Criterion in the Determination Tax Rate of an Imported Article

June 11, 1958 BIR RULING NO. 319-58 Ophir Drugs and Cosmetics Manufacturing Co., Inc. Northern Hills, Malabon Rizal Gentlemen : In reply to your letter dated April 16, 1958, I have the honor to inform you that in the determination of the rate of tax to which an imported article is subject, the criterion is the classification and not the end use thereof. Essential oils and petroleum jellies for instance are subject to 50% sales tax even if they are to be used in the manufacture of articles subject to only 7% sales tax. Similarly, talcum powder, zinc oxide, mineral oil, formaldehyde and others are subject to 7% sales tax even if they are to be used in the manufacture of articles subject to 50% sales tax. Accordingly, your request that you be given the option to choose the proper rate of tax that shall be applicable to raw materials you import for your manufacturing business is hereby denied. Very truly yours, (SGD.) JOSE ARAAS Commissioner of Internal Revenue