Tax Imposed on a Company Supplying Gas to NPC

August 20, 1958 BIR RULING NO. 443-58 Mr. Jose W. Diokno Attorney-at-Law 332-334 Regina Building Escolta, Manila S i r : In reply to your letter dated July 30, 1958, I have the honor to inform you that a company supplying the National Power Corporation with oxygen, acetylene, nitrogen, liquified petroleum and other gases of its manufacture is subject to 7% sales tax on its sales thereof, pursuant to Section 186 of the Tax Code which provides as follows: "There shall be levied, assessed and collected once only on every original sale, barter, exchange, and similar transaction either for nominal or valuable considerations, intended to transfer ownership of, or title to, the articles not enumerated in section one hundred and eighty-four and one hundred and eighty-five a tax equivalent to seven per centum of the gross selling price or gross value in money of the articles so sold, bartered, exchanged, or transferred, such tax to be paid by the manufacturer or producer ." aisadc The National Power Corporation cannot claim exemption from the tax because the tax is not its liability. It is the liability of its manufacturer-supplier although ultimately the tax is shifted to the corporation. It has been held that when the nature of the tax had been determined at the outset it cannot be altered or made to vacillate depending upon the question of who eventually will pay it. Very truly yours, (SGD.) MELECIO R. DOMINGO Acting Commissioner of Internal Revenue