Importation of Marine Crude Salt Can Not Be Considered as Mineral or Mineral Product; Hence, Exempt from 2% Excise Tax

October 29, 1996 BIR RULING NO. 114-96 151 (a) (2) 000-00 114-96 Tacub Abano Pamfilo Tan Law Offices Suite 1505, Tower I Phil. Stock Exchange Centre Exchange Road, Ortigas Center Pasig City Attention: Atty . Vivencio F . Abao Gentlemen : This refers to your letter dated July 17, 1996 requesting on behalf of your client, La Filipina Uygongco Corporation, for a ruling to the effect that its importation of marine crude salt is not subject to the excise tax. It appears that your abovenamed client imported 180,000 bags of marine crude salt from India under Entry No. 6401-C/96, B/L NAV/LMG/001 which arrived on board the vessel M/V Li Ming; that an Authority To Release Imported Goods (ATRIG) No. VAT V62096-005688 was issued to your client on June 19, 1996 exempting the said importation from the 10% value-added tax since the same is classified as marine food product in its original state; that the District Collector of the Bureau of Customs; Port of Cebu, subjected said importation to excise tax pursuant to Section 2, paragraph II, subparagraph B of Revenue Regulations No. 13-94 which include salt, among others, in the enumeration of Non-Metals; and that you are of the opinion that the "salt" being referred to therein refers to mineral salt that is mined. aisadc In your supplemental letter dated August 9, 1996, you contended that under the principle of ejusdem generis , the word "salt" must be construed as being of the same nature as the other minerals and mineral products enumerated in Revenue Regulations No. 13-94 which are being quarried, mined or extracted from the earth; that the imported Marine Crude Salt is produced or obtained by solar evaporation method and is not extracted from mineral lands but comes from seawater or saline lakes; and that furthermore, under Republic Act No. 6657 otherwise known as the Comprehensive Agrarian Reform Law, saltbeds and saltponds are considered agricultural lands so much so that salt obtained or produced by solar evaporation in saltbeds or saltponds should be considered agricultural product and therefore not covered by Revenue Regulations No. 13-94. In reply, please be informed that this Office finds your contention to be well-taken. Since Revenue Regulations No. 13-94 governs the taxation of minerals and mineral products, it is safe to conclude that the "salt" being classified therein as among the other non-metals pertains to the rock salt which is mined or quarried like other minerals. However, the imported crude salt in question has been certified by the exporter, Friends Salt Works and Allied Industries, as "natural sun dried salt" or solar salt. Such being the case, your clients importation of marine crude salt which is appropriately described by the shipper as "edible common semi-crushed salt" can not be considered as mineral or mineral product, hence, exempt from the 2% excise tax imposed under Section 151 (a) (2) of the Tax Code, as amended by Republic Act No. 7729. This serves as the authority of La Filipina Uygongco Corporation to secure the release of the aforesaid importation from customs custody without the payment of the 2% excise tax. cdt Very truly yours, LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue