Tax Imposed in the Importation of Batching Oil

December 29, 1958 BIR RULING NO. 727-58 The Caltex (Phil.), Inc. P. O. Box No. 783 Manila Gentlemen : Reference is made to your letter dated October 20, 1958, stating that batching oil, a shipment of which you are expecting to receive, is used for two distinct purposes, namely: (1) for rope manufacturing and (2) for blending with lubricating oils. For that reason, you propose to carry said shipment in bond and pay the advance sales tax on the quantities thereof you shall withdraw for sale to rope manufacturers, and the specific tax on those to be withdrawn for use in blending with lubricating oils. LLphil In answer thereto, I have the honor to inform you that, as batching oil is not a lubricating oil, the importation thereof is subject to the advance sales tax of 7%, based on the total landed cost thereof plus 25% mark-up, pursuant to Section 183(b), in relation to Section 186 of the Tax Code. This holds true regardless of whether said product is sold by you to manufacturers of ropes or to manufacturers of lubricating oils. However, should that corporation itself, as importer thereof, use the batching oil, or a part thereof, for blending with lubricating oils, the same or that particular part so used shall be exempt from the advance sales tax, but the resultant mixture is subject to the specific tax prescribed in Section 142(b) of the same Code. Very truly yours, (SGD.) MELECIO R. DOMINGO Acting Commissioner of Internal Revenue