BIR Ruling

July 17, 1972 Messrs. Picazo, Agcaoili, Santayana, Reyes & Tayao Attorneys-at-Law 6th Floor Padilla de los Reyes Bldg. 252 Juan Luna Street Manila Attention: Mr . Salomon F . Reyes Gentlemen : This refers to your letter dated July 12, 1972 requesting exemption from the payment of compensating tax due on one U.S. air parcel, consisting of twelve phonograph records of the dramatico-musical compositions constituting the Rock Opera-JESUS CHRIST SUPERSTAR, which was forwarded to you by the Universal City Studios, Inc. of California, U.S.A. in behalf of your client, Leeds Music Limited, for copyright registration with the Copyright Office of the National Library. It is represented that the aforesaid records will not be used nor resold in the Philippines but are to be filed and deposited with the National Library for copyright registration and that the same shall become and remain the property of the Philippine Government by virtue of the provisions of Act No. 3134, as amended, otherwise known as the Philippine Copyright Law. In reply thereto, I have the honor to inform you that compensating tax is also known as the "use tax" since it is a tax on the use of commodities or articles purchased or received from abroad. (Collector of Internal Revenue vs. Marcelino T. Veduya, G.R. No. L-10808, February 28, 1958). Accordingly, under the foregoing facts, the records in question are not subject to compensating tax. This will authorize the Commissioner of Customs to release the above importation free from the payment of the compensating tax. Very truly yours, CONRADO P. DIAZ Acting Commissioner of Internal Revenue