BIR Ruling

February 26, 1974 Mr. Florentino M. Morales Certified Public Accountant Rm. 206-208 Wellington & Ty Bros., Inc. 870 Tabora St., Manila S i r : This refers to your letter dated January 29, 1974 requesting the issuance of the necessary guidelines for the following cases: aisa dc " CASE I A manufacturer (needle craft) of men's and womens' wear manufacture his products in one of the town of Bulacan, where he obtained the necessary taxes (C-14) and licenses as a manufacturer. While the production takes place in Bulacan, the sole outlet of his products is at Baclaran Market, Paraaque, Rizal. The sales invoice being used bears the business name as the heading and on the left hand top corner is the factory address while on the right hand top corner is the sole sales outlet which is Baclaran, Paraaque, Rizal. " QUESTION : 1) Can the B.I.R. at Paraaque force the owner to secure C-13 when in fact C-14 is enough? That's C-14 at Bulacan and another C-14 at Paraaque. 2) Will he still be obliged to maintain a columnar and ledger separate from the columnar and ledger at Bulacan? We think sales Journal Book will do at Baclaran. 3) In relation to question number 1, suppose he is a NACIDA member, can he still be obliged to secure B.I.R. tax at Paraaque? For example, C-13 or C-14? 4) Was there no violation in using the said sales invoice with such heading? If not, what is the correct procedure? " CASE II In relation to case I, the subject manufacturer sells another goods besides his own products. That's why he secured a C-13 and C-14 at Baclaran. But sales out of items not manufactured by him will only be the one to be declared as C-13 receipts. Furthermore, a new set of sales invoice was printed to take care the sales of C-13 products. " QUESTIONS : 1) Will this be sustained? 2) Suppose the sales invoice is still in the process of printing, can be use any form of paper to serve as sales invoice properly compiled which will be transferred to official invoice upon completion? If not, what should be done? CASE III A person buys merchandise worth FIVE THOUSAND PESOS (P5,000.00) for his employees use or in other words this is a case of direct consumption or end user. When the owner inquire for his Class "A" to be reflected in the sales invoice, she says she forgot to bring along. " QUESTIONS : 1) What is the alternative of the owner? 2) Suppose it is not Class "A" but C-13 is lacking, what should be done?" In reply, I have the honor to inform you as follows: CASE No. I (1) Considering that the branch store in Baclaran, Paraaque is the outlet of the manufacturer of his manufactured products, he is not required to secure a C-13 privilege tax receipt. His C-14 in Bulacan the place of manufacture and C-14 in Baclaran, the place of sale are sufficient. (2) Under the foregoing circumstances, the Baclaran establishment need not maintain a columnar and ledger separate from the columnar and ledger maintained in Bulacan. The sales journal book is sufficient for the Baclaran establishment. (3) If the manufacturer is a NACIDA registered member, then he is exempt from the payment of the privilege tax receipt (C-14). (4) The sales invoice which bears the business name as the heading and on the left hand top corner is the factory address while on the right hand top corner is the sales outlet which is Baclaran, Paraaque, Rizal, has not violated any provision of Revenue Regulations No. V-I, otherwise known as the Bookkeeping Regulations, provided that the sales invoice was duly registered to this Bureau prior to the use thereof. CASE NO. II (1) If the manufacturer as mentioned in Case No. I above, sells items not manufactured by him, then he is required to secure a C-13 privilege tax receipt, the initial amount of which is P10.00; thereafter, the amount of the tax will depend upon the amount of gross sales made on the items not manufactured by him during the preceding calendar year. (2) In case the sales invoices are still in the process of printing, a manufacturer cannot use any other form of paper to serve as sales invoice. Revenue Regulations No. V-1 does not provide for a substitute to the regular printed invoice. CASE No. III (1) Section 15 of Revenue Regulations No. V-1 provides, among other, that in case of sale or transfer in the amount of P50.00 or more, the invoice shall also show the name, or style, if any, and business address of the purchaser, and the number, date, and place of issue of his residence certificate. A person, therefore, who buys merchandise worth P5,000.00 is required to present his residence certificate to the seller so that proper annotation of the number, date and place of issue of his residence certificate can be made to the invoice. There is no other alternative for the seller to do under the circumstances. (2) The C-13 privilege tax receipt of a purchaser is not required to be presented to the seller regardless of the amount of purchases. acd Very truly yours, (SGD.) MISAEL P. VERA Commissioner of Internal Revenue TAN-1601-593-5 "TAXPAYERS SHOULD INDICATE THEIR TAN IN ALL COMMUNICATIONS TO THE BIR.