BIR Ruling No. 027-63

March 26, 1963 BIR RULING NO. 027-63 Mr. Policarpo Medrano Nasugbu, Batangas S i r : Reference is made to your letter dated December 5, 1962, stating that you and your co-writers are engaged are engaged in agriculture as sugar cane planters; that you own trucks which, by special contract with the Central Azucarera Don Pedro, haul and transport sugar cane for processing; and that in view of Section 13, Commonwealth Act No. 146 (Public Service Act), as amended by Republic Act No. 1270, you are exempt from the 2% tax imposed in Section 192 of the Tax Code. We quote hereunder the pertinent provisions of said Section 13, as amended: LLphil "(b) The term 'public service' includes every person that now or hereafter may own, operate, manage, or control in the Philippines, for hire or compensation, with general or limited clientele, whether permanent, occasional or accidental, and done for general business purposes, any common carrier, railroad, street railway, traction railway, sub-way, motor vehicle, either for freight or passenger, or both, with or without fixed route and whatever may be its classification, freight or carrier service of any class, express service, steam-boat, or steamship line, pontines, ferries, and small water craft, engaged in the transportation of passengers and freight, shipyard, marine railway, marine repair shop, warehouse, wharf or dock, ice plant, ice-refrigeration plant, canal, irrigation system, sewerage, gas, electric light, heat and power, water supply and power, petroleum, sewerage system, telephone, wire or wireless telegraph system and broadcasting radio stations; Provided, however, That a person engaged in agriculture, nor otherwise a public service, who owns a motor vehicle and uses it personally and/or enters into a special contract whereby said motor vehicle is offered for hire or compensation to a third party or third parties engaged in agriculture, not itself or themselves a public service, for operation by the latter for a limited time and for a specific purpose directly connected with the cultivation of his or their farm, the transportation, processing, and marketing of agricultural products of such third party of third parties, shall not be considered as operating a public service for the purpose of this Act . We note from the aforequoted provisions that a person who offers his motor vehicle for hire or compensation under the circumstances mentioned therein is not considered as operating a public service only for the purpose of the Public Service Act. Each being the case, whatever exemption may be enjoyed by said person by reason of such provisions cannot extend beyond the taxes, fees and/or licenses imposed in the Public Service Act and cannot embrace the taxes prescribed in the Tax Code. Accordingly, it is regretted that we cannot share your view on the matter. LLjur It will be highly appreciated if you can advise your co-writers of the contents of this letter. Very truly yours, (SGD.) JOSE B. LINGAD Acting Commissioner of Internal Revenue The above ruling was duly signed by the Acting Commissioner of Internal Revenue on March 26, 1963. (SGD.) P. F. LANDAS Revenue Operations Head (Legal)