Tax Exemption on the Purchase of Thread in Big Spools and Balls

August 10, 1959 BIR RULING NO. 367-59 Miss Maria Rosario Ong 642 P. Rada St., Manila M A D A M : In reply to your letter dated July 22, 1959, I have the honor to inform you that a person who purchases thread in big spools and balls from direct importers and local manufacturers and rewinds the same into smaller spools before selling them to the public is not a manufacturer. His sale thereof is a subsequent sale which is also exempt from tax. For engaging in such business he is, however, subject to the graduated fixed tax prescribed in section 182(A)(2) of the National Internal Revenue Code based on his gross annual sales during the preceding calendar year. The initial graduated fixed annual tax of ten pesos shall be paid by him before engaging in said business. The gross income derived by him from the said business is also subject to income tax and to the additional residence tax. cdi Very truly yours, (SGD.) MELECIO R. DOMINGO Commissioner of Internal Revenue