BIR Ruling No. 405-61

No date supplied BIR RULING NO. 405-61 Reference is made to your letter . . . requesting information whether or not purchases made from that corporation by . . . & Co., Ltd. of spare parts for equipment used by it in the construction of Mactan Airfield are exempt from the sales tax. You stated that . . . & Co., Ltd. is the authorized contractor in the construction of Mactan Airfield and that it informed you that said purchases are tax exempt in accordance with the Mutual Defense Pact (not Mutual Defense Act) and, accordingly, has requested you that sales made to it of those spare parts be exempt from tax. LLpr In answer thereto, I have the honor to inform you that, on the assumption that the construction of the above-mentioned airfield is an approved project of the Armed Forces of the Philippines under the Mutual Defense Pact between the Government of the Philippines and of the United States, your query is answered in the affirmative, provided that the aforesaid equipment is required solely for such project. However, before making any sale, you must ask from . . . & Co., Ltd. the original copy of the certificate of tax exemption covering the articles being purchased. Such certificate must be signed by the Chief or Vice Chief of Staff, Armed Forces of the Philippines and countersigned by the Secretary or Undersecretary of National Defense, and particularly describe the articles and state the name and address of that corporation. The certificate, which you should keep on file, is sufficient authority for you to exclude the items covered thereby from your report of taxable sales during a given month. prll It may be stated that this letter has been delayed because, among other reasons, a representative of yours who came to this Office promised to furnished us with a copy of the "Mutual Defense Act"; however, he never came back.