BIR Ruling No. 115-62

October 15, 1962 BIR RULING NO. 115-62 3rd Indorsement Returned to the Revenue Operations Head (Assessment), the docket bearing on the internal revenue case of Century Marble Company, Inc., for P19,543.92 as sales tax, surcharge and penalties. casia It appears that the company is engaged in the quarrying of marbles which it extracts from five mineral claims, namely: the Ecali 1 & 11 Mineral Claim, Tabinay Mineral Claim, Sabang Agbalilang Mineral Claim, Milagrosa Mineral Claim and the Gregorio Mineral Claim, which are covered by a contract of lease executed by the owners of the mineral lands, except the Milagrosa Mining Claim, which is covered by a deed of assignment in favor of said company. With the exception of Tabinay Mineral Claim, for which a mining lease contract was issued by the Secretary of Agriculture & Natural Resources on June 26, 1958, the rest are the subject of a pending application by the company with the Secretary of Agriculture & Natural Resources for the issuance and execution of a mining lease contract. In the meantime, however, the Bureau of Lands issued a temporary permit to the company to mine, quarry and extract marble from those mineral claims. The question posed is whether or not the company is exempt from the sale tax on the sales of the marble slabs, chips, and powder that it manufactures out of the marble mined from said mineral claims. From the foregoing facts, it seems quite clear that the company is exempt from the sales tax in accordance with section 188(c) of the Tax Code, provided that at least 80% of said products are minerals extracted by it as lessee of the mineral lands. To be considered as "lessee" under said section 188(c), it is enough that one is so in the common acceptation of the term, it being immaterial whether or not he is one in the technical sense of the term. It may be stated, in this connection, that the basis of the ad valorem tax payable by the company is the actual market value of the marble slabs, chips and powder without any deduction for mining, milling, refining, transporting, handling, marketing, or any other expenses (see section 246, Tax Code). JOSE B. LINGAD Acting Commissioner of Internal Revenue