Tax Imposed on the Raw Materials, Both Local and Imported, Purchased and are Exclusively Used in the Manufacture of Packaging Materials for Food, Pharmaceuticals and Detergents

April 8, 1987 BIR RULING NO. 104-87 163 (2) 165-86 104-87 Gentlemen : This refers to your letter dated March 25, 1987 requesting in effect that the raw materials, both local and imported, which you purchase and are exclusively used in the manufacture of packaging materials for food, pharmaceuticals and detergents be subject only to 10% sales tax. In reply, please be informed that food, pharmaceuticals and detergents are classified as essential articles subject to 10% sales tax. (Section 163(2), Tax Code as amended by Executive Order No. 36). The packaging materials which are exclusively used as containers of said essential articles are also subject to the same rate of sales tax, i.e., 10% provided that the purchasers thereof shall certify to you as manufacturer, that the same shall be used exclusively as containers of said essential articles. (Section 163(2), Tax Code, Section 6.II, Revenue Regulations No. 11-86). If the purchasers fail to issue the certification, you will be subject to 20% sales tax, pursuant to Section 163(4) of the Tax Code as amended. On the other hand, the raw materials (shown in the attached list) both local and imported, which you purchase and are exclusively used as raw materials in the manufacture of packaging materials for food, pharmaceuticals and detergents shall be subject to 10% sales tax provided that you shall certify to this Bureau that the same shall be used exclusively in the manufacture of packaging materials. If you fail to issue the certification, the aforesaid raw materials shall be subject to 20% sales tax. Very truly yours, (SGD.) BIENVENIDO A. TAN, JR. Commissioner