Tax on the Overnight Bags Imported by An Airline Company for Resale to Passengers and to the General Public

June 20, 1958 BIR RULING NO. 329-58 Trans World Airlines, Inc. Hotel Filipinas Dewey Boulevard Manila Gentlemen : This is in connection with your request for a ruling on the question of whether or not you are liable for the payment of the fixed tax of P20.00 and the 30% advance sales tax prescribed in Section 183(B) in relation to Section 185 of the National Internal Revenue Code, on overnight bags imported by you for resale to passengers and to the general public. It appears from your letter that you are an airline company engaged in the business of transporting passengers and cargoes. The importation and sale of overnight bags is undertaken by you not for the purpose of deriving profits therefrom but to serve as an advertisement or publicity to boost your transportation business. Under these facts, you cannot be considered engaged in the business of selling overnight bags. Accordingly, you are not liable for the payment of the fixed tax prescribed in Section 182 of the National Internal Revenue Code. You are, however, liable for the payment of the 30% compensating tax prescribed in Section 190 in relation to Section 185, both of the Tax Code. The said tax should be computed on the total landed cost of the imported overnight bags. LLjur Very truly yours, (SGD.) JOSE P. TRINIDAD Acting Commissioner of Internal Revenue