Taxability of An Importation of 60 Drums PKWF 28/31 and 20 Drums PKWF 4/7

March 20, 1989 BIR RULING NO. 041-89 145 (b) (2) 000-00 041-89 Gentlemen : This refers to your letter dated March 2, 1989, in effect, requesting a ruling on the taxability of your importation of 60 drums PKWF 28/31 and 20 drums PKWF 4/7. It appears from the certification of the BIR Laboratory that PKWF 28/31 and PKWF 4/7 are used as solvents and thinners for printing ink. Gleaned from the provision of Section 145,(b)(2) of the Tax Code, as amended by Executive Order No. 273, only thinners which are produced from petroleum or mineral oils are subject to the ad valorem tax of 24% and, obviously, if the thinner is already subject to ad valorem tax , it is no longer subject to value-added tax pursuant to Section 103(d) of the same Code. Conversely, a solvent derived from petroleum which is no longer subject to ad valorem tax shall be subject to the 10% value-added tax only under Section 100 of the same Code. In view of the laboratory report that PKWF 28/31 and PKWF 4/7 are used both as solvents and thinners, the higher rate of 24% ad valorem tax under Section 145(b)(2) of the same Code shall be imposed. This serves as your authority for the release of your shipment of 60 drums of PKWF 28/31 and 20 drums of PKWF 4/7 after payment of the 24% ad valorem tax. cdtech Very truly yours, (SGD.) JOSE U. ONG Commissioner