Auxiliary Invoices Accomplished Upon removal of the Logs

October 7, 1959 BIR RULING NO. 505-59 1st Indorsement Respectfully returned to the Chief, Business Tax Division, B.I.R., Manila. The records of the case show that the Sta. Clara Lumber Company was, during the period in question, an operator of the Class "C" sawmill. They further show that said company brought the logs from the forest where they were cut to its log pond, a distance of 18 kilometers away but within its forest concession and that said company was a bonded licensee. As to whether or not the logs should have been accompanied by auxiliary invoices from the forest to the log pond, section 12 of Revenue Regulations No. 85 is hereby quoted: cdt "Where the requirement to pay the charges on an official invoice in the municipality in which the forest products are cut or gathered before the removal of the forest products would cause great inconvenience to a forestry licensee, he may be permitted to ship his forest products from the cutting area to their destination (emphasis ours), on an auxiliary invoice, in quadruplicate, signed by him or his authorized agent at the point of origin." It is clear, therefore, that auxiliary invoices should be accomplished upon removal of the logs from the cutting area or place covered by the forest concession and not upon removal of the logs from the log pond. In this case, however, where the log pond is, although separated by agricultural land from the place where the logs have been actually cut, situated within the forest concession, auxiliary invoices need not accompany the logs from the forest to the log pond. This is for the reason that such removal cannot be considered as transporting which should be covered by invoices. In view of the foregoing, the Sta. Clara Lumber Company cannot be held liable to the 25% surcharge for removing without invoices and 25% surcharge for discharging without permit. (SGD.) MELECIO R. DOMINGO Commissioner of Internal Revenue