Tax Exemption of Items Purchased from Caltex Philippines, Inc.

May 18, 1988 BIR RULING NO. 209-88 145 (a) & (b) 174-87 209-88 Gentlemen : This refers to the 1st Indorsement dated April 14, 1988 of the Department Service Chief, Revenue Service, Department of Finance, referring to this Office your request for tax exemption of the following items which were purchased by you from Caltex Philippines, Inc. for delivery to the United States Navy at Subic Bay, viz: 1,422,000 ltrs. Fuel, diesel 318.25 Kgs. Grease, M.S. 4,410 ltrs. oil, hydraulic #10 5,460 ltrs. oil, hydraulic #40 22,200 ltrs. Asphalt SSI 139,590 ltrs. Asphalt 60/70 20,000 ltrs. Fuel, bunker oil pursuant to the Military Bases Agreement and Treaty of General Relations between the Republic of the Philippines and the United States of America. In connection therewith, please be informed that Article V of the U.S.-P.I. Military Bases Agreement provides as follows: "No import, excise, consumption or other tax, duty or impost shall be charged on material, equipment, supplies or goods, including food stores, clothing, for exclusive use in the construction, maintenance, operation or defense of the bases, consigned to, or destined for, the United States authorities and certified by them to be for such purpose." Accordingly, it appearing in Certificate of Exemption No. 0240 dated March 9, 1988 issued by direction of the OICC Southwest Pacific that the aforesaid articles are for use on military base construction, the same are exempt from the excise taxes imposed under Section 128(a) & (b) [renumbered as Section 145(a) & (b) by E.O. No. 273] as amended. However, the withdrawal from bonded stocks and delivery to the tax-exempt agency should comply with the following requirements: 1. The withdrawal of said articles from bonded stock be entered in the Official Register Books of the supplier and duly evidenced by a Withdrawal Certificate (BIR Form 2.67); and 2. That the U.S. Navy Station, Subic Bay, should provide D.M. Consunji, Inc. with Certificate of exemption. (B.I.R. Rulings dated May 22, 1975 and August 27, 1985). cdtech Very truly yours, (SGD.) EUFRACIO D. SANTOS Deputy Commissioner