BIR Ruling

December 17, 1970 Messrs. Sycip, Salazar, Luna, Manalo & Feliciano 3rd Floor, Far East Building Buendia Ave., Makati, Rizal Attention: Mr . Andres Gatmaitan Gentlemen : This refers to your letters dated July 20, August 20 and December 17, 1970 requesting confirmation that the electric fans to be manufactured by your client, 3-D Industries, Inc. of Barrio Santolan, Pasig, Rizal are subject only to the 7% sales tax imposed in Section 186 of the Tax Code, and that its importation of parts to be used in the manufacture of said electric fans are also subject to the 7% advance sales tax. cdti In reply, I have the honor to inform you that if, as represented your client uses 80% locally manufactured parts and materials which it either manufacture within its manufacturing enterprise or purchase from local manufacturers and the parts imported by it for use in its manufacture of electric fan represent only 20% of the total quantity of the components and parts of the finished product, the electric fans manufactured by your client are considered locally manufactured, subject to the 7% sales tax, pursuant to Section 185(i) in relation to Section 186, of the Tax Code. As regards the parts which your client imports for use in its manufacture of electric fans, they are subject to the 7% advance sales tax, if as represented, said parts constitute only 20%, (and in no case will they be more than 20%) of the total quantity of components and parts of the gas stove manufactured by it. This ruling is subject to revocation should it be found after investigation that the facts are different from those represented. cd Very truly yours, MISAEL P. VERA Commissioner of Internal Revenue