Taxability of Merchandise Imported for Resale and of Imported Equipment to be Used for the Training of Employees

September 19, 1967 BIR RULING NO. 036-67 The Educational Systems Development Corporation 4th Floor, Valgosons Building 2228 Pasong Tamo Extension Makati, Rizal Attention : Mr . Joaquin S . Lim General Manager Gentlemen : This refers to your letter dated July 28, 1967 requesting an opinion on the following: "(1) If the merchandise is imported for resale to educational institutions, will the importation be subject to duties and sales tax? "(2) Are equipment and materials imported by commercial houses to be used in the training and educational programs of the employees subject to duties and sales tax?" In reply thereto, I have the honor to inform you as follows: 1. Merchandise imported for resale to educational institutions are subject to the 7%, 30%, or 50% advance sales tax based on the landed cost thereof, plus the corresponding mark-up provided in Section 183(b) in relation to Sections 184, 185 or 186, as the case may be, all of the Tax Code. 2. The equipment and materials imported by commercial houses to be used in the training and educational programs of their own employees are subject to the compensating tax based on the landed cost, pursuant to Section 190 of the Tax Code, as amended by Republic Act No. 4103, in relation to Sections 184, 185 or 186, as the case may be, all of the Tax Code. LLphil Very truly yours, (SGD.) MISAEL P. VERA Commissioner of Internal Revenue