Exemption from Taxes and Duties on the Importation of Aircraft Parts

January 28, 1988 BIR RULING NO. 010-88 101 (a) 340-87 010-88 Gentlemen : This refers to your letter dated November 9, 1987 requesting in effect, confirmation of your opinion that your client, Air Link International Aviation School (Airlink) is exempt from taxes and duties on its importation of aircraft parts in view of Section 4(3), Article XIV of the 1987 Constitution. Documentary evidence submitted show that Airlink, a private non-stock, non-profit educational institution duly registered with the Securities and Exchange Commission is conducting aviation courses such as flying and maintenance of aircraft of all kinds, aerotechnical sciences and other related and allied discipline science courses; and that it imported aircraft parts covered by "LOUIS MAERSK" Bill of Lading No. LSA-190872 consisting of educational apparatus/gadgets which will be used exclusively and actually for lectures/practical instructions/demonstration to enrich the teaching techniques for aviation courses as certified to by the National Institute of Science and Technology (NIST) and recommended by the Department of Education, Culture and Sports and the UNESCO National Commission for tax and duty-free importation. cdtech In reply, please be informed that based on the foregoing facts Airlink is exempt from taxes and duties on its importation of the aforesaid aircraft parts which will be used actually and exclusively for instructional/educational purposes pursuant to Article XIV, Section 4, paragraph 3 of the 1987 Constitution stating: "(3) All revenues and assets of non-stock, non-profit educational institutions used actually, directly, and exclusively for educational purposes shall be exempt from taxes and duties. Upon the dissolution or cessation of the corporate existence of such institutions, their assets shall be disposed of in the manner provided by law. (Emphasis supplied) If removed from Customs custody after January 1, 1988, it is also exempt from the value-added tax of 10% imposed under Section 101(a) of the Tax Code, as amended by Executive Order No. 273. This serves as authority for the release of the aforesaid importation from Customs custody without the payment of compensating tax or the value-added tax, as the case may be. cdti Very truly yours, (SGD.) BIENVENIDO A. TAN, JR. Commissioner