BIR Ruling

January 22, 1969 Philippine National Railways P. O. Box 448 Manila Attention: Mr . Delfin E . Reyes Asst . Traffic Manager Gentlemen : This refers to your letter dated January 13, 1969 stating as follows: cdta "In connection with your Revenue Memorandum Circular No. 43-68, publishing Republic Act No. 5448, prescribing the collection of "Science Stamp Tax" or collection of additional stamp taxes imposed under Sections 211 to 235 of the Tax Code, may we know if shipments freight or express of any goods, merchandise or effects shipped or tendered for shipment from one railroad station to another, the owner or shipper will be required to pay additional stamp tax. "The goods referred to herein-above are those goods not accompanied by passengers." In reply, I have the honor to quote, for ready reference, the pertinent portion of Section 4 of Republic Act No. 5448, as follows: "Sec. 4. Imposition of additional stamp taxes . . . . " Provided , however , That no science tax shall be imposed on freight tickets covering goods, merchandise, or effects carried as accompanied baggage of passengers on land and water carriers primarily engaged in the transportation of passenger." From the foregoing provision, it can be seen that there are two requisites for the non-imposition of the science tax and these are (1) that the goods, merchandise or effects shipped on a carrier are accompanied by the owner or shipper thereof and (2) that the carrier of the goods, merchandise or effects is primarily engaged in the transportation of passengers. Considering that the PNR uses two types of traits for transportation, one for freight and the other for passengers, there is no doubt that in the former the freight tickets covering goods, merchandise or effects shipped thereon even if accompanied are subject to the science tax. In the latter case, the goods, merchandise or effects accompanied by the owner or shipper thereof are not subject to the science tax but those which are unaccompanied are subject. casia Very truly yours, (SGD.) MISAEL P. VERA Commissioner of Internal Revenue