Imported Polyprophylene Resins Used as Raw Materials in the Manufacture of Packaging Materials is Subject to 10% Advance Sales Tax

November 23, 1987 BIR RULING NO. 372-87 162 (2) (b) 255-87 372-87 S i r : This refers to your letter dated November 11, 1987 requesting confirmation of your opinion that imported polyprophylene resins to be used in the manufacture of packaging materials for dairy products is subject only to 10% advance sales tax. In reply, please be informed that under Section 163(2) of the Tax Code as amended by Executive Order No. 36, any article subject to the original sales tax when used as a raw material in the manufacture or preparation of essential articles, shall, subject to certain conditions be taxed at the same rate as the finished product. Accordingly, since the dairy products are essential articles subject to the 10% sales tax, the packaging materials are subject to the same rate of tax. Such being the case, imported polyprophylene resins to be used exclusively as raw materials in the manufacture of said packaging materials shall be subject to the advance sales tax at the same rate, i.e., 10%, provided that the purchasers shall certify to the importer that the imported articles will be used exclusively in the manufacture of the said packaging materials. If the purchasers fail to issue the certification, the imported articles will be taxed at 20%. Very truly yours, (SGD.) EUFRACIO D. SANTOS Deputy Commissioner