Sales Tax Rate Imposed on Packaging Materials for Beverages, Dairy Products, Medicine, Laundry Soap and Detergents

July 9, 1986 BIR RULING NO. 101-86 165 (A) (3) 000-00 101-86 Gentlemen : This refers to your letter dated May 14, 1986 requesting in effect that your manufactured packaging materials for beverages, dairy products, medicine, laundry soap and detergents are subject only to 10% sales tax. You have represented that you are a converter of paper, film and foil into packaging materials for beverages, dairy products, medicine, laundry soap and detergents; and that said packaging materials are sold only to beverage, dairy products, medicine and laundry soap and detergent manufacturers. In reply, please be informed that in general, materials, parts and accessories of articles subject to sales tax on original sale shall be subject to tax at the same rate as the finished article: Provided, that materials, parts and accessories of articles classified as essential articles which are taxable at 10% under Section 165(A)(3), of the Tax Code, shall be taxed at the same rate as the finished product, only if such materials, parts and accessories can only be used in the manufacture of an article taxable at 10%. (Sec. 6 Revenue Regulations No. 5-86 dated April 17, 1986) Accordingly, since the aforesaid finished articles are subject to the 10% sales tax, the packaging materials you manufacture and are exclusively used as parts or accessories of said finished articles are subject to the same rate of sales tax. Very truly yours, (SGD.) BIENVENIDO A. TAN, JR. Commissioner