Supreme Court E-Library
Information At Your Fingertips

  View printer friendly version

SECTION 1. SCOPE. - Pursuant to Section 244 of the National Internal Revenue Code (NIRC), as amended, and Section 84 of Republic Act (R.A.) No. 10963, otherwise known as the “Tax Reform for Acceleration and Inclusion (TRAIN)” Law, these regulations are hereby promulgated to implement Section 150-B of the  NIRC,  as  amended,  on  the  excise  tax  on  sweetened  beverages,  as introduced by Section 47 of the TRAIN Law.

SEC. 2. DEFINITION OF TERMS - For purposes of these Regulations and for a more effective enforcement and collection of excise taxes, the following words and phrases shall have the meaning indicated below:

a.   “ACT” – shall refer to Republic Act (R.A) No. 10963 otherwise known as the “Tax Reform for Acceleration and Inclusion (TRAIN) Law”;
 
b.    SWEETENED BEVERAGES (SBs) - refer to non-alcoholic beverages of any constitution (liquid, powder, or concentrates) that are pre-packaged and sealed  in  accordance  with  the  Food  and  Drug  Administration  (FDA) standards, that contain caloric and/or non-caloric sweeteners added by the manufacturers, and shall include, but not be limited to the following, as described in the Food Category System from Codex Alimentarius Food Category Descriptors (Codex Stan 192-1995, Rev 2017 or the latest) as adopted by the FDA:

(1) Sweetened juice drinks; (2) Sweetened tea;
(3) All carbonated beverages; (4) Flavored water;
(5) Energy and sports drinks;
(6) Other powdered drinks not classified as milk, juice, tea, and coffee; (7) Cereal and grain beverages; and
(8) Other non-alcoholic beverages that contain added sugar.

c.    CALORIC SWEETENER - refers to a substance that is sweet and includes sucrose, fructose, and glucose that produces a certain sweetness.

d.    HIGH FRUCTOSE CORN SYRUP (HFCS) – refers to a sweet saccharide mixture containing fructose and glucose which is derived from corn and added to provide sweetness to beverages, and which includes other similar fructose syrup preparations.

e.    NON-CALORIC SWEETENER - refers to a substance that is artificially or chemically processed that produces a certain sweetness. These are substances which can be directly added to beverages, such as aspartame, sucralose, saccharin, acesulfame potassium, neotame, cyclamates and other non-nutritive sweeteners approved by the Codex Alimentarius and adopted by the FDA.

SEC. 3. TAX RATES AND BASES – There shall be levied, assessed and collected, effective January 1, 2018, a specific tax on sweetened beverages, in accordance with the following:

PRODUCT DESCRI PTI ON	Tax Rate (per liter of volume capacity)
Us i ng purely cal oric sweet eners, and purely non-caloric sweetener s, or a mix of cal oric and non-caloric sweeteners	P6 .00
Using purely hi gh f ruct ose corn syrup or in combi nati on with any cal oric or non-cal oric sweetener	P12 . 00
Using purely coconut sap sugar and purely st evi ol gl ycosides	Exempt

Coconut sap sugar shall comply with specifications as stated in the Philippine National   Standard   (PNS)/Bureau   of   Agricultural   and  Fisheries  Products Standards (BAFPS) 76:2010 ICS 67.180 or latest updated standards.

Steviol  glycoside  specified  shall  comply  with  the  Joint  FAO/WHO  Expert
Committee on Food Additives (JECFA) specifications.

Computation of Excise Tax (Illustrations):
 
1.    Carbonated Beverages

No . of Cases	100
Mu lti pli ed by no. of bottl es per case	x 6
Tota l no. of bot tl es	600
Mu lti pli ed by cont ent per bottle	x 1 . 5L
Tota l Vol ume in Li ters	900L
Mu lti pli ed by Specific Tax Rate	x P12 . 00
Tota l Exci se Tax to be paid before removal	P10 , 800. 00

2.    Powdered Juice

Sweety Import Corp. will remove from customs custody 50 cases of Four
Seasons Powdered Juice using caloric and non-caloric sweetener containing
144 packs by 25 grams. Each 25 grams pack can make 1 Liter (per serving suggestion appearing on the label).

No . of Cases	50
Mu lti pli ed by no. of packs per case	x 14 4
Tota l no. of packs	7 , 200
Mu lti pli ed by servi ng suggesti on per pack in lit ers of vol ume	x 1 L
Tota l Vol ume in Li ters	7 , 200 L
Mu lti pli ed by Specific Tax Rate	x P6 . 00
Tota l Exci se Tax to be paid bef ore removal	P43 , 200. 00

SEC.  4.  PERSONS  LIABLE:  The  following  persons  shall  be  liable  for  the payment of excise tax on sweetened beverages:

a.    For Locally Manufactured Sweetened Beverages

(1) All Manufacturers of Sweetened Beverages shall pay the excise tax imposed under Section 150-B, Chapter VI, Title VI of the Tax Code, as amended.

(2) Person having possession of domestically manufactured sweetened beverages removed from the place of production without the payment of the tax shall pay the excise tax thereon.

b.    For Imported Sweetened Beverages

(1) All  Owners  or  Importers  of  Sweetened  Beverages  shall  pay  the excise tax imposed under Section 150-B, Chapter VI, Title VI of the Tax Code, as amended.

(2) Person having possession of imported sweetened beverages removed from customs custody without the payment of the tax shall pay the excise tax thereon.

The excise tax shall be paid by the owner or importer of the sweetened beverages or by any person who is found in possession of any untaxed sweetened  beverages,  including  any  person  other  than  the  one  legally entitled to exemption from the excise tax in the proper case. In the case of sweetened beverages brought or imported tax-free into the country by persons, entities, or agencies exempt from tax and are subsequently sold, transferred,  or  exchanged  in  the  Philippines  to  non-exempt  persons  or entities, including the introduction and re-introduction into customs territory of said sweetened beverages intended for exclusive use within the freeport zones, the purchaser or transferee, owner/possessor thereof shall be considered as the importer, and shall be liable for the excise tax due on such importation.

Provided, That toll manufacturers, bottlers and other sub-contractors of manufacturers or importers of sweetened beverages shall not be subject to excise tax. Provided further, in such cases, the manufacturer or importer shall be liable to pay the excise tax on sweetened beverages.

SEC.  5.  TIME,  PLACE  AND  MANNER  OF  FILING  OF  RETURN  AND PAYMENT OF EXCISE TAX ON SWEETENED BEVERAGES.

a.   For Locally Manufactured Sweetened Beverages

A separate return (BIR Form No. 2200-S) shall be filed for each place of production with the concerned Revenue District Office (RDO) where the Head  Office  is  duly  registered  and  the  excise  tax  shall  be  paid  before removal of domestically manufactured sweetened beverages from place of production and the return shall be filed and the excise tax paid at any authorized agent bank (AAB), revenue collection officer or duly authorized city or municipal treasurer in the Philippines under Section 130 (A)(2)(3) of the NIRC, as amended.

b.   For Imported Sweetened Beverages

All importers/traders of excisable sweetened beverages, whether importing raw materials of any constitution (liquid, syrups, powder, or concentrates) or finished goods, shall apply for an Authority to Release Imported Goods (ATRIG) with Excise LT Regulatory Division (ELTRD), BIR National Office and pay the corresponding excise tax based on the equivalent yield in liters of volume capacity of the imported articles.

The Excise Tax on imported finished goods shall be paid before release from customs custody. However, for imported raw materials which will be used in the  production  of  excisable  sweetened  beverages,  the  excise  tax  due thereon shall be paid before removal of the finished goods from place of production.

SEC.  6.  EXCLUSIONS  -  The  following  products,  as  described  in  the  food category system from Codex Alimentarius Food Category Descriptors (Codex Stan 192-1995, Rev 2017 or the latest) as adopted by the FDA, are not subject to the excise tax imposed under Section 150-B of the NIRC, as amended, to wit:

a.    All milk products, including plain milk, infant formula milk, follow-on milk, growing up milk, powdered milk, ready-to-drink milk, flavored milk, and fermented milk.

Milk product refers to products obtained by any processing of milk, which may contain food additives, and other ingredients functionally necessary for the processing (Codex General Standard for the Use of Dairy Terms (Codex Stan 206-1999).

In accordance with the Codex Alimentarius, the following Codex Standards for various milk products are adopted:

1.   Milk powders and cream powder (Codex Stan 207-1999)
2.   Fermented milks (Codex Stan 243-2003)
3.   Blend of evaporated skimmed milk and vegetable fat (Codex Stan 250-
2006)
4.   Blend of skimmed milk and vegetable fat in powdered form Codex Stan
251-2006)
5.   Blend of sweetened condensed skimmed milk and vegetable fat (Codex
Stan 252-2006)
6.   Evaporated milks (Codex Stan 281-1971)
7.   Sweetened condensed milks (Codex Stan 282-1971)

Dairy products are not synonymous with milk products. Only milk products are covered by the exemption.

b.    Soymilk and flavored soymilk shall refer to products, the main ingredients of which are the soybean and/or soy derivative(s) (e.g. soybean flour, soybean concentrates, soybean isolates or defatted soya) and water which are produced without fermentation process. (Codex Stan. CXS 322R-2015)

c.    One Hundred Percent (100%) Natural Fruit Juices - Original liquid resulting from the pressing of fruit, the liquid resulting from the reconstitution of natural fruit juice concentrate, or the liquid resulting from the restoration of water to dehydrated natural fruit juice that do not have added sugar or caloric sweetener. If there is sugar or sweetener added at any amount, the product shall be considered excisable depending on the kind of sweetener added and its corresponding rate specified under the Act;

d.    One  Hundred  Percent  (100%  Natural  Vegetable  Juices  -  Original  liquid resulting from the pressing of vegetables, the liquid resulting from the reconstitution of natural vegetable juice concentrate, or the liquid resulting from the restoration of water to dehydrated natural vegetable juice that do not have added sugar or caloric sweetener. If there is sugar or sweetener added at any amount, the product shall be considered excisable depending on the kind of sweetener added and its corresponding rate specified under the Act;

e.    Meal  Replacement  and  Medically  Indicated  Beverages  –  Any  liquid  or powder drink/product for oral nutritional therapy for persons who cannot absorb  or  metabolize  dietary  nutrients  from  food  or  beverages,  or  as  a source of necessary nutrition used due to a medical condition and an oral electrolyte solution for infants and children formulated to prevent dehydration due to illness; and

f.    Ground coffee, instant soluble coffee, and pre-packaged powdered coffee products.

The proper classification of beverages shall be subject to the determination by the FDA.

SEC. 7. TRANSFER OF RAW MATERIALS - Manufacturers of sweetened beverages subject to tax herein shall not be allowed to transfer or remove raw materials from place of production, except when the transfer or removal thereof is intended for further processing to its other registered production or toll- manufacturing  plants  and  shall  be  accompanied  by  an  Excise  Taxpayer’s Removal Declaration (ETRD).

“Raw materials” shall refer to the chief substance or ingredient of any constitution (liquid,   syrups,   powder,   concentrates)   for   the   production  of   sweetened beverages. Raw materials that are intended for further processing to produce sweetened beverages are not subject to excise tax. Regardless however of declaration as raw materials, those that clearly do not need further processing (i.e., only for repacking) shall be subjected to excise tax.
Packaging materials and supplies shall not be considered as raw materials for purposes of these Regulations.

SEC. 8. TRANSFER OR SALE OF SEMI-PROCESSED GOODS

Semi-processed goods, such as syrups/puree/concentrates sold to fast food chains where the syrups/puree/concentrates are mixed with carbonated water and dispensed through soda vending or juice dispensing machines, shall be considered  as  finished  goods  subject  to  excise  tax  for  purposes  of  this Regulation, notwithstanding that the same are in their semi-processed state. The excise tax shall be computed using a pre-determined formula in arriving at the equivalent yield in liters of volume capacity submitted by the manufacturer as approved by the FDA.

SEC. 9. IMPOSITION OF EXCISE TAX ON SWEETENED BEVERAGES PRODUCED AND CONSUMED WITHIN THE PREMISES OF THE MANUFACTURER

Sweetened beverages that are produced or manufactured and are subsequently consumed within the place of production shall be subject to the payment of excise tax by the manufacturer. The corresponding volume in liter and the excise tax due thereon shall be declared in the excise tax returns and shall be paid, in the  same  manner  as  that  prescribed  for  ordinary  removals  of  excisable sweetened beverages.

The Excise Taxpayer’s Removal Declaration (ETRD), or any other form that may be prescribed by the BIR, shall be issued by the duly authorized representative of the manufacturer duly attested to by the Revenue Officer assigned at the manufacturer’s premises. Accordingly, the brand name and volume of sweetened beverages  consumed  within  the  production  premises  shall  be  separately indicated in the prescribed Official Register Books (ORBs) of the manufacturer.

SEC. 10. EXPORTATION OF SWEETENED BEVERAGES

Sweetened beverages products intended for exports may be removed from the place of production without the prepayment of excise tax, subject to the following terms and conditions:

a.    A permit  shall  be per  shipment  secured from the BIR Office where the manufacturer is registered or required to be registered as an excise taxpayer before the product is removed from the place of production;

b.    A surety bond has been posted to guarantee payment of excise tax which is otherwise due on such removal. For this purpose, the manufacturer-exporter may, at his option, post either a continuing surety bond or a performance surety bond for each and every export transaction. With respect to the performance surety bond, the amount of the exporter's bond shall be equal to the amount of excise tax otherwise due on the actual volume or value of the sweetened beverages to be exported. On the other hand, with respect to the continuing surety bond, the amount of the exporter’s bond shall be equivalent  to  the  amount  of  excise  tax  otherwise  due  on  the estimated annual volume or value of the said products to be exported, or to the amount of excise tax due on the unliquidated export shipments of such product, whichever is lower.

A revised surety bond shall be submitted to the appropriate BIR Office in case the exporter’s bond is no longer sufficient to cover the subsequent tax- exempt exportations. In case of failure to submit the said revised surety bond, no permit shall be issued by the concerned BIR Office;

c.    The  products  removed  from  the  place  of  production  shall  be  directly transported, loaded aboard the international shipping vessel or carrier, and shipped directly to the foreign country of destination without returning to the Philippines;

d.    Proof of exportation such as, but not limited to, the documents enumerated below, shall be submitted within thirty (30) days from the date of actual date of exportation. However, the concerned BIR Office may, upon written request by the taxpayer-exporter, grant a maximum of 30 days, one-time extension for the submission of such documents for meritorious reasons.

(1) Export Entry Declaration duly filed with the Bureau of Customs
(2) Commercial Invoice
(3) Packing list
(4) Bill of Lading
(5) Cargo Manifest, if applicable
(6) Inward bank remittance in foreign currency acceptable to the Bangko
Sentral ng Pilipinas
(7) Any document showing proof that the products exported have actually arrived and unloaded in the foreign port of destination (e.g., certificate of discharge, import entry declaration duly received by the foreign port of entry, etc.)
(8) Other necessary documents as may be reasonably required; and

e.    The prescribed phrase “EXPORTED FROM THE PHILIPPINES” is printed on each label that is attached/affixed on the primary container in a recognizable and readable manner.

In case of failure to comply with the above terms and conditions, the removal of the product shall be subject to excise tax, inclusive of penalties. Further, no  subsequent  application  for  permit  for  tax-free  exportation  shall  be processed and granted unless all the aforementioned requirements have been fully complied with.

SEC. 11. SECURING A ERMIT TO ENGAGE IN BUSINESS AS MANUFACTURER, IMPORTER OF SWEETENED BEVERAGES.

An application for a permit shall be filed with the ELTRD, BIR National Office where the manufacturer or importer is required to be registered as an excise taxpayer. The application shall be accompanied by the following:

(1)  Request Letter;

Attention: Chief, Excise LT Regulatory Division (ELTRD)

(2)  Importer/Manufacturer’s Surety Bond; (P100,000.00 - initial coverage)

(3) Certificate of Registration from the Securities and Exchange Commission, together with Articles of Incorporation/Partnership and By-Laws (for corporation and partnership) and Certificate of Registration from the Department of Trade and Industry (for individual);

(4)  Mayor’s Permit, as required by Local Government Code;

(5)  BIR  Certificate  of  Registration  (with  latest  Registration  Fee  BIR-FORM
0605);

(6) Latest copy of Income Tax Return duly filed and received by the BIR, if applicable;

(7)  Location Map and Plat & Plan of the Warehouse; and If Manufacturer – Blueprint

(8)  Latest Approved Certificate of Product Registration of every Product/Brand Name manufactured/imported issued by the FDA.

SEC. 12. ASSESSMENT NUMBERS -

For administration purposes, permits shall be assigned assessment numbers in the following order:

Schedule	Paragraph	Description
SB	1	Manu f act urer of Sweet ened Beverages
SB	1	Import er of Sweet ened Beverages
SB	T	Toll-Manuf act urer of Sweet ened Beverages

The code above will be followed by a code representing the place of production/plant/warehouse location as assigned by the BIR or as defined by the manufacturer/importer/toll-manufacturer, as the case may be.

To illustrate, SB1Laguna where:

SB	Swee t ened Beverages
1	Manu f act urer of SB
Laguna	Ass i gned code f or pl ant l ocati on/ pl ace of producti on

 
In  case  the  manufacturer/importer/toll-manufacturer  of  Sweetened  Beverages has an existing code for its place of production which form part of its batch code/lot code, it may opt to adopt the same. The manufacturer/importer/toll- manufacturer must provide the BIR with corresponding legends/guides for its respective batch code prior to its use.

T o illustrate, SB1012018 where:

CODE	PART I CULARS
SB	Swee t ened Beverages
1	Manu f act urer of SB
012018	Cod e f or pl ant l ocati on/ pl ace of pr o ducti on as defi ned by t he Manuf act urer

SB I 012018 where:

CODE	PART I CULARS
SB	Swee t ened Beverages
I	I mport er of SB
012018	Cod e f or pl ace of removal f rom warehouse as defi ned by t he I mport er

SBT012018 where:

CODE	PART I CULARS
SB	Swee t ened Beverages
T	To ll Manuf actur er of SB
012018	Cod e f or pl ant l ocati on/ pl ace of producti on as defi ned by t he Toll Manuf act urer

SEC. 13. TOLLING, BOTTLING AND OTHER SUB-CONTRACTING AGREEMENTS

In   cases   of   tolling,   bottling   and   other   sub-contracting  agreements  by manufacturer or importer/owner of sweetened beverages with other persons or entities, the following rules and procedures shall be strictly observed:

a.   Registration Requirements

Any person who is engaged as a sub-contractor to manufacture sweetened beverages or to undertake any part of the manufacturing process such as bottling, packaging, etc. shall secure Permit to Operate as a sub-contractor at the Excise LT Regulatory Division (ELTRD).

In case the sub-contractor is a newly registered taxpayer for excise tax purposes, he shall be issued an Assessment Number. In case the sub- contractor/toller is already a registered excise taxpayer, a separate assessment number for this purpose shall no longer be required.

The newly registered sub-contractor/toller shall be required to install and maintain ORBs as well as the preparation and submission thereof using a format  as  may  be  prescribed  by  the  BIR.  For  sub-contractors  who  are already registered as an excise taxpayer, the installation and maintenance of a separate ORB for the sub-contracted/toller activity shall be required. The deadline of submission of the transcript sheets prescribed herein shall be on or before the eighth (8th) day of the month immediately following the month of operation and every eighth 8th day of every month thereafter, to be submitted to the LT Performance Monitoring and Programs Division (LTPMPD).

b.    Separate Application for Permits

For  each  brand  of  sweetened  beverages,  the  manufacturer  or importer/owner and the sub-contractor shall file separate applications for a permit with the BIR Office prior to the initial production of the brand. The application shall be supported by the following documents:

For the application of the manufacturer or importer/owner of the product:

(1) Sub-contracting Agreement (tolling, bottling, packaging, etc); and

(2) Permit to engage in business as manufacturer or importer of sweetened beverages. In case the manufacturer is not yet a duly registered taxpayer for excise tax purposes, he shall first undergo the usual registration process.

For the application of the sub-contractor:

(1) Sub-contracting Agreement (tolling, bottling, packaging, etc.);
(2) Permit to engage in business as sub-contractor of sweetened beverages.
In case the sub-contractor is not yet a duly registered taxpayer for excise tax purposes, he shall first undergo the usual registration process;
(3) Plant layout of the sub-contractor clearly indicating the line of production where  the  brand  shall  be  manufactured,  bottled,  packaged,  finished goods, storage tanks, warehouse, etc.; and
(4) Production process flow charts

c.    Terms and conditions during the sub-contracted activity

(1) In   case   the   basic   raw   materials   shall   be   supplied   by   the manufacturer/importer/owner of the brand, the same shall be directly transported to and unloaded in the premises of the sub-contractor from the production premises/warehouse of the manufacturer/importer/owner of the brand or from the customs’ custody, in case of importation;

(2) The dedicated storage areas, storage tank and line of production that are to be used for the purpose shall be clearly identified as depicted in the supporting plant layout. Only the assigned storage area, storage tank and line of production as granted in the permit shall be used during the period of the sub-contracting agreement. In case of any change thereof, a prior permit shall be secured from the BIR. However, if such change is temporary or emergency in nature such as due to the occurrence of fortuitous events, force majeure, etc., a written notification therefor shall be filed immediately with the BIR, in lieu of the said permit;

(3) In cases where the concerned BIR Office cannot provide a revenue officer to monitor the operations of the sub-contractor, an advance production schedule, together with documents that may be prescribed under the permit, shall be submitted to the Excise LT Field Operations Division (ELTFOD) prior to every scheduled production run indicating the quantity of the basic raw materials to be used for production, the scheduled date of production/tolling/bottling and the quantity of the finished products that will be produced;

(4) An  ETRD  or  any  form  to  be  prescribed  by  the  BIR  shall  cover  all removals from the sub-contractor’s production premises/warehouse. For this purpose, a separate set of ETRDs or any form to be prescribed by the  BIR  shall  be  issued  exclusively  for  activity  covered  by  the  sub- contracting agreement; and

(5) Such other terms and conditions that are deemed necessary in the performance of the sub-contracting activity.

SEC. 14. ADMINISTRATIVE REQUIREMENTS -

All manufacturers and importers of sweetened beverages shall comply with the following administrative requirements:

a.    Registration of Existing and New Brands and its Variants subject to Excise Tax.

Prior to the initial manufacture for public distribution or importation of existing and new brands and its variants, an application for registration thereof shall be filed with the ELTRD. The application shall be accompanied by the following:

i.    Manufacturer’s/Importer’s   Sworn   Statement   -   every   manufacturer/ importer of sweetened beverages subject to excise tax imposed herein shall file with the Commissioner a sworn statement showing, among other information, the following data:

a.    SB  Products  Manufactured  or  Produced  and  the  corresponding Monthly Volume of Production;
b.    Percentage  (%)  of  Sweeteners  Used  per  Product/Variant  (%  by volume);
c.    Brand Names;
d.    Bottle Content in liter per product;
e.    No. of bottles per case per product;
f.     Kind/Type of Sweeteners used;
g.    Applicable Specific Tax Rate; and
h.    Equivalent Servings (in liter) - for concentrated or powdered form.

The manufacturer’s/importer’s sworn statement shall be submitted as a supporting   document   to   the   prescribed   application   for  the  initial registration of sweetened beverages and thereafter submit an updated sworn statement on or before the end of the months of June and December of the year.

ii.    Exact  replica  of  the  proposed  label,  as  well  as  the  `artwork’  of  the secondary containers (e.g. cartons, boxes, etc.), of the brand in three (3) copies. On the face of the label and all sides of secondary containers of sweetened beverage products, the following shall be conspicuously printed in easily recognizable and readable manner:

(1)  Name   and   address   of   the   manufacturer,   in   case   of   locally manufactured sweetened beverage products.

For imported products, the name and address of the foreign manufacturer, as well as the name and address of the importer, if applicable, shall be indicated on the label;

The assessment number may be printed on the container of the beverage (i.e. bottom of bottle, crown, neck) other than the label. It is mandatory for the assessment number to be reflected on the container of the beverage.

(2)  The phrase “EXPORTED FROM THE PHILIPPINES”, in case the brand shall be exported: Provided, That no exportation of sweetened beverage  products  by  any  person  shall  be  allowed  unless  the required export markings are prominently printed on the said containers; and

(3)  The  phrase  “FOR  EXPORT  TO  THE  PHILIPPINES;  TAX  AND DUTY PAID”, in case the brand shall be imported for domestic market.

(4)  In accordance with the rules promulgated by FDA, indicate on the label the type of sweetener used, and on sweetened beverages in powder form to indicate on the equivalent of each serving per liter of volume capacity.

b.    Application for an Electronic Authority to Release Imported Goods (eATRIG) for Excise Tax Purposes.

All applications for eATRIG for Excise Tax Purposes shall be done online and processed in the ELTRD, BIR-National Office. Accordingly, the Chief of ELTRD shall be the designated approving officer.

No ATRIG shall be issued in case the imported sweetened beverages are already released from the customs custody. Likewise, no subsequent application for ATRIG shall be processed unless the importer has submitted proofs of payment of the excise tax due on the imported products covered by previously issued ATRIG.

c.    Use of New BIRs Form on All Removals of Sweetened Beverages

Excise Tax Returns (BIR Form No. 2200-S) and Excise Taxpayer’s Removal Declaration (ETRD) (BIR Form No. 2299) are hereby prescribed to be used and issued by all registered manufacturers for all removals of sweetened beverages. The ETRD shall be requisitioned from the ELTFOD in the BIR National Office, or from the Excise Tax Area Offices at the different BIR Revenue Regions having respective jurisdiction over the manufacturers of sweetened  beverages.  The  manner  of  preparation,  issuance  and cancellation thereof as well as the applicable reportorial requirements shall be strictly observed in accordance with the existing rules, regulations and procedures issued for this purpose.

d.    Books and Records to be kept and Maintained - Every person or entity engaged in the manufacture or importation of sweetened beverages shall keep ORBs and such other forms or records that may be required by the Commissioner of Internal Revenue, which must be kept within the place of production/importer's warehouse and shall at all times be made available for inspection by duly authorized internal revenue officer(s).
 
e.    Deadline  for  the  Submission  of  Transcript  Sheets  of  the  ORBs  for Sweetened Beverages

The submission of all transcript sheets of ORBs by all manufacturers and importers, including sub-contractors, for sweetened beverages to the concerned BIR Office or to Excise Tax Area (EXTA) having jurisdiction of the place of production shall be on or before the eighth (8th) day of the month immediately following the month of operation.

f.    Amount of Manufacturers’ and Importers’ Surety Bond

Pursuant to Section 160 of the National Internal Revenue Code of 1997, as amended, Manufacturers and importers of articles subject to excise tax shall post a surety bond subject to the following conditions:

(A) Initial Bond. - In case of initial bond, the amount shall be equal to One Hundred Thousand pesos (P100,000): Provided, That if after six (6) months of operation, the amount of initial bond is less than the amount of the total excise tax paid during the period, the amount of the bond shall be adjusted to twice the tax actually paid for the period.

(B) Bond  for  the  Succeeding  Years  of  Operation  -  The  bonds  for  the succeeding years of operation shall be based on the actual total excise tax paid on locally manufactured and/or imported sweetened beverage during the year immediately preceding the year of operation.

Such bond shall be conditioned upon faithful compliance, during the time such business is followed, with laws and rules and regulations relating to such business and for the satisfaction of all fines and penalties imposed by this Code.

g.    Storage of Tax-Paid Sweetened Beverages - When the excise tax has been paid on the sweetened beverages, the same shall not thereafter be stored or permitted to remain in the manufacturing plant or place of production.

h.    Supervision and Control of the Manufacturing Plant or Place of Production

There shall be deployed, on a day-to-day basis, revenue officer(s) to check or supervise the production and removal of finished products from every unit of any establishment producing or manufacturing articles subject to excise tax; at least three (3) revenue officers in such establishment that operates twenty-four (24) hours a day; two (2) revenue officers if it operates more than eight (8) hours and at least one (1) in a small factory, who shall render eight (8)  hours  of  duty,  except  in  small  manufacturers  located  in  contiguous places, and perform the specific duties and functions.

SEC. 15. PENALTIES - Violations of these Regulations shall be subject to the corresponding penalties under Title X of the NIRC of 1997, as amended.

Further, the following penalty provisions are hereby prescribed pursuant to the provisions of the Act, as follows:

a.    Any manufacturer who knowingly misdeclares or misrepresents in his or its sworn  statement  as  required  under  Section  12  of  these  Regulations,  in relation to Section 130 (C) of the NIRC, as amended, any pertinent data or information shall, upon discovery, be penalized by a summary cancellation or withdrawal  of  the  permit  to  engage  in  business  as  manufacturer  of sweetened beverages as provided under Section 268 of the NIRC, as amended;

b.   Any  corporation,  association  or  partnership  liable  for  any of  the acts or omissions in violation of the provisions of Section 150-B of the NIRC, as amended and as implemented by these Regulations shall be fined treble the aggregate amount of deficiency taxes, surcharges and interest which may be assessed pursuant to the provisions of Section 150-B of the NIRC, as amended;

c.   Any person liable for any of the acts or omission prohibited under Section 150-B of the NIRC, as amended and as implemented by these Regulations shall be criminally liable and penalized under Section 254 of the NIRC, as amended;

d.   Any person who willfully aids or abets in the commission of any such act or omission shall be criminally liable in the same manner as the principal; and

e.   If  the  offender  is  not  a  citizen  of  the  Philippines,  he  shall  be  deported immediately after serving the sentence without further proceedings for deportation.

SEC. 16. RESPONSIBILITY OF THE FOOD AND DRUG ADMINISTRATION (FDA). - Starting June 1, 2018, the FDA shall require all manufacturers and importers of sweetened beverages covered by the Act to indicate on the label the type of sweetener used, and on sweetened beverages in powder form to indicate on the label the number of liters per pack size (net weight volume).

The FDA shall also conduct post-marketing surveillance of the sweetened beverages  on  display  in  supermarkets,  groceries  or  retail  stores  and/or inspection of manufacturing sites to determine compliance with the requirements of Section 150-B of the NIRC, as amended. Violations of the provisions of the Act, including but not limited to, mislabeling or misbranding, shall, to the extent applicable, be punishable under existing laws.

The  FDA  shall  provide  a  summary  list  of  registered  sweetened  beverages together with the required details and information using the prescribed format as shown in Annex “A*, hereto attached.

SEC. 17. TRANSITORY PROVISIONS - Upon the effectivity of the Act, the following transitory provisions shall strictly be observed by all concerned:

a.    Taxpayers   engaged   in   manufacturing   and   importation   of   sweetened beverages shall update on or before August 31, 2018, their Certificate of Registration (BIR Form No. 2303) using BIR Form No. 1905 to add the excise tax type ‘XB’ with LT Assistance Division or Excise LT Regulatory Division for Large Taxpayers; or with the Revenue District Office (RDO) for Non-Large Taxpayers where they are registered

b.   All manufacturers and importers of sweetened beverages are required to:

(1) Secure a Permit to operate as Manufacturer/Toll-Manufacturer/Importer of Sweetened Beverages whether registered as large taxpayers or non- large taxpayers at ELTRD on or before August 31, 2018.

(2) Secure an Authority to Release Imported Goods (ATRIGS) at the ELTRD before release of shipment from customs custody. In the meantime that Sweetened Beverage is not yet included in the National Single Window (NSW) System of the Bureau of Customs (BOC), hard copy of the duly notarized application form shall still be submitted by the importer or authorized broker-representative to ELTRD, BIR National Office. No ATRIG shall be electronically transmitted to BOC until the inclusion of the SB classification in the NSW.

(3) Requisition from ELTFOD in writing the required forms to be used in supporting the removals of the excisable products: Excise Taxpayer’s Removal Declaration (ETRD).

c.    All  the  manufacturers  and  importers  of  sweetened  beverages subject  to excise tax under Section 150-B of the NIRC shall submit to the ELTRD, copy furnished the ELTFOD, the following documentary requirements on or before August 31, 2018:

b.1 Notarized   summary   list   of   existing   and   new   brands   of   locally manufactured  and  imported  brands   of   sweetened  beverages   for purposes of registration of said brands. (Please refer to Sec. 14A hereof for the details of the requirements);

b.2 Manufacturer’s  Sworn  Statement  on  all  existing  and  new  locally manufactured brands; and

b.3 Notarized Sworn Declarations and Inventory List as of December 31,
2017;

d.    All manufacturers of sweetened beverages shall use the downloadable BIR Form No. 2200-S in filing and paying of excise tax due upon removals of excisable products from the place of production.

It is also required to submit the Excise Taxpayer's Removal Declaration (ETRD-BIR Form No. 2299), summary list of removals, and liquidation statement of advance deposits and application as supporting attachments to the BIR Form 2200-S on a weekly basis to its designated email address at sb.attachment@bir.gov.ph.

e.    For purposes of the label requirement on printing the name and address of the manufacturer/importer is mandated to comply on or before August 31, 2018.

SEC. 18. Separability Clause - If any of the provisions of these Regulations is declared invalid by a court of competent jurisdiction, the remainder of these Regulations or any provision not affected by such declaration of invalidity shall remain in full force and effect.

SEC. 19. Effectivity. - These Regulations are effective beginning January 1,
2018, the effectivity of the TRAIN Law.