Finality of Decision Dated 26 January 2016 Relative to Suspension of Atty. Sylvester C. Parado and His Permanent Disqualification as Notary Public

April 29, 1964 BIR RULING NO. 026-64 Messrs. Jose L. Torres & Co. Certified Public Accountants R-715 Roman R. Santos Bldg. Manila Gentlemen : In reply to your letter dated October 4, 1963, I have the honor to inform you that the cost of imported rice and corn brans on which the 7% advance sales tax had been paid, and which you used as raw materials in the manufacture of poultry feed, is, for the purpose of computing the sales tax on the said finished product, deductible from the gross sales thereof. However, the cost of rice and corn brans bought locally is no longer subjected to the 2% tax imposed by Section 189 of the Tax Code, pursuant to Republic Act No. 3704 and consequently, they do not come within the purview of those provisions of Sections 186 and 189 of the Tax Code allowing the cost of raw materials which are subject to the 2% tax imposed by Section 189. Neither can the cost of locally purchased rice and corn bran be claimed as deductible under Section 186-A, which allows the deduction of the cost of tax-free products used in the manufacture of another article, because rice and corn are not tax-free, the miller thereof being subjected to the tax imposed by Section 182(x) of the Tax Code. LibLex Very truly yours, (SGD.) BENJAMIN N. TABIOS Acting Commissioner of Internal Revenue