Tax Rate of Muscovado Sugar Mills

August 25, 1959 BIR RULING NO. 412-59 The Deputy Provincial Treasurer Tayasan, Negros Oriental S i r : In reply to your letter dated July 14, 1959, I have the honor to inform you that muscovado sugar mills are subject to the 2% tax prescribed by section 189 of the Tax Code on proprietors or operators of sugar centrals if they have attained analogous conditions now obtaining in sugar centrals. These conditions are the said muscovado sugar mills must be for the general use of the public and not exclusively for the owners only, or that they must process sugar out of canes coming from a wide surrounding territory or from various plantations. Nevertheless, even if the factory mills exclusively the sugar canes of the plantation only or of several plantations owned by the same owner, if said plantations are big enough to be comparable to the extensive area usually affiliated to a sugar central as intended by the law. However, in the case of small muscovado sugar mills which are exclusively used by the owner or only those animal powered (trapiches), and does not attain the analogous conditions obtaining in a sugar central, they are exempt from the payment of tax prescribed by said section 189 of the Tax Code. (Collector of Internal Revenue v. Juan L. Ledesma, G.R. L-12158, May 27, 1959) The tax heretofore collected on sugar milled by the exempt muscovado sugar mills may be refunded provided the claim therefor is made to the Commissioner of Internal Revenue within two years from the date of payment of the tax, pursuant to section 309 of the Tax Code. It may be stated in this connection that the proper claimant for a refund of the tax paid is not necessarily the proprietor or operator of the mills but the owner or owners of the milled product upon which the tax was assessed and collected. prcd Very truly yours, (SGD.) MELECIO R. DOMINGO Commissioner of Internal Revenue