Human and Veterinary Medicine are Subject to 10% Tax on Original Sale

May 29, 1987 BIR RULING NO. 147-87 163 (2) (k) 047-86 147-87 Gentlemen : This refers to your letter dated January 19, 1987 requesting a ruling that Upjohn, Inc., being a firm engaged in the manufacture and sale of both human and veterinary medicine, is subject to 10% sales tax. In reply, I have the honor to inform you that pursuant to BIR Ruling No. 047-86, dated April 22, 1986, the term "medicine" is defined as a substance or preparation such as drug, used in treating disease, healing, relieving pain, etc., (Websters Third New International Dictionary and Websters New World Dictionary) and under the Federal Food, Drug and Cosmetic Act, "drug" is defined as an article intended for use in diagnosis, cure, mitigation, treatment or prevention of disease in man or other animals. (U.S. V. 3 Cartons More or Less No. 26 Formula GM etc., D.C. Cal., 132 F. Supp, 569, 573 (13A Words and Phrases). iatdc Accordingly, human and veterinary medicine, are subject to 10% tax on original sale pursuant to Section 163 (2)(k) of the Tax Code, as amended by Executive Order No. 36, which took effect August 1, 1986. Moreover, this Office has consistently ruled that raw materials such as but not limited to packaging materials used in the manufacture of essential articles are subject to 10% sales tax, provided the manufacturer-purchaser, like Upjohn, Inc., in the instant case, shall certify to the domestic supplier-importer or manufacturer, that said raw materials shall be used exclusively in the manufacture or preparation of the essential article. Very truly yours, (SGD.) BIENVENIDO A. TAN, JR. Commissioner