BIR Ruling

December 22, 1977 Messrs. Ozaeta, Romulo, de Leon, Mabanta Buenaventura, Sayoc & de los Angeles Attorneys-at-Law 2nd Flr. Corinthian Plaza 121 Paseo de Roxas Makati, Metro Manila Gentlemen : This refers to your letter dated September 12, 1977 requesting that the product, "Body Mist Perfumed Talc" manufactured by your client, Muller, and Phipps Manufacturing Corporation, be subjected to the 7% sales tax. In reply, please be informed that under Revenue Regulations No. V-421, "As a general rule manufactured toilet powders shall be classified as talcum or medicated toilet powder if talc and/or other chemicals which are used in medicinal preparations constitute 70% or more of the manufactured article. All other manufactured toilet powders in which talc and/or other chemicals which are used in medicinal preparations constitute less than 70% thereof shall be classified under the terms 'cosmetics' and 'any similar substance, article or preparations, by whatsoever name known or distinguished' and therefore taxable at the rate of tax imposed under Section 184(c) of the National Internal Revenue Code." In the certificate of the Food and Drug Administration dated August 16, 1976, the presence of Irgasan DP 300, in the product, Body Mist Perfumed Talc (Medicated) classifies the product as medicated. And according to the report of analysis conducted by the National Institute of Science and Technology, the talcum content of the aforesaid product is 98.9%. Inasmuch as the aforesaid product is medicated and contains 98.9% talcum, it is classified as talcum or medicated toilet powder; hence subject to the 7% sales tax pursuant to Section 199 (formerly Section 186) in relation to Section 194(b) [formerly Section 184(b)], both of the Tax Code of 1977. Very truly yours, EFREN I, PLANA Acting Commissioner of Internal Revenue TAN-P4519-F2828-A-8 "TAXPAYERS SHOULD INDICATE THEIR TAN IN ALL COMMUNICATIONS TO THE BIR."