Share of the Association in the Sugar Milled

February 6, 1959 BIR RULING NO. 055-59 Messrs. Garcia, Perlada & Associates Attorneys-at-Law Suite 315 Gonzaga Building Rizal Avenue cor. Carriedo Manila Gentlemen : Reference is made to your letter dated February 2, 1959, stating substantially the following. LLphil "Your client, the Pampanga Cooperative Marketing Association, Inc. as an association duly organized under the provisions of Act No. 3425, as amended, was granted exemption by this Office from the 2% tax on the share of its members in the sugar which it caused to be milled by the PASUDECO. (B.I.R. Ruling No. 50, s. of 1958). It has plantations in places nearer other Centrals than the PASUDECO, such as the Pampanga Sugar Mills (PASUMIL) and Tabacalera Central. This circumstance, coupled with other circumstances, such as the strike staged at the PASUDECO make it necessary for your client to have the sugar cane produced in said plantations milled by either the PASUMIL or Tabacalera with which it has existing milling contracts". You now request a statement from this Office that the share of the association in the sugar milled by said Centrals is exempt from the 2% tax. In reply thereto, I have the honor to inform you that for purposes of the exemption granted your client from the 2% tax, it is immaterial as to which Central it enters into a milling contract. For so long that the association under its marketing agreement with its members is undertaking the milling of the produce of the latter, it is exempt from the 2% tax on the shares of its members in the milled sugar. LLjur This will serve as authority for the PASUMIL and TABACALERA from not withholding the 2% tax on the share of the association in the sugar which they mill out of the sugar cane delivered to them for milling by the association. Very truly yours, (SGD.) JOSE ARAAS Commissioner of Internal Revenue