BIR Ruling No. 264-82

October 19, 1982 BIR RULING NO. 264-82 199-A 000-00 264-82 Atty. Miguel Q. Baron Suite 734, Philamlife Bldg. United Nations Avenue Manila S i r : This refers to your letter dated September 8, 1982 requesting a ruling as to the rate of sales tax applicable to the PVC plastic products, namely: PVC sheeting and PVC leatherette being manufactured by your clients, the APO CHEMICALS & MFG. CORP., ACME SHOE, RUBBER & PLASTIC CORP., COATING INDUSTRIES OF THE PHILS., INC., CHAMPION MFG. & MKTG. CORP., GENERAL COATED FABRICS MFG., INC., PARAMOUNT CHEMICAL INDUSTRIES, INC., PHILIPPINE FABRIKOID, INC., INTERPOLYMER CORP., PHILIPPINE HI-STANDARD MFG., INC., PHIL. INTERNATIONAL FOOTWEAR, INC. and SUNTA RUBBERIZED INDUSTRIAL CORP. cdt It is represented that PVC sheeting manufacturing involves different raw materials, namely: PVC resins, plasticizers, fillers, pigments, lubricants and stabilizers which are mixed in the banbury machine; that it goes through the calendar machine where the thickness of the PVC sheeting is adjusted; and that the sheeting then passes to the embossing and printing machines for the making of different designs. You also represented that a piece of grey cloth or non-woven materials is being laminated at the back of the PVC sheeting so as to serve as a lining and to make it stronger and easier to handle by the users; and that this is then called the PVC leatherette. In reply, I have the honor to inform you that textiles which are taxed under Section 196(g) of the Tax Code covers only fabrics made by weaving, knitting, bonding, felting, or tufting. (Vol. 18, page 170, Encyclopedia Britannica). The PVC sheeting in question is not a fabric; hence, it is not considered a textile. With respect to the PVC leatherette, which is the PVC sheeting with cloth backing, the same is not also considered textile because the cloth is not silk, wool, linen or nylon but cotton. The cloth backing is not the chief value of the product. In view thereof, this Office believes, and so holds, that the PVC plastic products in question are subject to the 10% sales tax imposed by Section 199(a) of the Tax Code. Very truly yours, RUBEN B. ANCHETA Acting Commissioner