Imported Technical Grade Prosphoric Acid which Exclusively Used as a Raw Material in the Manufacture of Essential Articles is Subject to 10% Advance Sales Tax

August 11, 1987 BIR RULING NO. 240-87 162 (c) 163 (2) 246-86 240-87 Gentlemen : This refers to your letter dated July 29, 1987 requesting that your importation of technical grade phosphoric acid be subject only to 10% advance sales tax. You have represented and submitted a certification that the aforesaid article, like liquid caustic soda, soda ash dense and yellow phosphorous, is also a raw material used in the production of sodium tripolyphosphate (STPP) and tetrasodium pyrophosphate (TSPP) which are in turn used in the preparation of detergents. You also submitted certification issued by some of your customers/purchasers namely: Colgate-Palmolive, Inc., Philippine Refining Co., Inc., and Procter and Gamble PMC to the effect that the articles purchased from you, i.e., STPP and TSPP, are exclusively used by them in the manufacture or preparation of essential articles. 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. Accordingly, and in line with the certifications you and your customers/purchasers submitted to this Office, your importation of technical grade prosphoric acid which is exclusively used as a raw material in the manufacture or preparation of essential articles is subject only to 10% advance sales tax, pursuant to Section 162(c) in relation to Section 163 (2) of the Tax Code as amended. adc This will authorize the Bureau of Customs to release your aforementioned importation upon payment of the corresponding 10% advance sales tax. Very truly yours, (SGD.) BIENVENIDO A. TAN, JR. Commissioner