Tax Rate of a Mere Dealer

April 23, 1959 BIR RULING NO. 210-59 Mr. Potenciano Diaz 434 Salcedo Street Noveleta, Cavite S i r : Reference is made to your letter dated April 20, 1959 stating the following: "Last March 1959, the Bureau of Supply Coordination opened for bidding the supply of crushed stones, sand, gravel and/or adobe stones to the Civil Aeronautics Administration, a mimeograph copy of the bid is attached hereto. Upon delivery of the materials required, the supplier is given a copy of the attached printed form duly accomplished. "Last March 1959 I won a bid to supply 100 cubic meters of crushed stones at the stipulated price of P5.20 per cubic meter. The crushed stones were purchased by me from various persons Binangonan, Rizal, and delivered to the Civil Aeronautics Administration which takes care of their use and/or disposal. However, the Auditor of the CAA has deducted and withheld, allegedly pursuant to Republic Act No. 1051, 3% of the amount due me as a contractor although I only dealt in the sale or supply of locally purchased crushed stones. I think the transactions are sales and not contract of services, pursuant to Article 1467 of the New Civil Code of the Philippines." You now request information as to whether you are subject to tax as a contractor or as a mere dealer. In reply thereto, I have the honor to inform you that, in the transaction stated above, you did nothing more than to sell crushed stone, which you purchased from the producers thereof, to the Civil Aeronautics Administration. Under the circumstances, you are considered a mere dealer subject only to the graduated fixed annual tax. Very truly yours, (SGD.) JOSE ARAAS Commissioner of Internal Revenue