Cars Imported by Rural Banks

1970 BIR RULING NO. 026-70 Cars Imported by Rural Banks Rural banks with net assets not exceeding one million pesos (P1,000,000.00), excluding the counterpart capital subscribed paid in by the Government are not subject to the payment of counting tax under Section 190 of the Tax Code, for the importation cars intended for their own use. (Sec. 14 Rep. Act No. 720, as by Rep. Act No. 5939) It is alleged that the provisions of Section 14 of Republic Act No. 720, as amended by Republic Act No. 5939, which took effect on June 12, 1969 appears to be in conflict with the following provision of Section 184(a) of the Tax Code, as amended by Republic Act No. 6110 which took effect on September 1, 1969: "The provision of existing general and special laws to the contrary notwithstanding, there shall be no exemption from the tax in this subsection." cdt It should be noted that the foregoing provision withdrawing tax exemption on automobiles is located in, and made as part of Section 184(a); and that said provision specifically refers to the tax imposed in subsection (a) which as can be gleaned from the provisions thereof and the main provisions of Section 184, is a tax on every original sale, barter, and exchange of automobiles. On the other hand, Section 190 of the Tax Code, which would have imposed compensating tax on automobiles imported by rural banks for their own use were it not for the exemption provided by Section 14 of Republic Act No. 720, as amended, does not contain a provision similar to that provided in Section 184(a) of the Tax Code. The logical conclusion, therefore, is that the exemption from the compensating tax granted by law to certain persons, entities and agencies, such as rural banks in respect of their importation of automobiles for their own use and not for sale, has not been withdrawn or revoked. Nevertheless, if said rural banks (having net assets not exceeding P1,000,000.00, excluding the counterpart capital subscribed and paid in by the Government) should sell such cars or automobiles imported tax-free, they shall be subject to the sales tax imposed by Section 184(a) of the Tax Code