Taxability of a Manufacturer of Exportable Items

May 16, 1967 BIR RULING NO. 020-67 The President Shell-Craft Products, Inc. P.O. Box 672 M a n i l a S i r : This refers to your letter dated April 8, 1967 stating the following: "As a manufacturer of exportable items we would like to have a definite ruling regarding the following procedure: "In the case where our products are exported by a local agent of a U.S. company we would like to be sure that we are not subject to 7% local sales tax. It is the intention of the agent to pay us in pesos for our goods, although they receive payment in dollars from their principal, which of course includes their commission and other expenses. However, since the goods are intended for and are actually exported we would like to be sure that we are not subject to 7% sales tax." In reply, I have the honor to inform you that the products sold by you to the local agent of a U.S. Company are subject to the sales tax even if said agent exports said product to the United States. However, if you, as manufacturer of said products, exports them to the United States, you are exempt from the payment of the sales tax on your gross sales of said exported products, in accordance with Section 188(e) of the Tax Code. casia Very truly yours, (SGD.) MISAEL P. VERA Commissioner of Internal Revenue