BIR Ruling

January 3, 1967 Mr. Sabas Centeno Nabbauanga, Aparri Cagayan S i r : This refers to your request for tax exemption under Republic Act No. 3470. LexLib It is represented that you are the owner-operator of Sabas Centeno Distillery at Nabbauanga, Aparri, Cagayan; that you have a capital investment of P700.00; that you employ two laborers, one your nephew and the other your brother-in-law; that you are engaged in the manufacture of nipa wine out of nipa sap and also produce nipa shingles and vinegar; that the distilling apparatus is of "tambuli" type made out of gasoline drums welded together and properly furnished with fixtures and appurtenances; that your monthly production is 200 gauge liters of nipa wine of 50% proof or an equivalent of 10 arobas sold approximately P10.00 to P15.00 each that you are exempt from filing your income tax return in previous years because of failure to reach the statutory amount of P1,800; and that your establishment is duly registered with the Nacida. In reply, I have the honor to inform you that notwithstanding the aforestated representations you do not qualify for exemption under Republic Act No. 3470 because of distiller of spirits are not among those granted exemption under the aforesaid law. The fact that you are duly registered with the Nacida under the provisions of Republic Act No. 3470 is not conclusive of your exemption under said Act. To be exempt from tax, you must operate strictly in accordance with the provisions of the law. Therefore, as distiller of spirits you are subject to a fixed annual tax of P100.00 under Section 182(A)(3)(b) and to a specific tax of P0.70 per proof liter pursuant to Section 133, both of the Tax Code. However, as manufacturer of nipa shingles and vinegar, you may qualify as a tax exempt industry under the provisions of Republic Act No. 3470. Very truly yours, (SGD.) MISAEL P. VERA Commissioner of Internal Revenue