BIR Ruling No. 245-82

September 10, 1982 BIR RULING NO. 245-82 199 213-81 245-82 DRAGOCO (Philippines) Inc. # 17 Castilla Corner Granada Streets Quezon City Attention: Mr . Pablito B . Bermundo President Gentlemen : This refers to your letters dated June 3 and July 6, 1982 requesting a ruling as to the rate of advance sales tax and mark-up applicable to your importation of the following: 1. Raw materials for manufacturing of food flavorings such as lemon oil, orange oil and food flavors. 2. Raw materials for manufacturing of cosmetics or fragrances. In reply, please be informed that in the laboratory analysis conducted by this Office, it was ascertained that lemon and orange oils are volatile oils extracts from fresh peels of citrus and ripe orange fruits, respectively; that the food flavors such as chocolate, milk, strawberry, coffee and melon are extracts expressed from materials they are named after, although they may be manufactured by synthesis; and that the aforesaid oils and flavors are generally used as food flavors. Accordingly, said oils and flavors are subject to the 10% advance sales tax based on the landed cost thereof plus 25% mark-up, pursuant to Section 193(b) in relation to Section 199, both of the Tax Code of 1977, as amended. However, imported raw materials such as mixture of odoriferous substances, various aromatic chemicals and cosmetic essences are subject to the advance sales tax at the rate of 50% based on the total landed cost, plus 100% mark-up, pursuant to Section 194(b) of the Tax Code. aisadc Very truly yours, TOMAS C. TOLEDO Acting Commissioner