Tax liability of a Person Awarded the Bid by the Bureau of Public Works

July 1, 1960 BIR RULING NO. 269-60 Sycip, Gorres, Velayo & Co. Certified Public Accountants 490 San Luis, Manila Gentlemen : Reference is made to your letter dated June 29, 1960 requesting information as to the tax liability of a person awarded the bid by the Bureau of Public Works for the furnishing and installation of the complete duct-work systems of the air-conditioning system of the Bureau of Public Works Building. You described the work to be performed as follows: "Item A For the furnishing and installation of all metal ducts, duct installation materials (" Philtex board or equivalent) dampers, duct turns, santrols, etc. for the complete air distribution system termination and each air handling unit machine room as per plans and specifications. "Item B For the furnishing and installation ceiling and wall diffusers (supply and return) as per plans and specifications". In reply thereto, I have the honor to inform you that the contract in question is one for the piece of work. The contractor under the contract is subject to the fixed and percentage taxes prescribed by sections 182 and 191 of the Tax Code. It may be stated in this connection, however, that if the contractor is ordinarily engaged in the business of selling and/or installing air conditioning systems, he is considered manufacturer; and the installation of the duct-work system will then be considered a sale by him of parts and/or accessories of air-conditioning systems subject to 30% sales tax, the basis of which shall be the full contract price. cdta Very truly yours, (SGD.) MELECIO R. DOMINGO Commissioner of Internal Revenue