BIR Ruling

May 7, 1976 Anda Commercial Rm. 1205 Manhattan Bldg. 413 Nueva St., Manila Gentlemen : This refers to your letter dated May 5, 1976 requesting information as to the correct rate of advance sales tax applicable to imported electric cartridge heater. It is represented that the electric cartridge heater is made out a coiled length of resistor wire wound up around a ceramic rod encased inside a steel sheath or tube; that the two ends of the resistor wire are connected to the two insulated lead wires; that the article is commonly used in the plastic and rubber extrusion machines to melt the rubber or synthetic resin to a desired temperature in the extrusion cylinder immediately prior to molding or stamping to the desired size or shape in the mold; that the cartridge is inserted inside a drilled hole in the extrusion cylinder where the material to be melted passes thru on its way to the die or mold; that this process is known as block heating. It is also represented that these electric cartridge heaters are used in plastic injection molding equipment, plastic extrusion, steam generators, melting pots (glue, wax and greases),industrial fuel igniter, dental laboratories (casting machines),dryers, boilers, heat exchanges, process machines, and heating liquid metals (lead, sodium, tin and zinc). In reply, I have the honor to inform you that under the foregoing description of the nature and use of the imported electric cartridge heater and our appreciation of the brochure submitted, the article in question is an industrial contrivance. Consequently, the same is subject only to the 7% advance sales tax, the tax to be based on the landed cost thereof plus 25% mark-up pursuant to Section 183(b) in relation to Section 186, both of the Tax Code. acd Very truly yours, EFREN I. PLANA Acting Commissioner of Internal Revenue TAN-1456-040-3 "TAXPAYERS SHOULD INDICATE THEIR TAN IN ALL COMMUNICATIONS TO THE B. I. R."