Containers and Packaging Materials for Essential Articles are Subject to 10% Original Sales Tax

September 1, 1987 BIR RULING NO. 255-87 163 (2) 163 (4) 139-87 255-87 Gentlemen : This refers to your letter dated May 22, 1987 stating that you manufacture the following articles, viz: ITEMS USE 1. Babymate Bottle (8 oz.) Feeding bottle for baby 2. Fre-Flo Bottle (8.4 oz.) Feeding bottle for baby 3. Half Gallon Container for food, oil and juices 4. One Gallon Bottle Container for vinegar, concentrated softdrinks, flavors and catsup 5. Hot Sauce (200, 150.95 ml.) Container for hot sauce 6. Liter Flat Container for juice 7. Medicine Cap Hospital use 8. Peroxide (340, 200, 120 ml.) Medicine bottle for hospital use 9. Pint with handle Container for juice 10. RX Bottle (4, 3, 2, 1 oz.) Medicine bottle 11. Tablet or Wide Mouth Bottle (760, 500, 250, 180.60 ml.) Medicine bottle 12. Alcohol Bottle (16, 816 oz.) Container for rubbing alcohol 13. Alcohol Bottle New Design Container for rubbing alcohol arguadiente 14. Tumbler (big/small) Hospital use 15. Vial Bottle (30.15 ml.) Hospital use 16. Medicated Shampoo (120 ml.) Facial lotion bottle 17. Kidney Basin Hospital use 18. Petri Disc Hospital/Laboratory use 19. Specimen Bottle Hospital/Laboratory use 20. Tray Hospital use 21. Urinal Basin Hospital use 22. Jug Bottle Hospital use 23. Thermometer Holder Hospital use and that you now request information on the rate of percentage tax applicable on said items. cdtech 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 product except when such materials are taxed at a lower rate. This Office has ruled that containers are raw materials of the manufactured articles. (BIR Ruling No. 66-027 dated June 29, 1966). Accordingly, aforesaid items 1 to 13, inclusive, which are used as containers and packaging materials for articles considered essential, are subject to 10% original sales tax pursuant to Section 163(2) of the Tax Code as amended provided, your customers shall certify that such materials shall be used exclusively in the preparation of essential articles. However, items 14 to 23, inclusive, are considered ordinary articles hence subject to 20% sales tax pursuant to Section 163(4) of the same Code as amended. Very truly yours, (SGD.) BIENVENIDO A. TAN, JR. Commissioner