Percentage Taxes Imposed on Certain Locally Manufactured Articles

April 28, 1959 BIR RULING NO. 242-59 Mr. Gorgonio C. Adarma Gregg's Business Agency Rm. 308 Vergel de Dios Bldg. 664 P. Paterno, Quiapo M a n i l a S i r : In reply to your letter dated April 24, 1959, requesting information on the percentage taxes imposed on certain locally manufactured articles mentioned therein, I have the honor to inform you as follows: School bags and shopping bags, regardless of the material of which they are made, are subject to the 7% sales tax. (Sec. 186, Tax Code; BIR Ruling No. 227, April 22, 1958). Traveling bags and wallets made of any material are subject to the 30% sales tax. Brief cases made of leather or imitation leather are also subject to 30% sales tax and to the 7% sales tax if made of any other material. (Secs. 185 and 186, Tax Code) The 7% sales tax is based on the gross selling price of the manufactured article less the total cost of the raw materials used in the manufacture thereof which were previously taxed under section 186 or section 189 of the Tax Code. The 30% sales tax is likewise based on the gross selling price of the manufactured article less the total cost of the raw materials used in the manufacture thereof which were previously subjected to the 30% sales tax. cdll Very truly yours, (SGD.) JOSE ARAAS Commissioner of Internal Revenue