BIR Ruling No. 127-65

November 19, 1965 BIR RULING NO. 127-65 Mr. Jesus Sequera Sales Manager La Suerte Cigar & Cigarette Factory 165 Dolores Street, Pasay City S i r : This refers to your letters dated September 17, and October 6, 1965, requesting clarification on the matter of classification of your provincial dealers and the salesmen or agents employed by your company on salary and commission. As outlined in your letters, you will make an outright sale either in cash or credit to the dealers at much lower rates than your factory prices to allow them a reasonable profit in the sale of your products. These dealers will secure their own licenses and use their own set of invoices, and will employ personnel at their own expense. However, you will provide them with delivery panels or trucks and give them allowance for gasoline and proper maintenance of said vehicles. Under the set-up described in the preceding paragraph, your provincial dealers shall be considered wholesale tobacco dealers if their sales are in larger quantities than two hundred cigars, eight hundred cigarettes, or five kilos of manufactured tobacco at any one time, or for the purpose of resale, regardless of quantity; or they shall be considered retail tobacco dealers if their sales are not more than two hundred cigars, not more than eight hundred cigarettes or not more than five kilos of manufactured tobacco at any one time and not for resale; or they may be considered as both wholesale tobacco dealers and retail tobacco dealers, as the case may be, pursuant to Section 194(o) of the Tax Code. The salesmen or agents employed by your company on salary or commission basis will be considered wholesale tobacco peddlers if their sales are in larger quantities than two hundred cigars, eight hundred cigarettes, or five kilos of manufactured tobacco at any one time, or for the purpose of resale, or retail tobacco peddlers if their sales are not more than two hundred cigars, not more than eight hundred cigarettes, or not more than five kilos of manufactured tobacco at any one time and not for resale, or both, as the case may be, pursuant to Section 194(f) of the same Code. casia Very truly yours, (SGD.) MISAEL P. VERA Acting Commissioner of Internal Revenue