Distinction between "Advance Sales Tax" and "Customs Duties and Charges or Imports"

July 3, 1985 BIR RULING NO. 108-85 193-b 000-00 108-85 Gentlemen : This refers to your letter dated April 18, 1985 requesting in behalf of your client, Trebel Industries, Inc., opinion as to whether there is a distinction between "advance sales tax" and the term "customs duties and charges or imports." Under Section 12 of Republic Act No. 3850, as amended by P.D. No. 3850, a local inventor, like your client is exempted from taxes, license fees, and permit fees, except customs duties and charges on imports during the first five years from the date of first sale. In reply, I have the honor to inform you that the term "charges on imports" includes advance sales tax imposed under Section 193(b) of the Tax Code. This is so because the Bureau of Customs is charged with the assessment and collection of all lawful revenues from imported articles and dues, fees, charges, fines and penalties accruing under the tariff and customs laws . (Sec. 602, Tariff and Customs Code) It has been held that said Section 193(b) [formerly Section 183(b) is a part of the customs laws since it is enforced by the Bureau of Customs. (Leuterio vs. Commissioner of Customs, 101, Phil. 223; Caltex (Phil.) vs. Commissioner of Internal Revenue, G.R. No. L-20462, June 30, 1965) In other words, advance sales tax which is imposed on articles imported from abroad, is one of the "charges on imports" collected by the Bureau of Customs. Such being the case, a local inventor is subject to the advance sales tax on articles imported by it under the above cited provisions of Republic Act No. 3850, as amended. Very truly yours, (SGD.) RUBEN B. ANCHETA Acting Commissioner