BIR Ruling No. 171-82

May 19, 1982 BIR RULING NO. 171-82 202-f 000-00 171-82 Phil-International Footwear, Inc. 580-584 T. Pinpin St. M a n i l a Attention: Mr . Manuelito S . Picaa Accounting Manager Gentlemen : This refers to your letter dated July 14, 1981 requesting our opinion whether the sales tax on your products "synthetic leatherette" purchased by your customers to convert it into a finished product may be claimed as tax credit. It is represented that you are a manufacturer of synthetic leather which you sell locally; that your Shoe and Bag Division is a BOI registered enterprise while your manufacture of synthetic leatherette is not; that some customers (exporter) purchase synthetic leatherette from you which will then be converted into a finished product and eventually exported; that your local sales invoices of synthetic leatherette includes a 10% sales tax; that some exporters are claiming tax rebates from you on the materials purchased and used in producing their finished products. In reply, please be informed that the percentage taxes paid by you on the synthetic leatherette which you sold to your customers who used the same in the manufacture of finished products exported shall be allowed to be credited against other tax liabilities of the manufacturer-exporter, provided that the amount of the tax on such raw materials (synthetic leatherette) shall be indicated as a separate item in the sales invoices. (See 2nd paragraph of Sec. 202(f), Tax Code). In other words, your customers may claim tax credit, not from you, but from the Bureau of Internal Revenue, upon compliance with the provisions of Section 295 of the Tax Code. Very truly yours, RUBEN B. ANCHETA Acting Commissioner