LESSON2: APPLICATION OF FORMULAS AND RATES IN THE

IMPOSITION OF EXCISE TAXES ON ALCOHOL PRODUCTS,

TOBACCO PRODUCTS AND OTHER MATERIALS SUBJECT TO
EXCISE TAXES
 ALCOHOL PRODUCTS: Distilled Spirits
1. One bottle of whisky with a volume capacity of 750 ml,
alcohol content of 42% and NRP of Php 750.00. Compute
for the excise tax.

•= .75 ltr x 1 btl = Php 750 x .84 proof

•= .75 gl x .84 (42 x 2 / 100) = 630 x 22%
•= .63 pl x Php 59 = Php 138.60 AVT
•= Php 37.17 ST
•
•
•= Php 37.17 ST + Php 138.60 AVT
•= Php 175.77 EXC
•OR when using the revised shortcut formula:
•
•= .63 pl ( [ Php 1000 x .22 ] ) + Php 59 Solution : ( NRP/
GL)
•= .63 pl ( Php 220.00 Php) + Php 59 Php 750_ = 1 x 1000ml
•= .63 pl ( Php 279 ) 750 ml
•= Php 175.77 = Php 1,000/
ltr
2) XYZ Wines and Spirits Corp. imported 150 Cases of
Fundador Brandy containing 12 bottles in each
case. Volume Capacity is 1.5 Ltr. , Alcohol content is by 48%
and NRP of Php 265.00/ btl. How much is the
excise tax?
•= 1.5 ltr x 1,800 btls ( 150 case x 12 btls) = Php 265.00 x 1,800 btls
•= 2,700 gl x .96 ( 48 x 2/ 100 ) = Php 477,000 x .96 prf
•= 2592 pl x Php 59 = Php 457, 920 x .22
•= Php 152,928 ST = Php 100,742.40 AVT

•= Php 152,928 + Php 100,742.40 AVT

•= Php 253,670.40 Excise Tax
3) If Eduardo Ginaut, an importer of alcohol products imported 350
cases of Johnny Walker Whisky (6 btls/case) having a Net retail price of
PHp 750/ btl, with 1000ml volume capacity and 42% Alcohol Content,
what will be the excise tax for the said importation?
• = 1 ltr x 2,100 btls ( 350 case x 6 btls) = Php 750.00 x 2,100 btls
• = 2,100 gl x .84 ( 42 x 2/ 100 ) = Php 1,575,000 x .84 proof
• = 1,764 pl x Php 59 = Php 1, 323,000 x .22
• = Php 104, 076 ST = Php 291,060 AVT

•
= Php 104,076 + Php 291,060 AVT
• = Php 395,136 ET
4) CBA Corp. imported 2400 bottles of Tall Brand Whiskey with
volume capacity of 330 ml bottle, 40% alcohol content, and net retail
price of Php30.00 per bottle. Compute total excise tax, VAT included.

•= .33 ltr x 2,400 btls = Php 30.00 x 2,400 btls

•= 792 gl x .80 ( 40 x 2/ 100 ) = Php 72,000 x .80 proof
•= 633.6 pl x Php59 = Php 57, 600 x .22
•= Php 37,382.40 ST = Php 12,672 AVT
•
•
•= Php 37,382 + Php 12,672 AVT
•= Php 50,054 x 1.12 VAT
•= Php 56,060.48 Excise Tax w/ VAT
• 5) Jessie Wine Store imported 260 ctns of Romy Martin brandy,
each ctn contains 12 bottles of 2 ltr VC, 86 proof of Alcohol
Content, NRP of Php 150/btl. How much is the Excise tax?

•= 2 ltr x 3,120 btls(260ctns x 12btls) = Php 150.00 x 3,120 btls

•= 6,240 gl x .86 = Php 468,000 x .86 proof
•= 5,366.40 pl x Php 59 = Php 402,480 x .22
•= Php 316,617.60 ST = Php 88,545.60 AVT
•
•
•= Php 316,617.60 + Php 88,545.60 AVT
•= Php 405,163.20 Excise Tax
•
OR when using the revised shortcut formula:
•
•= 5,366.40 pl ( [ Php 75.00 x .22 ] ) + Php 25.31 Solution: ( NRP/GL)
•= 5,366.40 pl ( Php 16.50) + Php 59 _Php 150_ = 0.075 x 1000
•= 5,366.40 pl ( Php 75.50) 2000ml
•= Php 405,163.20 Excise Tax = Php 75.00/ ltr
•BASIS AND DERIVATION (Backward Computation):
‘
a) _Specific Tax_ = Proof liter e) _Specific Tax_ = Specific Tax Rate
STR Proof Liter

b) _Proof Liter_ = proof of AC f) _Proof of AC_ = Gauge Liter

Gauge Liter 2

c) _Proof Liter_ = Gauge liter g) _Gauge Liter_ = # of bottles

Proof of AC No. of liter

d) _Gauge Liter_ = # of liters

No. of bottles
1. If the total specific tax paid for the importation of Jhonny Walker
whisky amounted to Php 631, 955.22, how many bottles were
imported if each bottle has a VC of 750 ml at 86 proof and NRP
of Php 626/btl?

= ST Php 631,955.22 / Php 59.00 STR

= 10,711.11 PL / .86 proof
= 12,454.77 GL / .75 ltr
= 16,606 btls
FORMULA: Straight Compu

= # Ltrs x # bottles
= GL x proof of AC
= PL x STR ( Php59)
= ST
2. Century Park Hotel imported from Spain 4,200 bottles of Fundador
brandy and paid specific tax amounting to Php 868, 734.72. Each bottle is
rated at 76 proof and with a NRP of Php 562.50/btl. What is the VC in ml
per bottle?

= ST Php 868,734.72 / Php 59 STR

= 14,724.32 PL / .76 proof
= 19,374.10 GL / 4,200 btls.
= 4.6 ltrs x 1000ml
= 4,612.88 ml
FORMULA: Straight Compu

= # Ltrs x # bottles
= GL x proof of AC
= PL x STR ( Php59)
= ST
3.La Serbesa imported 200 cases of Chivas Regal w/c costs
$5.00/ btl w/ AC of 72 proof on NRP of Php 201.05. Packing List
shows that each bottle has a VC of 750 ml. What is the total # of
bottles if the Specific tax paid is Php 120,000?

= Php 120,000 ST / Php STR

= 2,033.90 PL / .72 proof
= 2,824.86 GL / .75 ltr
= 3,767 btls
FORMULA: Straight Compu

= # Ltrs x # bottles
= GL x proof of AC
= PL x STR ( Php59)
= ST
4) A shipment of Makati Wine Cellar Inc. consisting of 4,200
bottles of Fundador Brandy paid excise tax in the amount of Php
31, 920.00. Each bottle has a volume capacity of 1 ltr. Compute
the degree of strength in proof if the NRP per bottle is Php 750.00

= Php 31, 920.00 ST / Php 59 STR

= 541.02 PL / 4,200 GL
= .13 proof
FORMULA: Straight Compu

= # Ltrs x # bottles
= GL x proof of AC
= PL x STR ( Php59)
= ST
 ALCOHOL PRODUCTS: FERMENTED LIQUOR
1) Given: 10 bottles of beer with volume capacity of 750 ml and NRP of
Php 25.00 per bottle. Compute the excise tax of the beer.

= .75 ltr x 10 bottles

= 7.5 GL x Php 41
= Php 307.50
2) The Pavilion imported 1,200 cases of Heineken Flavored beer in
bottles, each bottle had a VC of 1 Ltr and each case contains 6 bottle with 5
% AC by volume. The NRP is Php 25.00/ btl. Compute the Excise tax.

= 1 ltr x 7,200 bottles ( 1,200 x 6 bottles)

= 7,200 GL x Php 41
= Php 295,200
3) An importation of Perlas ng Silangan Hotel consist of 300
Cases of Beer, each case contains 24 bottles at 350 ml. If the NRP
is Php 35 in 350 ml, how much is the excise tax?

= .35 ltr x 7,200 bottles

= 2520 GL x Php 41
= Php 103,320
4) Jessie Wine store imported 350 cartons of Corona Light Beer ,each
carton contain 10 bottles of 750 ml VC, NRP per bottle is Php 25.00 ( Php
6.15 VAT included).Compute the Excise tax.

= .75 ltr x 3,500 bottles

= 2625 GL x Php 41
= Php 107,625
 5) La Vida Distillery Inc. decided to increase its inventory of stocks in
anticipation of more demands this coming Yuletide Season. He
contracted his supplier from Georgia and placed an order for the
importation of 1,000 boxes of Largerlite beer (48 bottles/ box), 8%
alcohol content at NRP of Php 20.00 per 235 ml at $ 48,000.00. Compute
for the excise tax of said beer.

= .235 ltr x 48,000 bottles

= 11,280 GL x Php 41
= Php 462,480
Example Computation on FREMENTED LIQUOR (Backward Computation):

1) Perlas ng Silangan imported 500 cases Corona Beer in cans with volume capacit
of 330 ml/can and NRP of Php 22.50 /ltr. If the total excise tax paid amounted t
Php 34,927.20 , what is the total number of cans?

= ET Php 34,927.20 / Php 41

= 851.88 GL / .33 ltr
= 2,582 cans
 2) Perlas ng Silangan imported 160 cases of Corona beer in cans
with volume capacity of 750 ml/can and NRP of Php 40.00/ can. If the
total excise tax paid amounted to Php 40,320. What is the total number
of cans per case?

= Php 40,320 / Php 41

= 983.42 GL / .75 ltr
= 1,311 cans / 160 cases
= 8 cans/case
3) If the amount of Php 64, 666.80 was paid as excise tax for
the importation of beer with NRP of Php 22.50 per liter and in 24
bottles per case at 330 ml. What is the total volume in liters for the
total importation?

=Php 64,666.80 / Php 41

= 1,577.24 GL
4) Roma Cons imported 250 cases of corona beer in 330 ml cans paid
excise tax amounting to Php 32,333.40 based on the NRP of 22.50 per
liter. What is the total number of cans?

= Php 32,333.40 / Php 41

= 788.62GL / .33 ltrs
= 2,390 cans
 ALCOHOL PRODUCTS: WINES

1) Given: Carbonated Wines, AC: 15%, VC: 1 liter, NRP:

P200.00, GL: 420 li

Compute: ET

Solution: = 420 GL x P60 / li

ET = P25,200
2) ZZ Wines imported 500 (750 ml) bottles of champagne
had a net retail price of Php600.00/btl.
How much is the excise tax to be paid (net of VAT)

Solution: ET = .75ltr x 500 bottles

= 375 GL x Php60

= Php22,500
 Importation
)3) of following data: Smooth Champagne,
NRPPhp600.00 per liter, NOB 12000
VC750 ml per bottle. Compute the total excise tax with VAT
Solution: ET =.75 ltr x 12,000 btls
= 9000 GL x Php60

= Php 540,000 x 1.12

ET = Php 604,800 (with
VAT)
 Example Computation on WINES (Backward Computation):

1) Given: Red Wine, GL: 1,350 li, %AC:12%, VC:750ml / btl, NOB12 btls / case
Compute the Number of cases

Solution: NOC = 1,350 GL

.75 ltr
= 1,800 btls
12 btls

= 150 cases
2) Given: Sparkling Wine, NRP: P600.00 per liter, ET:P56,250.00, VC: 750 ml
Compute the Number of Bottles

Solution: = ET P56,250/ P60

= 937.5 GL/ .75 ltr
= 1,250 bottles
TOBACCO PRODUCTS: Chewing
Tobacco
Ching Bee trading imported 1x40FCL STC: 180 bales of tobacco specially
made for chewing tobacco. If 1 bale weighs 275.575 pounds, determine the
amount of excise tax imported for chewing tobacco.

Solution: ET = (180 bales)(275.575lbs)(0.4536kg)(Php2.22/kg)

bale lb
ET = Php49,950.33

Chewing Tobacco, STR = Php2.22/kg

TOBACCO PRODUCTS: Tobacco twisted
by Hand
Batangas Cooperative will release from Customs custody 250 bales
of tobacco twisted by hand. If each bale weighs 165 pounds , how
much is the total excise tax, net of VAT, due for this shipment?
Solution: ET = (250 bales)(165lbs)(0.4536kg)(Php2.60/kg)
bale lb
ET = Php48,646.60
TOBACCO PRODUCTS: Cigars
Tabacalera Bicolandi, Inc. imported 175 boxes of Cobana Cigars from Cuba. Each box
contains 50 Cigars with each Cigar having a net retail price of Php550.00. How much is the
total excise tax due for this shipment, inclusive of VAT?

Solution: a) NOCigars = (NOBoxes)(NOCigars/box)

NOCigars = (175 boxes)(50 cigars/box) = 8,750 cigars
ET = NOC (0.2 NRP + P7.39)
= (8,750 cigars)(0.2 x Php550.00
+ Php7.39)
= Php1,027,162.50 x 1.12
ET w/VAT = Php1,150,422.00
AVT= NRP/cigar Php 550 x .20
= Php 110 x 8,750 cigars
= Php962,500

ST = Php 6.84 x 8,750 cigars

= Php 59, 850

ST + AVT = ET
Php 59, 850 + Php 962, 500
Php1,022,350 x 1.12
= ET w/VAT = Php1,145,032.00
TOBACCO PRODUCTS: Cigarettes
packed by Hand
Cigarettes packed by hand =NOSticks: 400,000
Find: ET with VAT

Solution: ET w/VAT = (NOPacks)(STRate/pack)(VAT Rate)

ET w/VAT = (20,000 packs)(Php37.96/pack)(1.12)
ET w/VAT = Php850,030.40

Regardless if its packed by hand or by machine, the same rate applies

MINERAL PRODUCTS; PETROLEUM
PRODUCTS; NON-ESSENTIAL GOODS
Marubeni Corporation imported 45,000,000 pounds of coal in bulk from Indonesia. Total
FOB value was $150,000.00 while total ocean freight amounted to $10,000.00. How much is
the total excise tax, inclusive of VAT?

Solution:
MT = 45,000,000 lbs x 0.4536 kg / lb x 1 MT / 1,000 kg = 20,412.00 MT
ET = P10.00 / MT x 20,412 MT x 1.12 =
P228,614.40
DMCI imported several drums of asphalt from the Middle East with each drum having a
2.
gross weight of 1,050 pounds and net weight of 1,000 pounds and dutiable value of
P20.00 per kg. If the total specific tax paid was P159, 320.00 inclusive of VAT, determine
the total number of drums imported.

Solution:
ET = P159,320.00 / 1.12 = P142,250.00 net of VAT
KG = P142,250.00 / P10/kg = 14,225 kg/.4536 = 31,360.23lbs/1000 lbs
per drum

= 31 Drums