Applicable Rate of Tax on Certain Importations in View of the Passage of EO No. 273

January 12, 1988 BIR RULING NO. 003-88 99 24-86 003-88 S i r : This refers to your request for information as to the applicable rate of tax on certain importations in view of the passage of Executive Order No. 273 which took effect January 1, 1988. In reply, please be informed that importation begins when the carrying vessel or aircraft enters the jurisdiction of the Philippines with intention to unload therein. Importation is deemed terminated upon payment of the duties, taxes and other charges due upon the articles, or secured to be paid, at a port of entry and the legal permit for withdrawal shall have been granted. (Sec. 1202 Tariff and Customs Code) "As it is in the will of the importer or the owner of the imported goods to choose the moment for making payment of the internal revenue tax from its arrival at the port of Manila until immediately before its withdrawal from the Customhouse, the law in force when the payment is made is the one that should prevail, for human voluntary acts are governed by the laws in force at the time of their performance, unless there is a legal provision to the contrary ." (emphasis supplied, Luzon Brokerage Co., Inc. vs. Posadas, 51 Phil. 305). Thus, it is clear from then Section 204 of the Tax Code that compensating tax is to be computed as of the date of withdrawal or removal of the goods from the customhouse; hence, the rate of tax prevailing on such date has perforce to be applied . (F.F. Hamlin vs. Collector, G.R. No. L-12991, Dec. 23, 1953 cited in BIR Ruling No. 24-86 dated March 24, 1986) On the other hand, pursuant to Section 7(b) of Revenue Regulations No. 5-87 implementing Section 101 of the Tax Code as amended by E.O. No. 273, the rates prescribed under Section 101 shall be applicable to all importations entered or withdrawn on or after January 1, 1988, in accordance with the Tariff and Customs Code of the Philippines and its implementing regulations. The value-added tax on importation shall be paid by the importer prior to the release of such goods from customs custody. Accordingly, if the importer has caused the release from customs custody of his importation by paying in full the corresponding taxes and duties due thereon before January 1, 1988, the rates of tax prescribed by then Section 163 in relation to Section 162(c) and Section 169 of the Tax Code as amended shall apply. However, the value-added tax rates prescribed under Section 101 of the same Code as amended by E.O. No. 273 shall be applicable to all importations entered or withdrawn on or after January 1, 1988 which shall be paid by the importer prior to the release of such importation from customs custody. aisadc Very truly yours, (SGD.) BIENVENIDO A. TAN, JR. Commissioner