BIR Ruling

May 4, 1973 Globe Brokerage, Inc. Rm. 215-216 Yuchengco Bldg. Rosario St., Manila Attention: Mrs . Generosa L . Caluag Manager-Broker Gentlemen : This refers to your letter dated April 27, 1973 requesting information as to whether, in the determination of advance sales tax due on fountain pens, Section 185(a) of the Tax Code refers to the gross selling price of each fountain pen or gross selling price of the whole shipment. In reply, I have the honor to inform you that under Section 185(a) of the Tax Code, fountain pens the gross selling price of which exceeds P15.00 are subject to the 40% tax prescribed in said section. However, if their selling price does not exceeds P15.00, they shall be taxed at the rate prescribed in Section 186. The aforecited provision contemplates the selling price of each fountain pen. Such being the case, and it appearing that the total landed cost of each fountain pen imported by your client, Times Trading does no exceed P15.00, the same is subject to the 7% advance sales tax based on the landed cost thereof plus 25% mark-up pursuant to Section 183(b) in relation to Sections 185(a) and 186, all of the Tax Code. aisa dc Very truly yours, (SGD.) CONRADO P. DIAZ Acting Commissioner of Internal Revenue