BIR Ruling

November 14, 1966 Messrs. Caparas and Ilagan Attorneys at Law P.O. Box 3776 Manila Attention: Mr . P . L . Agsaoay Gentlemen : This refers to your letter dated August 2, 1966, stating the following: "A client of ours is planning to import bottles to be used as containers for skin freshener which it manufactures. We assume that skin freshener is subject to 50% sales tax under Section 184(c) of the Tax Code. On the other hand, bottles, in themselves, are generally considered ordinary articles subject to 7% sales tax. We respectfully request your confirmation that bottles to be used as containers for said skin freshener is a "part or accessor" thereof subject to 50% advance sales tax, and that the cost of such bottle containers on which 50% advance sales taxes are paid will be deductible from the selling price of the skin freshener as finished products in the computation of the 50% manufacturer's sales tax." In reply, I have the honor to inform you that as a general rule, containers are not considered parts or accessories of the articles or products to be contained in them. As such, they are considered ordinary articles, and, therefore, subject only to 7% sales tax under Section 186 of the Tax Code. However, if the imported containers are clearly manifested by the importer-manufacturer to be used as containers of his products which are subject to 50% sales tax, he has the option to declare the importation for the 50% advance sales tax. The cost (landed cost plus mark-up) of imported containers which are subjected to 50% advance sales tax are deductible from the gross selling price of articles to be contained therein which are also subject to 50% sales tax. cdt Very truly yours, (SGD.) MISAEL P. VERA Commissioner of Internal Revenue