Fatliquor Should Not Be Considered as Lubricating Oil Nor Petroleum Product

February 22, 1996 BIR RULING NO. 023-96 145 (1) 000-00 023-96 Tanners Association of the Philippines, Inc. 505 P. Gomez St., Quiapo M a n i l a Attention: Atty . Isidro I . Almeda Legal Counsel Gentlemen : This refers to your letter dated June 5, 1995 requesting for reconsideration of BIR Ruling No. 169-94 dated December 5, 1994 to the effect that "fatliquor" imported by the Philippine Leather Manufacturing Co., Inc. which is classified by the SGS for purposes of tariff classification as lubricating preparations subject to 3% rate of duty, falls within the purview of the term lubricating oils under Section 145(1) of the Tax Code, as amended; and that the subject article is a petroleum product which is included in the coverage of Section 145(1) of the Tax Code, as amended, and therefore subject to excise tax of four pesos and fifty centavos (P4.50) per liter of volume capacity pursuant to Section 145(1) of the Tax Code. aisadc It appears from the laboratory test conducted by the Tax Fraud Division of this Bureau, that fatliquor oil like Atlasol 310-B and Eureka GNF are cationic and anionic fatliquoring agents respectively or oil-in-water emulsion which are made from raw oils such as neatsfoot oil, cod oil dispersed in sulphonated oils. Neatsfoot oil is a fixed oil derived by boiling in water the skin, bones and feet of cattle and separating the oil from the fat obtained. The aforesaid report is now the basis of your request for reconsideration holding that fatliquor should not be regarded as lubricating oil because it is not a petroleum product; hence, excluded from the coverage of Section 145(1) of the Tax Code, as amended. Based on the foregoing, this Office is of the opinion as it hereby holds that your request for reconsideration of BIR Ruling No. 169-94 dated December 5, 1994 subjecting your importation of fatliquor to an excise tax of P4.50 per volume liter under Section 145(1) of the Tax Code, as amended, is hereby granted. In other words, fatliquor should not be considered as lubricating oil nor petroleum product under Section 145(1) of the Tax Code. LLjur Very truly yours, LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue