Japan: Court dismisses Sapporo Breweries’ tax refund request

A Japanese court dismissed on February 6 a lawsuit filed by Sapporo Breweries Ltd. demanding a liquor tax refund of 11.5 billion yen ($105 million) paid for a beer-like alcoholic beverage, The Mainichi reported.

Sapporo Breweries began selling Goku Zero in June 2013 as a "third-category" beer-like beverage with a lower liquor tax rate than regular beer and happoshu low-malt beer. It suspended shipments the following year because tax authorities said the beverage might fall under another category.

Sapporo Breweries changed its production process and resumed sales of Goku Zero as a happoshu beer in July 2014. The company later sought the return of 11.5 billion yen paid in additional liquor tax after determining the original product was in fact a third-category beer.

On February 6, the Tokyo District Court concluded that Goku Zero cannot be categorized as a third-category beer after studying data on its manufacturing process.

The court did not disclose which data its ruling is based on, at the request of Sapporo as the company fears its trade secrets may be leaked.

The court's decision well reflected the government's view, the National Tax Agency said, while Sapporo said it will examine the ruling before deciding how to respond.

Brewers in Japan have been vying to develop third-category beers given the reduced tax rate that enables them to offer lower prices to consumers. Third-category beers include beverages that use alternatives to malt, such as soy or pea protein.

The tax rates for beer and beer-like drinks are set to be unified in stages by 2026, with beer to be taxed less and happoshu and third-category beers to be taxed more.

03 February, 2019