Exemption from Sales Tax of Garment Manufacturer-Exporter

July 31, 1986 BIR RULING NO. 136-86 167 (e) 034-86 136-86 Gentlemen : This refers to your letter dated January 23, 1986 stating that you are engaged in the manufacture of garments for export in commercial quantities to foreign countries such as the United States, Australia, Canada and Kuwait; and that your registration with the Board of Investments (BOI) as an export producer under Certificate of Registration No. 78-808 has already lapsed. Based on the foregoing representation, your request information on the following questions, viz: 1. "Do we consider our export sales still exempted from percentage tax even though the 5-year period from our BOI registration have lapsed? 2. "Are we subject to the business fixed tax of P100 since we are not subject to percentage tax or do we have to pay on a graduated basis? In reply, please be informed that under Section 167(e) of the Tax Code as amended, articles shipped or exported by the manufacturer are exempt from the sales tax. Accordingly, as manufacturer-exporter of garments, you are exempt from the sales tax. However, even if you solely export your products, you are subject to the annual fixed tax of P200.00 prescribed in Section 161(1) of the Tax Code. (BIR Ruling No. 14, S. 1962) On the other hand, as manufacturer-exporter, you are not subject to the graduated annual fixed tax prescribed by Section 161(2) of the Tax Code. (BIR Ruling No. 99, S. 1965) cdti Very truly yours, (SGD.) BIENVENIDO A. TAN, JR. Commissioner