BIR Ruling No. 181-84

November 21, 1984 BIR RULING NO. 181-84 196-m-000-79-181-84 S i r : This refers to your letter dated October 16, 1984 requesting the recall or cancellation of the following Authority to Release Imported Goods (ATRIG): ATRIG NO. DATE 1. NARD-84-006222 July 25, 1984 2. NARD-84-006472 August 2, 1984 3. NARD-84-007304 August 28, 1984 granting the Bureau of Customs authority to release shipments of "beverage dispensers" by the PEPSI COLA BOTTLING COMPANY OF THE PHILIPPINES, INC. upon its payment of the 10% compensating tax. It appears that the said beverage dispensers which are covered by Bill of Lading Nos. CHS 01476, Hou 002851 and Hou 03201 were imported by the Pepsi Cola Bottling Company of the Philippines, Inc. for its use and not for sale, barter or exchange. A perusal of the brochure on the description and use of the imported dispensers disclosed that the articles are electrical refrigeration units used to dispense refrigerated drinks. Paragraph (i), Section 196 of the Tax Code, as amended by P.D. 1358, classifies, among others, "beverage coolers", inclusive of "any material, part or accessory" thereof; or any article similar or analogous thereto under paragraph (m) of said section, as "semi-essential" articles taxable at the rate of 25%. The term "dispenser" means a mechanical device for vending merchandise such as soft drink (Webster's Third New Dictionary p. 653) whereas, the word "cooler" means "one that cools; . . . a refrigerator" (Webster's 7th New Collegiate Dictionary, p. 115). Consequently, viewed against the aforequoted definitions, the imported electrical beverage equipment in question is similar or analogous to "beverage coolers" within the contemplation of par. (i) of Section 196 of the Tax Code, as amended. It should be noted that one of the salient features of the amendments to the Tax Code brought about by P.D. 1358, is the inclusion of the phrase "similar or analogous article" in the provisions dealing on classification of articles subject to the different rates of sales taxes. Such being the case, the enumeration of articles classified as "semi-essential" articles under Section 196 is not exclusive in nature considering paragraph (m) thereof, which authorizes the Commissioner of Internal Revenue to classify a particular product based on the inherent essentiality of said product, as "similar or analogous" to articles mentioned in the said provision. In view of the foregoing, the imported beverage dispensers which will be used by the Pepsi Cola Bottling Company of the Philippines, Inc. are subject to the 25% compensating tax prescribed by Section 204, in relation to Section 196(m), both of the Tax Code of 1977, as amended. This cancels Authority to Release Imported Goods (ATRIG) Nos. NARD-84-006222, NARD-84-006472 and NARD-84-007304 issued by the National Audit Review Division of the Bureau of Internal Revenue. Very truly yours, (SGD.) RUBEN B. ANCHETA Acting Commissioner