Correct Rate of Sales Tax Imposed on Absorbent Cotton
BIR Ruling No. 071-87 • Bureau of Internal Revenue (BIR) Issuances • Rulings (Numbered) • Mar 10, 1987
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March 10, 1987 BIR RULING NO. 071-87 163 (2) (h) 000-00 071-87 Gentlemen : This refers to your letter dated October 23, 1986 requesting a ruling as to the correct rate of sales tax to be imposed on absorbent cotton. It is represented that your client, Kimberly-Clark, manufactures, among others, absorbent cotton which it sells primarily to hospitals, clinics and drugstores. This article is used for cleaning and dressing wounds, application of medicine in almost all forms, particularly those in liquid, cream or ointment form, surgical operations, and other hospital and clinical uses. In reply, please be informed that absorbent cotton manufactured by your client which is primarily intended for the administration of medicine is subject to the 10% sales tax under Section 163(2)(h) of the Tax Code, as amended by Executive Order No. 36 which took effect on August 1, 1986. Very truly yours, (SGD.) BIENVENIDO A. TAN, JR. Commissioner
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