Tax-free Withdrawal by Trans World Airlines of Liquors and Wines from Customs Custody

February 27, 1958 BIR RULING NO. 165-58 The Philippine Air Lines, Inc. M.R.S. Building, Plaza Cervantes Manila Gentlemen : Reference is made to your request dated January 28, 1958, for and in behalf of the Trans World Airlines, to withdraw tax-free from customs custody the liquors and wines enumerated therein, under authority of Article 24 of the Chicago Convention of International Civil Aviation. This Office understands that the TransWorld Airlines, which is a foreign airline company, has brought into the Philippines liquor and wines for use in its bar service within its aircrafts during flights from Manila to points outside the Philippines. Article 24, paragraph (b) of the aforesaid Convention provides; "Spare parts and equipment imported into the territory of a contracting State for incorporation in or use on an aircraft of another contracting State engaged in international air navigation shall be admitted free of customs duty, subject to compliance with the regulations of the State concerned, which may provide that the articles shall be kept under customs supervision and control". Since in international flights the maintenance of a bar within the aircraft is indeed necessary, if not indispensable, especially when the passengers thereof are Americans and Europeans, the wines and liquors in question can be considered "Equipment for use on an aircraft" and, therefore, fall within the exempting provisions of the aforesaid Article 24 (b). Accordingly, your said request is hereby granted, provided that the aforesaid liquors and wines are stored in a bonded warehouse and that the subsequent removal thereof shall be under the supervision of a representative of the Bureau of Customs who shall submit to this Office a certificate containing the following: (1) the respective dates of arrival and storage of the liquors and wines, and the quantity and description hereof; (2) the date of removal, and the quantity and description of those removed; (3) the identifying description of the airplane wherein the liquors and wines are to be used; (4) the respective dates of arrival and departure of the plane concerned. Very truly yours, (SGD.) JOSE ARAAS Commissioner of Internal Revenue