BIR Ruling

September 11, 1973 Joaquin Cunanan & Co. P. O. Box 2288, Manila Gentlemen : This refers to your letter dated August 31, 1973 requesting a ruling whether your client, Rustan Manufacturing Corporation, is a manufacturer or a contractor under the following facts: aisadc "Our client is a domestic corporation duly registered with the Securities and Exchange Commission, organized to engage in the manufacture, sale, importation and exportation of paper and its by-products and in any and all activities necessary to carry out the aforementioned purposes. It manufactures carton boxes, wrappers, labels, cigarette packages, etc. (out of its own materials and supplies) based on the purchase order of specified customers who furnish the specifications necessary to suit their respective needs. On each of these carton boxes, wrappers, labels, packages, etc. is printed the name of the product and the name and address of the manufacturer. In all cases, the colors, letters, pictures and designs being printed on these carton boxes, wrappers, labels and packages are specified and/or supplied by each customer-manufacturers. In short, aforementioned articles are made only upon prior order of customers, based on their specifications, not held for sale to the general public but for use only by the corporations ordering them." In reply, I have the honor to inform you that under the foregoing facts, your client is a manufacturer subject to the P50.00 annual fixed tax and to the 7% sales tax, pursuant to Sections 182(a)(1) and 186 both of the Tax Code. (BIR Ruling No. 65-109, September 23, 1965). On the other hand, if your client furnishes only the labor and incidental manufacturing expenses and its customers furnish the materials, your client is an independent contractor subject to the P50.00 annual fixed tax and to the 3% tax prescribed by Sections 182(a)(1) and 191 of the Tax Code. (Ibid). Very truly yours, (SGD.) MISAEL P. VERA Commissioner of Internal Revenue TAN-1601-593-5 "TAXPAYERS SHOULD INDICATE THEIR TAN IN ALL COMMUNICATIONS TO THE BIR."