Whether the Importation of PKWF Solvents of Low Aromatic Content is Exempt from Excise Tax

July 14, 1995 BIR RULING NO. 106-95 145 000-00 106-95 BASF Coatings & Inks Phils., Inc. 101 Marcos Alvarez Avenue Talon, Las Pias, Metro Manila Attention: Ms . Monette R . Alon Gentlemen : This refers to your letter dated June 13, 1995, requesting for a confirmation of your opinion that your importation of PKWF solvents of low aromatic content is exempt from excise tax. It is represented that PKWF solvents having low aromatic content are less toxic and more environmentally friendly; that this a type of solvents is not lubricating oil nor any manufactured oil or fuel; that this type of solvents is not produced locally but are increasingly used in paints, adhesives, insecticides solvents, dry-cleaning, ink solvents and maintenance chemicals formulations; and that your importation of said chemicals are scrutinized by the Energy Industry Administration Bureau (formerly Energy Regulatory Board) for compliance with regulations and for special duty exemption. In reply, please be informed that PKWF solvent (or solvent in its generic sense) is not included in the list of petroleum products which are subject to excise tax under Section 145 of the Tax Code, as amended. In view thereof, it is our opinion that its importation is subject only to 10% VAT pursuant to Section 101 (a) of the Tax Code, as amended, but exempt from excise tax under Section 145 of the same Code. llcd Very truly yours, LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue