BIR Ruling

August 4, 1972 Mr. Juanito G. Bag-ao 078 (Trafic) Rizal Street Surigao City S i r : This refers to your letter dated November 22, 1971, to the President of the Philippines requesting information as to whether you can use your Backpay Certificate (No. 33303) in the amount of Eight Thousand Four Hundred Sixty Four Pesos and Eighty Five Centavos (P8,264.85) as payment for taxes on a machine (Farm Tiller) you are planning to purchase from the Agricultural & Industrial Marketing, Inc. (General Motors Corporation). In reply, I have the honor to inform you that backpay certificates may be used in payment only of those taxes which are due from the applicant or original holders thereof. (De Borja vs. Gella, G.R. No. L-18330, July 31, 1963; Republic of the Philippines vs. Antonio Heras, G.R. No. L-26742, April 30, 1970). This Office does not see its way clear as to how you can be held liable for the payment of any tax on your purchase of the farm machine from the Agricultural & Industrial Marketing, Inc. The sales tax due from the machine is the direct liability of the manufacturer-seller and not the purchaser thereof. In view thereof, your query is answered in the negative. Very truly yours, MISAEL P. VERA Commissioner of Internal Revenue