Imported Soda Ash Dense to be Used as Raw Materials in the Manufacture of Soaps and Detergents are Subject to 10% Sales Tax

July 16, 1987 BIR RULING NO. 210-87 162 (c) 163 (2) 246-86 210-87 Gentlemen : This refers to your letter dated June 5, 1987 requesting that your importation of Soda Ash Dense be subject only to 10% advance sales tax. It appears that the said imported article is used by soap and detergent companies exclusively in the manufacture of soaps and detergents. In reply, please be informed that under Section 163(2) of the Tax Code as amended by Executive Order No. 36, any article subject to the original sales tax, when used as a raw material in the manufacture or preparation of essential articles, shall, subject to certain conditions, be taxed at the same rate as the finished products, except when such materials are taxed at a lower rate. Consequently, since Soda Ash Dense is used in the production or manufacture of soaps and detergents considered essential articles [Section 163 (2)(i), Tax Code as amended], the same shall be taxed at the same rate of 10% pursuant to Section 162 (c) in relation to Section 163 (2) of the Tax Code as amended. However, your purchasers shall certify to you that the imported raw materials shall be used exclusively in the manufacture or preparation of soaps and detergents. If you fail to issue the certification, your importation of Soda Ash Dense shall be taxed at 20%. Very truly yours, (SGD.) BIENVENIDO A. TAN, JR. Commissioner