Title
ATRIG processing and issuance guidelines
Law
Bir Memorandum Order No. 35-2002
Decision Date
Oct 28, 2002
BIR Memorandum Order No. 35-2002 establishes uniform guidelines and procedures for the processing and issuance of Authority to Release Imported Goods (ATRIG) to ensure effective control and monitoring of excise and value-added tax compliance for imported articles.
authority to
release
value

Purpose, policy, and objectives

  • The order requires uniform procedure for the processing and issuance of ATRIG.
  • The order mandates the use of the official accountable form for ATRIG.
  • The order imposes reporting requirements to enable effective control and monitoring of all processed applications and issued ATRIGs.
  • The order delineates the duties and responsibilities of revenue offices and personnel involved in processing ATRIGs and in the requisition, utilization, and custody of the ATRIG form.

Key concepts and covered transactions

  • An Application for ATRIG for VAT purposes must be filed in duplicate with the Revenue District Office (RDO) having jurisdiction over the port of entry (Section II(1)).
  • For excise tax purposes, an Application for ATRIG must be filed with the Excise Tax District Office (ETDO) where the taxpayer-importer is registered or required to be registered (Section II(1)).
  • Each importation must be covered by a separate application, except that a consolidated application may be accepted and processed when articles of the same kind are covered by two or more Bills of Lading issued to the same importer under the same vessel (Section II(1)).
  • ATRIGs are issued for importations for:
    • Excise tax purposes: articles subject to excise tax (whether exempt or taxable), including raw materials and also machineries/equipment/apparatus or mechanical contrivances especially used for assembly/production (Section II(4)); and
    • VAT purposes: articles exempt from VAT, except those specifically identified and enumerated in the joint BIR and BOC circular (Section II(4)).

Application, form, and filing requirements

  • An application for ATRIG must be filed in duplicate and must be notarized and properly accomplished and signed by the importer or duly authorized representative, with the prescribed documentary stamp affixed thereon (Section II(1)).
  • The order requires distribution of the application as follows:
    • Original to RDO/ETDO; and
    • Duplicate to Importer/Broker (Section II(1)).
  • The order requires rejection of any application when the importer-applicant and/or broker-representative is/are not duly registered taxpayers with the BIR (Section II(2)).
  • For excisable articles, the order requires rejection if the importer-applicant lacks a separate Permit to Operate as an Importer for excise tax purposes (Section II(2)).
  • BIR Form No. 1918 is the required accountable form for ATRIG for both excise and VAT purposes (Section II(3)).
  • The order prohibits reproductions and/or issuances of pro-forma ATRIGs once new sets of BIR Form No. 1918 have been received (Section II(3)).
  • ATRIG applications must be prepared in triplicate and distributed as follows:
    • Original to Bureau of Customs (BOC);
    • Duplicate to Issuing RDO/ETDO; and
    • Triplicate to Business Intelligence Division (National Office) (Section II(3)).
  • The order permits a processing distribution clarification: for excise tax purposes, all ATRIG applications must be filed with and processed by the concerned ETDO having jurisdiction over the importer (Section II(3)).

Substantive issuance rules and processing standards

  • ATRIG processing, approval, and issuance must be done within one (1) day from actual receipt when the application is supported by complete documents and there is no legal/factual issue on the taxability of the imported article (Section II(5)).
  • The order requires coordination with Bureau of Customs authorized representatives when an ocular inspection is needed to verify the imported article’s description or secure a sample for laboratory analysis (Section II(6)).
  • For imported automobiles, the order requires prior ocular inspection at all times to determine taxability and compliance with prescribed seating capacity criteria under existing revenue issuances (Section II(6)).
  • The order requires the issuing office to print descriptive letters/words right below the pre-printed ATRIG serial number in the following order:
    • PRODUCT CODE (for excise) or VAT CODE (for VAT exemption),
    • YEAR OF ISSUE,
    • RDO NUMBER, and
    • RDO, RR, ETDO or NO Office CONTROL NUMBER (Section II(7)).
  • The order requires referral of applications with legal issues on taxability/exemption to the proper Legal Division (Regional Office) or Law Division (National Office) for resolution (Section II(8)).
  • The order requires referral of requests involving factual issues needing laboratory comment/evaluation/recommendation for identification/classification to the BIR Laboratory Unit in the National Office before referral to the proper legal office (Section II(8)).
  • The order requires that even when a taxpayer directly files a request affecting ATRIG with the Legal Division/Law Division or with the VAT Review Committee, the request must still be referred to the BIR Laboratory Unit prior to formulation and issuance of the ruling (Section II(8)).
  • The order requires physical laboratory analysis/comment/evaluation on samples of every shipment of alcohol and alcohol products, petroleum products, and other articles to determine taxability and proper classification, with samples taken directly from shipment in customs premises in coordination with customs representatives (Section II(8)).
  • The order allows dispensation of actual laboratory analysis when the correct product classification and basis of taxation can be sufficiently determined from an acceptable Certificate of Analysis and/or Material Safety Data Sheet (MSDS) with complete product specification and/or product data/information; in such case, documents must be referred to the BIR Laboratory Unit for evaluation and comment before issuance of ATRIG (Section II(8)).
  • The order prohibits issuance of any ATRIG merely to complete documentation for BOC purposes when the articles have already been released from customs custody prior to ATRIG issuance (Section II(10)).
  • The order requires the issuing RDO/ETDO to ensure excise-tax articles (whether taxable or exempt) are delivered to the importer’s place of business/production, by designating revenue officers to supervise release from customs premises to the importer’s place of business/production (Section II(11)).
  • The order requires prior notification to the BIR office with Revenue Officer(s) Assigned on Premises (ROOPs) so ROOPs are alerted on incoming deliveries/shipments (Section II(11)).

Required codes, ATRIG registry, and reporting

  • The order mandates strict observance of VAT/Product Codes for uniformity, including AGRI, FERT, FEEDS, ALCO, COOP, OSLA, VAT, TOB, OIL, MIN, AUT, and NEG (Section II(12)).
  • The order requires that ATRIGs issued for machineries/equipment/apparatus/mechanical contrivances used for assembly/production of excise-tax articles bear the same product codes as the assembled/manufactured products (Section II(12)).
  • The order requires the issuing RDO/ETDO to maintain an ATRIG Registry Book and enter all issued ATRIGs sequentially according to their Control Number, and it requires the registry book to contain specified information (Section II(13)).
  • The order requires preparation of an ATRIG control card for each importer/applicant containing specified information including the ATRIG Control Number and Date of ATRIG (Section II(13)).
  • The order requires submission of a monthly summary report (Annex C) with triplicate copies of issued ATRIGs to the Business Intelligence Division (National Office) on a regular basis (Section II(14)).
  • The order requires that the Business Intelligence Division reconcile the submissions and transmit a monthly summary report of findings, including whether each importation is covered with ATRIG and discrepancies, to concerned BIR offices including the RDO/ETDO and/or the relevant national reconciliation division (Section II(14)).
  • The order requires that the summary report received by the RDO/ETDO or the national reconciliation division become part of their database for audit and monitoring of taxpayers (Section II(14)).
  • The order requires maintenance of an ATRIG form stock balance in a computer file by the accountable officer in lieu of stock cards, containing specified column headings for received, issued, and balance information (Section II(15)).

Supervision, labels, and post-audit review

  • The order requires that requests for BIR strip stamps or labels for alcohol or tobacco products be processed only after the taxpayer-importer submits proofs of excise tax payment on the imported excisable articles covered by the ATRIG (Section II(9)).
  • The order requires that issued ATRIGs are subject anytime to post audit or review by any office authorized by the Commissioner or the Deputy Commissioner for Operations (Section II(17)).
  • The order requires that handling, requisition, loss, damage, cancellation, disposal, inventory, and reporting requirements for the ATRIG form be governed by Revenue Memorandum Order No. 32-98 dated March 5, 1998 (Section II(16)).

Operational procedures by BIR units

  • The order requires the Receiving Officer at the RDO/ETDO to check completeness of the application and supporting documents and to stamp or mark it “RECEIVED” with time/date and the receiving officer’s signature/initials when the application is in order (Section III-A(1) and III-A(4)).
  • The order requires the processing revenue officer to:
    • Check authenticity of supporting documents;
    • Verify whether VAT exemption claims fall within Section 109 of the Tax Code;
    • Verify VAT and excise registration for the importer and require registration before processing if not registered;
    • Verify existence of a required Permit to Import for excise tax purposes before processing;
    • Check existence of subsisting surety bond under Section 160 of the Tax Code for excisable articles;
    • Require samples, literature, certifications, and ocular inspection where doubts exist, and evaluate product information where no laboratory analysis is needed (Section III-A(Revenue Officer Assigned to Process the Application For ATRIG)).
  • The order requires the same processing officer to prepare the ATRIG for approval/signature by the authorized official, and thereafter to forward for final review and signature, then file duplicate copies and supporting documents in sequential order (Section III-A(Revenue Officer Assigned to Process the Application For ATRIG)).
  • The order requires coordination with the importer on exact customs release details (date, time, mode of delivery, and destination) for excise tax ATRIG issuances (Section III-A(Revenue Officer Assigned to Process the Application For ATRIG)(5)).
  • The order requires monthly reporting not later than the tenth (10th) day of the succeeding month to the Business Intelligence Division, together with triplicate copies of issued ATRIGs (Section III-A(Revenue Officer Assigned to Process the Application For ATRIG)(6)).
  • The order requires the Releasing Officer to:
    • Prepare a transmittal letter to BOC for approved ATRIGs for the day and have it signed;
    • Post information on the ATRIG control card and ATRIG Registry Book;
    • Send the transmittal letter and all original copies of approved ATRIGs through a designated revenue officer directly to BOC not later than 12:00 noon of the following day;
    • Prohibit delivery of the original ATRIG copies to BOC through the importer/applicant or broker/representative (Section III-A(Releasing Officer)).
  • The order requires revenue officers designated to supervise release to:
    • Oversee physical release and accompany the shipment until receipt at destination;
    • Obtain proof of excise tax payment in appropriate cases and include it in the ATRIG docket;
    • Check that auxiliary labels/internal revenue stamps are affixed when applicable prior to release;
    • Verify unloading location matches the intended destination, disclosing deviations in the release report;
    • If ROOPs are assigned, prepare and secure acknowledgment of Certificate of Supervision (Annex D); if not assigned, proceed to supervise unloading/inspection and secure acknowledgment from the in-charge person using the same Annex D certificate (Section III-A(Revenue Officer(s) Designated To Supervise Release Of Imported Articles)(1)-(6)).
  • The order requires a written report within two (2) days from unloading to be submitted with the Certificate, and requires proposed assessment of discrepancies no later than the following day after the supervision/inspection (Section III-A(Revenue Officer(s) Designated To Supervise Release Of Imported Articles)(7)).

Legal and laboratory roles

  • The Law Division (National Office) or Legal Division (Regional Office) must receive ATRIG applications requiring legal resolution and must prepare and transmit resolution to the RDO/ETDO within twenty four (24) hours from receipt, when possible (Section III-B(1)-(3)).
  • The BIR Laboratory Section must receive samples from the RDO or take samples directly from shipment in coordination with RDO/ETDO, Bureau of Customs, and the importer/broker, and must conduct laboratory testing to determine correct classification for tax purposes (Section III-C).
  • The BIR Laboratory Section must issue appropriate certification to the RDO as the basis for preparing ATRIG (Section III-C(4)).
  • The Business Intelligence Division must receive monthly summaries with triplicate ATRIGs, conduct review and evaluation, compare ATRIG data with BOC linkages, check correct classification/taxability application by BOC, ensure goods released requiring ATRIGs are duly covered, prepare and transmit reconciliation summaries to appropriate offices, coordinate with BOC on discrepancies, and segregate ATRIG copies by article subject to excise/VAT treatment (Section III-D).

Reconciliation and administrative action

  • The RDO where the importer is required to be registered and/or the national Excise Taxpayers Data Reconciliation & Analysis Division must receive BID summaries, maintain a database for audit and monitoring, and perform appropriate action on the information received, including imposition of administrative penalties for failures to secure ATRIG and misrepresentation in declarations to evade correct taxes (Section III-E(1)-(3)).

Penalties and disciplinary consequences

  • The order requires strict compliance and provides that any violation subjects the violator to disciplinary action to be dealt with accordingly (Section VI).

Transitional organization and repealing rules

  • The order provides transitional processing rules pending implementation of the BIR new organizational structure under Executive Order No. 114.
  • Pending that transition, applications must be processed as follows:
    • RDOs having jurisdiction over the port of entry for ATRIGs on VAT exemptions (Section IV(1)(a));
    • Large Taxpayers Assistance Division II for ATRIGs on excisable articles and specified production inputs/implements by importers required to be registered with Large Taxpayers Service divisions or offices or any district office falling under Revenue Regions Nos. 4 to 9 (Section IV(1)(b)); and
    • Excise Tax Areas (EXTAs) for ATRIGs on excisable articles and specified production inputs/implements by importers under their jurisdictions (Section IV(1)(c)).
  • Pending that transition, approvals must be made as follows:
    • Assistant Commissioner for Large Taxpayers Service for ATRIGs processed by Large Taxpayers Assistance Division II (Section IV(2)(a));
    • Regional Director for ATRIGs processed by RDOs and EXTAs (Section IV(2)(b)).
  • The order assigns transitional monitoring/evaluation/reportorial functions as follows:
    • Audit Information, Tax Exemption and Incentives Division for functions relating to BID procedures and monitoring of ATRIG issuance by Large Taxpayers Service (Excise Tax Group) at the national level (Section IV(3)(a));
    • Field Operations Division for functions relating to monitoring of ATRIG issuance by EXTAs/Revenue Regions for excise tax purposes (Section IV(3)(b)).
  • The repealing clause provides that all inconsistent issuances or portions are repealed and amended accordingly (Section V).

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