Non-Exemption from Sales Tax

December 7, 1979 BIR RULING NO. 100-79 Non-exemption from sales tax This refers to your letter dated October 22, 1979 requesting clarification as to whether or not your sale of manufactured product to a BOI-registered pioneer enterprise enjoying tax exemption benefit under Republic Act No. 5186 is exempt from the payment of sales tax. In reply, please be informed that your sale of products manufactured by you to a BOI-registered pioneer enterprise is not exempt from the payment of sales tax. The exemption provided by Section 8(a) of RA 5186 applies only to internal revenue taxes (except income tax) for which a pioneer enterprise would otherwise be directly liable. Consequently, you cannot claim exemption from sales tax on the sale of your products for the reason that the same are taxes directly payable by you as manufacturer. (BIR Ruling No. 64-077 dated December 23, 1964). The fact that the taxes may ultimately be shifted to or passed on the pioneer enterprise as part of the cost of the goods will not convert the same as taxes on the enterprise for the purpose of the exemption (John Gotamco & Sons, Inc. vs. Commissioner, CTA Case No. 1625, May 21, 1969, citing Philippine Acetylene Co., Inc. vs. Commissioner of Internal Revenue, et. al., G.R. No. L-19707, August 17, 1967). (BIR Ruling No. 70-043 dated August 27, 1970) casia