Publishing Republic Act No. 3696, Amending Section 183 of the National Internal Revenue Code — Re: Installment Sales

October 18, 1963 REVENUE MEMORANDUM CIRCULAR NO. 32-63 SUBJECT : Publishing Republic Act No. 3696, Amending Section 183 of the National Internal Revenue Code Re: Installment Sales TO : All Internal Revenue Officers and Others Concerned For the information and guidance of all concerned, there is published below Republic Act No. 3696, to wit: Republic Act No. 3696 "SECTION 1.Section one hundred and eighty-three of Commonwealth Act Numbered Four hundred and sixty-six, as amended, is hereby amended by adding a new subsection which shall read as follows: "(c) Sales tax on articles manufactured locally and sold on installment basis . When the articles are manufactured locally and sold on installment term of at least twelve months, the percentage taxes established in sections one hundred eight-four, one hundred eighty-five, and one hundred eighty-six of this Code shall be based on the cash prices of the articles, cash price being defined as the price at which an article is offered for sale on cash term to the public without any discount and/or rebate whatsoever during the tax period." "SEC. 2.This Act shall take effect upon its approval. "Approved, June 22, 1963." Features of the Amendments Under the amendment, the sales tax on articles manufactured locally and sold by its manufacturers directly to the consuming public on installment terms of at least twelve (12) months is now based on the cash price of the articles and not on the installment price. Before the amendment, the basis of the sales tax is the installment price. cdta The law defines the term "cash price" as the price at which an article is offered for sale on cash terms to the public without any discount and/or rebate whatsoever during the tax period. Any discount or rebate given after the sale by installments shall not reduce the "cash price" fixed by law as the tax base. Accordingly, in cases of sales on installment terms covering a period of less than twelve (12) months, the basis of the sales tax should be the installment price and not the cash price. Effectivity Republic Act No. 3696 took effect on June 22 1963, the date of its approval. Enforcement and Publicity All internal revenue officers and others charged with the enforcement of the internal revenue laws are hereby enjoined to be guided accordingly and to give this Circular as wide a publicity as possible. cdti (SGD.) RAMON T. OBEN Acting Commissioner of Internal Revenue APPROVED: (SGD.) RODRIGO D. PEREZ, JR. Secretary of Finance