Gross Monthly Sales as a Producer or Manufacturer

December 7, 1960 BIR RULING NO. 533-60 Mr. Crescencio J. Tutor 142 Int. 9 Claveria St. Davao City S i r : Reference is made to your letter of the 16th ultimo, requesting information whether or not the ruling of this Office exempting a person from the payment of the percentage (sales) tax when his gross monthly sales is less than P200.00 applies to one provided with C-4 (12) [restaurant, refreshment parlors and other eating places], C-4 (40) [tailor shop] and C-14 (producer or manufacturer) privilege tax receipts whose gross monthly sales from said business are P2,875.00, P3,500.00 and P195.00, respectively. In other words, your query is whether or not his gross monthly sales as a producer or manufacturer is exempt from the sales tax, the same being less than P200.00, notwithstanding the fact that the aggregate of his gross monthly sales from the three business exceeds P200.00. In answer thereto, I have the honor to inform you that for the purpose of determining whether or not a producer or manufacturer engaged in another business or businesses is exempt from the sales tax pursuant to section 188(a) of the Tax Code, only his gross monthly sales or receipts as such producer or manufacturer is considered, it being immaterial whether the gross sales or receipts from his other business or businesses are, individually or if added to the former, in excess of P200.00 a month. Accordingly, your query is answered in the affirmative. In this connection, it may be stated that to be entitled to the exemption under said section 188(a) it is not necessary that a taxpayer's gross monthly sales or receipts be less than P200.00, it being enough that such sales or receipts does not exceed P200.00. B.I.R. Ruling No. 18, s. 1959, refers to the matter of tax clearance requirement and not to the exemption from the sales tax in question. cdtech Very truly yours, MELECIO R. DOMINGO Commissioner of Internal Revenue