BIR Ruling

June 14, 1977 The General Manager R.V. Marzan Brokerage 2nd Floor, Mary Bachrach Bldg. Port Area, Manila S i r : This refers to your letter dated April 28, 1977 requesting information as to the rate of compensating tax due on the importation of your client, the Manila Mandarin Hotel, Inc., of: a) Three packages stoves and accessories under Bill of Lading No. BAL-501 dated January 31, 1977 on board S/S "ALBERT MAERSK"; b) Eight (8) Bales Woven synthetic fabrics "Joynel Drapery" under Bill of Lading No. NYC-B053 dated June 10, 1976 on Board S/S "ARTHUR MAERSK"; c) Eight (8) Bales Woven synthetic fabrics "Joynel Drapery" under Bill of Lading No. NYC B004 dated May 20, 1976 on board S/S "ANNA MAERSK". which are to be used in their kitchen (stoves and accessories) while the woven synthetic fabrics are to be used as draperies and not intended for clothing materials. In reply, you are advised that the importation of your aforesaid client of stoves and accessories is subject to the 40% compensating tax pursuant to Section 190 in relation to Section 185(p), both of the Tax Code. As regards the importation of your said client of woven synthetic fabrics (Joynel Drapery, verel and spunrayon, fire-retardant), it appears that said fabrics were already released from customs in July and August, 1976 upon payment of the 7% compensating tax, pursuant to Section 190 in relation to Section 186, both of the Tax Code. Since at the time of the release from the customs, our existing ruling is to the effect that the said imported synthetic fabrics are subject to the 7% compensating tax, the said payment made by your client is correct. However, henceforth imported synthetic fabrics will be subject to 40%, pursuant to Section 185(p) of the Tax Code, regardless of whether they will be used for clothing purposes. Very truly yours, EFREN I. PLANA Acting Commissioner of Internal Revenue TAN-P4519-F2828-A-8