Importation of Transportation Equipment for Use in Airline Business Exempted Under Company's Legislative Franchise

September 21, 1966 BIR RULING NO. 034-66 Air Manila, Inc. 2400 President Roxas Boulevard Pasay City Attention : Mr . Francisco G . Reyes Managing Director Gentlemen : This refers to your letter dated August 20, 1966 requesting information as to whether or not the importation of vehicles to be used in your airline business is within the exemption provided for under your legislative franchise R.A. No. 4501, Section 12 of which is quoted as follows: casia "Sec. 12. In consideration of the franchise and rights hereby granted, the grantee shall pay to the national government during the file of this franchise, a tax of two percent of the gross revenue or gross earnings derived by the grantee from its operation under this franchise . Such tax shall be payable quarterly and shall be in lieu of all taxes of any kind, nature or description , levied , established , or collected by any municipal or city, provincial or national authority : PROVIDED, That if, after the audit of the accounts of the grantee by the Commissioner of Internal Revenue, a deficiency tax is shown to be due, the deficiency tax shall be payable within ten days from the receipt of the Assessment. The grantee shall pay the tax on its real property in conformity with existing laws" (Emphasis Supplied) Pursuant to the ruling contained in the 1st Indorsement of the Secretary of Finance dated May 16, 1965, importations by PAL, FAIRWAYS, and Air Manila and similar franchise grantees of aviation gasoline and other fuel oils and other articles including aircrafts for use in their operations are exempt from the specific or compensating tax, as the case may be. In view of the foregoing, the importation of transportation equipment for use in your airline business is within the exemption provided for under your legislative franchise, R. A. No. 4501, Section 12. Very truly yours, (SGD.) MISAEL P. VERA Commissioner of Internal Revenue