Payment of Forest Charges and Surcharge

November 2, 1960 BIR RULING NO. 475-60 2nd Indorsement Returned to the Chief, Business Tax Division, the attached docket of the case of the International Hardwood & Veneer Company of the Philippines against whom this Bureau, thru that Division, has demanded payment of forest charges and surcharge in the amount of P72,507.49. (See: Letter of Demand dated September 22, 1960) cd The question presented for resolution is whether or not the said Company is subject to forest charges on the logs it cut and removed from the concession during the time when it was enjoying tax exemption as a manufacturer of plywood and veneer under Republic Act No. 35, that is, before the enactment of Republic Act No. 901. The Company, thru counsel, maintained that it is not liable because the Supreme Court's decision in the case of "Collector of Internal Revenue v. Mariano R. Lacson", (G.R. No. 12949), promulgated on April 29, 1960, whereby a tax-exempt industry under R.A. No. 901 was held liable to forest charges, cannot be applied to the instant case because said decision was rendered in light of the provisions of Republic Act No. 901 and not Republic Act No. 35. The aforestated contention of the company is without merit because there is no material difference between the exempting provisions of the two Acts mentioned which would change the above-mentioned decision if made in the light of the provisions of the former Act. Whatever innovations were brought about by Republic Act No. 901 on Republic Act No. 35 are, for purposes of resolving the present question, immaterial. Comparing the two Acts, it will be easily seen that the substantive clauses in section 1 of Republic Act No. 35 granting the right to tax exemption was retained also in Section 1 of Republic Act No. 901. Consequently, even if the Lacson case, supra , were to be decided in the light of the provisions of the former Act, the decision would be the same. The decision in the aforecited case therefore applies to all forest concessionaires who are at the same time manufacturers of plywood and veneer enjoying tax exemption as such manufacturers either under Republic Act No. 35 or 901. MELECIO R. DOMINGO Commissioner of Internal Revenue