Rules and Regulations to implement the subsidy availment of AFPCES and INPSSS.

July 6, 1990 REVENUE REGULATIONS NO. 09-90 SUBJECT : Rules and Regulations to Implement the Subsidy Availment of AFPCES and INPSSS TO : All Internal Revenue Officers and Others Concerned SECTION 1 . Scope . To implement the FIRB Resolution No. 28-90, 38-90 and 39-90 in so far as the subsidy of P85 M granted to AFPCES and INPSSS is concerned, the following Rules and Regulations, governing their purchases of articles or commodities from local manufacturers, producers, suppliers or importers subject to excise tax and value-added tax and the sales thereof to persons entitled to commissary and PX privileges, are hereby promulgated. SECTION 2 . Coverage/Limitations . The privileges granted herein shall apply to the transactions involving goods or products subject to Excise and/or Value-Added Taxes, except automobiles, aircraft, watercraft, perfumes, jewelries, precious stones and such other excisable articles not mentioned hereunder: A. Value-Added Tax (VAT) All goods purchased/sold subject to VAT under Title IV (NIRC) as amended. B. Excise Tax 1. Tobacco Products a. Smoking and Chewing Tobacco b. Cigars c. Cigarettes 2. Alcohol Beverages/Distilled Spirits a. Compounded Liquors b. Wines c. Fermented Liquor/Beer 3. Petroleum Products C. The quantity of excisable articles that may be purchased by AFPCES and INPSSS shall include imported products which shall not exceed ten percent (10%) of the total current local purchases. I. General Guidelines : SECTION 3 . The AFPCES and the INPSSS shall be the only units of the Armed Forces of the Philippines and the Integrated National Police of the Philippines which are authorized to purchase articles or commodities from local manufacturers, producers, suppliers or importers for sale to persons entitled to commissary or PX privileges. The corresponding taxes and duties on the goods purchased or delivered shall be paid through an approved subsidy chargeable against the CY 1990 appropriation for Tax Expenditures Subsidy under R.A. 6831. SECTION 4 . No purchase order for articles or commodities originating from the AFPCES or the INPSSS shall be honored nor filled by any manufactured, producer, supplier or importer unless the same is approved by the authorized official of the AFPCES or INPSSS whose full name, rank, branch of service and serial number are indicate herein. The identity of the approving official together with the specimens of his signature shall be furnished the Commissioner of Internal Revenue thru the Value Added Tax Division (VAT) & Excise Tax Service. SECTION 5 . The AFPCES or INPSSS as the case may be, shall submit to the Commissioner of Internal Revenue through the a) Excise Tax Service for purchases/sale of articles/products subject to Excise Tax or through the b) VAT Div. under the Sector Operations Service for purchases/sale of articles/ products subject to the Value Added Tax (VAT), a quarterly report of its purchases and sale of articles/products to its members. The report shall include a list of the manufacturers, producers, suppliers or importers, indicating the 1) corresponding sales invoice issued by said manufacturer, producer, supplier or importer, 2) the purchase order and 3) the corresponding sales/ delivery invoices issued by AFPCES or INPSSS as the case may be. SECTION 6 . The manufacturers, producers, suppliers or importers referred to herein as well as the AFPCES and INPSSS shall each have a registry book, duly registered with the Bureau of Internal Revenue. All sales made to AFPCES and INPSSS by the manufacturers, producers, suppliers or importers shall likewise be entered in the said registry book not later than the day immediately following the date of the transaction. The book shall be kept and maintained like any ordinary accounting record and shall be opened for inspection at any time during office hours by any duly authorized internal revenue officer. SECTION 7 . For purposes of recording and monitoring, the Revenue Accounting Division shall submit a monthly report to the Bureau of Treasury (BTr), indicating therein all TCCs issued to the AFPCES or INPSSS. II. Procedural Guidelines: A. On Items Subject to Value-Added Tax (VAT) SECTION 8 . AFPCES or INPSSS shall file an application with Department of Budget and Management (DBM) for availment of entitlement to subsidy for the payment of Excise Tax and/or Value-Added Tax (VAT) on purchases and subsequent sale of goods. Upon approval of the application, DBM issues an Allotment Advice in favor of the Bureau of Treasury (BTR) to cover payment of the aforesaid taxes payable to BIR furnishing the Receivable Accounts Division of the BIR a copy thereof. SECTION 9 . AFPCES or INPSSS shall apply for a Tax Compliance Certificate (TCC) representing payment of value added taxes on purchases and subsequent sales of goods with the Commissioner of Internal Revenue or his authorized representative. For VAT purposes, AFPCES or INPSSS shall present a copy of the purchase order (PO) and two (2) copies of the VAT invoice covering the transaction. The application for issuance of a Tax Compliance Certificate shall be signed by the authorized official of the AFPCES or INPSSS. SECTION 10 . Upon determination that the application is complete and in order, the Commissioner thru the Receivable Accounts Division shall issue a Tax Compliance Certificate to the effect that taxes for the said purchase have been paid. This certificate shall be made in four (4) copies, as follows: Original AFPCES or INPSSS; Duplicate-Seller of the goods; Triplicate - Revenue Accounting Division; Quadruplicate - Receivable Accounts Division. SECTION 11 . Before approval of the Tax Compliance Certificate, each and every availment to the subsidy shall be properly recorded in the Receivable Accounts Division record books in order to determine and update the balance of the released allotment. SECTION 12 . Based on the TCCs issued and complied at the end of each month, the Revenue Accounting Division (RAD) shall submit a Summary Report of TCCs issued to the Bureau of Treasury. The RAD Chief Accountant shall record the income corresponding to the amount of TCCs issued upon receipt of the BTR journal voucher. SECTION 13 . The sales covered by this availment of subsidy shall be reported by the manufacturer, producer, supplier or importer in his VAT return as taxable sales. The issued duplicate copy of the Tax Compliance Certificate may be used by the manufacturer, producer, supplier or importer to represent payment of his value added tax liability. The duplicate copy the certificate shall be attached in his VAT return. SECTION 14 . In filing his Quarterly Value Added Tax Return, the manufacturer, producer or importer shall include the sales made to AFPCES or INPSSS in his total gross sales subject to the value added tax. AFPCES or INPSSS shall likewise file a Quarterly Value Added Tax Return and the VAT payable, if any, shall also be paid by a Tax Compliance Certificate under the subsidy. B. On Articles Subject to Excise Tax . SECTION 15 . For goods subject to Excise Tax, AFPCES or INPSSS shall prepare Purchase Order/s (PO) indicating therein the total amount or tax base and the amount of Excise Tax Due. POs shall be coursed through the BIR/Excise Tax Service for proper evaluation as to the accuracy of the amount of Excise Tax indicated therein. The POs shall then be used to support the preparation and issuance of a Tax Compliance Certificate in the excise tax amount as computed therein, by the Receivable Accounts Division. The same amount shall be deducted from the current balance of the allotment advise. Prior to the issuance of the Tax Compliance Certificate, the Issuing unit should update their books and indicate the balance of available amount of excise tax for utilization after deducting the current amount of excise tax requested for application. All invoices covering sales by AFPCES or INPSSS of motor fuel and lubricants shall indicate legibly, among others, the name of the purchaser who is the user of the vehicle if government issued or owner of the vehicle, make of vehicle, plate number, kind sued or owner of the vehicle, make of vehicle, plate number, kind and quantity. The Tobacco Tax Division, Alcohol Tax Division and the Oil and Miscellaneous Tax Division shall maintain books to record all transactions pertaining to their respective jurisdiction with AFPCES and INPSSS. SECTION 16 . The same procedure in recording the issuance of the TCC as in Sections 11 and 12 hereof shall apply on articles subject to excise tax. SECTION 17 . Any existing regulations, orders or instructions or portions thereof inconsistent with these regulations are hereby repealed, amended or modified accordingly. SECTION 18 . This Regulations shall take effect immediately FIRB Resolution No. 38-90 and 39-90 dated July 6, 1990. (SGD.) JESUS P. ESTANISLAO Secretary of Finance Recommended by: (SGD.) JOSE U. ONG Commissioner