BIR Ruling

October 30, 1970 The President Maria Cristina Fertilizer Corporation P. O. Box 2956 Manila S i r : This refers to your letter dated October 15, 1970 requesting that your incoming shipment of naphtha feedstock for chemical fertilizer manufacture be subject to the 7% advance sales tax. It is stated in your letter that the aforementioned product will be used solely as feedstock or raw material in the manufacture of ammonia and ammonium sulphate fertilizer in your fertilizer plant in Iligan City. In reply, I have the honor to inform you that in consonance with the ruling of the Department of Finance dated December 23, 1969, holding that petroleum solvents which are "similar to naphtha", but which are not used or suited for use as motive power, are subject to tax under Section 186 and not under Section 142(c), of the Tax Code, your aforesaid shipment of naphtha feedstock which you will use as raw material in the manufacture of ammonia and ammonium sulphate fertilizer is subject to the 7% advance sales tax, said tax to be based on the landed cost thereof plus 25% mark-up, pursuant to Section 183(b) in relation to Section 186, both of the Tax Code. Very truly yours, MISAEL P. VERA Commissioner of Internal Revenue