BIR Ruling

March 2, 1970 Sycip, Gorres, Velayo & Co. Certified Public Accountants P. O. Box 589 Manila Attention: Mr . M . Gutierrez Tax Division Gentlemen : This refers to your letters dated December 19, 1969 and February 18, 1970 requesting clarification on the rate of sales tax payable on locally manufactured appliances for cooking, warming, or keeping warm food or beverage under Section 185(i) of the Tax Code, as amended by Republic Act No. 6110. You would like also to have our opinion on the propriety of deducting the cost of raw materials which had been previously taxed at 30% under Section 185, prior to its amendment by Republic Act No. 6110 but which were used in the manufacture of appliances sold after September 1, 1969. In reply, I have the honor to inform you that while it is true that under the amendment effecting by Republic Act No. 6110 to Section 185(i) of the Tax Code locally manufactured appliances used for cooking, warming, or keeping warm food or beverage are subject to the 7% sales tax, yet we cannot categorically rule that said articles locally manufactured by your clients are subject to the 7% sales tax unless we are informed of the extent of the manufacturing activities or operations of your clients, particularly as to the parts of the appliances manufactured within the manufacturing enterprise and the other parts used in the manufacture of such articles. Very truly yours, CONRADO P. DIAZ Deputy Commissioner of Internal Revenue (Operations)