10% Advance Sales Tax — Importation of Electric Motors

January 7, 1981 BIR RULING NO. 003-81 199 000-00 003-81 BBC Normelec (Fil.) Corp. Diadem Building Herrera St. Cor. Ormaza St. Legaspi Village Makati, Metro Manila Attention: Mr . Fernando A . Dumuk Sales Manager Gentlemen : This refers to your letter dated December 8, 1980 requesting information as to the applicable rate of advance sales tax on your importation of electric motors. It is represented that your company is principally engaged in the marketing and assembly of electrical standard products for general purpose application; that you are not, in any manner, engaged in the manufacture of air-conditioning system; that you have had previous importations of electrical motors wherein you were imposed 10% advance sales tax based on landed cost plus 25% mark-up; and that at present you have an importation of the same type of electrical motors but for which you are now being held to pay 35% advance sales tax based on landed cost plus 50% mark-up. In reply, I have the honor to inform you that based on our analysis of the documents and brochures submitted, it is our opinion that since said imported articles are merely standard electrical motors for general purpose application, they are considered "other articles" subject to 10% advance sales tax based on landed cost plus 25% mark-up pursuant to Section 193(b), in relation to Section 199 both of the Tax Code of 1977. This opinion is without prejudice, however, to a higher rate of tax which may be imposed on the said imported articles if after proper investigation they are found out to be included in the term " air-conditioning units, components or parts ." Very truly yours, RUBEN B. ANCHETA Acting Commissioner