Whether an Imported White Mineral Oil Product is Subject to Specific Tax as Petrolatum or as Lubricating Oil

June 18, 1992 BIR RULING NO. 187-92 145 (9) (3) 000-00 187-92 Exxon Chemical Philippines 15/F. BA-Lepanto Bldg. Paseo de Roxas Makati, Metro Manila Attention : Mr . Alfred A . Velayo General Manager Gentlemen : This refers to your letter dated October 14, 1991, requesting for a ruling as to whether, Marcol 82, an imported white mineral oil product is subject to a P3.50/kilogram specific tax as petrolatum, pursuant to Section 145 (a) (3) of the Tax Code, or P4.50/liter as lubricating oil, pursuant to Section 145(a)(1) of the Tax Code. cdta It is represented that a Marcol 82 is a medicinal grade white mineral oil obtained by treating refined oils with purified hydrogen in a 2-catalytic process. It is in the form of a clear colorless liquid with the following specifications: Kinematic Viscosity of 40 C, CST, Astra D445 15 Specific Gravity at 15 C, Astra D1298 0.848 Flash Point, C, Astra D92 192 Average Molecular Weight, ASTM D2502 350 In the past importations, Marcol 82 was assessed at P4.50 per liter as lubricating oil, but other similar white oil products are taxed at P3.50 per kilogram as petrolatum. Marcol 82 is not used as lubricant for machines or engines, but as a white mineral oil for "baby oil" products, hence this request. Per result of laboratory analysis of Marcol 82 by the Industrial Technology Development Institute (ITDI), formerly National Institute of Science and Technology (NIST), of the Department of Science and Technology (DOST), with Request Reference No. 11-91-003-C 933-FL, Marcol 82 conforms with the specifications of the "medicinal grade white mineral oil" but not with that of "lubricating oil" as reflected in the above-stated laboratory report. It means that marcol 82 does not fall under the classification of lubricating oils as defined in Section 145(a) (1) of the Tax Code, but rather as medicinal grade white mineral oil. Petrolatum on the other hand as defined by "Hawley's Condensed Chemical Dictionary" is a semi-solid or liquid mixture of hydrocarbons derived by distillation of paraffin base petroleum fractions. The liquid form (white mineral oil) is use as laxative, textile lubricant and dispersing agent. The physical properties of Marcol 82 exactly fits-in to the descriptive definition of petrolatum, as a white liquid-mineral oil used for "baby oil" products. Based on the foregoing, we are of the opinion that the correct specific tax on Marcol 82 is P3.50 per kilogram as petrolatum pursuant to Section 145(a)(3) of the Tax Code, and not P4.50 per liter as lubricating oil. This Office takes cognizance of your willingness not to file any claim for refund/tax credit of whatever excess of specific tax payment you have made in your previous importations of Marcol 82. cdti Very truly yours, JOSE U. ONG Commissioner of Internal Revenue