Furniture Shops Which Do Not Offer for Sale to the General Public already Manufactured Furniture

December 15, 1960 BIR RULING NO. 537-60 The Duchess Furniture Co. 151 Sta. Mesa Ext. San Juan, Rizal Gentlemen : In answer to your letter dated November 14, 1960, I have the honor to inform you as follows: B.I.R. Ruling No. 105.12 dated January 25, 1957 reading "A person who manufactures furnitures only upon previous orders from customers is subject to the 3% contractor's tax under section 191 of the Tax Code and not to the 7% or 30% sales tax under sections 186 and 185 of the same Code" is in full force and effect. This ruling is applicable to furniture shops which do not offer for sale to the general public already manufactured furniture. It contemplates a situation where the furniture shop has not finished furniture to sell but only offers to manufacture furniture of the type or class or make any specifications submitted by the customers. In your case, you are invariably a manufacturer because you have ready for sale already manufactured furniture. The alleged order given by customers is in effect purely an offer to purchase. The mere fact that you have not on hand the furniture ordered will not alter your tax status. You remain a manufacturer and not a contractor. Very truly yours, (SGD.) MELECIO R. DOMINGO Commissioner of Internal Revenue