Whether Norsophil Metal Resources, Inc. is No Longer Liable for Additional Ad Valorem Tax on the Tax Paid Ores

December 28, 1992 BIR RULING NO. 380-92 151-00 000-00 380-92 Ms. Elvira D. Presado Certified Public Accountant 459 Malaya Street Mandaluyong, Metro Manila M a d a m : This refers to your letter dated September 9, 1992 stating that your client, Norsophil Metal Resources, Inc. (Norsophil), is a producer of chromite ore extracted from its own mining claim as well as those extracted from the mining claims leased from other persons and that it has paid the corresponding 5% ad valorem tax on said extracted ores pursuant to Section 151 of the Tax Code; that their ores are principally sold to foreign buyers; that occasionally, in order to meet its supply commitments to their foreign buyers, Norsophil buys chromite ores produced by Crysapril, another mining producer, on which the corresponding 5% ad valorem tax bill has been paid. cdtech Based on the foregoing facts, you now request for a confirmation of your opinion that Norsophil is no longer liable for additional ad valorem tax on the tax paid ores purchased from Crysapril. In reply, please be informed that pursuant to Section 151 of the Tax Code, the producer of metallic products, i.e., chromite ore is subject to 5% ad valorem tax, which is one of the excise taxes payable by the producer upon removal from the place of production. Upon being paid, it shall be removed and not thereafter stored or permitted to remain in the place where produced. (Section 127, 157, Ibid ). If said tax paid products are subsequently sold by the producer, it shall be subject only to 10% VAT under Section 100 of the Tax Code, but it is no longer subject to additional ad-valorem tax. Accordingly, if the chromite ores, Norsophil has purchased from Crysapril has already been subjected to ad valorem tax, no further payment of the same tax shall be made by your client. If payment has in fact been made, the same may be returned to Norsophil by way of a claim for refund or tax credit filed in writing with the Commissioner of Internal Revenue within (2) years after the payment of the tax pursuant to Section 204 (3) of the Tax Code, as amended. Very truly yours, JOSE U. ONG Commissioner of Internal Revenue