BIR Ruling No. 145-83

August 9, 1983 BIR RULING NO. 145-83 Gentlemen : This refers to your letter dated October 10, 1982 requesting, in effect, that the handicraft manufacturers/producers be exempt from the payment of sales tax on their sale of products of traders who subsequently export the said products. cdta It is represented that there are many small producers/manufacturers of handicraft in Bicol who are selling their products to your members export traders; that said producers/manufacturers are being subjected to the 10% sales tax on their sales of handicraft; that since the said handicraft are subsequently exported by the buyer export traders abroad, you believe that said manufacturer/producers are exempt from sales tax. In reply, I regret to inform you that your request cannot be granted of back of legal basis. Article shipped or exported by the manufacturer or producer, irrespective of any shipping arrangement that may be agreed upon which may influence or determined the transfer of ownership of the articles so exported are exempt from percentage taxes under Section 202(d) of the Tax Code, as amended. In other words, in order that the producers or manufacturers may be exempt from the sales tax, they must be exporters themselves of their said products. In this connection, it is instead suggested that you urge the various small handicraft manufacturers/producers to avail of the tax exemption privileges granted under Republic Act Nos. 3470 and No. 5326, as amended by Presidential Decree No. 817 and No. 1788, otherwise known as Cottage Industries Development Authority (NACIDA). Very truly yours, (SGD.) RUBEN B. ANCHETA Acting Commissioner Bureau of Internal Revenue