BIR Ruling

February 23, 1970 The Revenue Director Revenue Region No. 16 Bureau of Internal Revenue Butuan City S i r : This refers to your telegram dated February 16, 1970 requesting clarification as to whether or not Section 191-A of the Tax Code as embodied in our Memorandum dated January 13, 1970 is enforceable on the ground that the same has been allegedly vetoed pursuant to the text of the veto message published in the November issue of the Philippine Revenue Service and Montejo's Internal Revenue Code. In reply, please be informed that the original provisions of Section 191-A of the Tax Code as inserted by House Bill No. 17839 which later became Republic Act No. 6110, has not been entirely vetoed by the President. Only the proposal to impose a 20% tax on gross receipts of operators or proprietors of restaurants, refreshment parlors, bars, and other eating places which are maintained within the premises or compound of a hotel, motel or resthouse was vetoed on the ground that it might restrain the development of hotels which is essential to the Tourist Industry. Hence, Section 191-A of the Tax Code which is section 37 of Republic Act No. 6110, reads as follows: cdta "(1) On proprietors or operators of restaurants, refreshment parlors and other eating places, including clubs, and caterers, three per cent of their gross receipts; "(2) On proprietors or operators of restaurants, bars, cafes and other eating places, including clubs, where distilled spirits, fermented liquors, or wines are served, three per cent of their gross receipts from sale of food or refreshments and seven per cent of their gross receipts from sale of distilled spirits, fermented liquors or wines. Two sets of commercial invoices or receipts serially numbered in duplicate shall be separately prepared and issued, one for each sale of food or refreshment served and another for each sale of distilled spirits, fermented liquors or wines served, the originals of the invoices or receipts to be issued to the purchaser or customer. "(3) On proprietors or operators of restaurants, refreshment parlors, bars, cafes and other eating places which are maintained within the premises or compound of a cockpit, race track, jai-alai, cabaret, nigh or day club or which are accessible to patrons of such cockpit, race track, jai-alai, cabaret, night or day club by means of a connecting door or passage, twenty per cent of their gross receipts. "Where the establishments enumerated above are operated or maintained by clubs of any kind or nature (irrespective of the disposition of their net income and whether or not they cater exclusively to members or their guests) the keepers of the establishments shall pay the corresponding tax at the rates fixed above." In view thereof, section 191-A of the Tax Code above quoted should be enforced. cdt Very truly yours, MISAEL P. VERA Commissioner of Internal Revenue