BIR Ruling

August 13, 1969 Theo H. Davies & Co., Far East, Ltd. 222 Buendia Avenue Makati, Rizal Attention: Mr . Jesus P . Lukban Special Assistant to the Treasurer Gentlemen : This refers to your letter dated July 17, 1969 stating the following: "We are a regular importer of lubricating oil subject to specific tax. In all our importations, the specific taxes are computed and prepaid up to the last centavo before effecting the release thereof from Customs custody. "Under Section 156 of the Tax Code, it is required that manufacturers and importers of articles subject to specific tax shall give a bond, conditioned upon the faithful compliance with the law and regulations relating to such business and for the satisfaction of all fines and penalties imposed by the Code. "We deduce from the provision of the Code that the requirement of posting a bond is only applicable to cases where withdrawal of articles subject to specific tax is made without prepayment of specific taxes due as in the cases of advance sales to the Armed Forces and other tax-exempt agencies and does not apply where specific taxes are prepaid and computed based on the quantity withdrawn from Customs custody. "In view therefore of these requirements, we would request for confirmation that the filing of importer's bond on the importation by Theo H. Davies of lubricating oil subject to specific tax is dispensed with as the specific tax due thereon is prepaid and computed accordingly." In reply, I have the honor to inform you that it appearing that you pay the specific tax due on your importations of lubricating oil before the release thereof from customs custody; and that you are not maintaining a bonded warehouse where your importations of articles subject to specific taxes are stored before actual payment of the taxes thereon, the filing of an importer's bond on your importations of lubricating oil as required in Section 156 of the Tax Code may be dispensed with. Very truly yours, (SGD.) MISAEL P. VERA Commissioner of Internal Revenue