BIR Ruling

May 27, 1969 Gutson Industries Inc. 20 Florencia, Grace Park Caloocan City Gentlemen : In reply to your letter dated March 7, 1969, I have the honor to inform you that imported component parts in the assembly of auto-air-conditioning such as electrical motors, wire harness, circuit breakers, position switches, directional lowers and double inlet strip wheels are subject to 50% advance sales tax based on the landed cost thereof, plus 100% mark-up, pursuant to Section 183(b) in relation to Section 184(a), both of the Tax Code. The reason for this is that under the doctrines laid down by the Supreme Court in Collector of Internal Revenue vs. Hon. Eulogio Rodriguez, Jr. et al., G.R. No. L-12783, March 25, 1961 and in the U.S. cases entitled Universal Battery Co., vs. U.S. 35 F. 2d 979, and Cuna Engineering Corporation vs. U.S. 43 F 2d 259; 262, auto-air-conditioning are considered component parts of automobiles. lexlib Very truly yours, (SGD.) MISAEL P. VERA Commissioner of Internal Revenue