Determination of Person Principally Liable for the Payment of Ad Valorem Tax on Chromite Ore Stockpile

October 1, 1991 BIR RULING NO. 201-91 127 (a) 151 (a) (3) 000-00 201-91 Gentlemen : This refers to your letter dated August 2, 1991, in effect, requesting a clarification as to the person liable for the payment of ad valorem tax on chromite ore. It appears that on February 28, 1989 your company purchased from Elysee Industries, Inc., 65 Rizal Avenue Extension, Caloocan City 42,000 metric tons of chromite stockpiles (muckpiles) for P3,000,000.00 as evidenced by a copy of the Deed of Absolute Sale; and that the said chromite ore were subsequently sold by your company to another buyer. cd In reply, please be informed that under Section 151 (a) (3) in relation to Section 127 (a) of the Tax Code, metallic minerals are subject to excise tax (ad valorem) of five percent (5%) based on the actual market value of the gross output thereof at the time of removal, in case the product is locally extracted or produced; and the person liable thereto is the manufacturer or producer, before removal of the products from the place of production. Should the domestic products be removed from the place of production without the payment of the tax, the owner or person having possession thereof shall be liable for the tax thereon. In the instant case, therefore, the person principally liable for the payment of ad valorem tax on chromite ore stockpile (muckpile) is the producer of Elysee Industries, Inc., but if the tax was not paid upon removal from the place of production, the same shall be paid by you as the owner or the person in possession thereof. The excise tax imposed herein shall be in addition to the value-added tax pursuant to Section 126 of the Tax Code. cdtech Very truly yours, (SGD.) EUFRACIO D. SANTOS Deputy Commissioner and Officer-in-Charge