Request of the Books for the Barrios, Inc. for Exemption from VAT of Its Shipment of Donated Books

May 21, 1996 BIR RULING NO. 059-96 103 (q) 000-00 059-96 Ms. Susan Abaya Office of the President Malacaang M a d a m : This refers to your Fax Cover Sheet dated January 23, 1996, wherein you referred to this Office the request of the Books for the Barrios, Inc. for exemption from VAT of its shipment of donated books. cdta It appears that the Books for the Barrios, Inc., a civic organization with address at 1125 Wiget Lane, Walnut Creek, CA4598-4355, U.S.A., delivers each day free of charge over 600 kilos of high quality education materials and resources to the most deprived schools in the remote provinces; that the program reaches nearly one million of our nation's poorest children each year with the books they need to achieve literacy; that its two (2) containers of donated books are being held at the Bureau of Customs pending payment of VAT while two (2) others are at sea inbound; that included in those shipments are new National Geographic Science books 27 volume sets for 1500 deprived DECS schools; hence, it is now seeking your help for the exemption from VAT of said shipments of donated books. In connection therewith, please be informed that pursuant to Section 12 of Republic Act No. 8047, the sale of books . . . including book publishing and printing as well as its distribution and circulation, shall be exempt from the coverage of the Expanded Value-Added Tax (EVAT) Law. Section 3(a) and (b) of R.A. No. 8047 provides that the term "book" as defined by the United Nations Educational Scientific and Cultural Organization (UNESCO) is a printed non-periodical publication of at least forty-eight (48) pages, exclusive of cover pages, published in the country and made available to the public. The term "textbook" shall mean a book which is an exposition of generally accepted principles in one (1) subject, intended primarily as a basis for instruction in a classroom or pupil-book-teacher situation. However, pursuant to Section 8(b) in relation to Section 12 of R.A. No. 8047, in order to be exempt from all taxes, duties and charges, books or raw materials to be used in book publishing must be imported by the Governing National Book Development Board which shall be under the administrative supervision of the Office of the President. The Governing Board shall be composed of eleven (11) members who shall be appointed by the President of the Philippines. Moreover, in the case of tax and duty-free importation of books or raw materials to be used in book publishing, the Board and its duly authorized representatives shall strictly monitor the quality and volume of imported books and materials as well as their distribution and utilization of the said imported materials. Accordingly, in order to be exempted from the EVAT, the books as defined under R.A. No. 8047, must be imported and certified as to quality and volume only by the Board; but which is not so, in the case of the shipment of the books in question by the Books for the Barrios, Inc. cdpr Very truly yours, LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue