Filing/Submission of BIR Form 2316 for Fiscal Year 2016 with the Bureau of Internal Revenue

December 2, 1958 BIR RULING NO. 695-58 8th Indorsement Respectfully returned to the Revenue Operations Executive (Assessment) the within papers relative to the proposed assessment for the contractor's percentage tax in the sum of P12,770.00 against the Mindanao Motors Corporation, Cagayan de Oro City. LibLex It appears that the Mindanao Motors Corporation is maintaining an independent spare parts department which sells to the general public indiscriminately and which is provided with C-13 privilege tax receipt. While it is alleged that the spare parts used in repairs were purchased from the spare parts department independently of the contract in repair, nevertheless, the alleged purchase is not invoiced by the spare parts department. On the contrary, the cost of repair and the spare parts used are both billed in the invoice for repair. Under the foregoing facts, the cost of spare parts used in the repair is includible in the taxable receipts of the corporation for purposes of the tax prescribed by Section 191 of the tax code. This is for the reason that, under the circumstances, the contract for repair is deemed to include both labor and material and, therefore, the cost of both should be subject to the tax prescribed by Section 191 of the National Internal Revenue Code. (SGD.) MELECIO R. DOMINGO Acting Commissioner of Internal Revenue