BIR Ruling No. 059-62

February 19, 1962 BIR RULING NO. 059-62 The Airport Manager Pan American World Airways, Inc. P. O. Box 2462, Manila S i r : Reference is made to your letter dated January 30, 1962, advising this office that you are expecting the following supplies from your New York Office via the SS "Maran Maersk": LLphil "4 CTNS INSTANT MIX FOR HOT CHOCOLATE 21 CASE OLIVES 1 CASE INSTANT COFFEE & TEA BAGS 1 CASE PRINTED ADVERTISING MATTER" You stated that the first three items mentioned above were to be used exclusively aboard Pan Am aircraft and, therefore, free from all taxes and duties in accordance with the Chicago Convention at 1944. In reply thereto, I have the honor to quote hereunder the pertinent provisions of the Chicago Convention of 1944 on International Civil Aviation: "Art. 24(a). Aircraft on a flight to, from, or across the territory of another contracting State shall be admitted temporarily free of duty, subject to the Customs regulations of the State, Fuel, lubricating oils, spare parts, regular equipment and aircraft stores on board an aircraft of a contracting State , on arrival in the territory of another contracting State and retained on board on leaving the territory of that State shall be exempt from Customs duty, inspection fees or similar national or local duties and charges. . . .". (Emphasis supplied). It seems quite clear that to be tax exempt, the aircraft stores must be on board an aircraft of a contracting State on arrival in the territory of another contracting State and retained on board on leaving the territory of the latter. Accordingly, and as the items in question do not satisfy the requirement, this Office is of the opinion and so holds that the same are subject to the 7% compensating tax imposed under Section 190 of the Tax Code. Very truly yours, MELECIO R. DOMINGO Commissioner of Internal Revenue