BIR Ruling

March 9, 1973 Mr. Rizalino Pablo P. O. Box 1735 Manila S i r : This refers to your letter dated January 9, 1973 requesting information as to whether or not your client as producer of plastic and ceramic products for sale to the general public and some upon previous order of its customer is subject to the 3% contractor's tax under Section 191 of the Tax Code, or to the 7% sales tax under Section 186 of the same Code. In reply, I have the honor to inform you that under the foregoing facts, your client is a manufacturer of plastic and ceramic products. The fact that some of the articles are manufactured by your client upon previous order of its customers does not divest it of its character as a manufacturer. The rule is, unless an activity is covered by Section 191 of Tax Code, one who manufacture articles, although upon a previous order and subject to specifications of the buyer, constitutes the maker, nonetheless a manufacturer. (See Celestino Co and Company vs. Collector, G.R. No. L-8506, August 31, 1956). Accordingly, your client is subject to the P50.00 annual fixed tax and his sales of plastic and ceramics products is subject to the 7% sales tax pursuant to Section 182(A)(1) and 186, respectively, of the Tax Code. aisa dc Very truly yours, (SGD.) MISAEL P. VERA Commissioner of Internal Revenue