Taxability of Trucking Charges Added to the Cost of Goods Sold to Customers

May 25, 1992 BIR RULING NO. 154-92 100 (a) 000-00 154-92 Federation of Filipino-Chinese Chambers of Commerce & Industry, Inc. 6th Floor, Federation Center Muelle de Binondo St., Manila Attention: Mr . Vicente S . Tan Secretary General Gentlemen : This refers to your letter dated March 9, 1992 requesting a ruling on the following queries: 1. Whether trucking charges added to the cost of commodities forms part of the tax base in the computation of VAT liability of the seller. 2. Whether prompt payment discount granted to the customer and not reflected in the invoice is deductible from sales subject to VAT. In reply, please be informed as follows: 1. Trucking charges added to the cost of goods sold to your customer forms part of the gross selling price as defined in Section 2(k) of Rev. Reg. No. 5-87. Accordingly, such charges are in effect subject to 10% VAT. 2. Pursuant to Section 6 (c) of Revenue Regulations No. 5-87, discounts granted and determined at the time of sale which are expressly indicated in the invoice shall be allowed as deductions from the gross selling price or gross receipts. Accordingly, if the discount is not reflected in the invoice, as required in said regulations, the same shall not be allowed as deduction from gross sales subject to VAT. aisadc Very truly yours, JOSE U. ONG Commissioner of Internal Revenue