Tax Exemption of Sales of Imported Vitamins and Chemicals to Cooperatives

September 17, 1986 BIR RULING NO. 183-86 162 000 00 183-86 Gentlemen : This refers to your letter dated May 5, 1986 stating that you are importing vitamins and chemicals for and in behalf of cooperatives; and that these cooperatives claims exemption from the sales tax. You now request for information as to whether your local sales to the cooperatives are exempt from the sales tax; and whether you are exempt from the payment of the advance sales tax on your importation for the said cooperatives. In reply, please be informed that the above imported articles are subject to the taxes imposed by Section 162(c) of the Tax Code, payable by you as importer, i.e., the advance sales tax prior to the release thereof from customs custody and the sales tax at the same rate on your original sale thereof to the cooperative, the advance sales tax previously paid to be credited against the sales tax due on the original sale. While cooperative are exempt from the sales tax from January 8, 1986 to December 31, 1991 under P.D. No. 2008, such exemption pertains only to the sales tax (including advance sales tax on imported articles) for which they are directly liable e.g., if the cooperatives undertake the importation themselves and that the imported articles are sold exclusively to their members. (BIR Ruling No. 053-86). In view thereof, the claim of the cooperatives for exemption from the sales tax cannot be granted. cdtech Very truly yours, (SGD.) BIENVENIDO A. TAN, JR. Commissioner