BIR Ruling No. 303-61

August 28, 1961 BIR RULING NO. 303-61 2nd Indorsement Returned to the Regional Director B.I.R. Regional District No. 3 . . . the herein papers pertaining to the case of . . . (hereinafter referred to as the taxpayer) against whom a deficiency assessment for advance sales tax in the sum of . . . was recommended by the Chief, Manila Agents with the concurrence of the City Revenue Officer. prcd That Office has not yet issued the assessment as recommended in view of the "conflicting opinions" on the question of the whether or not the taxpayer is liable to the aforesaid tax. It is noted that the difficulty encountered by that Office springs from the determination of who is the importer of the goods involved in the case. It is gathered from the report of Agent Meliton Quitiviz that the Marinduque Iron Mines, Inc. imported certain merchandise which it sold to the taxpayer before arrival in the Philippines. In the sale, it was stipulated that the taxpayer shall pay "all the charges and government levies on the merchandise upon arrival" and shall "take possession of the same". cdta For purposes of the advance sales tax the person who secures the release of imported goods from customs custody is deemed the importer subject to the aforesaid tax. The findings of the investigating agent tend to show that the taxpayer was the one who secured the release of the merchandise in question from customs custody as he (the taxpayer) was to "take possession" of the same upon arrival. Besides, the taxpayer had the legal tittle over the goods upon their arrival in this country by virtue of the sale. The taxpayer is therefore liable for the advance sales tax in this case. cdt However, it is noted that the investigating agent computed the deficiency advance sales tax on the "total purchases" of the taxpayer from the Marinduque Iron Mines, Inc. which is not correct as said tax is computed on the total landed cost. He is advised to assess and collect the deficiency tax, if any, in the light of the foregoing observation. In passing, he is further advised that cases arising on or after June 18, 1960 which are similar to the case at bar should be decided in accordance with Section 183(b) as amended by the Republic Act No. 2704 (published in General Circular No. V-323, dated July 27, 1960) which holds the transferee of imported goods transferred before release from custom custody liable to the advance sales tax regardless of the tax status of the transferor and transferee. cdti