Percentage Tax Exemption on the Gross Receipts of Japanese Club restaurant

April 15, 1958 BIR RULING NO. 239-58 1st Indorsement Respectfully returned to the Regional Director, Regional District No. 3, Bureau of Internal Revenue, Manila. If the restaurant of the Japanese Club caters exclusively to its members and their guests, the Club is not liable to the percentage tax on its gross receipts from the restaurant. However, notwithstanding the fact that in the case of "Manila Lodge No. 761 of the Benevolent and Protective Order of the Elks (Manila Club) versus Silverio Blaquera", the Court of Tax Appeals ruled that "a fraternal, civic, non-stock and non-profit organization which sells at retail, liquors and tobacco to its members and their guests exclusively is not subject to the fixed taxes under Section 193 (i), (k) and (n) in relation to Section 178 of the Tax Code", the Club should be subjected to the retail liquor, fixed taxes because the decision in the aforesaid case had been appealed to the Supreme Court and, as a matter of policy, this Office does not hold itself bound by such decision until affirmed by the Supreme Court. (SGD.) JOSE ARAAS Commissioner of Internal Revenue