Certificate of Eligibility to Suspend Payment

February 20, 1987 BIR RULING NO. 055-87 246 000-00 055-87 Gentlemen : This refers to your letter dated June 30, 1986, bearing on the Certificate of Eligibility to Suspend Payment issued to you on December 4, 1984 by the Minister of Trade and Industry as well as your letter dated July 29, 1986 requesting tax credit of P1,666,819.00 representing alleged erroneously paid sales tax on various articles purchased from the Philippine Explosives Corporation during the years 1985 and 1986. In reply, I have the honor to inform you that said certificate was issued pursuant to Letter of Instruction No. 1416 which orders and directs "the suspension of payment of all taxes, duties, fees, imposts, and other charges, whether direct or indirect, due and payable by the copper mining companies in distress to National and Local Government. . . . " In order to effectuate the suspension of payment, in the case of the sales tax which is indirectly due and payable by you, your major suppliers, contrary to their position on the matter, should not bill to you the sales tax for which they are directly liable under the law. On this basis, said suppliers are relieved from paying the sales tax. However, before you can avail of the suspension of payment privilege under LOI No. 1416, your request for availment shall be filed with and processed by the Agriculture and National Resources Division of this Office, pursuant to Revenue Memorandum Order No. 9-86. LOI No. 1416 only authorizes the suspension of payment of taxes, hence, does not authorize the refund of taxes that have already been paid. In fact, paragraph 3 of the said LOI No. 1416 requires the repayment of taxes, duties fees and imposts, the collection of which has been suspended. Such being the case, your claim for tax credit with respect to the aforesaid sales tax paid by the Philippine Explosives Corporation and passed on to you cannot be granted for lack of legal basis. In view thereof, your claim for tax credit of P1,666,819.00 should be, as it is hereby, denied. cdtech Very truly yours, (SGD.) BIENVENIDO A. TAN, JR. Commissioner