Amendment of Certain Provisions of Revenue Regulations No. 7-76 Governing the Purchase and Sales of Tax Free Articles by the Armed Forces of the Philippines Commissary and Exchange Service (AFPCES)

April 30, 1980 REVENUE REGULATIONS NO. 02-80 SUBJECT : Amendment of Certain Provisions of Revenue Regulations No. 7-76 Governing the Purchase and Sales of Tax Free Articles by the Armed Forces of the Philippines Commissary and Exchange Service (AFPCES) TO : All Internal Revenue Officers and Others Concerned Pursuant to Section 326 in relation to Section 4 of the National Internal Revenue Code of 1977, as amended the following amendments to Revenue Regulations No. 7-76 are hereby promulgated and shall be known as Revenue Regulations No. 2-80. SECTION 1 . Section 6 of Revenue Regulations No. 7-76 is hereby amended to read as follows: aisa dc "Sec. 6. In filing his quarterly percentage tax return the manufacturer or producer selling articles or commodities to AFPCES shall exclude from his total gross sales subject to tax the sales made to AFPCES during the quarter. The tax free sales to AFPCES shall, however, be indicated in the return by means of a footnote stating the amount of sales and the percentage, specific or mining taxes paid on the raw materials, parts, accessories or other articles forming part of the finished product sold. Any percentage, specific or mining tax paid, on domestically manufactured or imported raw materials, parts, accessories or other articles forming part of the finished product sold to AFPCES may be claimed as a tax credit by the manufacturer or producer upon proper application provided that the amount of the tax paid on the raw material, part, accessory or other article is indicated as a separate item in the sales invoice. The application for tax credit referred to herein shall be filed with the Indirect Taxes Division, Bureau of Internal Revenue, in a prescribed form and shall be prepared under the penalties of perjury. It shall be accompanied by the following documents: 1. Certified true copy of quarterly percentage tax return filed for the quarter or quarters during which the sales to AFPCES were made; 2. Manufacturing statement showing the cost of raw materials used in the manufacture of the articles sold to AFPCES which form the basis for the tax credit being applied; and 3. Such other information which may be needed in order to arrive at the correct tax credit applied for. If by all indications the applications appears to be in order, the Indirect Taxes Division shall prepare the tax credit certificate for the signature of the Commissioner of Internal Revenue or his duly authorized representative. Such tax credit when approved may be credited against any sales tax liability of the manufacturer or producer during any quarter or quarters. The use of a tax credit certificate, however, shall in no case result in refund, whether directly or indirectly." SECTION 2 . Section 7 of Revenue Regulations No. 7-76 is hereby amended by adding a new paragraph to read as follows: "4. Petroleum Products." SECTION 3 . The first sentence of Section 8 of Revenue Regulations No. 7-76 is hereby amended to read as follows: "Sec. 8. The commercial labels intended for the above enumerated articles other than petroleum products shall bear the following inscription: "FOR THE EXCLUSIVE USE BY AFP PERSONNEL AND OTHER AUTHORIZED PERSONS UNDER P.D. 83. THE POSSESSION OR USE OF THESE ARTICLES BY UNAUTHORIZED PERSONS IS PROHIBITED BY LAW." SECTION 4 . Revenue Regulations No. 7-76 is hereby amended by adding a new Section to be known as Section 11-A to read as follows: "Sec. 11-A. Purchases by AFPCES of petroleum products on a tax-free bases shall be allowed only after a copy of the supply contract entered into with a local oil company is submitted to the Commissioner of Internal Revenue thru the Gasoline & Miscellaneous Tax Division on or before January 1 of every year, together with a list of persons entitled to commissary and PX privileges and indicating, if any, the vehicles registered in their names, the make of vehicles and the corresponding plate numbers. cd i In case the petroleum products sold to AFPCES are tax-paid, a claim may be filed by AFPCES for the refund or replacement under Section 34 and 35 of Revenue Regulations No. 13-77, otherwise known as Petroleum Products Regulations. In case the petroleum products delivered to AFPCES are tax-paid but the purchase price is net of specific tax, the supplier-oil company may file a claim for tax refund, tax credit or replenishment. All invoices covering sales by AFPCES of motor fuel and lubricants shall indicate legibly, among others, the name of the purchaser, make of vehicle, plate number, kind and quantity. A copy of the sales invoice shall in all cases accompany the claim for tax refund, tax credit or replenishment filed either by AFPCES or by the supplier-oil company. A monthly summary of sales of petroleum products indicating the kind and quantity sold should be submitted by the AFPCES within the 10th day of the month following to the Gasoline & Miscellaneous Tax Division." SECTION 5 . Section 12 of Revenue Regulations No. 7-76 is hereby amended to read as follows: Sec. 12. The provisions of Sections 1, 2, 3, 4 and 5 of these regulations shall apply to purchases by AFPCES from local manufacturers, compounders, brewer or suppliers of articles subject to specific tax, except that in the case of identity of the approving official referred to in Section 2, and submission of bi-monthly report of purchases by the AFPCES mentioned in Sec. 5, both of these regulations, the same shall be submitted to the Commissioner of Internal Revenue thru the Manufactured Tobacco Tax Division, Alcohol Tax Division and the Gasoline & Miscellaneous Tax Division, as the case may be. SECTION 6 . This regulations shall take effect immediately. CESAR VIRATA Minister of Finance Recommending Approval: EFREN I. PLANA Acting Commissioner