Tax Imposed on the Sale of Side Edging, Slabs and Firewood and Other Lumber By-Products

June 17, 1958 BIR RULING NO. 328-58 2nd Indorsement Respectfully returned to the Chief, Business Tax Division, thru the Chief, Assessment Department, Manila. LibLex As regards the assessment of P15,443.55 as forest charges and surcharges demanded by the Bureau of Forestry in Daet, Camarines Norte, and from which the taxpayer appealed to the Secretary of Agriculture and Natural Resources, this Office believes that in spite of said appeal our agents can make the necessary investigation to ascertain the taxes legally due and take necessary steps to effect the collection thereof. The other legal question involved in this case which was referred to this Office for resolution is whether or not the sale of side edging, slabs and firewood and other lumber by-products is subject to the 5% sales tax provided in Section 186 of the National Internal Revenue Code. The pertinent provisions of the Tax Code read as follows: ". . . And Provided , further , That will respect to all forest products, whether manufactured or in the original form, a tax equivalent to five per centum only of the selling price or gross value in money shall be levied, assessed, and collected: . . .." The abovequoted provisions of law impose a tax of 5% (now 7%) on the sale of all forest products. Side edging, slabs and firewood and other lumber by-products are forest products. Accordingly, the sale thereof is subject to the 5% sales tax prescribed in Section 186 of the Tax Code. Anent the assessment of P105.00 representing graduated annual fixed tax on the sale of logs abroad for the years 1953 and 1954 and the sum of P9,785.94 representing part of the percentage tax, he is further informed that the sale of logs abroad by the producer thereof is not subject to the graduated fixed tax prescribed in Section 182 of the National Internal Revenue Code. Before August 24, 1956, the date of effectivity of Republic Act No. 1612, exported articles are not also subject to the sales tax provided that title thereto did not pass within Philippine jurisdiction. Appropriate action in accordance with the above ruling of this Office is requested. LLphil Very truly yours, (SGD.) JOSE P. TRINIDAD Acting Commissioner of Internal Revenue