Purchaser of Raw Marble Materials from Licensed Quarry Operators Who Have Already Paid Excise Still Subject to Excise Tax

February 27, 1996 BIR RULING NO. 027-96 151-00 000-00 027-96 Marble Corporation of the Philippines #2 Fema Street, 1106, Quezon City Attention: Mr . Abraham L . Ng Sinco President Gentlemen : This refers to your letter dated February 17, 1995, stating that the Marble Corporation of the Philippines, a duly registered domestic corporation is engaged in the manufacture of finished marble products for export and domestic sale; that the raw materials used are purchased from various quarry operators with a big portion supplied by Kalakalan 20 registered quarry operators enjoying tax exemption privileges; that our Revenue Officers are collecting excise tax on raw marble materials used by your corporation and purchased from duly registered and licensed quarry operators; that under Revenue Regulations No. 13-94, the owner or person having possession of the quarry resources shall be liable for the tax in case the quarry resources had been removed/extracted from the site without the payment of the tax; and that you disputed and protested against the additional collection of the excise tax from you on your purchases of marble quarry from said licensed operators who already paid the excise tax thereon. Based on the foregoing representation, you now request, in effect for a ruling that as the purchaser of raw marble materials from licensed quarry operators who have already paid the excise tax thereon, you should no longer be subject to another round of excise tax. casia In reply, please be informed that under Section 151 of the Tax Code, excise tax is collectible only once from the operator or extractor of the marble quarry. Unless removed from the quarry site without the payment of the excise tax, it cannot be further subjected to another round of excise tax when such taxpaid marble quarry are sold to or is in the possession of the manufacturer of finished marble. Applying the procedure under Revenue Regulations 13-80, the excise tax (which replaced the Royalty tax) shall be paid by the quarry operators at the time of removal. Payment shall be made to the Revenue District Officer, Collection Agent, or the treasurer of the city or municipality of the place where the quarrying is conducted. Before removing any minerals or mineral products or quarry resources subject to the excise tax, the lessee shall file in duplicate a return (BIR Form No. ___ ) setting forth among others, the quantity and the actual market value of the minerals or mineral products or quarry resources to be removed and pay the excise taxes due thereon. Where the prepayment of excise taxes at the point of removal would result in undue financial hardship to the lessee, owner or operator of mines, minerals or mineral products or quarry resources may be removed without prepayment, conditioned upon filing of a bond. However, in the case of VAT, since the same is collectible in all stages of distribution, both the operator of the marble quarry and the manufacturer of marble are liable pursuant to Sections 99 and 100 of the Tax Code. Very truly yours, LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue