BIR Ruling

June 30, 1969 MEMORANDUM FOR: The Chief, Business Tax Division Thru the Revenue Operations Head (Assessment) This refers to the rate of advance sales tax applicable to imported celluloid sheeting for the manufacture of optical frames. Celluloid is subject to the 30% tax imposed in Section 185(d) of the Tax Code. Section 184(b) of the same Code, however, specially exempts from tax imposed therein frames and mountings for spectacles or eyeglasses. By so providing the law has classified frames or mountings for spectacles or eyeglasses as ordinary articles and not as luxury items. Moreover, it has been consistently ruled that celluloid when used as raw materials in the manufacture of articles taxable under Section 186 of the Tax Code are subject only to the 7% advance sales tax. Accordingly, the instant importation of Trulite, Inc. of celluloid sheetings for the manufacture of optical frames is subject to the 7% advance sales tax 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. prcd (SGD.) MISAEL P. VERA Commissioner of Internal Revenue