Rate of Sales Tax Payable by Vanson Paper Industrial Corporation, on Its Sale of Paper Board, Bond Paper and Chipboard

January 21, 1987 BIR RULING NO. 017-87 163 (2) (j) 000-00 017-87 Gentlemen : This refers to your letters dated October 30 and December 2, 1986, requesting a ruling as to the correct rate of sales tax payable by your client, Vanson Paper Industrial Corporation, on its sale of paper board, bond paper and chipboard. It is represented that paper board is used as back cover for grade school writing pad; bond paper is used in the manufacture of grade school writing pad and/or notebook while chipboard is likewise used as back cover for grade school writing pad. In reply, please be informed that writing pads and notebooks are considered essential articles subject to 10% sales tax pursuant to Section 163(2)(j) of the Tax Code, as amended by Executive Order No. 36. Accordingly, the paper board and chipboard which are exclusively used as back cover of writing pads and the bond paper used in the manufacture of writing pads and notebooks are also subject to the same rate of sales tax, i.e., 10% provided that the purchasers thereof shall certify to Vanson Paper Industrial Corporation that the same shall be used exclusively in the manufacture of writing pads and notebooks. (Section 163(2); Tax Code, as amended; Section 6.II, Rev. Regs. No. 11-86). If the purchasers fail to issue the certification, Vanson Paper Industrial Corporation will be subject to 20% sales tax, pursuant to Section 163(4) of the Tax Code, as amended. Very truly yours, (SGD.) BIENVENIDO A. TAN, JR. Commissioner