Rate of Advance Sales Tax on Importation of Ammonium Bicarbonate Powder, Sodium Bicarbonate Powder, etc.

October 8, 1986 BIR RULING NO. 207-86 162 (c) 163 (2) (3) 000-00 207-86 Gentlemen : This refers to your letter dated September 15, 1986 requesting information as to the correct rate of advance sales tax to be imposed on your importation of the following articles: 1. Ammonium Bicarbonate powder 2. Sodium Bicarbonate powder 3. Glucose Liquid 4. Glacial Acetic Acid 5. Whole Alaska Green Peas from U.S.A. 6. Green Peas from Australia 7. Soy Beans 8. Soybean Meal It is represented that items 1, 2 and 3 are raw materials used in the manufacture of bakery products; item 4 is a raw material used as bleaching agent in the manufacture of textiles for clothing while items 5, 6, 7 and 8 (samples attached) are all agricultural products. In reply, please be informed that since the aforesaid finished articles, i.e., bakery products and textiles intended for clothing are classified as essential articles subject to the 10% sales tax in accordance with Section 163(2) (c) and (g) of the Tax Code, your importation of Ammonium bicarbonate powder, Sodium Bicarbonate powder, Glucose liquid and Acetic acid which are raw materials to be used in the manufacture of the said finished articles is subject to the advance sales tax at the same rate of 10% provided that the purchasers of said commodities shall certify to you as importer that the same shall be used exclusively in the manufacture or preparation of bakery products and textiles for clothing. (Sec. 6. II. Revenue Regulations No. 11-86 dated July 31, 1986). Said certification shall be kept by you for reference in the future investigation of your business tax cases. If your purchasers fail to issue the certification, the aforesaid imported raw materials shall be subject to the 20% advance sales tax. (BIR Ruling No. 161-86.) aisadc On the other hand, your importation of Whole Alaska Green peas from U.S.A., Green peas from Australia, Soybeans and Soybean meal all of which are classified as agricultural products in their original state are subject to zero per cent (0%) advance sales tax pursuant to Section 163(3) (a) of the Tax Code as amended by Executive Order No. 36. In other words, your aforesaid importation is not subject to advance sales tax. Likewise, on your original sales thereof, you are not subject to the sales tax under said Section 163(3)(a) of the Tax Code. Very truly yours, (SGD.) ROMULO M. VILLA Acting Commissioner