Revised Rules and Regulations Implementing Republic Act No. 1180

REVISED RULES AND REGULATIONS IMPLEMENTING REPUBLIC ACT NO. 1180, OTHERWISE KNOWN AS THE RETAIL TRADE NATIONALIZATION LAW, AS AMENDED

Pursuant to the provisions of Republic Act No. 1180, as amended by Presidential Decree No. 714, Section 79 (B) of the Revised Administrative Code and Presidential Decree Nos. 715 and 721, the following rules and regulations are hereby promulgated.

RULE I

Definition of Terms

SECTION 1. "Retail Business" shall mean any act, occupation or calling of habitually selling direct to the general public merchandise, commodities or goods for consumption, but shall not include:

(a) Sales by a manufacturer, processor, laborer or worker, to the general public the products manufactured, processed or produced by him if his capital does not exceed five thousand pesos.

(b) Sales by a farmer or agriculturist of the product of his farm.

(c) Sales by a manufacturer or processor, in the Philippines or its subsidiary or affiliate company, to industrial, commercial and agricultural users or consumers who use the products bought by them to render service to the general public and/or to produce or manufacture goods which are in turn sold by them in accordance with the Retail Trade Nationalization Law.

(d) Sales by a hotel-owner, keeper, lessor or concessionaire, lessee operating a restaurant, irrespective of the amount of capital provided that the restaurant is necessarily included in, or incidental to, the hotel business. aDTSHc

(e) Sales by a manufacturer or processor to the Government and its agencies, including government-owned and controlled corporations.

(f) Sales at wholesale.

SECTION 2. "Consumption" shall mean the utilization of economic goods in the satisfaction of want or in the process of production resulting in immediate destruction, gradual decay or deterioration or transformation into other goods.

SECTION 3. "Manufacturer" refers to —

(a) a person who by physical or chemical process alters the exterior texture or form or inner substance of any raw material or partially manufactured product, in such a manner as to prepare it for a special use or uses to which it could not have been put in its original condition;

(b) a person who by any such process alters the quality of any such raw material or manufactured or partially manufactured products so as to reduce it to marketable shape or prepare it for any of the uses of industry;

(c) a person who by any such process combines the raw material or manufactured or partially manufactured products with other materials or products of the same or of different kinds in a such manner that the finished product can be put to a special use or uses to which such raw material or manufactured or partially manufactured products in their original condition could not have been put, or

(d) a person who alters such raw material or manufactured or partially manufactured products, or combines the same in order to produce finished products for the purpose of being sold or distributed to others.

SECTION 4. "Processor" refers to a person who converts raw materials into marketable form by special treatment or a series of action that changes the nature or state of the product, like slaughtering, milling, pasteurizing, drying, or desiccating, quick freezing and the like. Mere packing, packaging, sorting or classifying does not make a person a processor.

SECTION 5. "Farmer" refers to an individual personally engaged in producing products of the soil. He may be engaged in dairy farming, poultry or livestock raising, the production of poultry or livestock products; or his principal income is derived from any one or more of the foregoing operations.

SECTION 6. "Agriculturist" refers to a person who derives his income from the cultivation of land. The land cultivated must be of something that is more than a garden, though it may be less than a field.

SECTION 7. "Capital" shall mean those objects whether consisting of money or property, owned or leased by an individual or corporation for which a merchant, trader or another person who adventures in any undertaking, is liable to creditor or in case of insolvency to a receiver.

SECTION 8. "Technical Personnel" refers to any natural person who is not a citizen of the Philippines, who is employed in a retail, manufacturing or processing business that is wholly owned by citizens of the Philippines and who possesses special skills, abilities, techniques and competence needed and necessary for the successful operation of the business.

SECTION 9. "Line of business" refers to the specific nature of business in which a person, natural or juridical, is actually and lawfully engaged, duly registered with the Department of Trade or other appropriate government agency such as retailing, wholesaling, manufacturing or a processing business.

SECTION 10. "Transfer of business" refers to the relocation of a business establishment of an alien retailer from its duly registered place to another.

RULE II

Registration of Alien Retailers

SECTION 1. Any individual engaged in the retail business on May 15, 1954, and who is not a citizen of the Philippines, hereinafter referred to as retailer, shall within the first fifteen (15) days of January each year, file with the treasurer of the city or municipality where his retail business is located an application for the renewal registration of said business showing all the particulars required by Section 2 of Republic Act No. 1180. caHASI

SECTION 2. The application for registration, known as DT Form No. 1, which is obtainable from the City or Municipal Treasurer shall be accomplished in quintuplicate. The original shall be retained by the treasurer. Three signed copies, stamped "received" by the treasurer's office, shall be forwarded to the Trade Nationalization Division of the Bureau of Domestic Trade by the retailer through the treasurer. One copy shall be retained by the retailer.

SECTION 3. In case the official DT Form No. 1 is not available at the time of registration due to lawful cause(s) the retailer shall write the treasurer on or before the deadline set for filing the application for renewal registration, a registered letter in five copies manifesting his intention to register under the provisions of Republic Act No. 1180, as amended. The treasurer shall indicate on all copies of the letter the date it was posted and shall distribute them in the same manner as provided for in Section 2 hereof.

The letter shall be the basis of the acceptance and approval of the application to be filed later by the retailer when the official form is available. Three copies of the late application which shall be forwarded to the Trade Nationalization Division of the Bureau of Domestic Trade shall be accompanied by a certificate of the treasurer relating the cause or causes of the delay in the filing of the application. The application shall be deemed filed on the date the registered letter of intention to file the application was posted by the applicant. CAcDTI

SECTION 4. A retailer who has more than one store whether in the same or different city/municipality shall file a separate application for each store in the municipality or city where the store is located. A separate retail permit (DT Form: No. 2) for each store shall be issued by the treasurer under whose jurisdiction the store falls.

SECTION 5. Application for renewal of registration received after the first fifteen days January shall be considered as having filed outside the reglementary period, and no permit shall be given unless it is explained to the satisfaction of the Secretary of Trade that the delay was due to a lawful cause.

SECTION 6. Municipal treasurers shall secure DT Forms 1 and 2 from their respective provincial treasurers who shall requisition the forms from the Government Printing Office. City treasurers shall requisition the said forms also from the Government Printing Office. Municipal and City treasurers are authorized to sell DT Forms 1 and 2 at cost plus a nominal markup as service fee.

RULE III

Permit to Engage in the Retail Business

SECTION 1. (a)) Upon receipt of the application for renewal registration, the treasurer under whose jurisdiction the retail business falls shall issue to the retailer a "Permit to Engage in the Retail Business" if he was engaged in the retail business on May 15, 1954 and can present his immediate prior year's permit.

(b) The permit shall entitle the retailer to obtain the internal revenue license and municipal license for his business.

(c) The permit together with a passport size photograph of the retailer shall be exhibited in a conspicuous place in his store side by side with his current internal revenue license.

(d) The permit issued under these rules and regulations shall be forfeited by the Secretary of Trade for any violation of any provision of law on nationalization, economic control, weights and measure and labor and other laws relating to trade, commerce and industry, non-payment of a national or local tax or for violations of policies laid down by the Secretary of Trade.

In case of forfeiture, revocation or cancellation of the permit by the Secretary of Trade, the treasurer and the alien retailer shall be notified of such forfeiture, cancellation or revocation and the treasurer shall stamp on the face of the permit the words forfeited, cancelled, or revoked; annotate in his books such action; and notify the proper internal revenue officer of the action taken.

RULE IV

Permit for Non-Retail Business

SECTION 1. Any person, natural or juridical, who is not a citizen of the Philippines or whose capital is not wholly owned by citizens of the Philippines, and whose business falls within any of the exceptions to retail business enumerated in Section 1 of Rule I hereof, shall obtain a permit from the Secretary of Trade before engaging in any of the business activities mentioned therein. TAEcSC

SECTION 2. Permits issued in accordance with Section 1 above shall be renewable every year.

SECTION 3. All city and municipal treasurer shall not issue municipal permits and licenses to any person falling under this Rule without the permit required by the Secretary of Trade.

RULE V

Technical Personnel

SECTION 1. Any Filipino citizen, natural or juridical who is engaged in the retail business shall, before employing any alien in his retail business, obtain a permit for employment from the Secretary of Trade.

RULE VI

Transfer of Retail Stores

SECTION 1. Any retailer transferring his retail store shall first secure a permit from the Secretary of Trade.

SECTION 2. The city/municipal treasurer of the place where the retailer has closed his retail establishment for the purpose of transferring it to another place shall require the retailer to surrender his municipal license and internal revenue papers. The treasurer shall issue a certificate stating whether the retailer was duly registered under the provisions of R.A. 1180, the type of his business and the type of municipal and internal revenue licenses previously issued to the retailer. The retailer shall present to the city/municipal treasurer where he is transferring his retail store, the said certificate together with his permit to transfer when he shall apply for a municipal permit and license in the municipality/city where he has transferred his business.

SECTION 3. The city/municipal treasurer of the place where the retail business is transferred shall issue the new municipal license to the retailer for the same class and type of retail business as what he carried before the transfer, while the internal revenue license shall be issued by the BIR district officer.

RULE VII

Change/Additional Line or Class of Merchandise

SECTION 1. Any retailer shall, before changing the line or type of his business or before selling additional class of merchandise in his store, secure a permit from the Secretary of Trade.

RULE VIII

Application for Permits for Non-Retail Business, etc.

SECTION 1. Applicants for permits required in Rules IV, V, VI and VII shall use a form to be prescribed by the Secretary of Trade with whom applications falling within Manila and the Greater Manila area shall be filed directly. All other applications shall be filed respectively with the Trade Assistance Coordinators assigned in the different administrative regions of the country. HIEAcC

SECTION 2. After verifying the application/s with the assistance of the Provincial Commercial Agent/s within his region, the Trade Assistance Coordinator shall forward the applications with his comments and recommendation to the Secretary of Trade for action.

RULE IX

Report of Treasurers

SECTION 1. Not later than March 31 every year, the treasurer shall make an official report to the Secretary of Trade of the registration of alien retailers, in their respective jurisdictions, showing the:

(a) Name and address of retailers who filed DT Form No. 1;

(b) Name and address of retailers who were issued DT Form No. 2;

(3) Name and address of retailers whose retail business were retired due to voluntary surrender of license, death and other causes.

RULE X

Liquidation of A Retail Business

SECTION 1. In case of death of retailer, his or her heir(s), administrator or executor may continue with the retail business only for the purpose of liquidation for a period not exceeding six (6) months beginning on the date immediately after such death. During the liquidation, no merchandise shall be purchased for resale in the store of the deceased retailer. In case, however, the merchandise or commodities are of such nature that they cannot be sold without the necessary accessories, parts or components such as, but not limited to, milling machines and other motors, purchase of the necessary parts or components sufficient only to enable the liquidation of the existing stock within the liquidation period of six months, may be allowed upon application with the Secretary of Trade. DEaCSA

SECTION 2. Within the first ten (10) days of liquidation period, the Secretary of Trade shall be notified of the liquidation and the retail trade permit of the deceased retailer together with his licenses, shall be presented to the city/municipal treasurer who shall stamp on the face of the permit and licenses the following: "Valid for liquidation purposes only until (date) under R.A. 1180, as amended".

SECTION 3. Within five (5) days after the completion of liquidation, the liquidator shall notify the Secretary of Trade of the termination of such liquidation and shall surrender to the city, municipal treasurer the retail permit and the licenses of the deceased retailer for cancellation. The treasurer shall inform the Secretary of Trade of such cancellation.

RULE XI

Implementation

The Trade Nationalization Division of the Bureau of Domestic Trade shall implement these rules and regulations and submit periodic report and recommendations to the Secretary of Trade.

RULE XII

Revocation of Inconsistent Rules

All rules and regulations, circulars or memoranda that are not consistent with these rules and regulations are hereby revoked or amended accordingly.

RULE XIII

Effectivity

These Rules and Regulations shall take effect after fifteen (15) days following the completion of publication in the three newspapers of general circulation.

(SGD.) TROADIO T. QUIAZON, JR.Secretary

Concurred in:

(SGD.) CESAR A. VIRATASecretary of Finance