Request for Exemption from Payment of Advance Sales Tax on the Shipment of a Replacement of a Tax-Paid Defective Article

July 11, 1986 BIR RULING NO. 110-86 162 (c) 00-00 09-86 Gentlemen : This refers to your letter dated May 13, 1986, requesting for and in behalf of your client, Burroughs Ltd. exemption from the payment of advance sales tax on the shipment of an article which is allegedly a replacement of a tax-paid defective article. It is represented that an importation was made by Burroughs Ltd., the original shipment of which arrived last December 31, 1985 via AWB No. 322841864 and released from customs custody by paying in full the duties and taxes as evidenced by receipts numbered; invoice No. 1800827-1; CBOR (IED) No. 662006 and RC No. 661485; that of the items imported last December 31, 1985 one item namely, B25 40MB Flex Disc B was found to be defective; that said defective item was shipped back as per agreement with the supplier as evidenced by export papers AWB No. 00454 and its commercial invoice No. 02867322; Export Declaration No. 26488; that the second shipment of Burroughs Ltd., arrived last April 12, 1986 via AWB No. 292-2277963 per registration No. 2682 which contains the replacement of the defective item imported last December 31, 1985. In reply, please be informed that advance sales tax imposed under Section 162(c) of the Tax Code as amended is levied and paid only once on the articles imported. Consequently, your client's second shipment of an article that would replace the defective item imported last December 31, 1985 the advance sales tax on which amounting to P80.577.00 has already been paid, is no longer subject to another advance sales tax. This will serve as an authority for the Bureau of customs to release the goods and to forego the imposition of the advance sales tax thereon. Very truly yours, (SGD.) BIENVENIDO A. TAN, JR. Commissioner