BIR Ruling No. 145-62

December 27, 1962 BIR RULING NO. 145-62 Messrs. Sycip. Gorres, Velayo & Co. Certified Public Accountants P.O. Box 589 M a n i l a Gentlemen : Reference is made to your letter dated November 8, 1962, stating the following: cdt "One of our clients, an automobile manufacture sells its automobile on installment at a price of P8,500. However, the terms and conditions of the contract of sale executed by the purchaser provide that if the full amount is paid within ninety days from the date of sale, the customer is entitled to a reduced price of P8,100 for a discount of P400. The invoices issued by the manufacturer in connection with these sales will also show a notation that if the full amount is paid in cash within 90 days of the price will be reduced to P8,100. It is possible that the customer may elect to take advantage of the discount within thirty, sixty or ninety days from the date of sale. "xxx xxx xxx. "Our question is whether your office will permit the deduction of the discounts from the total sales of the month for discounts given to customers in that month for purposes of computing the sales tax of the manufacturer." In reply thereto, I have the honor to inform you that under the circumstances stated above, the discounts given to customers during the month may be deducted from the total sales for that of tax other provided that such deduction will not affect the rate of tax otherwise due on those sales. Very truly yours, JOSE B. LINGAD Acting Commissioner of Internal Revenue