BIR Ruling

October 5, 1972 The President Asphaltrade Corporation Mangahan, Pasig, Rizal S i r : This refers to your letter of even date stating, among others, that you have delivered to the City of Manila 3,299.938 metric tons of bituminous concrete surface course for the repair of streets valued at P125,397.64; and that the City Treasurer is withholding the 7% sales tax due thereon. In view of the foregoing circumstances, you would like to be issued a ruling to the effect that the above sales of bituminous concrete surface course to the City of Manila is not subject to the withholding tax. In reply, I have the honor to inform you that although the manufactured bituminous concrete surface is subject to the 7% sales tax under Section 186 of the Tax Code, your sales thereof to the City of Manila is not subject to the withholding provisions of Republic Act No. 1051, as implemented by Revenue Regulations No. 21-67, for the reason that the 7% sales tax due thereon cannot be determined at the time of payment. The sales tax can only be determined after the cost of raw materials used in the manufacture of the finished product are first deducted from the selling price of such finished products. cdt Very truly yours, MISAEL P. VERA Commissioner of Internal Revenue