BIR Ruling

August 17, 1971 Lianga Bay Logging Company, Inc. P. O. Box 1230 Manila Attention: Mr . William M . Sheridan Vice-President & Controller Gentlemen : This refers to your letter dated October 13, 1970 requesting information on the legality of depositing in advance "Certified Checks" in lieu of the bond so required under Section 273 of the Tax Code. Under this provision, forest charges are payable at the time of removal of the products from the forest. However, such products may be removed from the forest without the prepayment of the forest charges provided that a bond is filed conditioned upon the payment thereof after removal. In reply, I have the honor to inform you that depositing in advance "Certified Checks" in lieu of the bond may be allowed considering that the same guarantee sure payment upon demand of the forest charges at the point of destination or at such time as the Commissioner of Internal Revenue may direct. Since the law requires the execution of a bond satisfactory to the Commissioner before a concessionaire is permitted to make any shipment without prior payment of the charges, necessarily, such deposit in advance of "certified checks" in lieu of the bond, requires also prior approval of the Commissioner. For failure to procure such prior approval required by law, the concessionaire shall be liable for the payment of charges. (Sections 12 and 13, Regulations No. 85). cdi Very truly yours, MISAEL P. VERA Commissioner of Internal Revenue