Law Summary
Coordination Between SRA and BIR
- The Sugar Regulatory Administration (SRA) provides BIR with test results showing the polarimeter and color readings within 15 days from the end of each calendar month to verify product compliance.
- Revenue district and regional BIR offices accept sugar mill analysis as initial compliance verification.
Verification and Post-Audit Procedures
- SRA conducts its own laboratory analysis to verify the sugar mill’s results.
- If SRA's analysis contradicts the mill’s results, the mill’s sugar production for the sampled week will be subject to VAT upon BIR post-audit.
Legal Authority and Rulemaking
- SRA is empowered under Executive Order No. 18 to issue rules on the withdrawal of sugar from warehouses.
Sampling and Testing Procedures
- Sugar mills must take composite samples of their weekly production throughout operations.
- Mills conduct lab analyses on the samples and send part to SRA for independent testing.
- Sampling and analysis procedures follow SRA Memorandum Circular Nos. 6 and 6a.
Labeling and Tax Implications Based on Mill Analysis
- If mill analysis confirms raw cane sugar parameters, the corresponding production quedans are stamped or printed "Raw Cane Sugar."
- These quedans represent raw cane sugar exempt from VAT or Percentage Tax upon withdrawal.
- If the sugar does not meet the raw cane sugar parameters, the quedans remain unstamped and the sugar is subject to VAT or Percentage Tax.
Documentation and Reporting Obligations
- Mills must submit original lab analysis results and sugar samples to SRA.
- SRA provides the BIR Assistant Commissioner for Large Taxpayers Service and relevant BIR offices, plus the mill’s Resident Manager, with results of both SRA and mill analyses.
- Mills must provide SRA with names and addresses of BIR officers in their jurisdiction.
Effectivity and Consistency
- This order modifies or revokes any conflicting sugar orders, circulars, or rules.
- It takes effect immediately upon issuance.
Administrative and Publication Requirements
- A copy of the order shall be filed with the National Administrative Registrar at the UP Law Center.
- The order shall also be posted on the SRA website for public accessibility.