Shipments Expected to Receive as a Result of the Barter Transactions

January 6, 1960 BIR RULING NO. 002-60 The Manager Sugar Producers' Cooperative Marketing Association, Inc. 4th Floor, Gonzaga Building M a n i l a S i r : Reference is made to your letter dated January 6, 1960 requesting a ruling from this Office to the effect that the shipments which you are expecting to receive as a result of the barter transactions you have entered into are exempt from either the advance or compensating tax. In reply thereto, I have the honor to inform you as follows: The SPCMA, as an association duly organized under the provisions of Act No. 3425 is exempt from, among others, all kinds of percentage taxes otherwise arising from activities undertaken by it in accordance with said Act, pursuant to section 48 of the Act, as amended by Republic Act No. 702. Under the provisions of Section 6(a) of the Act. SPCMA is empowered, among others, to engage in any activity in connection with the marketing of any agricultural products produced or delivered to it by its members. Such being the case, the marketing of the sugar belonging to its members thru barter constitutes activity undertaken by the Association which is authorized by the law. Necessarily, therefor, the association is exempt from any percentage tax otherwise due on the transaction, pursuant to the aforesaid Act. Accordingly, the SPCMA is exempt from either the advance sales or compensating tax on shipments consigned to it as a result of the barter transactions it entered into. cdta Very truly yours, MELECIO R. DOMINGO Commissioner of Internal Revenue