Rate of Tax due on Importation of One Set Industrial Refrigeration Complex

September 16, 1986 BIR RULING NO. 168-86 163 (4) 165082 168-86 Gentlemen : This refers to your letter dated May 24, 1985 requesting a ruling as to the correct rate of tax due on your importation of one (1) set industrial refrigeration complex. It is represented that Aquacor Food Marketing, Inc. (AQUACOR), is a domestic corporation engaged in the processing of shrimps, prawns, crabs and other marine and/or aquatic products for export, that AQUACOR entered into an agreement with K. CESURA, LTD., a corporation operating in HongKong, whereby the latter agreed to invest with the former by contributing industrial refrigeration equipment valued at $300,000.00 to be utilized in the processing of shrimps, prawns, crabs and other marine and/or aquatic products for export; that said refrigeration complex was imported on no-dollar basis; and was entered in the Customhouse on March 28, 1985; that the BIR authorized the release of the imported merchandise from customs custody, subject to the payment of the 25% percentage tax pursuant to Section 197(II) & (H) (now Sec. 163(4) of the Tax Code; and that on March 28, 1985, in order to safeguard the imported merchandise from damage and deterioration, and with prior approval from the customs authorities, the shipment was released under surety bond in the amount of P6,466,689.00 to cover 150% of the assessed duties and taxes therein. You are now protesting the classification of the said imported equipment as "household refrigerators and freezers" under Section 197 of the Tax Code. In reply, please be informed that your importation in March, 1985 of industrial refrigeration equipment to be utilized in your business of processing shrimps, prawns, crabs, and other marine and aquatic products for export is subject to 10% compensating tax pursuant to Section 204 in relation to Section 199, both of the Tax Code, as amended, which are the provisions of law then in force at the time of the importation. However, if said imported article will be sold, bartered, or exchanged, the same shall be subject to advance sales tax. This ruling is subject to verification. The same will be revoked if, after verification, the facts are not as represented. aisadc Very truly yours, (SGD.) BIENVENIDO A. TAN, JR. Commissioner