BIR Ruling

April 11, 1967 The General Manager Stero World, Inc. 1368 A. Mabini cor. Sta. Monica St. Ermita, Manila S i r : This refers to your letter dated April 5, 1967 requesting that tape deck which you are contemplating to import for resale be subject only to the 7% advance sales tax under Section 186 of the Tax Code. LibLex In your aforesaid letter you stated that a tape deck is an electronic machine which has some, but not all of the major parts of a tape recorder; that while the latter machine has always a built-in amplifier, an erase head or heads, a recording and playback heads and usually with a built-in loudspeaker or loudspeakers and therefore as is, it could record and reproduce sound or music, a tape deck on the other hand, has, it is true, a recording and playback head, but it has no built-in amplifier or loudspeakers and therefore in order to function like that of a tape recorder, it has to be connected yet to a separate amplifier and separate loudspeaker or loudspeakers. In the same letter, you argued that machine (tape decks) of these nature would have to fall under Section 186 of the Tax Code and not Section 185)B(g) of the same; that it is your belief that in order that a machine could fall or be classified under said Section 185)B(g) of the Code, it must be able to record and reproduce sound and music just like any kind of tape recorder; and that inasmuch as a tape deck, as is, could not function or operate like that of a tape recorder, the former machine would be classified and fall under Section 186 of the Tax Code. In reply, I have the honor to inform you that inasmuch as the tape deck is an essential part of a tape recorder, the same is subject to 30% advance sales tax, based on the landed cost thereof, plus 50% mark-up pursuant to Section 183(b), in relation to Section 185-B of the Tax Code. LexLib Very truly yours, (SGD.) MISAEL P. VERA Commissioner of Internal Revenue