Proper Tax Rate Levied on the Importation of CKD Renault Bantam Cars

April 18, 1958 BIR RULING NO. 226-58 Compaia General de Tabacos de Filipinas P. O. Box 143 Manila Gentlemen : Reference is made to your letter dated April 1, 1958, inquiring as to the proper rate of tax to be levied on your importation of CKD Renault Bantam cars in completely knocked down condition which you will assemble and sell to the public. You stated that you contemplate to construct an assembly plant for this purpose. In the meantime, you also stated that for the assembly of the automobile parts and accessories which you have imported in completely knocked down condition, you are to lease the assembly plant of the Liberty Motors, Inc. employing for that purpose highly skilled French Technicians of the Regie Nationale Des Usines, Paris, France. cdt In reply thereto, I have the honor to inform you that, pursuant to Section 184(a) of the National Internal Revenue Code, as amended, your importation of CKD Renault Bantam cars in completely knocked down parts for the purpose of assembly and sale is subject to the 7% advance sales tax based on the landed cost thereof plus 25% mark-up. Your sale of the finished automobiles shall be subject to either 50%, 75% or 100% sales tax depending upon the gross selling price thereof. However, pursuant to the aforementioned section of the Tax Code, you are allowed to deduct from the gross selling price of the finished automobiles the total cost of the imported parts and accessories which is the landed cost plus the 25% mark-up. This will serve as authority for the Commissioner of Customs to effect the release of your importation upon the payment of the 7% advance sales tax due thereon. Very truly yours, (SGD.) JOSE ARAAS Commissioner of Internal Revenue