BIR Ruling

August 16, 1971 Mrs. Pura D. Almario Vice-President-Administration Findlay Millar Timber Company 3rd Floor, CMI Building Ayala Avenue, Makati, Rizal M a d a m : This refers to your letter dated August 3, 1971 requesting information as to whether or not you are entitled to a refund or tax credit of the advance sales tax paid and, thereafter, passed on to you by your suppliers of imported glue, prefinishing paints and varnishes which you use in the manufacture of plywood for export. In reply, I have the honor to inform you that under Section 183(b) of the Tax Code, imported articles to be used by the importer himself in the manufacture or preparation of articles for consignment abroad are exempt from the advance sales tax. In other words, to be exempt from the advance sales tax, the raw material used in the manufacture of exported articles must be imported by the manufacturer himself. In this case, it appears that you are not the importer of the glue, prefinishing paints and varnishes used in the manufacture of plywood for export. Consequently the said imported raw materials cannot be exempt from the advance sales tax. Such being the case, the advance sales tax paid by the importers thereof was neither erroneously nor illegally collected and, therefore, no refund thereof can be allowed. Section 309 of the Tax Code provides that the Commissioner of Internal Revenue may only credit or refund taxes erroneously or illegally received. aisa dc Very truly yours, MISAEL P. VERA Commissioner of Internal Revenue