Tax Rate on Imported Essential Oils

October 11, 1960 BIR RULING NO. 450-60 Messrs. Ross, Selph & Carrascoso Attorneys-at-Law P.O. Box 781 M a n i l a Gentlemen : With reference to your letter dated August 17, 1960, I have the honor to inform you that where imported essential oils were subjected to only 7% advance sales tax because of representation of the importer thereof that it shall be used in his manufacture of articles subject to 7% sales tax and subsequently portions of the oils were used in the manufacture of articles subject to 50% sales tax, deficiency advance sales tax shall not be assessed against the portions thus used. However, in the computation of the sales tax due on the articles subject to 50% tax, the cost of the essential oils thus used shall not be deductible from the gross selling price thereof. The foregoing ruling is predicated on the general rule that the cost of raw materials is deductible from the gross selling price of the articles manufactured therefrom only when the raw materials were previously taxed under the same section of the Tax Code under which the finished articles are subject. cdll Very truly yours, MELECIO R. DOMINGO Commissioner of Internal Revenue