REVENUE MEMORANDUM ORDER NO. 30-2016 issued on June 28, 2016 prescribes the guidelines, policies and procedures for the replacement of spoiled/Bad Order (BO) and Factory Defected (FD) internal revenue stamps under the Internal Revenue Stamps Integrated System (IRSIS). Pursuant to Section 8 of Revenue Regulations No. 7-2014, internal revenue stamps already in the possession of the local manufacturer of cigarettes that became spoiled, were damaged or rendered unfit for affixture to the cigarette products or found to be BOs shall be surrendered to the BIR within fifteen (15) calendar days immediately after end of the month of production but not later than three (3) months from the date of release by APO Production Inc. In the case of spoiled stamps and BOs in the possession of importers, the same shall be surrendered to the BIR within five (5) months immediately after receipt thereof from APO; Provided that the importer shall report the same in accordance with the provisions of Section 10 of said Regulations. The replacement of spoiled stamps shall be allowed only upon approval by the BIR using the online facility of IRSIS, with the corresponding payment of the price prevailing at the time when the spoiled stamps were originally ordered. The replacement of spoiled/BO/FD stamps shall only be done using the ordering module of the IRSIS after crediting back the equivalent Excise Tax amount to the ledger of the local cigarette manufacturer/importer. The crediting back of the amount of Excise Tax requires a validation process to ensure the existence and authenticity of the internal revenue stamps; accuracy of the number of stamps declared as spoiled stamps; and correctness of the corresponding Excise Taxes to be credited back in the IRSIS. In order to validate the existence and authenticity of the above-cited stamps, including the determination whether the same are spoiled or BO stamps, physical verification and inspection shall be done simultaneously by the Revenue Officers On-Premise assigned at the production plant of concerned manufacturer/importer, together with APO Production Inc.’s authorized representative, responsible in assessing the technical features of the stamps and to be witnessed by the Company’s authorized representative. No replacement shall be allowed under the following instances: a. Failure by the importer or manufacturer of cigarettes to surrender spoiled stamp or BO subject of replacement request; b. Unaccounted internal revenue stamps, except in cases of losses due to force majeure or other fortuitous events beyond the control of man; c. Spoiled internal revenue stamps surrendered to BIR that do not bear their respective Unique Identifier Code (UIC) or Quick Reference (QR) Codes; and d. Spoiled internal revenue stamps surrendered to BIR containing their respective UIC or QR Codes but no longer verifiable by the mobile device. The processing of request for replacement shall proceed after submission of the required request and returned stamps, provided the reporting requirements under IRSIS for affixed stamp of the previous quarter shall have been complied with. Wrong order stamps or duly approved ordered stamps printed by APO but not yet physically released to the manufacturer/importer due to the latter’s admission of mistake/error in ordering shall be treated as spoiled stamps for purposes of replacement. However, the necessary documentation for its deemed release will still be executed in the regular manner in the IRSIS. The spoiled/BO/FD stamps shall be stored by APO Production Unit, Inc. at their LIMA Plant, in such a manner that said stamps are properly identified and secured safely in their designated depository or warehouse, for disposal in accordance with the existing COA rules and regulations.