BIR Ruling No. 192-83

November 15, 1983 BIR RULING NO. 192-83 Gentlemen : This refers to your letter dated November 9, 1983 requesting a ruling as to the correct rate of sales tax applicable to the importation of "Lordan Collector" a solar water heating systems by the City of Manila for its Slaughter House. Brochures submitted show that the "Lordan Collector" is designed for efficient operation in Hot Water Heating for domestic, commercial and industrial use, which is presently the most widespread way of utilizing solar energy. Cooper tubed Lordan Collectors used in a direct heating system are more economical and more efficient than conventional closed loop heating systems. In reply, please be informed that the aforesaid solar water heating system is similar or analogous to an electric gas or oil water heaters subject to the 25% compensating tax based on landed cost thereof, pursuant to Section 204 in relation to Section 196(d) of the Tax Code, as amended. However, as a government unit, the City of Manila, is entitled to either a tax subsidy or payments constituting equity contributions, in which case, it shall not be required to pay cash or its equivalent. The revenue collecting agencies shall instead, issue a "Payment Compliance Certificate" indicating the nature of the assessment and amount due. The subsidy shall be effected through journal vouchers or their equivalent. (See Joint Budget Circular No. 289 and pars. 4, 6 and 9, Finance Circular No. 2-78, implementing Sec. 23, P.D. 1177) cdtech Very truly yours, (SGD.) RUBEN B. ANCHETA Acting Commissioner Bureau of Internal Revenue