10% Sales Tax — Ligo Canned Sardines

September 24, 1979 BIR RULING NO. 092-79 10% Sales tax Ligo canned sardines This refers to your letter dated March 28, 1978 informing this Office that your client, Chattrade Enterprises of 822 Elcano, Binondo, Manila received a notice of deficiency assessment from the Bureau of Customs for advance sales tax amounting to P62,031.00 representing the difference between 10% and 5% tax on imported 7,655 cartons of Ligo canned sardines from Japan, which arrived on September 8, 1978; that on September 28, 1978, this Office issued a ruling stating, among others, that imported canned sardines and other canned products are invariably subject to the 10% advance sales tax. On the basis of the foregoing, you now request reconsideration of said ruling and that the aforesaid assessment against your client be withdrawn. In support of your request for reconsideration, you stated that imported canned fish like sardines and mackerel should be subject to the 5% advance sales tax pursuant to Section 193(b) of the Tax Code, as amended by P.D. No. 1358, which provides: "(b) Sales tax on imported articles . When the articles are imported, the percentage taxes established in Sections 194, 195, 196, 197, 198, 199 and 201 of this Code shall be paid in advance by the importer . . ." (Emphasis ours) In reply, I have the honor to inform you that the articles enumerated in paragraphs (a), (c), (d) and (e) of Section 201 of the Tax Code in order to be subject to the 5% sales tax therein imposed must be "locally" processed or manufactured. Since imported canned sardines are not locally processed or manufactured, they are subject to the 10% sales tax imposed in Section 199 of the same Code.