BIR Ruling

January 30, 1974 Padilla Law Office 6th Floor, Shurdut Bldg. Muralla, Manila Attention: Atty . S . Padilla , JR . Gentlemen : This refers to your letter dated January 28, 1974 requesting information as to whether or not St. Mary's College of Quezon City is liable for fixed and percentage taxes for the operation of a school canteen. aisa dc St. Mary's College is a non-stock non-profit educational institution incorporated as an instrumentality of a religious congregation, the Religious of the Virgin Mary which also operates missionary schools in Luzon, Visayas and Mindanao. The canteen is located within the school campus and only candies, soft drinks and already prepared foodstuffs are served. Sometimes sandwiches are prepared, but it (we may assume) does not serve cooked food as that served in a restaurant or carinderia. It has several tables for use by the students and teachers whether with their own "baon" or with foodstuffs purchased from the canteen. It is projected that the maintenance of the canteen is of necessity as school hours are morning and afternoon, and there are no eating places within the vicinity of the school. Students, therefore, find it extremely inconvenient to leave the school premises during lunch break. Moreover, students of tender age, for reasons of their safety, are not allowed to leave the school premises during lunch time unless fetched by their parents or some other responsible persons. Very few parents have the time to fetch their children for lunch. Finally, it is represented that the general public is not allowed even only inside the school premises, except occasional visitors and parents or other persons who fetch the school children at dismissal time. In reply, I have the honor to inform you that, under the foregoing facts, it is the opinion of this Office, as it hereby holds, that the School, for operating a canteen, is not engaged in a taxable business. (CIR v. St. Paul's Hospital of Iloilo, G. R. No. L-12127 applied) Accordingly, it cannot be held subject to the fixed and percentage taxes prescribed by Sections 182(A)(1) and 191-A of the Tax Code, nor to the graduated fixed tax prescribed by Section 182 (A) (2) of the same Code. Very truly yours, (SGD.) MISAEL P. VERA Commissioner of Internal Revenue TAN-1601-593-5