Publishing Department Order No. 62-62; Regarding the Termination of Tax Exemption Privileges of New and Necessary Industries

March 8, 1963 REVENUE MEMORANDUM CIRCULAR NO. 08-63 SUBJECT : Publishing Department Order No. 62-62; Regarding the Termination of Tax Exemption Privileges of New and Necessary Industries TO : All Internal Revenue Officers and Others Concerned For the information and guidance of all concerned, there is quoted hereunder Department Order No. 62-62 dated November 29, 1962 of the Honorable, the Secretary of Finance which is self-explanatory: "Department Order No. 62-62 "SUBJECT : Termination of Tax Exemption Privileges of New and Necessary Industries under Republic Acts Nos . 35 and 901 "By authority under section 11 of Republic Act No. 901, as amended, the following rules and regulations are hereby promulgated for the information and guidance of all concerned: "PARAGRAPH I. By operation of Republic Act No. 901, all existing tax exemption grants of new and necessary industries under Republic Act Nos. 35 and 901 shall terminate at 12:00 o'clock midnight of December 31, 1962 and thereafter shall not have any force and effect whatsoever. "PAR. II. New and necessary industries whose tax exemption grants under Republic Acts Nos. 35 and 901 are still effective on December 31, 1962 may pay up to 12:00 o'clock midnight of December 31, 1962 ninety per centum (90%)of the full rates of customs duties and internal revenue taxes, in addition to the full special import tax and other charges, due on their shipments of machinery and spare parts and raw materials authorized to be imported under their grants even if the release authorizations for the partial tax-free release of the shipments have not been received in the Bureau of Customs as long as the conditions provided in section 206 of the Tariff and Customs Code, hereunder quoted for ready reference, for the entry, or withdrawal from warehouse, for consumption of the importation have all been complied with by the importing tax-exempt industries or by their authorized duly licensed customs brokers before 12:00 o'clock midnight of December 31, 1962: cdti "SEC. 206. Entry, or Withdrawal from Warehouse, for Consumption . Imported articles shall be deemed 'entered' in the Philippines for consumption when the specified entry form is properly filed and accepted, together with any related documents required by the provisions of this C and/or regulations to be filed with such form at the time of entry, at the port or station by the customs official designated to receive such entry papers and any duties, taxes, fees, and/or other lawful charges required to be paid at the time of making such entry have been paid or secured to paid with the customs official designated to receive such monies, provided that the article has previously arrived within the limits of the port of entry. "Imported articles shall be deemed 'withdrawn' from warehouse in the Philippines for consumption when the specified form is properly filed and accepted, together with any related documents required by any provisions of this Code and/or regulations to be filed with such form at the time of withdrawal by the customs official designated to receive the withdrawal entry and any duties, taxes, fees and/or other lawful charges required to be paid at the time of withdrawal have been deposited with the customs official designated to receive such payment." "PAR. III. Notwithstanding compliance with the conditions mentioned in Paragraph II above, including the entry of the shipments and the payment of the customs duties and internal revenue taxes, in addition to the special import tax and other charges, on importations before 12:00 o'clock midnight of December 31, 1962, importations of tax-exempt industries shall not be released from Customs custody until receipt from this Department of corresponding release authorizations or advice of denial of the partial tax-free entry of the shipments. In case of denial of the partial tax-free entry, the shipments shall be released by the Bureau of Customs only upon the prepayment of the full customs duties, taxes and other charges due on the shipments. "PAR. IV. Shipments of machinery and spare parts thereof and raw materials authorized to be imported under tax exemption grants of new and necessary industries that are entered, or withdrawn from warehouse, for consumption in accordance with section 206 of the Tariff and Customs Code after 12:00 o'clock midnight of December 31, 1962 should be subjected to the payment of the full rates of customs duties and internal revenue taxes; in addition to the full special import tax and other charges, due thereon even if such importations are covered by release authorizations in form-letters addressed to the Bureau of Customs directing the collection of only ninety per centum (90%) of the customs duties and internal revenue taxes, in addition to the special import tax and other charges on the shipments. cdt "PAR. V. The termination of tax exemption grants under Republic Acts Nos. 35 and 901 at 12:00 o'clock midnight of December 31, 1962 shall not prejudice in any way the assessment and collection, even after December 31, 1962, of customs duties and taxes that accrued and became due and payable during the period of effectivity of Republic Acts Nos. 35 and 901 nor the tax exemption privileges grantees under Republic Acts Nos. 35 and 901 are entitled to in connection with the operation of their tax-exempt industries during the period of effectivity of the aforesaid laws. "Tax-exempt industries shall submit, within seventy (70) days but not beyond March 11, 1963, to this Department the reports required by law, for the period ended December 31, 1962. The reports shall be the bases for determination as to whether or not new and necessary industries with existing tax exemption grants are entitled to diminishing tax exemption privileges under the aforesaid laws until 12:00 o'clock midnight of December 31, 1962. "PAR. VI. The Commissioner of Customs, the Commissioner of Internal Revenue, all Collectors and Customs and all Provincial, City, Municipal and Municipal District Treasurers shall give wide publicity to the provisions of this Department Order." "(SGD.) RODRIGO D. PEREZ, JR. "Acting Secretary" Internal revenue officers and others charged with the enforcement of the internal revenue law are hereby enjoined to give this circular as wide a publicity as possible. LLjur (SGD.) JOSE B. LINGAD Acting Commissioner of Internal Revenue