Tax Imposed on the Local Sales of a Manufacturer

March 21, 1958 BIR RULING NO. 210-58 Mr. Jose V. Garcia Proprietor, J. V. Garcia's Homecraft 14 St. John, Cubao Quezon City S i r : In answer to your letter of the 20th ultimo, I have the honor to inform you as follows: A manufacturer is, on his local sales of articles manufactured by him, subject to the sales tax of 50%, 30% or 7% prescribed in Sections 184, 185 and 186, respectively, of the National Internal Revenue Code, as amended, depending upon the kind and nature of said articles. The tax is based on the gross selling price of the articles minus the total costs of deductible raw materials used in the manufacture of the finished products. On the other hand, manufactured articles shipped or exported abroad by the manufacturer himself are exempt from the sales tax otherwise due thereon, pursuant to Section 188(e) of the aforesaid Code, as amended. If such articles are sold locally, they cannot be exempt from the corresponding sales tax even if they are subsequently exported abroad by the purchaser thereof, because said Section 188(e) requires that the manufacturer himself be the exporter. LexLib Very truly yours, (SGD.) JOSE ARAAS Commissioner of Internal Revenue