Computation of Advance Sales Tax by the Collector of Customs

February 10, 1958 BIR RULING NO. 079-58 Mr. Ernesto Ma. B. Cabanting 17 Morong Street San Francisco del Monte Quezon City S i r : In reply to your letter dated October 12, 1957, I have the honor to inform you as follows: cdt Section 183(b) of the Tax Code provides that when the articles are imported, the percentage tax established in Sections 184, 185 and 186 of the Tax Code shall be paid in advance by the importer, based on the import invoice value thereof, certified to as correct by the Philippine consul at the port of origin if there is any, including freight, postage, insurance, commission, customs duty, and all similar charges, plus 100% of such total value in the case of articles enumerated in Section 184; 50% of such total value in the case of articles enumerated in Section 185; and 25% of such total value in the case of articles enumerated in Section 186. In other words, the basis of the advance sales tax is the landed cost which consist of the import invoice value plus all expenses incurred in connection with the importation until the imported articles are removed from customs custody plus the corresponding mark-up. The tax itself does not form part of the landed cost. The computation of the Collector of Customs, is therefore, correct. llcd The payment of the advance sales tax is final. Thereafter, the importer may dispose of the imported articles at whatever price without any further sales tax liability. Similarly, the importer cannot claim any refund in case he sells below the landed cost plus mark-up. Very truly yours, (SGD.) JOSE ARAAS Commissioner of Internal Revenue