Imported High Carbon Steel Plates Used as Raw Material in SPare Parts of Motor Vehicles Will be Subject to 10% Advance Sales Tax

July 10, 1987 BIR RULING NO. 197-87 163 (2) (n) 000-00 197-87 Gentlemen : This refers to your letter dated July 3, 1987 requesting that your importation of High Carbon Steel Plates of SAE (Society of Automotive Engineers) 1050 grade be subject only to 10% advance sales tax. It is represented that the aforesaid imported High Carbon Steel Plates of SAE 1050 is used as raw material in the preparation of nuts by stripping it into an optimum dimension after which it is fed into the forging machine. The nuts made from this type of steel are intended for the automotive industry to be used as part of their spare parts. In reply, please be informed that among the articles subject to 10% sales tax are parts and accessories of motor vehicles. (Section 163 (2)(n), Tax Code as amended) Nuts fall within the purview of the term spare parts of motor vehicles. Accordingly, the imported High Carbon Steel Plates of SAE 1050 which is used as raw material thereof will be subject to 10% advance sales tax provided that you as importer/manufacturer shall certify to this Bureau that the imported materials shall be used exclusively in the manufacture or production of nuts. (Section 163(2), Tax Code as amended) Accordingly, and in line with your Certification, your aforesaid importation is subject to 10% advance sales tax pursuant to Section 162(c) in relation to Section 163(2) of the Tax Code as amended. Very truly yours, (SGD.) BIENVENIDO A. TAN, JR. Commissioner