Rice and Corn Dealer Not Subject to 1.5% Tax on Subsequent Sale

October 10, 1986 BIR RULING NO. 210-86 249 073-86 209-86 S i r : This refers to your letter dated April 12, 1986 requesting a ruling whether a dealer of sugar and molasses is subject to the C-13 annual graduated fixed tax imposed by Section 161(2) of the Tax Code, like a dealer of rice and corn. In reply, please be informed that rice and corn are considered agricultural products in their original state even when milled. (Sec. 163(3), Tax Code, as amended by Executive Order No. 36). Hence, the subsequent sale of rice and corn is subject to zero percent (0%) rate. (Sec. 164, Ibid). In other words, a dealer of rice and corn is not subject to the 1.5% tax on subsequent sale, in which case, he is subject to the C-13 graduated annual fixed tax imposed by Section 161(2) of the Tax Code. (RMC No. 2-86). On the other hand, a dealer of sugar and molasses is not subject to the C-13 annual graduated fixed tax, like a dealer of rice and corn. This is so because sugar and molasses are no longer agricultural products in their original state, the same being products derived from the milling of sugarcane; hence, sugar and molasses are subject to the 3% tax payable by sugar centrals and mills, in accordance with Section 168 of the Tax Code. Such being the case, dealers of sugar and molasses (those dealing with the subsequent sales of said products) are subject to the 1.5% tax imposed by Section 164 of the Tax Code, as amended by Executive Order No. 36. Very truly yours, (SGD.) BIENVENIDO A. TAN, JR. Commissioner of Internal Revenue