Rate of Sales Tax Payable on the Manufacture of Polyester Buttons
BIR Ruling No. 091-87 • Bureau of Internal Revenue (BIR) Issuances • Rulings (Numbered) • Apr 1, 1987
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April 1, 1987 BIR RULING NO. 091-87 163 (2) (g) 285-86 091-87 Gentlemen : This refers to your letter dated February 11, 1987, requesting a ruling as to the rate of sales tax payable by you on your manufacture of Polyester buttons to be used in the manufacture of clothes; and also the rate of advance sales tax on imported polyester blanks to be used in the manufacture of polyester buttons. In reply, please be informed that clothes are subject to the 10% sales tax, as essential article. [Sec. 163(2)(g), Tax Code, as amended by Executive Order No. 36]. Accordingly, the polyester buttons you manufacture, shall be taxed at the same rate as the finished product (clothes) provided that your purchasers shall certify to you that all of said polyester buttons shall be used exclusively in the manufacture of clothes; likewise, your importations of polyester blanks shall be subject to the 10% advance sales tax, provided that you certify to this Bureau that said imported articles will be used in the manufacture of polyester buttons. Upon failure to issue the required certification, the polyester buttons as well as the polyester blanks shall be taxed at 20%. This will authorize the Bureau of Customs to release your importation of polyester blanks upon payment of the corresponding 10% advance sales tax. Very truly yours, (SGD.) BIENVENIDO A. TAN, JR. Commissioner
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