Request for Exemption from Sales Tax on Importations for Exclusive Use of Cooperative and/or Sold Only to Its Members

September 9, 1986 BIR RULING NO. 162-86 162 (c) 053-86 162-86 Gentlemen : This refers to your letter dated August 20, 1986 requesting exemption from sales tax including the advance sales tax on all your importation for the exclusive use of the Cooperative and/or sold only to its members under P.D. No. 2008. Documentary evidence submitted show that the Minalin Poultry & Livestock Cooperative, Inc. (formerly the Minalin Poultry & Livestock Raisers Cooperative Marketing Association, Inc.) is a cooperative duly organized and existing under the laws of the Philippines, that it was organized under Cooperative Act No. 3425 as amended by P.D. No 175 and P.D. No. 2008 and registered with the Securities & Exchange Commission in June 1972 under Registration No. 44498, with the Bureau of Domestic Trade under Registry No. 27644 and with the Bureau of Cooperatives Development under Registration No. 111-FF-002RR; that the cooperative is composed of more or less 180 small farmer-members of poultry and hog raisers around the neighboring barrios of the town who are presently the owners and stockholders of the cooperative; that the business operation of the cooperative is being managed by the elected members of Board and is supported and run by responsible officer duly appointed by the Board who operate the actual day to day business transactions; that the cooperative was registered and awarded a Certificate of Good Standing upon full and complete compliance of existing laws under P.D. No. 175 and enjoyed the privileges granted under the same decree by the Bureau of Cooperatives Development under the Ministry of Agriculture; that in BIR Ruling No. 083-84 dated April 27, 1984, the BIR has ruled that cooperative has complied with the requirements of an agricultural cooperative under the provisions of P.D. No. 175, as amended; that it is exempt from the payment of income and sales taxes pursuant to Section 5(a) of the said Decree; and that the exemption of the cooperative from income tax however, shall expire on June 9, 1991, or after ten (10) years from the date of its registration of June 9, 1981 pursuant to the aforesaid P.D. No. 175, as amended. cdta In reply, I have the honor to inform you that your request is hereby granted, provided that the imported articles are sold exclusively to members of that cooperative. P.D. No. 2008 which took effect on January 8, 1986, restored the exemption of cooperatives from income and sales taxes that was previously abolished by P.D. No. 1955 effective October 15, 1984. The said tax exemption of cooperatives shall be effective only until December 31, 1991. (RMC No. 10-86 dated May 12, 1986). Since that cooperative is duly registered with and certified as in good standing by the Bureau of Cooperatives Development, it is exempt from income and sales taxes from January 8, 1986 until December 31, 1991 pursuant to Section 5(a) of P.D. No. 175, as amended by P.D. No. 2008. Such exemption from the sales tax includes the advance sales tax on imported articles imposed by Section 162(c) of the Tax Code. (See BIR Ruling No. 053-86 dated April 29, 1986.) Very truly yours, (SGD.) BIENVENIDO A. TAN, JR. Commissioner