BIR Ruling No. 072-65

July 7, 1965 BIR RULING NO. 072-65 Miss Lilia P. Zamar 215 4th Street 7th Avenue Grace Park, Caloocan City M a d a m : Reference is made to your letter dated May 15, 1965 requesting further clarification as to why a concessionaire of sand and gravel is liable to the payment of the 7% sales tax prescribed by Section 186 of the Tax Code. You also ask information as to whether or not said concessionaire can be exempted under Section 188 of the same Code. In answer thereto, I have the honor to inform you that a "producer" is one who produces, brings forth, or generates. (Words & Phrases, Vol. 34, p. 307, Permanent Edition) The term producer is not only limited to tangible articles that are being produced by human beings but also includes persons who cause to bring other natural products in a condition for the market. Accordingly, the mere physical gathering of sand gravel for the purpose of sale is sufficient to qualify one as a producer. Sand and gravel cannot be exempted from tax under Section 188 of the Tax Code for said section exempts from tax among others, only agricultural and mineral products. Sand and gravel it must be noted are neither agricultural nor mineral products. However, a producer of sand and of gravel may be exempted under Sections 182(C)(1) and 188 of the Tax Code from both the fixed and percentage taxes if his gross monthly sales do not exceed P200.00. Very truly yours, (SGD.) BENJAMIN N. TABIOS Acting Commissioner of Internal Revenue