BIR Ruling

August 20, 1976 The Honorable Undersecretary Department of Local Government and Community Development Quezon City S i r : This refers to your letter addressed to the Commissioner of the Land Transportation Commission dated May 6, 1976 requesting exemption in behalf of the League of Transport Cooperatives, Inc., a federation of Transport Service Association organized and registered under Presidential Decree No. 175 from the payment of the 2% common carrier's tax imposed under Section 192 of the Tax Code. In reply, I have the honor to inform you that under Section 5 of Presidential Decree No. 175, cooperatives registered with the Department of Local Government and Community Development are exempt from the payment of income and sales tax. In this connection, the sales tax to which a cooperative is exempt includes only the manufacturer's or producer's sales tax prescribed by Sections 184, 184-A, 185, 185-A, 185-B, 186, 186-B and 189, all of the Tax Code. The exemption, therefore, does not include the percentage taxes imposed under Section 192 of the same Tax Code which are taxes on the sale of service of transportation. Accordingly, the League of Transport Cooperatives, Inc. is subject to the 2% tax prescribed in Section 192 of the Tax Code. Very truly yours, EFREN I. PLANA Acting Commissioner of Internal Revenue TAN-1456-040-3