Tax Imposed on a Caterer and Canteen Tickets

October 20, 1958 BIR RULING NO. 618-58 Mr. Graciano T. Cruz Certified Public Accountant 2665 Oroquieta, Sta. Cruz Manila S i r : Reference is made to your letter dated August 20, 1958, requesting information on the following: aisadc "Employer "A", who has approximately 400 employees and laborers, desires to put up a canteen for its employees, and lease the same to private person "B2. "A" will furnish free of charge to "B" the canteen hall, all furnitures, equipment, tablewares, dishes, utensils, fuel, light and water necessary for the efficient operation of the canteen and make available to the employees decent and low-cost wholesome food. All that "B" will provide is the labor and food that will be served in the canteen. The food is cooked outside of the Company compound, either by "B" himself or purchased from other suppliers. The food is brought to the canteen in cooked form. Whenever necessary the food is heated on the electric stove provided by "A". Employees may suggest the viand desired from day to day. "B" can be compared favorably to a peddler of food in lunch kits or "priemrera", the only difference being the food will be served in plates and on tables provided "A". "Private person "B" will cause to be printed canteen tickets in booklets of P2.00, P5.00 and P10.00 to be sold to employees on account and deducted from their salaries every payday. These canteen tickets will be in denominations of P.05, P0.10, P0.15 and P0.20 which will be used to pay the employees' account with the canteen instead of cash." In answer thereto, I have the honor to inform you as follows: Queries 1 & 2. "B" is not a peddler but a caterer, subject to the fixed annual tax of P20.00 and to the 3% tax on his gross receipts, pursuant to Sections 182(A)(1) and 191 of the National Internal Revenue Code, as amended. The fact that the food sold in the canteen are either cooked outside of said place by "B" himself or purchased by him from others, and that the canteen hall, furnitures and equipments thereof, etc. are provided free to him by "A" do not affect the taxability of "B" as caterer. Queries 3 & 4. Notwithstanding the fact that instead of cash, tickets shall be used as the medium of exchange in the case under consideration, "B" is still under obligation to issue invoices or receipts for sales made by him in excess of P2.00. However, while said invoices or receipts should be registered prior to their use, in accordance with Section 19 of Revenue Regulations No. V-1, or the Bookkeeping Regulations, as amended, the canteen tickets need not be so registered. LexLib Very truly yours, (SGD.) MELECIO R. DOMINGO Acting Commissioner of Internal Revenue