BIR Ruling

November 22, 1971 New Geneva Enterprises Rm. 1104 Manhattan Bldg. 413 Nueva St., Manila Attention: Mr . F . Hoernlimann Gentlemen : This refers to your letter dated November 17, 1971 requesting clarification as to the correct rate of advance sales tax applicable to your importation of steel and gold watches. This clarification is being sought in view of the belief of the Bureau of Customs at the Manila International Airport that gold watches are subject to the 70% tax imposed in Section 184(b) of the Tax Code. In reply, I have the honor to inform you that under Section 185(b) of the Tax Code, watches and clocks are subject to the 40% tax therein imposed. Such being the case, the Rolex watches imported by you which are made of stainless steel are subject to the 40% advance sales tax, based on the landed cost thereof, plus 50% mark-up, pursuant to Section 183(b) in relation to Section 185(b), both of the Tax Code. Moreover, it appearing in the invoice that the gold watch imported by you are not the expensive or luxury type, they are also subject to the 40% tax prescribed in Section 185(b) of the Tax Code. (BIR Ruling dated September 22, 1954) aisa dc Very truly yours, MISAEL P. VERA Commissioner of Internal Revenue