BIR Ruling No. 085-83

May 16, 1983 BIR RULING NO. 085-83 Gentlemen : This refers to your letter dated September 27, 1982 requesting that your company be exempted from the payment of taxes and license fees as manufacturer of "Growel T", a utility model, liquid fertilizer pursuant to Section 10 of Republic Act No. 3850, otherwise known as "Philippine Investors Incentives Act" as amended by Presidential Decree No. 1423. cdta It appears from the documentary evidence submitted that you are a domestic corporation duly registered with the Securities and Exchange Commission on July 28, 1982 with an authorized capital stock of Three Million Five Hundred Thousand Pesos (P3,500,000.00); that your are engaged in the manufacture of liquid fertilizer under the trade name "Growel T" with the authority of the Fertilizer and Pesticide Authority; that Letter Patent No. 500 was duly issued to that corporation under Republic Act No. 165; and that the investor/patentee, Dr. Eliseo P. Ruiz and his wife own the majority of the capital stock subscribed and issued of the said corporation. In reply, please be informed that Section 12 of Republic Act No. 3850, otherwise known as the Philippine Investors Incentives Act, as amended by Presidential Decree No. 1423 provides as follows: "Sec. 12. To promote and encourage the manufacture of local inventions, utility models or industrial designs, their manufacture shall be exempted from taxes, license fees and permits fees, except customs duties and charges on imports, during the first five years from the date of the first sale, subject to the rules and regulations to be promulgated by the Department of Finance; Provided, that their manufacture is carried out by the inventor/himself/themselves as a small/medium scale industry with capitalization not exceeding four million pesos; Provided, further , that in case of a partnership or a corporation, the majority interest belongs to the patentee himself/themselves: Provided still further , that the manufacturer shall keep separate books of accounts of the manufacture and sale of said inventions; and Provided finally , that the manufacturer is a Filipino citizen or an enterprise at least sixty percent of the capital of which is owned by such citizens. Such being the case, and since the manufacture of "Growel T" is carried out by the inventor/patentee himself, Dr. Eliseo L. Ruiz, as a small/medium industry with a capitalization of P3,500,000.00 and that he owns the majority interest of that corporation, your manufacture and sale of "Growel T" are therefore, exempt from all taxes, license fees and permit fees for a period of five years from the date of first sale, subject to the rules and regulations promulgated by the Ministry of Finance, pursuant to Section 12 of the Philippine Inventors Incentives Act. aisadc This ruling is based on your representation and the same will be revoked if, after verification, it is ascertained that the facts are different from those represented. Very truly yours, (SGD.) ROMULO M. VILLA Acting Commissioner Bureau of Internal Revenue