Whether Wings Manufacturing Corp. Should be Classified as a Manufacturer or a Contractor

March 19, 1985 BIR RULING NO. 040-85 (x) 135-84 040-85 S i r : This refers to your letter dated September 5, 1984 requesting a ruling as to whether your client, Wings Manufacturing Corporation should be classified as a manufacturer or a contractor. It is represented that Wings Manufacturing Corporation is duly registered with the Securities and Exchange Commission and with the Board of Investments (BOI) as a preferred non-pioneer enterprise for the production/manufacture and export of PVC children shoes under Certificate of Registration No. 78-739 dated July 15, 1978 in accordance with Republic Act No. 6135; that it manufactures rubber shoes for exclusively to a United States buyer, using the latter's brand name; that it buys raw materials locally and from aboard through direct importation which constitute 70% of the manufactured rubber shoes; that no raw material is supplied by the said United States buyer; and that although it is manufacturing rubber shoes for its exclusive buyer in the United States, it is not prohibited from manufacturing rubber shoes for others under different brands for export to the United States and other countries. cdtech In reply, I have the honor to inform you that under the foregoing facts, Wings Manufacturing Corporation is not a contractor, but a manufacturer as defined Section 187(x) of the Tax Code. However, your client is not subject to the percentage tax on its of the manufactured articles, since it is a BOI registered enterprises under Republic Act No. 6135 and said articles are exported abroad. Very truly yours, (SGD.) RUBEN B. ANCHETA Acting Commissioner