Sales of Candles Made out of Paraffin Wax Subject to 20% Sales Tax

November 4, 1986 BIR RULING NO. 229-86 163-4 000-00 229-86 S i r : This refers to your letter dated September 3, 1986 requesting, for and in behalf of your client, Y.S. Coffee and Candle Factory, a ruling as to whether it is only subject to the C-13 graduated annual fixed tax on its making and sale of candles. It is represented that your client is engaged in the production of candles; that such candles are made by melting paraffin wax after which it is poured in different sizes of moulders for cooling purposes; and that no other ingredient is added except wicks. In reply, please be informed that the making of candles out of paraffin wax constitutes manufacturing; hence, the sales of candles by your client are subject to the 20% sales tax imposed by Section 163(4) of the Tax Code, as amended by Executive Order No. 36. However, the specific tax paid on the paraffin wax [Sec. 128(3), Tax Code] and the sales tax paid on the wicks shall be credited against the sales tax due on the original sales of candles; provided that the amounts of said taxes paid on the raw materials are indicated as separate items in the sales invoice of the supplier-dealer. (Sec. 166(a), Tax Code, as amended by Executive Order No. 36; Sec. 5(c)(1), Revenue Regulations No. 11-86) cdtech Very truly yours, (SGD.) BIENVENIDO A. TAN, JR. Commissioner of Internal Revenue TAN-T-5150-J0923-A-4