BIR Ruling

June 18, 1975 Lepanto Consolidated Mining Co. P.O. Box 299 Makati, Rizal Attention: Mr . J . R . Ravalo Purchasing Manager Gentlemen : This refers to your letter of even date requesting clarification as to whether or not the value of one aircraft engine with S/N 20889 which was overhauled by Beech Aircraft Corp., Witchita, Kansas, U. S. A.. is subject to the compensating tax; or whether the cost of repair or overhaul is subject to the compensating tax. In reply, I have the honor to inform you that only the new attachments, spare parts and accessories that were placed with the aircraft engine that has undergone repair abroad are subject to the 7% compensating tax imposed in Section 190 in relation to Section 186, both of the Tax Code. However, the cost of repair is not subject to the aforesaid tax. This supersedes Authority to Release Imported Goods No. BT-75-13520, dated June 17, 1975. cdta Very truly yours, (SGD.) MISAEL P. VERA Commissioner of Internal Revenue TAN 1601-593-5