Refund Request of Lian Ho of the Sales Tax on the Cost of Raw Materials

January 9, 1958 BIR RULING NO. 021-58 Mr. Crispin Llamado Attorney-at-Law Room 201-202 Goiti Bldg. Manila S i r : In reply to your request for refund of the sales tax allegedly overpaid by your client, Lian Ho, 742 P. Herrera, Manila, on raw materials used in the manufacture of undershirts, which were purchased from tax-exempt producers, I have the honor to inform you that, following the decisions in BTA Case No. 187 entitled "Rufina & Company vs. David" and CTA Case No. 14, entitled "Ngo Siek vs. Collector of Internal Revenue", this Office ruled that effective November 1, 1955, he cost of raw materials purchased from tax-exempt industries and used in the manufacture of articles was not deductible from the gross selling price of the manufactured products. It appearing that the taxes sought to be refunded were paid beginning April 22, 1957 to June 12, 1957 and inasmuch as Republic Act 2025 was effective only June 22, 1957, your request cannot be granted. Very truly yours, (SGD.) JOSE ARAAS Collector of Internal Revenue