Taxability of a Hollow Block Manufacturer

September 26, 1958 BIR RULING NO. 575-58 Mr. Dario Pascual Paraaque, Rizal S i r : Anent your query of August 20, 1958, I have the honor to inform you that as a hollow block manufacturer you are subject to a fixed annual tax of P20.00 pursuant to Section 182 of the tax code, payable upon the start of operation and thereafter on or before the 20th of January, if paid annually, or on or before the 20th of January and July of each year, if paid semi-annually. Furthermore, you are subject to a percentage tax of seven (7) per centum of the gross selling price or gross value in money of the hollow blocks less the cost of tax paid raw materials used, pursuant to Section 186 of the Tax Code. The cost of cement is not deductible because it is exempt from the sales tax. The same is true with sand and gravel if you produced them yourself. However, if you purchase the sand and gravel used in the manufacture, the cost thereof is deductible provided, that the sales tax thereon had been previously paid by the producer. Your information regarding the 70% deduction, for purposes of the sales tax, is not correct. Very truly yours, (SGD.) MELECIO R. DOMINGO Acting Commissioner of Internal Revenue