Rules on the Use of Cash Register Machines in Lieu of Registered Sales Invoices or Receipts

July 15, 1980 REVENUE REGULATIONS NO. 04-80 SUBJECT : Rules on the Use of Cash Register Machines in Lieu of Registered Sales Invoices or Receipts TO : All Internal Revenue Officers and Others Concerned Pursuant to the provisions of Section 326 in relation to Section 4, both of the National Internal Revenue Code of 1977, as amended, the following regulations are hereby promulgated. SECTION 1 . Scope . These regulations shall govern the procedures for the grant of the permit to use cash register machines and their actual use, subject to certain conditions herein prescribed. acd SECTION 2 . Lines of Business That May Qualify for the Issuance of Permits to Use Cash Register Machines . The permit to use cash register machines in lieu of sales invoices or receipts shall be issued only to proprietors, owners or operators of any of the following lines of business: 1. Supermarkets 2. Department Stores 3. Drugstores 4. Bookstores 5. Groceries 6. Bakeries; and 7. Restaurants, bars, beer gardens, refreshment parlors and other eating places. The Commissioner of Internal Revenue may, in meritorious cases, qualify other lines of business to use cash register machines, considering modern business practices. SECTION 3 . Procedures : Application and Grant of Permit . 3.1 Application . The application to use cash register machine shall be in the form of a joint sworn declaration by the applicant and the distributor/dealer or vendor of the machine (Annex "A"), which shall contain the following: (a) Name, address, business name/style and TAN of applicant, kind/line of business and the address where the machine will be used; (b) Name, business style, address and TAN of the distributor/dealer or vendor of the machine; (c) Cash register machine brand, model, serial number and type, whether electronic or mechanical, whether with resettable or non-resettable accumulating grand total, and whether new or secondhand; (d) Maximum accumulating sales capacity; (e) Reset counter number; and (f) Other essential features. 3.1(a) Where to File the Application ; Attachments . The application shall be filed with the Revenue District Officer within whose jurisdiction the business establishment where the machine will be used is located and shall be accepted only as duly filed if submitted with the following: (1) A copy of the applicant's current privilege tax receipt (PTR); (2) Copies of the certificate of registration of business name/style issued by the Bureau of Internal Revenue and Bureau of Domestic Trade and, in case of corporations or partnerships, also a copy of the certificate of registration with the Securities and Exchange Commission. The documents mentioned above shall not be required from applicants who had already submitted the same with their previous application to use a cash register machine. (3) Sample receipts for a "no sale" transaction identified to the particular issuing machine legibly showing the logo (business name, municipality/city address including branch identification, and TAN), consecutive receipt numbers and date; (4) Sample receipt showing the reading of the accumulated grand total recorded in the machine and, in case of electronic machine, the reset counter number; and (5) For machines with resettable accumulating grand total, all the proprietor's and reset keys. 3.2 Issuance of the Permit to Use Cash Register Machines, Subject to Certain Conditions . The Revenue District Officer shall issue to the applicant the corresponding permit to use cash register machine (Annex "B") upon receipt of a duly filed application; PROVIDED, THAT , it is satisfactorily shown by the applicant that he/it is provided with a duly registered cash register sales book, appropriately identified as such to each machine being applied for use, showing the following columns: a. Date of sale; b. Inclusive consecutive receipt numbers; c Previous reading; d. Present reading; e. Sales; f. Sales over-run or overflow count; g. Reset counter number; and h. Remarks If the business establishment where the machine will be used is in the city/municipality where the Regional Office is situated, the permit shall be issued by the Regional Director, except when he has delegated such power to the Revenue District Officer of the district where the Director's Office is located. 3.2(a) Permits for different lines of business . A separate permit shall be issued by the Regional Director or the Revenue District Officer concerned for every application duly files. 3.2(b) Conditions for the Issuance of the Permit . The subject to use cash register machines shall be granted subject to the following conditions: 1. The machine shall be used exclusively in the operation of only one line of business covered by the permit. If the business is conducted simultaneously with another line of business for which no cash register permit has been issued, sales made in such business shall be covered with the corresponding issuance of registered sales invoices or receipts; aisa dc 2. The machine should be equipped with two (2) rollers, one for the audit journal tape intended for audit and internal revenue tax purposes and the other for the customers' tape which are issued as itemized and consecutively numbered receipts; 3. When the machine is punched for the purpose of recording a sale, the amount of sale should automatically be printed on the customer's receipt and the audit journal tape. Under no circumstance should the machine be operated without the corresponding tapes installed on both rollers; 4. It must be equipped with a reset counter that advances by one every time the total is reset to zero; 5. The imprint on the customers' and audit journal tapes should always be legible; 6. Electronic cash register machines with volatile memory shall at all times be connected to a power source and shall not be used at anytime as reserve units (kept for future use) to protect the memory mechanism and preserve stored data; 7. Upon filing of the application, all the proprietor's and reset (z) keys of machines with resettable accumulating grand total shall be surrendered to the Revenue District Officer for safekeeping and control; 8. Registered machines with resettable accumulating grand total shall not be reset, except when expressly authorized by the Revenue District Officer; 9. The proprietor shall not change his business name or the use of the registered machine or transfer to another business location, branch or establishment, or otherwise have the machine repaired without prior written notice to the proper Revenue District Officer; 10. After repair and before re-use of the machine the proprietor and the person who made the repair shall submit a joint sworn statement to the Revenue District Officer (Annex "C"). 11. Registered machines may be withdrawn from use, either by retirement or sale, only upon prior application and approval by the Regional Director or Revenue District Officer, as the case may be. Upon receipt of the application, such officer shall cause the immediate verification of said machine and the accounting records kept in connection therewith, to insure that all the sales data registered in the machine up to the last day it was used are properly recorded for internal revenue purposes. The approval shall show the following information as of the date of retirement or sale: namely, the reset counter number, accumulated grand total sales and the number of the last cash register receipt issued (Annex "D"). The permit previously granted shall be recalled for cancellation; 12. The permit (Annex "B") should be securely attached at the back of the machine to which it refers and must be conspicuously visible to the public. The serial number of the machine should also be printed in bold figures on the back thereof to facilities verification; 13. In restaurants, bars, refreshment parlors and other eating places located or maintained within the premises or compound of a cockpit, cabaret, night or day club, jai-alai or race track, or which are accessible to patrons of such cockpit, cabaret, night or day club, jai-alai or race track by means of a connecting door or passage permit to use a cash register machine may be issued to record gross receipts from sales of both food and distilled spirits, fermented liquors or wines. However, in eating places other than those mentioned above, permits to use cash register machines may be issued to record gross receipts from the sale either of (a) food only or (b) distilled spirits, fermented liquors or wines only. If the permit to use cash register machine is for food only, duly registered sales receipts or invoices should be issued separately for every sale of distilled spirits, fermented liquors or wines; and, vice-versa, if the permit is for the sale of liquors only, duly registered sales receipts or invoices should be issued separately for every sale of food. In cases where the cash register machine is of the type which is capable of clearly indicating separately in words sales of food and sales of liquor, then only one permit may be issued. 14. Data required to be reflected on the register receipts . The cash register receipts must show among others, the following: a. Proprietor's business name; b. Municipal/City address (if the machine is used by a branch, the receipt should identify the particular branch; e.g. Branch 1 or Branch 2 Manila, etc.); c. Proprietor's Tax Account Number (TAN); d. Amount of the transaction; and e. Date of the transaction. In no case shall a cash register machine be used without the customer's receipt clearly showing all the data required above, except in the case of electronic machines, where the proprietor has been authorized by the Regional Director or the Revenue District Officer concerned the use thereof pending the completion of the installation of the "logo" for a period not exceeding sixty (60) days from the date of such authority. 15. Receipt Numbering Mechanisms . In order to maintain the consecutive sequence of the numbers imprinted on the customer's receipts and the audit journal tape, the receipt numbering mechanism of a registered machine shall not be disturbed or tampered with; and 16. Inspection/Verification of subsidiary cash register sales book and cash register machines . The subsidiary cash register sales book shall be kept at all times at the place where the machine is located and shall be available at any time for verification by duly authorized internal revenue officers. Likewise, all cash register machines, whether registered or not shall be subject to inspection at any time by duly authorized internal revenue officers. acd SECTION 4 . Procedures in Recording of Sales . The entries in the audit journal tape shall be summarized at the end of the day and the total transferred to the Cash Register Sales Book. Thereafter, the total sales in all the registered machines shall be summarized and entered in the Cash Receipts Book or Columnar Journal not later than five o'clock in the afternoon of the following business day. The Cash Receipts Book or Columnar Journal shall have a special column strictly for sales recorded thru the cash register machines to properly distinguish sales through the use of registered sales invoices or receipts. The used portion of the audit journal tape, appropriately identified to the machine and certified correct by the proprietor or his authorized representative, shall be cut off from the audit roll at the end of each business day and shall constitute the basic document to support daily sales entries in the cash register sales book. The cash register sales book and the used audit journal tape shall form part of the accounting records and shall be preserved within the same period prescribed by applicable laws, rules and regulations. SECTION 5 . Cash Register Machines for Internal Control . Any proprietor, owner or operator of a business establishment may use a cash register machine of any type for "internal control purposes", provided that, duly registered sales invoices or receipts are issued for every sale. However, such proprietor, owner or operator shall first notify the proper Revenue District Officer of his intention to use the machine solely for "internal control" and shall secure a poster from the said Office which shall be securely attached at the back of the machine conspicuous to the public showing the following: " WARNING THIS MACHINE IS NOT AUTHORIZED TO ISSUE RECEIPT . ASK FOR SALES INVOICE. REPORT ANY VIOLATION TO THE B.I.R. COMMISSIONER OF INTERNAL REVENUE" (Annex "E") At no time shall the poster be detached or covered from public view. However, cash register machine without a built-in receipt dispensing mechanism or roller on which to mount the customers' roll may be used for internal control purposes without complying with the foregoing requirements. SECTION 6 . Exemptions . Persons authorized to use cash register machines are hereby exempted from showing on the cash register receipt the name, business style and address of the purchaser, regardless of the amount of sales. SECTION 7 . Registration of Other Kinds/Types of Cash Register Machine and/or Inclusion of Other Lines of Business . A cash register machine with built-in capacity to accumulate sales data of different lines of business may be authorized by the Commissioner to issue cash register receipts for all such different lines of business, provided, however, that the distinction of sales by lines of business shall be clearly shown on the machine tapes in words rather than by code or symbol. Application for the above purpose shall be filed with the proper Revenue District Officer who shall cause the investigation of the veracity and merit of the applicant's representations on the built-in mechanisms and operating features of the machine and on the necessity for its use on such other line or lines of business. The report thereon shall be submitted to the Commissioner, through the Indirect Taxes Division, for appropriate action. SECTION 8 . Violations . Any violation of the provisions of these Regulations shall be considered sufficient ground for the revocation of the permit to use cash register machine. If the nature of the violation is equivalent to non-issuance of sales invoice or receipt; or issuance of an unregistered receipt, such violation shall be dealt with in accordance with Revenue Memorandum Order No. 7-79. SECTION 9 . Transitory Provisions : a. Inventory of Existing Machines In order to effectively control all cash register machines, whether or not registered with the Bureau, all Regional Directors shall require the submission of inventory of all cash register machines within their jurisdictions in accordance with the form prescribed herein (Annex "F"), within 30 days from the effectivity of these Regulations. Machines not built with receipt dispensing mechanisms or not equipped with any roller on which to mount the customer's receipt shall not be included in the inventory. b. Validity of Prior Permit . All permits to use cash register machines issued before the effectivity of these Regulations shall remain valid until revoked by the Commissioner of Internal Revenue. c. Registration of Cash Register Sales Book . The cash register sales book shall be registered with the proper Revenue District Office before use. However, in the initial implementation of these Regulations, the cash register sales books for existing authorized machines shall be registered with the Bureau within thirty (30) days after the effectivity of these Regulations. SECTION 10 . Repealing Clause . All revenue regulations, circulars, orders or memoranda or portions thereof which are inconsistent herewith are hereby repealed or modified accordingly. casia SECTION 11 . Effectivity . These Regulations shall take effect immediately. CESAR VIRATA Minister of Finance Recommending Approval: RUBEN B. ANCHETA Acting Commissioner ANNEX A BIR FORM NO. _______ APPLICATION FOR PERMIT TO USE CASH REGISTER MACHINE IN LIEU OF SALES INVOICES/RECEIPTS Name of Applicant ______________________________ Business Name/Style ______________________________ Address ______________________________ Kind/Line of Business ______________________________ Address of Business Using the Machine ______________________________ Source of Machine: (a) Distributor's/Dealer's or Vendor's Name, Business Name and Address ______________________________ (b) Condition of the Machine ______________________________ New [ ] Second Hand [ ] Description of Machine: Brand, Model and Serial No. ______________________________ Type Mechanical _____ Electronic _____ Function Resettable Non-Resettable Accumulating Accumulating Grand Total _____ Grand Total _____ Maximum accumulating sales capacity ______________________________ Reset Counter Number ______________________________ 1. Equipped with two (2) rollers for customer's receipt and audit roll. 2. The customers' receipts issued are consecutively numbered. 3. Every sale printed on the customer's receipt is reflected simultaneously on the audit roll. cdtai 4. With reset counter which advances by "1" everytime the cash register is reset to zero. 5. The reset counter is non-resettable. We hereby declare, that the above information are true and correct . IN WITNESS WHEREOF, we hereunto affix our signatures this ______ day of _____, 19 ___ at ________________. ___________________ ____________________ Distributor/Dealer/Vendor Applicant T.A.N. ________________ T.A.N. _______________ SUBSCRIBED AND SWORN TO before me this __________ day of _________, 19 ______, affiants exhibited to me their Residence Certificate Nos. _________________ and _______________, issued at __________________ and _______________________, on ________________, 198_ and ___________________, 198_, respectively. Doc. No. _______ Page No. _______ Book No. _______ Series of 19__. _____________________________ Officer Authorized to Administer Oath ______________ | | | Documentary | | Stamp | | | | ______________ | ANNEX B BIR FORM NO. _______ REPUBLIC OF THE PHILIPPINES MINISTRY OF FINANCE BUREAU OF INTERNAL REVENUE REVENUE REGION NO. _____ REVENUE DISTRICT OFFICE NO. _____ No. __________ P E R M I T PERMIT IS HEREBY GRANTED TO ___________________, of (Applicant) ____________________________________, to use cash register machine (Address) brand _________________, model _________________, serial no. ___________, at ____________________________________________ (Business name and address) ________________________________________________________, subject to the provisions of the National Internal Revenue Code, as implemented by Revenue Regulations No. _________, dated ___________. This Permit is valid until revoked by the Commissioner of Internal Revenue. Date Issued __________________ COMMISSIONER OF INTERNAL REVENUE By: _________________________________ Regional Director/Revenue District Officer ANNEX C BIR FORM NO. _______ __________________ Date The Revenue District Officer Revenue District No. _______ _______________________ S i r : Pursuant to Revenue Regulations No. ______, dated ____________, please be informed that Cash Register Machine, Brand _________, Model ______, Serial No. _________, has been repaired. It will be re-used on _____. 1. Kind of Machine Electronic _________ Mechanical _________ 2. Name of taxpayer and/or business using the machine ___________________________________ 3. Address of taxpayer and/or business where the machine is used___________________________________ 4. Dates repair started and finished _____________, 19__/ ___________, 19__ Before Repair After Repair 5. Reset counter no. ______________ _______________ 6. Accumulated grand sales total * P______________ P_______________ 7. Last and beginning receipt numbers * ______________ _______________ 8. Explanation of variations in the detector or reset counter number and accumulated sales total in the machine before and after repair, and also, if the receipt number after repair is not consecutive to the last receipt number before repair. (Use reverse side hereof if more space is needed.) (1) ___________________ (2) ____________________ Person/Company Repairing Taxpayer-User TAN No. __________ TAN No. ____________ SUBSCRIBED AND SWORN TO before me this ____ day of __________, 198___, affiants exhibited to me their Residence Certificate Nos. _________ and _______, issued at _____________ and ______________, on _______, 198 __, respectively. Doc. No. _______ Page No. _______ Book No. _______ Series of 19__. _____________________________ Officer Authorized to Administer Oath ______________ | | | Documentary | | Stamp | | | | ______________ | * Two (2) sample receipts of a "no sale" transaction showing the accumulated grand sales total and receipt numbers before and after the repair attached. (If the receipts are not available because the machine would not operate, secure data from audit monitor tape.) ANNEX D BIR FORM NO. _______ ____________________ ____________________ ____________________ ____________________ S i r : Your request to withdraw from use your Cash Register Machine, as of _______________, described hereunder is hereby granted: Brand _______________________________________ Model No. ___________________________________ Serial No. ____________________________________ BIR Permit No. ________________________________ Verification of the said machine and the accounting records kept in connection therewith, as of the last day it was used, disclosed the following: Reset counter No. _______________ Accumulated grand total sales P_______________ Number of the last receipt issued _______________ Very truly yours, ________________________________ Regional Director/ Revenue District Officer ANNEX E WARNING THIS MACHINE IS NOT AUTHORIZED TO ISSUE RECEIPT. ASK FOR SALES INVOICE. REPORT ANY VIOLATION TO THE B.I.R. Commissioner of Internal Revenue THIS NOTICE MUST ALWAYS BE POSTED OR ATTACHED AT THE BACK OF CASH REGISTERED MACHINE MODEL ____________ SERIAL NO.___________________. ANNEX F Republic of the Philippines Ministry of Finance BUREAU OF INTERNAL REVENUE Revenue Region No. ___________ Revenue District No. ___________ ___________________________ _______________________ Date INVENTORY OF CASH REGISTER MACHINES ___________________________ ___________________________ Name Business Name/Style ___________________________ ___________________________ Address Line of Business ___________________________ T.A.N. I. MACHINE ACTUALLY USED WITH BIR PERMIT : If reset- State if with table, are Resettable the pro- or Non- prietor's Reset Resettable and reset State if Date of Counter Accumu- (z) keys Brand and Mechanical Date Original Renewal No. lating with Model No. Serial No. or Electronic Permit Granted Permit* (Present) grand total the B.I.R. ______________________ Owner or Proprietor * attach copies of the original and renewal permits II. MACHINES WITHOUT PERMIT AND USED FOR INTERNAL CONTROL PURPOSES ONLY : (registered sales invoices or receipts are issued for every sale) Brand & Model No. Serial No. III. MACHINES NOT PRESENTLY USED BECAUSE OUT-OF-ORDER OR UNDER REPAIR : A. WITH BIR PERMIT : If reset- State if with table, are Resettable the pro- or Non- prietor's Reset Resettable and reset State if Date of Counter Accumu- (z) keys Brand and Mechanical Date Original Renewal No. lating with Model No. Serial No. or Electronic Permit Granted Permit* (Present) grand total the B.I.R. * attach copies of the original and renewal permits B. WITHOUT BIR PERMIT : Brand & Model No. Serial No. Note: (1) Cash Register machines without built-in receipt-dispensing mechanisms or roller on which to mount the customer's roll should not be included in this inventory. (2) Submit this form in quadruplicate.