10% Advance Sales Tax on Fiberboard

March 25, 1988 BIR RULING NO. 118-88 101 000-00 118-88 Gentlemen : This refers to your letter dated September 2, 1987 stating that you plan to import laminated sheets (also known as "Formica") from Japan or Korea, which shall be sold in the local market; that said article is essentially fiberboard because the materials used in the manufacture thereof are fibers, saw dust, dye coloring and synthetic resins; that the same is used for house panels, dividers, kitchen cabinets and finishings for interior decorations; and that you now request for an opinion as to the rate and basis of the advance sales tax applicable thereto. In reply, please be informed that fiberboard is considered an essential article. Accordingly, your importation of the same is subject to 10% advance sales tax based on the total value used by the Bureau of Customs in determining tariff and customs duties including customs duties and other charges pursuant to Section 162(c) in relation to Section 163(2)(k), both of the Tax Code, as amended by Executive Order No. 36, which took effect on August 1, 1986. However, effective January 1, 1988, the advance sales tax has been replaced by the value-added tax of 10% which shall be levied, assessed and collected on every importation of goods based on the total value used by the Bureau of Customs in determining tariff and customs duties, plus customs duties, excise taxes if any, and other charges, such tax to be paid by the importer prior to the release of such goods from customs custody, pursuant to Section 101 of the Tax Code, as amended by Executive Order No. 273. cdta Very truly yours, (SGD.) BIENVENIDO A. TAN, JR. Commissioner