Tax Imposed on Non-governmental Activity of Peace and Amelioration Fund Commission

February 27, 1958 BIR RULING NO. 141-58 The Chairman Peace and Amelioration Fund Commission P. O. Box 1046, Manila S i r : Reference is made to your letter of the 5th instant, requesting tax-exemption on the automobiles, refrigerators, pianos, radios and other articles being purchased by that Commission and offered as door prizes in its benefits. You also requested that the taxes paid on your previous purchases be refunded. In answer thereto, I have the honor to inform you that, as a government agency, the Peace and Amelioration Fund Commission is only tax-exempt on activities conducted by it which are governmental in character. In other words, the moment it undertakes any taxable non-governmental activity, it becomes subject to the corresponding tax. Accordingly, and as the holding of benefits is a taxable non-governmental activity, the articles being purchased by said Commission in connection therewith are, if imported, subject to the advance sales tax and if locally purchased, to the ordinary sales tax. Moreover, in the case of locally purchased articles, the sales tax due is the liability of the manufacturer, producer, or importer thereof, and not of the purchaser which, in this case, is the Peace and Amelioration Fund Commission. Not being the one liable to said tax, the Commission has no legal basis for requesting exemption therefrom. LLphil In the same vein, the request for tax refund must be, as it is hereby, denied. Very truly yours, (SGD.) JOSE ARAAS Commissioner of Internal Revenue