BIR Ruling [DA-201-01]

October 19, 2001 BIR RULING [DA-201-01] GSK Tradeway Inc. 651 Nueva St., Galaxy Building Binondo, Manila Attention: Mr. Bernard O. Go Gentlemen : This refers to your letter dated October 3, 2000 requesting for exemption from the payment of excise tax on Luxchem Polyethylene (P.E.) pursuant to Section 148(c) of the Tax Code of 1997. It is represented that Luxchem Polyethylene (P.E.) wax is a pure white product without any impurity; that it is unique with linear molecular structure as compared to petroleum waxes being often branched, which results in relatively high melting point, high hardness even at an elevated temperature; that it is compatible with all the other waxes and most resins, providing desirable properties for blending with these materials; that it is used in making candle, crayon clay, carbon paper, floor polish, paper coating, textile sizing, plywood coating and sizing plastic, rubber, pharmaceuticals, hot melt and other industrial; and that it is different from the wax mentioned in Section 148(c) of the Tax Code of 1997, which is a petroleum based product. In reply, please be informed that Section 148(c) of the Tax Code of 1997, provides, viz: "SEC. 148. Manufactured Oils and Other Fuels . There shall be collected on refined and manufactured mineral oils and motor oils and motor fuels, the following excise taxes which shall attach to the goods hereunder enumerated as soon as they are in existence as such: xxx xxx xxx "(c) Waxes and petrolatum, per kilogram, Three pesos and fifty centavos (P3.50); xxx xxx xxx" In BIR Ruling No. 168-99 dated October 26, 1999, this Office through the Tax Fraud Division, effectively classifies the subject article as a synthetic wax produced by high pressure polymerization of ethylene (gas), and which is, therefore, not a petroleum based wax. In the light of the foregoing, this Office is of the opinion as it hereby holds that Polyethylene (P.E.) Wax, not being a petroleum based wax, is not subject to excise tax imposed under Section 148(c) of the Tax Code of 1997. This ruling is being issued on the basis of the foregoing facts as represented. However, if upon investigation, it will be disclosed that the facts are different, then this ruling shall be considered null and void. Very truly yours, Commissioner of Internal Revenue By: (SGD.) EDMUNDO P. GUEVARA Deputy Commissioner Legal and Inspection Group