10% Compensating Tax — Refrigeration Machinery

February 4, 1980 BIR RULING NO. 007-80 Mr. Sulpicio P. Dimatatac (Licensed Customs Broker) Rm. 1, Paz Ongsiako Bldg. San Vicente Street (cor. T. Pinpin) Binondo, Manila S i r : This refers to your letter dated December 14, 1979, requesting reconsideration of Authority to Release Imported Goods No. IT-79-0017857 which was issued by this Office on December 5, 1979, subjecting your client's importation of CHOEI MARU No. 31, a 299.92 ton second-hand fishing vessel with refrigeration equipment, to the 25% compensating tax imposed by Section 196, in relation to Section 204, both of the Tax Code of 1977, as amended. cdt We find merit in your request for reconsideration, it appearing, on the basis of your representations and the documents you have presented, that the refrigeration facilities of the fishing vessel in question consist of two "freezing rooms" with refrigerating equipment built into and forming integral part of accessory of the second-hand vessel at the time of importation. Hence, the refrigeration machinery should be subjected to the same rate of tax 10% as the fishing vessel, pursuant to Section 199, in relation to Section 204, both of the Tax Code of 1977, as amended, such refrigeration machinery being "part or accessory" of the vessel. It goes without saying that the corresponding advance sales taxes will apply should the fishing vessel in question be subsequently sold, bartered, or exchanged by your client. cd This letter supersedes Authority to Release Imported Goods No. IT-79-0017857. Please be guided accordingly. Very truly yours, RUBEN B. ANCHETA Acting Commissioner