Clarification and/or Ruling on the Interpretation of Sec. 191 (Tax Code)

August 6, 1959 BIR RULING NO. 372-59 Mr. Domingo G. Suck 444-446 Regina Building Escolta, Manila S i r : This has reference to your letter dated July 13, 1959, wherein you requested this Office to clarify and/or issue a ruling on the current interpretation of Sec. 191 of the Tax Code as amended by Republic Act No. 2376, specifically with respect to the tax liability of a keeper of a restaurant who occasionally caters to outside customers. cdll In reply thereto, we are quoting hereunder the pertinent provision of Sec. 191 of the Tax Code as amended by R.A. 2376: "Keepers of restaurants, refreshment parlors and other eating places, except those inside public market places and caterers, shall pay a tax of three per centum of their gross receipts. Keepers of bars and cafes where wines or liquors are served shall pay a tax of seven per centum of their gross receipts: . . ." The aforequoted provision of law only exempts "keepers of restaurants, refreshment parlors and other eating places inside public markets" from the payment of the 3% percentage tax on their gross receipts. An examination of the explanatory note to the bill enacted later as Republic Act No. 2376 revealed that Congress never had the intention to exempt caterers from the payment of the percentage tax imposed by Section 191 of the Tax Code. We notice, however, that there is an inadvertent omission of a comma between the words "places" and "and caterers", which probably explains the misinterpretation of the law. In view of the foregoing, this Office is of the opinion that, the 3% percentage tax on sales of foods and refreshments and the 7% tax on sales of wines and liquors should be paid by caterers and keepers of restaurants. As a matter of fact, this is the interpretation contained in the General Circular publishing RA 2376 which had already been approved by the Secretary of Finance. Very truly yours, (SGD.) MELECIO R. DOMINGO Commissioner of Internal Revenue