BIR Ruling

January 27, 1970 Mr. Manuel S. Ponce, Jr. Ponce Shipyards 215 Tanduay Street San Miguel, Manila S i r : This refers to your letter dated January 22, 1970 requesting that your importation of mild steel plates which will be used in the construction of cargo vessels for your shipping department be exempt from the payment of the compensating tax pursuant to the provisions of Republic Act No. 3176 (now Section 190(d) of the Tax Code). In reply, I have the honor to inform you that it appearing that the imported articles will be used in the construction of vessels which you will use in the coastwise trade, it is the opinion of this Office as it hereby holds that the imported mild steel plates are exempt from the compensating tax in accordance with Section 190(d) of the Tax Code. However, if the imported steel plates shall, after verification, be ascertained to have been channeled for other purposes than shipbuilding, said articles shall be subjected to the corresponding taxes and penalties. This will serve as authority for the Commissioner of Customs in releasing your importation free from taxes. cdt Very truly yours, MISAEL P. VERA Commissioner of Internal Revenue