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

September 16, 1986 BIR RULING NO. 170-86 162-c 162-86 170-86 Gentlemen : This refers to your letter dated September 6, 1986, requesting exemption from the payment of sales tax including advance sales tax on your importation of articles for the exclusive use of the cooperative and/or to be sold only to members of the cooperative. It is represented that Limcoma Marketing Cooperative, Inc. is a cooperative duly organized and existing under the laws of the Philippine, that it was registered with the Securities and Exchange Commission on July 9, 1970 under Registration No. 41663, with the Bureau of Domestic Trade under Registry No. 23211 for the period October 4, 1985 October 4, 1990 and with the Bureau of Cooperatives Development under Certificate of Registration No. R-IV-FF-O47BR dated October 23, 1972 and re-registered under PD 175 last April 13, 1977; that it is composed more or less of 1,400 small farmers-members of poultry and hog raisers from neighboring towns who are the owners of the cooperative; that it was organized primarily to engage in the purchase or procurement and sale of all kinds of farming inputs, such as supplies, materials, tools and equipment needed in farming, orchard growing, poultry and livestock raising, including fertilizers, seeds, veterinary drugs and farm chemicals; to engage in the purchase, processing and sale of all kinds of products from farms, orchards, poultry and livestock farms, especially of its members; to represent and act for and on behalf of any/or all of its members in securing adequate allocations for them from any and all institutions, private or governmental, of any or all farm in-puts, such as subsidized fertilizers, seeds, seedlings and other supplies and materials, tools and equipment that may be needed in connection with farming, orchard growing, poultry and livestock raising, and to distribute the same to its members in accordance with the rules and regulations prescribed for such contributions. cd 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. Since that cooperative is registered with and certified as in good standing by the Bureau of Cooperatives Development, it is exempt from income and sales taxes 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. 013-85). Very truly yours, (SGD.) BIENVENIDO A. TAN, JR. Commissioner