BIR Ruling

October 9, 1968 The Vice President & General Manager Manila Gas Corporation 1536 Otis Manila S i r : This refers to your letter dated October 8, 1968 inquiring as to the taxes due and payable by your corporation in connection with its business consisting of the purchase for the purpose of resale of liquefied petroleum gas (LPG). It is represented that your corporation purchases liquefied petroleum gas (LPG). It is represented that your corporation purchases liquefied petroleum gas from ESSO Standard Eastern, Incorporated. The gas is delivered by Esso in bulk by gas tankers. Esso on the other hand purchased the liquefied petroleum gas from the Bataan Refinery Corporation. From the gas tanker, you transfer the liquefied petroleum gas to cylinder tank containers which it delivers to customers. Sale is made by you to anybody desiring to buy. In reply, I have the honor to inform you that in purchasing for the purpose of resale liquefied petroleum gas, you are considered a dealer subject to the graduated fixed annual tax prescribed by Section 182 (A)(2) of the Tax Code. As a mere dealer, you are not subject to the sales tax on your sales of the liquefied petroleum gas. However, considering that the purchase and resale of liquefied petroleum gas is a business undertaken by your corporation which is not contemplated in its franchise, your corporation is subject to income tax on income derived from said business. Very truly yours, (SGD.) MISAEL P. VERA Commissioner of Internal Revenue