BIR Ruling

July 21, 1976 The Manager Hua Tong Trading 484-486 Sto. Cristo St. Manila S i r : This is in reply to your letter dated February 23, 1976 requesting confirmation of your understanding that your importation of Korean Ginseng Wine is subject to the 7% advance sales tax. aisa dc It is represented that Korean Ginseng Wine is a liquid preparation of the famous Korean Ginseng root; that it is a cure-all preparation; that as a "wonder drug" as it is often called, it helps to promote energy, prolong life, remedy anemia, rheumatism, "women's diseases", diabetes, and liver complaints, and to inhibit the growth of cancer cells; that it is not an intoxicating beverage or liquor; and that it is usually sold to drug stores. Analysis of a sample of said product conducted by our Laboratory confirms your aforesaid representation that the product is a medicinal preparation and that alcohol or distilled spirits is not its chief ingredient. In view of all the foregoing, it is the opinion of this Office as it hereby holds that imported Korean Ginseng Wine to the 7% advance sales tax, the 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. It should be understood however, that this ruling shall apply to future importation of said products only if a sample of each importation is found by our laboratory analyst to be a medicinal preparation, the chief ingredient of which is neither alcohol nor distilled spirits. Very truly yours, EFREN I. PLANA Acting Commissioner of Internal Revenue TAN-1456-040-3