Packaging Materials, Containers and Bottles, Used Exclusively in Manufacturing Medicine Subject to 10% Sales Tax

August 1, 1986 BIR RULING NO. 140-86 165 (A) (3) 097-86 140-86 Gentlemen : This refers to your letter dated May 20, 1986 requesting, for and in behalf of your client, Pfizer, Inc., that the packaging materials, including containers and bottles it purchases for use in the manufacture of medicine be subject to 10% sales tax. It is represented that Pfizer, Inc. is engaged in the manufacture of medicine; that it purchases packaging materials, including containers and bottles, from local manufacturers; and that such purchases are used exclusively in the manufacture of medicine. In reply, please be informed that in general, materials, parts and accessories of articles subject to sales tax on original sale shall be subject to tax at the same rate as the finished article: provided, however, that materials, parts and accessories of articles classified as essential articles which are taxable at 10% under Section 165(A)(3) of the Tax Code, shall be taxed at the same rate as the finished product, only if such materials, parts and accessories can only be used exclusively in the manufacture or production of an article taxable at 10% rate. (Sec. 6, Revenue Regulations No. 5-86) Accordingly, the packaging materials, including containers and bottles which are used exclusively in the manufacture of medicine are subject to the 10% sales tax. In other words, the manufacturer of such packaging materials, containers and bottles which are used exclusively as containers of medicine is subject to 10% sales tax on the original sales thereof. cdtech Very truly yours, (SGD.) BIENVENIDO A. TAN, JR. Commissioner