Request that Importation of Special Lemon Oil, Terpeneless Oil of Lemon, etc. Be Subject to 10% Advance Sales Tax

May 12, 1986 BIR RULING NO. 061-86 162-c 041-85 061-86 Gentlemen : This refers to your letter dated March 19, 1986 requesting that your importation of Special Lemon Oil, Terpeneless Oil of Lemon and Concentrated Lime Oil be subject to 10% advance sales tax. You have represented that Seven-Up Philippines, Inc. is engaged solely in the manufacture of 7Up Extracts for 7Up Beverages; that the imported special lemon oil, terpeneless oil of lemon and concentrated lime oil are essential active ingredients in the manufacture of 7Up Extracts and have no other use except for Seven-Up products; and that the Extracts produced from those imported flavoring raw materials are directly sold to the bottlers of 7Up softdrinks or beverages. In reply, I have the honor to inform you that if the aforesaid imported articles will be used exclusively as flavoring raw materials in the manufacture of 7Up beverages, the same are considered ordinary articles subject to 20% advance sales tax based on the total value used by the Bureau of Customs in determining tariff and customs duties, including customs duties and other charges, pursuant to Section 162(c) in relation to Section 165(A)(2), both of the Tax Code as amended. However, if the aforementioned articles will be used for purposes other than the manufacture of flavor for Seven-Up products, the same will be subject to 50% advance sales tax based on the total value used by the Bureau of Customs in determining tariff and customs duties, including customs duties and other charges, pursuant to Section 162(c) in relation to Section 163(b), both of the Tax Code as amended. (BIR Ruling No. 041-85 dated March 19, 1985). aisadc Very truly yours, (SGD.) BIENVENIDO A. TAN, JR. Commissioner