Request for CISO Member Lines to Deduct Cost of Tickets Issued Free to MSSD Clients for Common Carrier's Tax Purposes

October 14, 1986 BIR RULING NO. 216-86 173 000-00 216-86 M a d a m : This refers to your letter dated July 11, 1986, requesting that the Conference of Interisland Shipowners and Operators (CISO) member lines be allowed to deduct the cost of tickets issued free to the MSSD clients for purposes of the common carrier's tax. It appears that the Ministry of Social Service and Development has for its clientele the disadvantaged of our society, so much so that there are request for free transportation tickets to different provinces in the Visayas and Mindanao; that in order to accommodate said clientele, you requested the cooperation of the various interisland shipping lines to favor you with two (2) free transportation tickets per trip/voyage; that the CISO member lines are amenable to your request provided that the cost of the tickets for said service will be deducted or will not be considered part of gross receipts for purposes of common carrier's tax. In reply, please be informed that your request is hereby granted. Accordingly, the shipowners and/or operators who issued free tickets to the said MSSD clients should not consider as forming part of their gross receipts the amount representing the value of the free tickets for purposes of the 3% common carrier's tax imposed by Section 173 of the Tax Code, as amended, (see PAL vs. Coll. of Internal Revenue CTA Case No. 45, February 8, 1956). Very truly yours, (SGD.) ROMULO M. VILLA Acting Commissioner