Domestic Alcohol to be Specially Denatured for Use in Manufacture of Vinegar Covers Not Only Heads and Tails But also Rectified or Fine (ethyl) Alcohol of Not Less than 180º Proof, in Accordance with the Approved Formula Issued by the Assistant Commissioner (Intelligence & Investigation Service) but Subject to Compliance with Certain Requirements

May 15, 1997 BIR RULING NO. 063-97 100; 131 138 67-97 063-97 Philippine Aslam Corporation 4/F Centro Bldg., 180 Salcedo St. Legaspi Village, Makati City Gentlemen : This refers to BIR Ruling No. 67-96 dated June 25, 1996 stating that the domestic alcohol which you will purchase to be specially denatured for use in the manufacture of vinegar shall be exempt from specific tax imposed under Section 138 of the Tax Code, as amended, but subject to the 10% value-added tax under Section 100 of the same Code. By way of clarification, please be informed that the domestic alcohol to be specially denatured for use in the manufacture of vinegar covers not only heads and tails but also rectified or fine (ethyl) alcohol of not less than 180 proof, in accordance with the approved formula issued by the Assistant Commissioner (Intelligence & Investigation Service) on September 29, 1995 but subject to your compliance with the requirements stated therein, viz: 1. That the alcohol to be denatured shall be heads and tails rectified, or fine (ethyl) alcohol of not less than 180 proof; 2. That the vinegar must not be less than 10% acidity taken as acetic acid; 3. That the sample of alcohol to be denatured and the vinegar to be used as denaturant shall be tested and approved by the Standard and Classification (Laboratory) Section, Tax Fraud Division; and 4. That the denatured alcohol will be used exclusively for the manufacture of vinegar. Very truly yours, LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue