Request for Exemption from the Value-Added Tax on the Importation of Twenty-Two (22) Cartons stc: 1,114 Phonograph Records - 78 RPM, 597 Card Talks - Cardboard Players, 239 Recorded Cassettes, 200 Tape Talks - Hand Wound Players from Gospel Recordings

February 8, 1994 BIR RULING NO. 050-94 101 000-00 050-94 Gospel Recording Philippines, Inc. 30 T. Bogallon St., Karuhatan Valenzuela, Metro Manila Attention: Rev . Absalom A . Mariano Executive Director Gentlemen : This refers to your letter dated September 9, 1992 requesting exemption from the value-added tax on the importation of twenty-two (22) cartons stc: 1,114 Phonograph Records 78 RPM, 597 Card Talks Cardboard Players, 239 Recorded Cassettes, 200 Tape Talks hand wound players with a total value of $4,260.15 from Gospel Recordings, 122 Glendale Blvd., Los Angeles CA 90026, United States of America. It is represented that you are a non-stock, non-profit religious corporation; that your objective is to encourage and promote the worship of God, the edification of believers in the Christian faith; and to promote and encourage the evangelization of the world with the Gospel of the Lord Jesus by means of recordings to all people in their languages and dialects; that upon the favorable recommendation of the Secretary-General, UNESCO National Commission of the Philippines, you had been granted by the Department of Finance in its 1st Indorsement to the Commissioner of Customs, Manila dated September 9, 1992 exemption from the payment of customs duties pursuant to the provisions of Annex C (iii) and Annex D (a)(b) of the UNESCO Florence Agreement, in line with the last paragraph of Section 105 of The Tariff and Customs Code, but subject to the payment of value-added tax imposed under Section 101 (a) of The National Internal Revenue Code, as amended. In reply thereto, I have the honor to inform you that pursuant to Section 103 (u) of the Tax Code as amended by Executive Order No. 273 and implemented by Section 9(b)(16) of Revenue Regulations No. 5-87 dated September 1, 1987, transactions which are exempt under special laws or international agreements to which the Philippines is a signatory, are exempt from the value-added tax. However, the importation under Annex C (iii) of the UNESCO Florence Agreement of auditory materials refers to sound recordings of an educational, scientific or cultural character for use exclusively in public or private educational, scientific or cultural institutions or societies, (including, at the discretion of the importing country, broadcasting organizations approved by the competent authorities of the importing country for the purpose of duty-free admission.) In view thereof, and considering that the aforementioned importation of 1,114 Phonograph Records 78 RPM, 597 Cardtalks-cardboard players, 239 Recorded Cassettes, 200 Tape Talks-hand wound players with a total value of $4,260.15 is purely for religious purposes, this Office is of the opinion as it hereby holds that they are subject to the 10% value added tax pursuant to Section 101 of the Tax Code, as amended. Very truly yours, LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue