BIR Ruling

October 4, 1971 Mr. A.G. Candelaria Executive Vice President Lanuza & Company, Inc. 333 A.. Bonifacio St. Quezon City S i r : This refers to your letter dated September 8, 1971 requesting confirmation of your understanding that under Section 185-A (a) and (b) the articles referred to therein are finished articles like refrigerators, beverage coolers, ice cream cabinets, water coolers, food and beverage storage cabinets, etc; that reference to "such article" also means and includes refrigerated cabinets as used in drug and pharmaceutical manufacture and/or preservation. It is also your belief that parts and accessories of the "mechanical refrigerating units" are not covered by Section 185-A; and that the provision which states "Any part of accessory of the abovementioned articles . . ." refers only to part or accessory of the finished products, and not to intermediate parts and components of assemblies like mechanical refrigerating units. acd In reply, I have the honor to inform you as follows: The provisions of Section 185-A of the Tax Code are clear and unambiguous. Thus, as correctly understood by you, the term "articles" mentioned therein refers to the finished articles enumerated in subsections (a), (b) and (c) thereof. However, your understanding that parts and accessories of the "mechanical refrigerating units" (as used with the articles enumerated in the law) are not covered by Section 185-A of the Tax Code is erroneous. The term "part or accessory" as found in the provision which states "Any part or accessory of the above-mentioned articles shall be taxes at the same rate as the finished articles" refers to all intermediate component parts and accessories which when assembled and/or fitted together will produce the finished product. cdi Very truly yours, MISAEL P. VERA Commissioner of Internal Revenue