BIR Ruling

February 4, 1975 Mr. D.U. Afable Purchasing Assistant Muller & Phipps Manufacturing Corporation P. O. Box 950, Manila S i r : This refers to your letter of January 7, 1975 requesting a ruling of this Department on the pertinent provision of the National Internal Revenue Code, as amended, applicable in the imposition of percentage tax on Hi-Flo Aerosolve Air Filters, an industrial air conditioning part which that firm is intending to purchase for the purpose of using it in sterile rooms where you manufacture pharmaceutical products. In your above-mentioned letter, it is your contention that the subject importation should be liable for compensating tax equivalent to that provided for under Sec. 186 of the National Internal Revenue Code, as amended, imposing a tax equivalent to 7% of the gross selling price of gross value of the article, as an exception to Sec. 185(i) of the same Code, for the reason that said article will be for industrial use. casia In this connection, please be advised that the exception to Sec. 185(i) of the Tax Code refers to electric fans and circulators only, when they are for industrial use, and does not include air filters, which are air-conditioning parts. The pertinent provision which should therefore apply hereto is Sec. 185(A) of the said Code which provides for taxes on any part or accessory of air-conditioning units, among others, and the imposition of a percentage tax equivalent to 40% of the gross selling price or gross value of the articles. Please be guided accordingly. Very truly yours, (SGD.) CESAR VIRATA Secretary