Taxation of Producing, Selling and Supplying of Donut to Dealers

July 13, 1987 BIR RULING NO. 202-87 172 (1) 153-86 202-87 Gentlemen : This refers to your letter dated April 27, 1987 requesting information as to your business taxes. It is represented that you are engaged in the production of donut and sell the same in your five (5) company-owned stores: one main store and four (4) booth type outlets; and that all of said main store and outlets have sit-in services and take-out counters. Likewise, you supply donuts to your several dealers. In reply, please be informed that with respect to the operation of your main store and outlets you are considered as a caterer subject to an annual fixed tax of P200.00 and to the 4% tax prescribed in Section 161(1) and 172(1), both of the Tax Code, as amended. Each of the five stores operated by you is considered a separate or distinct establishment or place where business subject to the tax is conducted pursuant to Section 158 of the Tax Code, as amended. Hence, each store is liable for payment of a separate fixed annual tax of P200.00. cdta However, for supplying donuts considered as bread and bakery products, which are produced by you to several dealers, you are a manufacturer subject to another fixed annual tax of P200.00 and to the 10% sales tax prescribed under Section 161(1) and 163 (2)(c) of the Tax Code, as amended. Very truly yours, (SGD.) BIENVENIDO A. TAN, JR. Commissioner