Planing or Surfacing of Sawn Lumber Does Not Constitute Manufacturing

August 29, 1960 BIR RULING NO. 374-60 Mr. Jose Ramos 546-552 A. Mabini Caloocan, Rizal S i r : Reference is made to your letter dated July 5, 1960 stating that you buy rough, planed or surfaced lumber of various sizes from big lumber dealers for the purpose of resale either in "as is" condition measurements or recut according to the measurements desired by your customers. You further stated that if a buyer asks for planed or surfaced lumber and your available stock is rough lumber, you plane or surface it. You stated still further that there are standard prices for rough, sawn or surfaced lumber among lumber dealers. You now pose the question of whether or not in addition to the C-13 (graduated fixed tax) privilege tax which you are now paying, you are further subject to the contractor's tax. In reply thereto, I have the honor to inform you that this Office has consistently ruled that the planing or surfacing of sawn lumber does not constitute manufacturing. Neither will the person so doing be considered a contractor unless he is ordinarily engaged in the business of planing or surfacing sawn lumber belonging to others for a fee. Under the circumstances mentioned above, you did nothing more than sell planed or surfaced lumber to your customer. This Office is, therefore, of the view and so holds that you are a mere dealer and that for the planing or surfacing of sawn lumber under the circumstances presented by you, you are not thereby constituted a contractor. LLphil Very truly yours, (SGD.) MELECIO R. DOMINGO Commissioner of Internal Revenue