Exemption of Lubricating Oils and Greases Produced from Basestocks and Additives from Specific Tax

March 16, 1988 BIR RULING NO. 102-88 103 (d) 000-00 102-88 Gentlemen : This refers to your letter dated January 28, 1988 stating that you use basestocks purchased from Philippine Petroleum Corporation (PPC) to manufacture lubricating oils and greases; that PPC enjoys BOI tax exemption privilege of 10% such that PPC pays only P4.05 instead of P4.50 specific tax per liter of basestocks manufactured or sold. Based on the foregoing facts, you now request for an opinion as to whether the basestocks purchased from PPC are already considered paid such that lubricating oils and greases manufactured out of these basestocks are no longer subject to the payment of any specific tax. In reply, please be informed that lubricating oils and greases produced from basestocks and additives on which the specific tax has already been paid are no longer subject to specific tax. (Sec. 145(a)(1), Tax Code, as amended by Executive Order No. 273). Accordingly, since under the foregoing facts, the specific tax on the basestocks purchased by you from PPC is considered fully paid, the specific tax on the lubricating oils and greases produced out of said basestocks are, likewise paid. However, your sale of the manufactured lubricating oils and greases is subject to the value-added tax of 10% pursuant to Section 150, in relation to Section 103(d) both of the Tax Code as amended by Executive Order No. 273. cdtech Very truly yours, (SGD.) BIENVENIDO A. TAN, JR. Commissioner