BIR Ruling

October 17, 1973 1st Indorsement Returned to the Regional Director, Revenue Region No. 7, North Manila, the within papers bearing on the case of Gomba & Hermosura, Inc. which informed that Office that beginning this quarter, payment of percentage taxes on manufacturing of papers will be stopped as the corporation is only on C-13; and that this is due to the purchase of local papers from local manufacturers which is recut for resale. cdtech As a result of the foregoing, that Office is requesting a re-examination of the rulings of this Office on particular lines of business involving application of labor, such as recutting of articles which were already considered manufactured products. Specifically, BIR Ruling No. 64-061, dated September 29, 1964 is mentioned wherein it was held that a person who buys ready-made tissue and kraft paper in jumbo rolls with sizes 36" in diameter 48" in which from local paper mills and that he cuts these papers into standard sizes such as 22" x 12" x 480 sheets and 36" x 48" by 480 sheets and wraps them into reams for resale to the public, is a manufacturer subject to the manufacturer's fixed and percentage taxes. There is no hard and fast rule regarding the treatment of particular lines of business involving the application of labor for tax purposes. Each case will have to be determined on the basis of the facts obtaining therein. In the case of Gomba & Hermosura, Inc., it is a dealer subject to the graduated annual fixed tax prescribed by Section 182(A) (2) of the Tax Code. (SGD.) MISAEL P. VERA Commissioner of Internal Revenue TAN-1601-593-5 "TAXPAYERS SHOULD INDICATE THEIR TAN IN ALL COMMUNICATIONS TO THE BIR."