Whether Imported Fat Liquor is Subject to Excise Tax

December 5, 1994 BIR RULING NO. 169-94 145 (1) 000-00 169-94 Phil. Ocean Air International Corp. Rm. 302 Marvel Bldg. No. 1 258 Juan Luna St. Binondo, Metro Manila Attention: Mr . Conrado E . Valmores President & General Manager Gentlemen : This refers to your letter dated August 5, 1994 requesting for an opinion on whether imported fatliquor is subject to excise tax under Section 145 of the Tax Code, as amended. It is represented that your client, Phil. Leather Manufacturing Co., Inc., a manufacturer of leather products, is importing chemicals (i.e., fatliquor), which is being used as raw material for the production of finished leather products, such as shoes and bags; that under Tariff Heading No. 3403.1100 at 3% rate of duty; that the said tariff classification covers "lubricating preparation (including cutting oil preparations, bolt or release preparations, anti-rust or anti-corrosion preparations and mould release preparations, based on lubricants) and preparations of kind used for the oil on grease treatment of textile materials, leather, furskin or other materials, but excluding preparations containing, as basic constituents, 70% or more by weight of petroleum oils or oils contained from bituminous minerals. In reply, please be informed that the aforementioned chemicals (i.e., fatliquor), being imported by Phil. Leather Manufacturing Co., Inc., which is classified by the SGS for purposes of the tariff classification as "lubricating preparation" subject to 3% rate of duty, falls within the purview of the terms "lubricating oils" under Section 145(1) of the Tax Code, as amended. Henceforth, it is the opinion of this Office that the same is subject to excise tax of Four Pesos and Fifty Centavos provision of the Tax Code. Very truly yours, LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue