Procedure Adopted in Computing the Sales Tax Due

October 9, 1959 BIR RULING NO. 521-59 Republic Shoe Manufacturing Co. 412-A Quisumbing Building Dasmarias corner Marquina M a n i l a Attention : G . O . Subong Gentlemen : Reference is made to your letter dated August 20, 1959, stating as follows: "1. That we are a shoe manufacturer having secured the necessary licenses both of the national and the municipal licenses required for in the business. "2. That we distribute our finished products thru the different dealers, but most of our products are distributed by us thru our own established branch stores. Our branch stores under the different municipalities have secured the necessary licenses and at the same time a C-13 Internal Revenue fixed tax. "3. That for the purpose of accounting control of our sales both from the main Office and the sales made by our branch are consolidated in our return for rendering the monthly sales tax." Under the above facts, you now request this Office for opinion as to whether or not the procedure adopted is correct in computing the sales tax due. In reply thereto, I have the honor to inform you that the procedure followed, by you, as shown in item No. 3, is correct, that is, the sales made by the main office directly to the dealers and the sales made by your own established branch stores are consolidated and made the basis in computing the manufacturer's sales tax (C-14). We note, that your branch stores are holders of a C-13 privilege tax receipt which in our opinion is wrong. Your branch stores in the different municipalities are mere conduits or extensions of the main office. For which reason, the selling price of shoes in the branch stores have been taken as the basis in the computation of the manufacturer's sales tax (C-14). Accordingly, said branch stores are subject to a separate C-14 privilege tax receipt and not to the C-13. In this connection it may be stated that a C-13 privilege tax receipt is otherwise known as a "dealer's" privilege tax receipt. Your branch stores are not dealers or persons who buy and sell merchandise, goods and chattles for themselves or for their own account, but they are, as stated, mere conduits or extensions of the main office. aisadc Very truly yours, (SGD.) MELECIO R. DOMINGO Commissioner of Internal Revenue