BIR Ruling

September 6, 1971 Gelacio Herrera Co Law Offices 721 Elcano Street Manila Gentlemen : This refers to your letter dated October 16, 1970, enclosing therewith the letter dated October 14, 1970 of your client, the Treasure Island Industrial Company, 117-119 Plaridel St., Cebu City, relative to its pending internal revenue case involving the amount of P1,325.00 as fixed tax, surcharge and penalty, as wholesale dealer of distilled spirits and wines. In reply thereto, I have the honor to inform you that with the amendment of Section 194(g) of the Tax Code by Republic Act No. 6110 which took effect on September 1, 1969, a wholesale dealer of denatured alcohol now falls within the definition of the term "wholesale dealer of distilled spirits and wines." Since the nature of the business operations of your client indicates that it is a wholesale dealer of denatured alcohol, it falls within the said definition and, accordingly, subject to the fixed annual tax of P600.00 prescribed by Section 182(A)(3)(d) of the Tax Code. Under the circumstances, your client is really liable for the payment of the sum of P1,325.00 as fixed tax, surcharge and penalty assessed against it by our Regional Office at Cebu City. In this connection, since your client is already subject to the said annual fixed tax, it is no longer subject to the C-13 fixed tax imposed by Section 182(A) (2) of the Tax Code. As regards the claim of your client that it has made an overpayment of the C-13 fixed tax in view of the inclusion of its sales of denatured alcohol on the gross sales upon which said fixed tax was based, please be informed that the matter is being investigated by our Regional Office at Cebu City. In case there is really an overpayment, the same may be applied against the abovementioned fixed tax liability of your client. Very truly yours, MISAEL P. VERA Commissioner of Internal Revenue