BIR Ruling

August 29, 1967 Miss Josefina B. Enrile #3 Samat Street Quezon City M a d a m : This refers to your letter dated May 10, 1967 stating the following: cdt "We are planning to engage in the business of buying and selling of fish. In this venture, we are anticipating a constant increase in the volume of transactions. To date, we are still studying requirements which we have to comply with the Bureau of Internal Revenue Regulations. In the course of our study, we found out that we will encounter difficulty proving the cost of our sales since we are going to buy a major portion of the fish from market vendors. We are, therefore, endorsing this problem to your good office for clarification. "In our proposed business, we are going to act as middlemen between the supplier and the end consumer. We have started canvassing different prices of various kinds of fish and during this time we have observed that nobody among the vendors issue sales invoices or anything of the kind. We tried and finally got one but the effort and the time wasted getting it is not compensating. "We all know, that all persons subject to tax are also required to issue sales invoices or receipt, however, we have come to know the exemptions, just recently. Section 204 of the Bureau of Internal Revenue Code provides that all persons subject to tax shall, from each sale or transfer of merchandise or for services rendered valued for P2.00 or more, prepare and issue sales or commercial invoices serially numbered in duplicate etc., Paragraph 2 of said section provides the exemptions and we quote hereunder. cdta "The Collector of Internal Revenue, in meritorious cases, exempt any person subject to an internal revenue tax, from compliance with the provisions of this section. In any event, public market vendors selling exclusively domestic meat, fruits vegetables game, poultry, fish and other domestic food products are hereby exempted from the provisions of this section." "As we have said, a substantial amount of our stocks shall be purchased from market vendors. How can we justify then, the cost of our sales if there is no receipt issued us by these vendors? May we be exempted from issuing sales invoices, also? . . .". In reply, I have the honor to inform you as follows: The fact that the market vendors from whom you purchase the fish that you resell are exempt from the requirement of issuance of sales invoices does not relieve you from the keeping of the corresponding book of account where purchases are recorded. At any rate, as provided for by Section 14 of the Bookkeeping Regulations, you can always require the market vendors to sign a purchase voucher showing the date, quantity and the description of the articles purchased, the consideration paid therefor, the name and address of the vendor, and the number, date and place of issue of his residence certificate. LLpr As a fish dealer, you shall be subject to all the rules as regards the issuance of sales invoices and the keeping of books of account. Very truly yours, (SGD.) MISAEL P. VERA Commissioner of Internal Revenue