Dealer of Phosphate Rocks Subject to Graduated Annual Fixed Tax

March 18, 1985 BIR RULING NO. 039-85 192-2 90-82 039-85 Gentlemen : This refers to your letter dated December 14, 1984 stating that you are an operator of a rock grinding plant that you buy phosphate rocks from mining claim owners which you dry under the sun or heat by fire in order to reduce moisture before grinding; that the rocks are ground according to specification of the customer as to granulation like feed millers who require for their use ground rock phosphate with granulations that will pass wire mesh No. 30; and that the calcium and phosphorus contents of the rock are not altered by the heating and grinding operations. Based on your representations, you now request information as to whether you are subject to any percentage tax. cdta In reply, I have the honor to inform you that under the foregoing facts, you are considered a dealer of phosphate rocks, subject to the graduated annual fixed tax prescribed in Section 192(2) of the Tax Code of 1977, as amended. The drying and grinding of the rocks to granulate, does not constitute manufacturing within the contemplation of Section 187(x) of the same Code. Thus, it has been ruled that: "The cutting of glasses into specific sizes by the dealers thereof to meet the sizes desired by their customers does not constitute manufacturing, and neither are the dealers considered contractors because the cutting of the glasses into desired sizes and/or installation thereof in buildings are merely incidental to the main contract of purchase and sale. Said sales are only subject to the graduated fixed annual tax under Section 182 of the Tax Code." (BIR Ruling dated June 10, 1955). Very truly yours, (SGD.) RUBEN B. ANCHETA Acting Commissioner