Tax Liability of the Retailers of the Security Trading Co.

December 12, 1958 BIR RULING NO. 728-58 Mr. Julian T. Ocampo Attorney-at-Law R-212 Quisumbing Bldg. Dasmarias Corner Marquina Manila S i r : Reference is made to your query dated December 3, 1958, addressed to the Chief Counsel of this Bureau, requesting opinion as to whether or not the retailers of your client, the Security Trading Co., are subject to the 7% manufacturer's sales tax on their sales of cement to the Highway District Engineers. In reply thereto, I have the honor to inform you that retailers, who are not themselves manufacturers (as defined in Section 194(x) of the Tax Code) or producers of articles enumerated in Section 184, 185 and 186 of the Tax Code, are not subject to the sales tax but only to the graduated annual fixed tax prescribed in Section 182(A)(2) of the same Code. Such being the case your, client's retailers of cement are not subject to the 7% manufacturer's sales tax imposed in Section 186 of the Tax Code. It may be stated in this connection that cement is not subject to the sales tax when sold by the producer who is a lessee, concessionaire or owner of a mineral land if at least 80% of the cement consist of minerals of their own extraction, pursuant to Section 188(c), in relation to Section 246, both of the Tax Code. Very truly yours, (SGD.) MELECIO R. DOMINGO Acting Commissioner of Internal Revenue