BIR Ruling No. 065-83

April 15, 1983 BIR RULING NO. 065-83 Gentlemen : In reply to your letter dated November 6, 1981, for and in behalf of Carnation Philippines, Inc. which was addressed to the Ministry of Finance, please be informed that locally processed milk is subject to 5% sales tax prescribed by Section 201(a) of the Tax Code, as amended. The raw materials used in the manufacture of said finished article are not, however, subject to the same rate of tax. It should be noted that raw materials used in the manufacture of articles taxable under Section 201 of the Tax Code are not mentioned as subject to tax under the same provision. Accordingly, all imported raw materials like skimmed milk powder and buttermilk powder necessary for the local production of milk are subject to the 10% advance sales tax based on the landed cost thereof, plus 25% mark-up, in accordance with Section 199(a) in relation to Section 193(b), both of the Tax Code, as amended. Very truly yours, (SGD.) RUBEN B. ANCHETA Acting Commissioner Bureau of Internal Revenue