Liquefied Petroleum Gas is a Separate and Distinct Product from Processed Gas

April 13, 1998 BIR RULING NO. 041-98 109 (e); Sec. 148 (b) and (j) 000-00-41-98 Petron Corporation 7901 Makati Avenue 1200 Makati City, Metro Manila Attention: Mr . Luis A . Maglaya Legal Counsel Gentlemen : This refers to your letter dated October 27, 1997, requesting a confirmatory ruling to the effect that liquefied petroleum gas (LPG) is a separate and distinct product from processed gas. It appears that you have imported around 810 metric tons of LPG which were discharged at Mandaue City; that the Port Collector of the Bureau of Customs assigned at the Port of Cebu had temporarily released your aforesaid shipment/importation pending receipt of the result of its inquiry from Societe Generate de Surveillance (SGS Far East Limited); and that the latter, in its letter dated October 29, 1997, has confirmed that LPG is processed gas subject to excise and value-added taxes on the basis of an alleged BIR Ruling. LLphil In reply, please be informed that LPG falls under the definition of "Petroleum products" under Section 2(1) of Revenue Regulations No. 8-96 which is separate and distinct from the term "Processed gas" as defined in letter (m) thereof. The latter is subject to excise tax at the rate of P0.05 per liter while LPG is subject to excise tax at the rate of P0.00 per liter (except LPG used for motive power which is subject to excise tax at the rate of P1.63 per liter) pursuant to Section 148(b) and (j) of the Tax Code of 1997 [formerly Section 145 (2) and (10) of the Tax Code, as amended R.A. No. 8184]. Moreover, the sale or importation, among others, of petroleum products, which as per definition under Sec. 2(1) of Revenue Regulations No. 8-96 included LPG is exempt from VAT pursuant to Section 109(e), also of the Tax Code of 1997 [formerly Section 103(e), Tax Code, as amended by R.A. No. 7716, as further amended by R.A. 8241]. Very truly yours, (SGD.) LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue