BIR Ruling [DA-231-97]

July 7, 1997 BIR RULING [DA-231-97] Director Tamanatao Amerol Revenue Region No. 6 Manila Attention: RDO Jaime Concepcion RD No . 33, Intramuros Manila Dear Director Amerol : This refers to the memorandum of RDO Jaime Concepcion dated June 23, 1997 requesting clarification on the taxability of thirteen (13) Mitsubishi Monteros consigned to different individuals, the ATRIG applications of which are now pending with your Office. aisadc Per BIR Ruling 073-96 which ruled that for purposes of imposing the ad valorem tax (AVT), a "utility vehicle" shall be considered an "automobile" if it is specially designed for the transport of passengers not exceeding nine (9) including the driver and that it conforms with the following area specifications pursuant to Article II, Section 8(a), of R.A. 4136: "a) For each adult passenger, a horizontal rectangular area, including seat and feet space is not less than thirty-five centimeters wide and sixty centimeters long, except in the front seat, which shall allow an area of fifty centimeters wide for the operator. "b) For each half passenger, a horizontal rectangular area, including seat and feet spaces is not less than seventeen and a half centimeters wide by sixty centimeters long provided that each continuous row of seats shall not be allowed to have more than one-half passenger." In the above-mentioned memorandum of RDO Jaime Concepcion, the following findings were disclosed: "1st roll appears to be designed for two persons, one seat for the driver and one for the passenger. It has two head rest. The passenger seat however, measures 52 cm. Each. "2nd row the entire length of the bench has 138 cm. If divided by 35 cm., the minimum seat measurement, the total is 4. "Last row being under contention, has two long benches facing each other with a measurement of 90 cm each. However, the measurement between the ceiling and the floor is only 86 cm. Which means that the ceiling is lower than the ordinary utility vehicle. The width of all the seats mentioned above have a measurement of 35 cm x 60 cm. "Except for the measurement of the ceiling on the third row of the seats, the measurement of the seats are within the measurement allowed by the law for ten seating capacity vehicle. On the issue of the measurement of the height of the ceiling, the contention of the importer is that the Law, is silent on the measurement of the height of the ceiling and therefore, the vehicle is exempt from ad valorem tax." Noting the above findings and since the law applicable on the matter is silent as to whether or not "utility vehicles" fall within the coverage of the term "automobile" as contemplated under Section 149 of the Tax Code, as amended, this Office believes that the Mitsubishi Monteros are not subject to AVT. Accordingly, you are hereby directed to issue the corresponding ATRIGs without imposing ad valorem tax under Section 149 of the Tax Code, as amended. Very truly yours, LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue