BIR Ruling

July 3, 1967 The President Paramount Agencies Corporation P.O. Box 202 Makati, Rizal S i r : This refers to your letter dated June 29, 1967 requesting that your importation of Bravo Smokes be exempted from the payment of specific tax due on tobacco products and that the article in question be subjected only to the 7% sales tax. cdt In a report of analysis made by the Laboratory Center of this Bureau on the imported article, it was found out that Bravo Smokes is negative to test for nicotine; that the fillers are black with aroma familiar to dried leaves similar to tea; and that the filler used is not tobacco. An examination conducted by the U.S. Internal Revenue Service on the same product revealed that the product in question did not contain any tobacco, hence, not subject to the Federal Internal Revenue tax imposed on cigars and cigarettes. Under the foregoing circumstances, this Office believes as it hereby holds that Bravo Smokes is not a tobacco product, hence, exempt from the specific tax due on tobacco products. However, since the article in question is imported for resale, the same is subject to 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. cdll Very truly yours, (SGD.) MISAEL P. VERA Commissioner of Internal Revenue