Request for Exemption from Sales Tax on the Purchase of Motor Vehicles by Pambansang Katipunan ng Kabataang Barangay

January 31, 1984 BIR RULING NO. 023-84 195-00-000-00-023-84 Gentlemen : This refers to your letter dated August 26, 1983 requesting exemption from the sales tax on your purchase of two (2) units of Toyota Tamaraw from Fabar Sales, Inc. and Motocars, Inc., on June 22 and July 21, 1983, respectively. In reply, please be informed that under Section 13, P.D. No. 1191, the Pambansang Katipunan ng Kabataang Barangay "shall be exempted from all forms of taxation or other impositions whether local or national, and shall be free from all duties and other impost on any requirement, articles, or goods which it may import when reasonably necessary for use in its operations." Under this tax exemption provision, you are only exempt from taxes for which you are directly liable. Sales taxes on the abovementioned motor vehicles are the direct liabilities of the producer or manufacturer thereof under Section 195 of the Tax Code. The fact that the sales taxes may ultimately be shifted to or passed on to you as the purchaser will not constitute the same as taxes payable by you for purposes of the exemption. (Philippine Acetylene Co., Inc. vs. Commissioner of Internal Revenue, G.R. L-19707, August 17, 1967). In view thereof, it is regretted that your request cannot be granted in view of the jurisprudence on the matter as enunciated by our Supreme Court. The fact that you were able to purchase vehicles before without the sales tax being paid thereon will not exempt the abovementioned vehicles from the sales tax due thereon. Very truly yours, (SGD.) RUBEN B. ANCHETA Acting Commissioner