Similar Terms of "Total Receipts or Sales" and "Gross Receipts or Earnings"

March 13, 1958 BIR RULING NO. 180-58 Mr. Rufinao M. Remoreras Lajug, Clarin, Bohol S i r : This is with reference to your letter dated January 25, 1958, requesting information on the following: cdpr 1. Whether the terms "total receipts or sales" and "gross receipts or earnings" are similar terms. 2. Whether or not the cost of raw materials is deductible from the gross receipts of a tailor shop for purposes of the 3% tax. The terms "total receipts, "gross receipts" or "gross earnings" are similar terms. The choice of the use thereof is, of course, dependent upon the tax status of the taxpayer. The "gross sales" is, however, different as the denomination connotes. It must necessarily be used in relation to a taxpayer who sells and whose tax is determined on the basis of his gross sales. The 3% tax being based on gross receipts, the cost of raw materials is not deductible therefrom. When a tailor provides both labor and materials, his taxable receipts include costs of both. If he provides only labor, his taxable receipts include only cost of labor. prcd Very truly yours, (SGD.) JOSE ARAAS Commissioner of Internal Revenue