East Asia Sawmill Corporation is Exempt from Payment of Forest Charges and Sales Tax

September 9, 1987 BIR RULING NO. 276-87 232 163 (2) 000-00 276-87 Gentlemen : This refers to your letter dated August 25, 1987 requesting in effect a ruling that East Asia Sawmill Corporation is not liable for the payment of forest charges and sales tax on the transaction stated hereunder. Documentary evidence submitted shows that the Ministry of Natural Resources granted a permit in favor of the Philippine Army (PA), to occupy 87.0 hectares of public forest land for road right-of-way (Ordinary Gratuitous Road Right-of-Way Permit No. 20 RW-37-0686-0022 pursuant to Sec. 57, P.D. 705); that to undertake the construction, the permittee (PA) contracted the services of East Asia Sawmill Corporation whose sole consideration thereof are the trees felled incident in the process of clearing the area and accordingly given due course by the Bureau of Forest Development, and that conformably with the Revised Forestry Code, the Ministry of Natural Resources authorized the permittee to haul, transport and dispose the logs and other forest products as stated above. asiacd In reply, please be informed that on the basis of the foregoing facts, East Asia Sawmill Corporation is not subject to the payment of the charges on forest products imposed under Section 232 of the Tax Code, as amended by Batas Pambansa Blg. 83. Moreover, the transfer of ownership over said forest products to East Asia Sawmill Corporation is likewise exempt from the sales tax imposed by Section 163(2)(k) of the same Code, as amended by Executive Order No. 36 which took effect August 1, 1986. (Standard Oil Co. vs. Posadas, 55 Phil. 715.) Very truly yours, (SGD.) EUFRACIO D. SANTOS Deputy Commissioner