Publishing Republic Act No. 3050 Exempting Local Fertilizer Manufacturers from the Payment of Certain Taxes on their Importation of Capital Goods, Equipment, Spare Parts, etc.

August 21, 1962 REVENUE MEMORANDUM CIRCULAR NO. 15-62 SUBJECT : Publishing Republic Act No. 3050 Exempting Local Fertilizer Manufacturers from the Payment of Certain Taxes on their Importation of Capital Goods, Equipment, Spare Parts, etc. TO : All Internal Revenue Officers and Others Concerned For the information and guidance of all concerned, there is quoted hereunder Republic Act No. 3050: AN ACT EXEMPTING LOCAL FERTILIZER COMPANIES FROM THE PAYMENT OF SPECIAL IMPORT TAX, MARGIN FEE OR FOREIGN EXCHANGE, SALES AND COMPENSATING TAXES AND CUSTOMS DUTIES ON THEIR IMPORTATION OF CAPITAL GOODS, EQUIPMENT, SPARE PART, RAW MATERIALS, SUPPLIES, CONTAINERS, AND FUEL. "Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled. "SECTION 1.Notwithstanding any provisions of law to the contrary, subject to the conditions hereinafter provided, any person, partnership, company or corporation engaged or which shall engage in the manufacture of fertilizer of whatever nature shall be entitled to exemption until December thirty-one, nineteen hundred and sixty-five from the payment of the special import tax, margin fee on foreign exchange, sales and compensating taxes and customs duties payable by such person, partnership, company or corporation, in respect to the importation of capital goods, equipment, spare parts, raw material, supplies, containers and fuel by any of those engaged in the above industry: Provided however , That the importation of raw materials as mentioned in this section, made by farmers for farmers' cooperatives if applied to their land shall be entitled to the same exemption mentioned in this section. "SEC. 2.Any person, partnership, company or corporation granted exemption under the provisions of this Act shall, during the period of exemption, report to the National Economic Council at the end of every fiscal year the actual foreign exchange requirements, a complete list and correct valuation of all real and personal property of its industrial plant or factory, and a financial statement under oath. "SEC. 3.The Department of Finance shall promulgate the rules and Regulations necessary for the implementation of this Act. "SEC. 4.It shall be unlawful for any person to make any material misrepresentation in any report or document required by Section two of this Act or by the rules and regulations promulgated thereunder. "SEC. 5.Any person violating any provision of this Act or any of the rules and regulations promulgated, pursuant thereto shall, upon conviction, be sentenced to pay a fine not exceeding thirty thousand pesos or suffer imprisonment for a period not exceeding three years, or both, at the discretion of the court: Provided, however, That if the offender is a corporation, association or partnership, the penalty shall be imposed upon the president, directors, managers, managing partners, as the case may be and/or the person charged with the administration thereof. And if he is an alien, in addition to the penalties herein prescribed, he shall be deported without further proceedings on the part of the Deportation Board. "SEC. 6.All existing laws, executive orders and administrative rules and regulations or parts thereof which are inconsistent with the provisions of this Act are hereby modified or repealed accordingly. "SEC. 7.This Act shall take effect upon its approval. "Approved, June 17, 1961. FEATURES OF THE ACT The statute provides that bona-fide fertilizer manufacturers who are qualified for tax exemption under this Act may file an application for withdrawal from customs custody of their importations of capital goods, equipment, spare parts, raw materials, supplies, containers and fuel actually needed and solely for use in their manufacture of fertilizers. The said imported articles are exempt from the payment of special import tax, margin fee on foreign exchange, sales and compensating taxes and customs duties up to December 31, 1965. Raw materials imported by farmers for farmers' cooperatives for use in the manufacture of fertilizer to be applied to their land are likewise exempt from the payment of the aforesaid taxes with the same period of exemption. All persons granted exemption under said Act are required to report to the National Economic Council under oath, at the end of every fiscal year, during the period of exemption, their financial statements, complete list and correct valuation of the real and personal properties of their industrial plants or factories and their actual foreign exchange requirements. Any violation of the provision of the law is punishable by a fine not exceeding P30,000 or imprisonment for not more than 3 years, or both, at the discretion of the court, in accordance with Section 5 of the law. EFFECTIVITY Republic Act No. 3050 took effect on June 17, 1961. IMPLEMENTATION For the implementation of the law, the Department of Finance had promulgated Department Order No. 105-A, copy of which is attached hereto for ready reference. atdc PUBLICITY Internal revenue officers and others charged with the enforcement of internal revenue laws are hereby requested to give this circular as wide a publicity as possible. (SGD.) JOSE B. LINGAD Acting Commissioner of Internal Revenue "September 15, 1961 "DEPARTMENT ORDER NO. 105-A "SUBJECT : Withdrawal of capital goods, equipment, spare parts, raw materials, supplies, containers, and fuel by bona-fide fertilizer manufacturers and farmers for farmers' cooperatives if applied to their land. "To carry into effect the provisions of Section 1 of Republic Act No. 3050 pertaining to the importation of articles specified therein by bona-fide fertilizer manufacturers and of raw materials by farmers for farmers' cooperatives if applied to their land, the following rules and regulations are hereby promulgated for the information and guidance of all concerned. "Paragraph 1.Any person, partnership, company or corporation who or which qualified for tax exemption under Republic Act No. 3050 as a bona-fide fertilizer manufacturer may file an application for withdrawal from customs custody of capital goods, equipment, spare parts, raw materials, supplies, containers and fuel actually needed and for the exclusive use in the manufacture of fertilizer. Farmers may file such application only for the withdrawal from customs custody of raw materials imported by them for farmers' cooperatives for the manufacture of fertilizer to be applied to their land. The application shall be filed in writing with the Department of Finance and shall be accompanied by the following commercial, shipping and related documents: "a. Release certificate . Release certificate issued by the Central Bank, the Producers Incentive Board created under Section 5 of Republic Act No. 2261 and other agencies duly authorized to issue there lease certificates as in the case of the Export Control Committee, in favor of the fertilizer manufacturer or farmer concerned. "b. Commercial invoice . Commercial invoice issued to the applicant fertilizer manufacturer or farmer covering the imported articles. The commercial invoice shall contain all the data called for in Section 1308 of the Tariff and Customs Code. " Pro forma invoice . When it is shown to the satisfaction of this Department that it is impossible to produce the commercial invoice at the time of the filing of the application, pro-forma invoice based on the date appearing on the covering release certificate issued by the agencies named in Par. 1(a) above, may be submitted in lieu of the commercial invoice. "c. Consular invoice . Consular certification of commercial invoice issued in the name of the fertilizer manufacturer or farmer concerned and accomplished in accordance with Section 1309 of the Tariff and Customs Code. Consular invoice shall not be required in every importation the export value of which does not exceed five hundred pesos (P500.00). " Surety Bond . When it is impossible to produce the consular invoice at the time of the filing of the application, a bond in an amount prescribed in Section 1312 of the Tariff and Customs Code to guarantee the subsequent production of the consular invoice, may be submitted by the tax-exempt fertilizer manufacturer or farmer concerned in lieu of the consular invoice. "d. Bill of lading of carrying vessel or aircraft . The consignee in a "straight" bill of lading of the carrying vessel or aircraft must invariably be in the name of the bona-fide fertilizer manufacturer of farmer. The "order" bill of lading of the carrying vessel or aircraft shall be consigned to the order of a particular local bank or local exclusive distributor which shall notify the consignee or importer name therein. " Delivery permit . Permit to deliver imported articles issued by the carrier or agent of the carrying vessel or aircraft in the name of the importing fertilizer manufacturer or farmer or its authorized licensed customs broker may be presented in lieu of the bill of lading if the latter document (the B/L) is not available at the time of the filing of the application for withdrawal. " Postal advice . Postal advice in the name of the fertilizer manufacturer or farmer concerned shall be submitted in lieu of the bill of lading when the importation arrives by parcel post. "e. Authority to import . A true or photostat copy of the letter-grant authorizing the tax-free importation of the articles applied to be withdrawn from customs custody. "Par. 2.The application shall be in the form of an affidavit and shall contain: "a.an adequate description of the items being imported "b.the C.I.F. or C & F value of the shipment and "c.an explanation in reasonable detail of the use of such imported article in the manufacture of fertilizer. "Par. 3.The authority to release the imported items shall be addressed to the Commissioner of Customs and copies thereof shall be furnished the Commissioner of Internal Revenue, the Governor of the Central Bank and the importing fertilizer manufacturer or farmer. "Importation by fertilizer manufacturer or farmer in accordance with the provisions of this Order may be given due course by the Bureau of Customs only if the corresponding import entry is made by the importing fertilizer manufacturer or farmer or by a duly licensed customs broker acting under authority of the importing fertilizer manufacturer or farmer. The importations shall be delivered directly by the Bureau of Customs to the importing fertilizer manufacturer or farmer or the authorized licensed customs broker. "Par. 4.This Order shall take effect immediately. "(SGD.) DOMINADOR R. AYTONA "Secretary of Finance"