BIR Ruling

January 4, 1968 Sycip, Salazar, Luna, Manalo & Feliciano Law Offices P.O. Box 4223 Manila Attention: Mr . Florentino P . Feliciano Gentlemen : This refers to your letters dated June 23 and September 25, 1967 stating the following: "Carlque Pastics, Inc. habitually manufactures several kinds of toothbrushes and pays the 7% manufactures sales tax imposed by Section 186 of the National Internal Revenue Code on the sales of toothbrushes manufactured by it. Carlque Plastics, Inc. sells exclusively to Colgate-Palmolive Philippines Inc. toothbrushes of a special kind, namely, toothbrushes of a design and style as well as with such raw materials and container specifications as are furnished by Colgate-Palmolive Philippines Inc. resells such toothbrushes to its customers without altering the form or substance thereof. All raw materials for the manufacture of the toothbrushes in question are supplied by Carlque Plastics, Inc." You now want to be informed as to whether under the foregoing facts, Colgate-Palmolive Philippines Inc. is liable for the payment of any sales tax on its sales to its customers of the toothbrushes purchased from Carlque Plastics, Inc. In reply, I have the honor to inform you that under the foregoing facts Colgate-Palmolive Philippines Inc. is considered the manufacturer of the above described toothbrushes and consequently, it is subject to the sales tax on its sales of said toothbrushes to the public. Carlque Plastics, Inc. which manufactures the toothbrushes for Colgate-Palmolive is an independent contractor, subject to the fixed and percentage taxes prescribed in Section 182(A)(1) and 191 of the Tax Code. Very truly yours, (SGD.) MISAEL P. VERA Commissioner of Internal Revenue