Tax Exemption Granted to Philippine Producers' Cooperative Marketing Association, Inc.

October 13, 1959 BIR RULING NO. 485-59 The President Philippine Producers' Cooperative Marketing Association, Inc. Araneta Street, Bacolod City S i r : Reference is made to your letter dated October 8, 1959 requesting exemption from the 2% processing tax on the share of your members in the sugar milled by the Central out of the sugar cane delivered by said members to the Association which the latter to be milled by the Central. cdtech Investigation disclosed that your Association was duly organized under the provisions of Act No. 3425, as amended. Your organization as an association under said law is also duly evidenced by your Articles of Incorporation. In accordance with the Marketing Agreement and Power of Attorney entered into by the Association and its members, the latter agreed to deliver to the Association their produce for milling in the Central under existing milling contracts. The Association, on the other hand, agreed not only to undertake the milling of the produce of its members but also the market the same. The proceeds of the sale by the Association of the sugar of its members is turned over by the Association to the latter less only advances and interests and cost of management and production. Under these terms and conditions, the Marketing Agreement and Power of Attorney is clearly within the scope of the functions of the Association as envisaged by Republic Act No. 3425. Considering the foregoing circumstances, this Office is of the opinion and so holds that the Philippine Producers' Cooperative Marketing Association, Inc. is, for undertaking the milling and marketing of the produce of its members, exempt from the 2% tax on the share of its members in the sugar which it caused to be milled by the Central. This will serve as authority for the Central in not withholding the 2% tax corresponding to the share of your members in the sugar which the Association caused, for and in their behalf, to be milled by the Central. aisadc Very truly yours, (SGD.) MELECIO R. DOMINGO Commissioner of Internal Revenue