BIR Ruling No. 124-82

April 16, 1982 BIR RULING NO. 124-82 205-16 000-00 124-82 Labrador Electronics Corporation No. 6, 21st Avenue Cubao Quezon City Attention: Mr . Ramon G . Quipones AGM Operations Gentlemen : This refers to your letter dated September 17, 1981 requesting information as to what other taxes you are liable to for rendering services to your customers. It is represented that you are a manufacturer of automatic voltage regulators for computers and other related electronic equipment such as, battery chargers, constant current regulators and uninterruptible power supplies; that said equipment are special equipment manufactured in accordance with customers' specifications; that if the equipment are brought to your factory for repair during the warranty period (one year), the service is free of charge and if they are repaired at the installation site, you bill the customer for transportation and other incidental expenses of your service engineers and technicians; that if the equipment are repaired beyond the warranty period, you bill the customer for materials used, labor, actual transportation expenses and other incidental expenses; that you perform the repair service solely because the equipment are special units and invariably your customers would not allow engineers or technicians other than your personnel to repair them; and that you are paying business taxes as a contractor. cdta In reply, I have the honor to inform you that for rendering repair services, you are an independent contractor subject to the fixed tax of P100.00 prescribed in Section 192(l) of the Tax Code of 1977, as amended and to the 3% contractor's tax based on your gross receipts derived from repair services which include costs of materials used, labor, actual transportation expenses and other incidental expenses, pursuant to Section 205 (16) of the same Code. Aside from the aforesaid taxes, you are liable to the manufacturer's fixed and percentage taxes prescribed in Sections 192(l) and 199, respectively, of the Tax Code of 1977, as amended. However, transportation and incidental expenses billed to your customer on account of repair job done by your service engineers and technicians at the installation site during the one year warranty period where no service fee is charged shall not form part of your gross receipts for purposes of the 3% tax. cd Very truly yours, RUBEN B. ANCHETA Acting Commissioner