BIR Ruling No. 061-80

December 15, 1980 BIR RULING NO. 061-80 199 000-00 61-80 Gosotto & Company, Inc. P.O. Box 86 Cebu City Attention : Ms . Mary G . Ahyong Gentlemen: This refers to your letter dated April 28, 1980 requesting clarification on whether the 2% miller's tax, otherwise due on corn germ were it not for its exemption under Republic Act No. 3704 is considered deemed paid pursuant to Section 199 and therefore creditable, pursuant to Section 200, both of the Tax Code, as amended, against the sales tax due on your sales of corn oil. cdti In reply, please be informed that corn germ being a by-product in corn milling would have been subjected to the 2% miller's tax imposed by Section 189 (now Section 203) of the Tax Code were it not for Republic Act No. 3704 amending said provision. Under said Republic Act, corn mills are no longer subject to the 2% miller's tax but to the annual graduated fixed tax imposed by Section 182(3)(x) [now Section 192(3)(nn)] of the Tax Code. Considering that corn germ is exempt from tax, the 2% miller's tax otherwise due thereon is deemed paid for purposes of the following pertinent provisions of Section 199 of the Tax Code allowing the crediting of taxes paid on the raw material used in the manufacture of the finished product. Sec. 199. Percentage tax on sales of other articles . xxx xxx xxx Provided, That any percentage, specific or mining tax paid under this Title, Title IV or Title VII, respectively, on domestically manufactured, processed or produced, or imported raw materials, part, accessory or other article forming part of the finished product shall be credited against the sales tax due on the finished product: . . . . xxx xxx xxx Whenever the finished product subject to sales tax is manufactured or produced out of any raw material, part, accessory or other article which is exempt from tax, the tax otherwise due on the latter shall be deemed to have been paid for purposes of the next preceding paragraph.(Emphasis ours) xxx xxx xxx In view thereof, the 2% miller's tax deemed paid on the corn germ is creditable against the 10% sales tax due on the corn oil which is manufactured out of said raw material i.e., corn germ. cdt Very truly yours, RUBEN B. ANCHETA Acting Commissioner