BIR Ruling No. 133-61

May 8, 1961 BIR RULING NO. 133-61 Central Lopez Planter's Association, Inc. Fabrica, Negros Occidental Gentlemen : Reference is made to your letter dated May 3, 1961 inquiring as to the rate of tax to which your importation of completely knocked down Ford consul automobiles, thru barter, is subject. It appears that you entered into agreement with the Luneta Motor Company under which the latter agreed to extend to you their plant facilities for the assembly of the imported knocked down cars. You stated that this agreement is made possible because Luneta Motor Company is periodically incurring shut downs for lack of raw materials. For the use of its plant, you will pay Luneta Motor Company the sum of P300.00 for every car assembled. In reply thereto, I have the honor to inform you that inasmuch as the CKD cars were imported for the purpose of assembly and sale, the same are subject to only 7% advance sales tax pursuant to Section 186 of the Tax Code, as amended. (BIR Ruling No. 226, s. of 1958). On your sales of the assembled cars, however, you shall pay a sales tax at the rate of 50%, 75% or 100% as the case may be. This will serve as authority for the Commissioner of Customs in releasing the importation in question upon your payment of the 7% advance sales tax thereon. cdtech Very truly yours, (SGD.) MELECIO R. DOMINGO Commissioner of Internal Revenue