Tax Imposed on Exported Chromite

April 7, 1989 BIR RULING NO. 062-89 100 (a) (1) 000-00 062-89 Gentlemen : This refers to your letter dated February 13, 1989 stating that the First Richland Minerals Corporation is registered on May 19, 1988 with the Securities and Exchange Commission; that it is a grantee of a Small Scale Mining Permit No. (2)-05 issued on May 31, 1988 under Presidential Decree No. 1899 to extract and remove 10,000 tons of materials in Ayud, Dinapique, Isabela; that said permit is for a period of two (2) years from May 31, 1988 to May 30, 1990 inclusive, renewable for a like period; and that the permittee shall be exempted from the payment of all taxes except income tax for a period co-terminus with the terms of the permit. cdtech Based on the foregoing, you now request information on the following: (a) What possible taxes do you have to pay on the said exported chromite if any? and (b) What possible incentives you are entitled to, especially on importation of machineries and equipment? In reply, please be informed that effective March 10, 1987, Executive Order No. 93 has already withdrawn the tax exemption of small scale mining permittee/licensee under P.D. No. 1899. Accordingly, if you are VAT-registered, your export sales of mineral ores shall be subject to 0% pursuant to Section 100(a)(I) of the Tax Code, as amended by Executive Order No. 273; otherwise, your export sales shall be exempt from the value-added tax pursuant to Section 103(v) of the same Code. As a VAT-registered person, you may apply for the issuance of a tax credit certificate or refund of input taxes paid on capital goods, i.e., machineries and equipment imported or locally purchased, to the extent that such input taxes have not been applied against output taxes under Section 106(c) of the same Code, as amended. In addition to the said value-added tax, the mineral products you produced are likewise subject to the excise tax imposed under Section 151(a)(2) of the Tax Code, as amended. This excise tax payment is not creditable or refundable even if your said mineral products (chromite ores) are actually exported as provided for under Section 127(d) of the same Code. cd Very truly yours, (SGD.) JOSE U. ONG Commissioner