BIR Ruling No. 233-61

July 20, 1961 BIR RULING NO. 233-61 Mr. Antonio S. Veloso Certified Public Accountant P. O. Box 916, Manila S i r : Reference is made to your letter of the 19th instant, requesting information whether or not the costs of locally purchased scrap iron, cast iron and aluminum scrap are deductible from the gross selling price of the steel bars manufactured therefrom. cdll In answer thereto, I have the honor to inform you that, pursuant to Section 186 of the Tax Code, where articles subject to the tax under said section are manufactured out of materials likewise subject to that tax, the total cost of such materials shall be deductible from the gross selling price of the manufactured articles. Such being the case, and considering that steel bars and scrap iron, cast iron and aluminum scrap are subject to the 7% sales tax, the total cost of said materials are deductible from the gross selling price of the steel bars manufactured therefrom. It is understood that the costs of the raw materials must be duly established before deduction can be allowed. llcd Very truly yours, (SGD.) MELECIO R. DOMINGO Commissioner of Internal Revenue