Sale of Medicine and Other Medical Supplies is Subject to 1.5% Subsequent Sales Tax and to Fixed Annual Tax

September 7, 1987 BIR RULING NO. 266-87 164 000-00 266-87 Gentlemen : This refers to your letter dated July 31, 1987 requesting a ruling regarding the imposition of 1.5% subsequent sales tax on your sale of pharmacy items. You stated that you are paying the 1.5% subsequent sales tax on actual outpatient cash sales of pharmacy items but not on in-patient pharmacy charges because you believe that medicine and other medical supplies used by patients are incidental to their medical care and treatment. In reply, please be informed that your sale of medicine and other medical supplies, whether to outpatients or in-patients, is still considered a subsequent sale, hence, subject to the 1.5% subsequent sales tax under Section 164 of the Tax Code as amended. Moreover, you are subject to the fixed annual tax of P200.00 in accordance with Section 161(l) of the same Code. Very truly yours, (SGD.) EUFRACIO D. SANTOS Deputy Commissioner