Since the Tax Exemption Privileges of Its Forerunner Has Been Withdrawn, PNP Service Stores System is Now Subject to Value-Added Tax

August 9, 1996 BIR RULING NO. 091-96 99; 107 000-00 091-96 PNP Service Stores System Camp Crame, Quezon City Attention: Mr . Marcelino S . Castillo III Administrator Gentlemen : This refers to your letter dated July 20, 1994, which was referred to this Office by the Regional Director of Revenue Region No. 7, Quezon City,. requesting information as to whether the PNP Service Stores System (PNPSSS) is required to register as a VAT taxpayer. It is represented that the PNPSSS was created as a service unit of the PNP to fully implement the intents and purposes of P.D. No. 875 dated January 15, 1976; that its has operation is governed by a Corporate Manual duly approved by the Secretary of the Department of the Interior and Local Government; that the entity is non-stock, service oriented and VAT-exempted; that it is also exempted from registration with the Securities and Exchange Commission (SEC); and that the members of the PNPSSS are PNP personnel and include civilian employees, their dependents and beneficiaries. cdta In reply, please be informed that the tax exemption privileges previously enjoyed by the Armed Forces of the Philippines Commissary and Exchange Service System (AFPCESS) and the Philippine Constabulary/Integrated National Police Service Stores System (PC/INPSSS) were withdrawn by FIRB Resolution No. 12-89 effective January 1, 1990. Since the tax exemption privileges of its forerunner has been withdrawn, it is our opinion that PNPSSS is now subject to the value-added tax imposed under Sections 100 to 102 of the Tax Code, as amended By R.A. No. 7716. Accordingly, as a taxpayer engaged in vatable activity, PNPSSS is mandatorily required to register as a VAT taxpayer if its gross sales or receipts is more than P500,000.00 for any 12-month period. For VAT registration purposes, PNPSSS is required to register its head office, branches, place of production and storage places where inventory of goods for sale or use in business are kept, with the Revenue District Officer having jurisdiction over the place where its head office is located. Each branch is liable to pay the annual registration fee of P1,000.00 which should be paid at the Revenue District Office in the place where the branch is located. Storage and production places are liable to the annual registration fee only when sales operation are conducted thereat. (Revenue Memorandum Order No. 41-94; Revenue Memorandum Circular No. 39-95) cd Very truly yours, LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue