Rate of Advance Sales Tax on Imported Gestetner Brand Duplicating Stencil/Mimeographing Ink

September 15, 1986 BIR RULING NO. 167-86 163 (4) 038-85 167-86 Gentlemen : This refers to your letter dated August 18, 1986 requesting clarification as to the correct rate of advance sales tax on your imported Gestetner brand duplicating stencil/mimeographing ink covered by eleven (11) entry declarations between 1983 and 1985. You stated that you have already paid the advance sales tax at the rate of 10% but the Bureau of Customs is demanding payment of the advance sales tax at the rate of 25%. In reply, please be informed that said mimeographing ink imported between 1983 to 1985, being a part and accessory of duplicating/mimeographing machine is subject to the advance sales tax at the rate of 10% based on the landed cost thereof, plus 25% mark-up, pursuant to the law then in force, i.e. Section 193(b), in relation to Section 199(a), both of the Tax Code, as amended by Executive Order No. 883. (BIR Ruling No. 038-85). It should be noted that in 1983 to 1985 duplicating/mimeographing machine was classified, for sales tax purposes, as an ordinary article taxable at the rate of 10%, pursuant to Section 199(a) of the Tax Code then in force. It is not one of those enumerated as semi-essential articles under Section 197 of the Tax Code also then in force, which are taxable at the rate of 25%, if imported. Consequently, the determination that the mimeographing ink is taxable at the rate of 25% is not correct. Beginning January 1, 1986 up to this date, said machines are still classified, for sales tax purposes, as ordinary articles but the rate of tax has been increased to 20%. [Section 165(A)(2), Tax Code, as amended by P.D. No. 1994; Sec. 163(4) of the Tax Code, as amended by Executive Order No. 36]. Therefore, beginning January 1, 1986, said mimeographing ink shall be subject to advance sales tax at the same rate of 20%. cdtech Very truly yours, (SGD.) BIENVENIDO A. TAN, JR. Commissioner