BIR Ruling

September 29, 1973 The Chief Intelligence Unit B.I.R., Manila S i r : This refers to your inquiry dated September 20, 1973 relative to the proper rate of tax that is impossible on the importations of ABS-CBN Network of TV sets and spare parts, machinery, equipment and accessories and other articles for the use of its own TV-station and sub-stations. All equipments, parts and accessories used in the broadcasting station are subject to only 7% tax under Section 186, they not being included in Section 185-B of the Tax Code. The only equipments that may be taxed under Section 185-B are the receiving sets enumerated therein. The TV receiving sets contemplated Section 185-B are, however, those commonly known to the layman as television sets used for televiewing and most commonly in the homes and other places for personal consumption. These television sets that the layman commonly use are, however, a necessary equipment in the television broadcasting station for without them the station have no means of knowing that the broadcast is in order. They are used by the station for televiewing not for personal consumption but as part of business operations. To the station they are equipment pure and simple. It is, therefore, the opinion of this Office as it hereby held that all equipments (including receiving sets), parts and accessories and others which are necessary and essential to the operation of the TV Station are subject to only 7% advance sales tax pursuant to Section 186 of the Tax Code. cdtech Very truly yours, (SGD.) MISAEL P. VERA Commissioner of Internal Revenue TAN-1601-593-5