BIR Ruling

June 1, 1967 The Victoria Manufacturing Corporation P.O. Box No. 2827 Manila Gentlemen : This refers to your letter dated April 14, 1967 requesting that your importation of synthetic fabrics be subject to only 7% advance sales tax under Section 186 of the Tax Code. cdta It is represented that your firm is engaged in the manufacture of laces for lady's dresses; that due to lack of available local raw materials, you import synthetic fabrics which you use in the manufacture of the finished product; that the imported fabric is used as base of the laces you manufacture; and that in the process of manufacture the fabric dissolves and disappears upon the application of some chemical substances, leaving only the laces manufactured. In reply, I have the honor to inform you that inasmuch as the imported synthetic are used as raw materials in the manufacture of cotton laces which are subject to 7% sales tax, the imported fabrics are subject to 7% advance sales tax based on the landed cost thereof, plus 25% mark-up, pursuant to Section 183(b), in relation to Section 186, both of the Tax Code. cdti Very truly yours, (SGD.) MISAEL P. VERA Commissioner of Internal Revenue