BIR Ruling [DA-202-00]

April 4, 2000 BIR RULING [DA-202-00] Sec. 148 (c), NIRC BIR Ruling No. 168-99; DA-202-2000 Jemac International 1388 G. Araneta Avenue Rm. 303, Quezon City Attention: Ms . Jose de Castro Chua Gentlemen : This refers to your letter dated January 17, 200 requesting for exemption from excise tax on Luxchem Polyethylene (PE) WAX imposed under Section 148(c) of the Tax Code of 1997. LibLex It is represented that Luxchem Polyethylene (P.E.) wax is a pure white product without any impurity; that it is unique with 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 other waxes and most resins, providing desirable properties for blending with these materials; that it is being used in making candle, crayon, carbon paper, polish floor, paper coating, textile sizing, plywood coating and sizing plastic, rubber, pharmaceuticals, hot melt and other industrial; that P.E. wax is a synthetic wax produced by high pressure polymerization of ethylene (gas); and that it is different from the wax mentioned in Section 148(c) of the Tax Code, which is a petroleum based product. In reply, please be informed that pursuant to Section 148(c), Chapter V of the 1997 Tax Code, which provides that "CHAPTER V EXCISE TAX ON PETROLEUM PRODUCTS "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 petroleum, per kilogram, Three pesos and fifty centavos (P3.50);" a specific tax of P3.50 is being imposed on petroleum-based waxes and petrolatum. 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 1997 tax Code. 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, (SGD.) SIXTO S. ESQUIVIAS IV Deputy Commissioner Legal and Enforcement Group