Taxation of the Importation of Vinyl Chloride Monomer

December 14, 1994 BIR RULING NO. 179-94 101 000-00 179-94 Mabuhay Vinyl Corporation 4th Floor, Gammon Centre 126 Alfaro Street, Salcedo Village Makati, Metro Manila Attention: Mr . Diosdado T . de la Cruz Vice-President, Finance Gentlemen : This refers to your letters dated November 4 and November 10, 1994, requesting a ruling to the effect that Vinyl Chloride Monomer (VCM), a non-toxic, colorless gas possessing a faintly sweet odor, is not a mineral product as defined under Section 151(b)(3) of the Tax Code, hence, not subject to the excise tax imposed therein. In support of your request, you submitted a full chapter text on Chemistry as well as handbook on Hydrocarbon Processing which show in detail the chemical process in the production of VCM. Our laboratory analysis confirms the said chemical process, i.e ., that Vinyl Chloride is a colorless gas (or liquid under pressure) made by reaction of acetylene with hydrogen chloride or by catalytic cracking of ethylene dichloride. It is a petrochemical and as monomer, is used to manufacture vinyl plastics (Polyvinyl Chloride) and as refrigerant. Based on the foregoing, it is our opinion that your importation of Vinyl Chloride Monomer (VCM) is subject only to the 10% value-added tax prescribed under Section 101 of the Tax Code, as amended; but not to the excise tax imposed by Section 151 of the same Code. aisadc Very truly yours, LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue