BIR Ruling No. 083-63

November 5, 1963 BIR RULING NO. 083-63 3rd Indorsement Returned to the Regional Director, Regional District No. 3, B.I.R., Manila, the papers bearing on the case of the Philamlife Employees Cafeteria, United Nations Avenue, Manila, relative to its request to use "chits" (sample attached) in lieu of cash on sales made to the employee of the Philam Companies and other customers. In a letter of R.T. Bancod of the Philamlife, dated August 16, 1961, and the Memorandum dated January 11, 1962, submitted by Examiner Carlos G. Jarabelo, who conducted the investigation of this case, it was found out that the said cafeteria issues "chits" to extend credit to employees of the Philam Companies only that; these "chits' will be used exclusively for purchase from the cafeteria and will be properly recorded in the books for tax purposes; that the value of the "chits" obtained on credit is deducted from the employees' salary; that once issued as payment the "chits" are recorded, cancelled and not re-issued anymore and that sales invoices are issued whether cash sales or "chits" sales are made. In the light of the foregoing, purchases made by the employees of the Philam Companies, payment of which is effected by means of "chits" are considered sales on credit contemplated by Section of the Revenue Regulations No. V-1, otherwise known as the Bookkeeping Regulations, as amended, implementing Section 334 of the Tax Code. (Since all these sales are properly invoiced and the use of "chits" in lieu of cash does not constitute violation of any internal revenue law or regulations, the same need not be approved by this Office. LexLib (SGD.) RAMON T. OBEN Acting Commissioner of Internal Revenue