Structural Billets and Low Carbon Billets Used in Making Steel Bars and Nails Subject to 10% Sales Tax
BIR Ruling No. 222-86 • Bureau of Internal Revenue (BIR) Issuances • Rulings (Numbered) • Oct 21, 1986
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October 21, 1986 BIR RULING NO. 222-86 163 (2) 039-86 022-86 Gentlemen : This refers to your letter dated May 5, 1986 requesting, in behalf of your client, Armco-Marsteel Alloy Corporation, a ruling to the effect that structural billets and low carbon billets are subject to 10% sales tax. It is represented that structural billets are the main raw materials used in the manufacture of steel bars while low carbon billets are used in the manufacture of nails. In reply, please be informed that the aforesaid finished articles, i.e., steel bars and nails are subject to 10% sales tax, in accordance with Section 163(2)(k) of the Tax Code, Accordingly, the structural billets and low carbon billets which are to be used in the manufacture of said finished articles are subject to the same rate of 10% provided that the purchaser shall certify to Armco-Marsteel Alloy Corporation that the aforesaid raw material shall be used exclusively in the manufacture of steel bars and nails. (Section 163(2), Tax Code as amended by Executive Order No. 36). If the purchaser fails to issue the certification, the aforesaid raw materials shall be subject to 20% sales tax. Very truly yours, (SGD.) BIENVENIDO A. TAN, JR. Commissioner of Internal Revenue
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