Applicability of Withholding Provisions of RA No. 1051

August 6, 1958 BIR RULING NO. 436-58 Mr. Jose Andia Vigan, Ilocos Sur S i r : In answer to your letter of the 31st ultimo, I have the honor to inform you that the withholding provisions of Republic Act No. 1051 apply only in case the amount of the tax due from a person on account of a money payment due to him can be fixed, determined, computed or ascertained at the time such payment is made. As the tax due on your sales of concrete hollow blocks to the government cannot be fixed, determined, computed or ascertained at the time payment for said sales is to be made to you, no tax need be deducted and withheld from the money payment due to you by reason of the sales in question. As regards the deductibility of the costs of the raw materials used in your manufacture of hollow blocks for the purpose of computing the sales tax due on the latter, please be further informed that only the costs of raw materials taxable under Section 186 of the National Internal Revenue Code can be deducted from the gross selling price of said products. Accordingly, gravel and sand being taxable under said Section 186, the costs thereof are deductible. On the other hand, the cost of cement is not deductible, it being exempt from that tax, pursuant to Section 188(c) of the same Code, unless the same is imported. This serves as authority for the government officer concerned to make to you the money payment in question without deducting and withholding any tax therefrom. LexLib Very truly yours, (SGD.) MELECIO R. DOMINGO Acting Commissioner of Internal Revenue