Tax Imposed on Tennis Balls Manufactured by an EPZA

April 6, 1987 BIR RULING NO. 096-87 167 (d) 000-00 096-87 Gentlemen : This refers to your letter dated March 5, 1987 stating that you are a trader-exporter of Slazenger Tennis Balls; that you buy the Slazenger Tennis Balls from Wise & Co., who is the exclusive distributor for the manufacturer an EPZA registered firm; and that Wise & Co. pays the 20% sales tax which it bills to you as a separate item in the invoice. Based on the foregoing, you request confirmation of your opinion that since you export the said articles, your export sales are exempt from payment of the sales tax. In reply, please be informed that under the foregoing facts, the aforesaid tennis balls manufactured by an EPZA registered firm and sold to Wise & Co., is treated as an imported merchandise which is subject to the advance sales tax at the rate of 20% payable by Wise & Co., the purchaser. (BIR Ruling No. 095-83) Upon the subsequent purchase and exportation of the articles by you as trader-exporter the same became exempt from the sales tax in accordance with Section 167(b) of the Tax Code, which provides: "Sec. 167. Articles and Transactions not Subject to Sales Tax . The following shall be exempt from the sales tax imposed in Section 163 hereof: xxx xxx xxx (d) Articles shipped or exported by the manufacturer, producer, or trader, irrespective of any shipping arrangement that may be agreed upon which may influence or determine the transfer of ownership of the articles so exported. In other words, you can claim tax credit of the entire amount of sales tax passed on to you by Wise & Co. provided that the sales tax is separately indicated in the sales invoice and the tax credit is filed with this Office within two (2) years from the date of payment of the tax. Very truly yours, (SGD.) BIENVENIDO A. TAN, JR. Commissioner