RR No. 3-2008: Amends certain provisions of existing Revenue Regulations on the granting of outright Excise Tax exemption on removal of excisable articles intended for export or sale/delivery to international carriers or to tax-exempt entities/agencies and prescribes the provisions for availing claims for product replenishment

Key points

1. Payment on removal. Manufacturers pay the Excise Tax on every removal from the place of production for export or sale or delivery to international carriers or tax-exempt entities, subject to a later claim for credit or refund or product replenishment. If the articles are also sold locally, the domestic rate applies. If there is no similar domestic article, the tax is computed on the value in the manufacturer’s sworn statement converted to Philippine currency. BIR-bonded storage facility permits are revoked or withdrawn.
2. Embassies and international organizations. Sales to embassies, legates and international organizations may be removed without Excise Tax payment. Each transaction needs a prior written permit from the Large Taxpayer Assistance Division II (LTAD II), and no later permit is approved until a liquidation report is submitted to LTAD II within 30 days from removal.
3. Product replenishment. A manufacturer may claim product replenishment instead of tax credit or refund, so that articles can be removed without Excise Tax to replace those previously exported or sold. Differences in tax paid or rates are settled as the Regulations provide, and Excise Tax is paid before removal using Payment Form No. 0605 per shipment. Advance deposit scheme payments are not accepted.
4. Application and processing. Manufacturers apply to the Chief, Large Taxpayers Field Operations Division (LTFOD) with the listed documents for export, international carriers or freeport and economic zone sales. They file within 90 days from the actual exportation or sale or delivery, and failure or denial does not bar a credit or refund application. The Product Replenishment Certificate (PRC) is issued within 10 days from filing with complete documents.
5. PRC use and validity. A PRC is used through an application for Product Replenishment Debit Memo with the Chief, LTFOD, after outstanding Excise Tax liability is paid. It is valid for five (5) years from issuance, with one revalidation allowed before expiry, and may be converted to a TCC or refund. Sale, assignment or transfer of a PRC is prohibited.
6. Imported articles and inventory. Product replenishment never applies to imported articles, and the claim for Excise Tax on an imported component is filed separately for refund or credit only. Upon effectivity, manufacturers submit a notarized list of under-bond inventory with proof of Excise Tax payment within five (5) days. Payment is made on BIR Form No. 0605 with the required note on its face.

Who is affected

• Manufacturers of excisable articles
• Tax-exempt entities and international carriers buying excisable articles

Deadlines and effectivity

• Liquidation report within 30 days from removal
• Replenishment application within 90 days from actual exportation or sale or delivery
• PRC issued within 10 days from filing
• PRC valid five (5) years from issuance
• Inventory list within five (5) days from effectivity