leaf tobacco.
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