Publishing BIR Ruling No. 132-85, Which Subjects Carpets and Rugs to 25% Sales Tax Pursuant to Section 196(g) of the Tax Code

October 1, 1985 REVENUE MEMORANDUM CIRCULAR NO. 45-85 SUBJECT : Publishing BIR Ruling No. 132-85, Which Subjects Carpets and Rugs to 25% Sales Tax Pursuant to Section 196(g) of the Tax Code TO : All Internal Revenue Officers and Others Concerned For the information and guidance of all concerned, hereunder are the salient features of BIR Ruling No. 132-85 dated August 22, 1985, to wit: 1. Holding carpets and rugs as "textile" based on the definitions of the terms "carpet", which means a heavy woven fabric usually made of wool for covering floors and stairs; and "rugs", being a thick woven cloth used as covering, and the term textile means woven fabric or cloth. Consequently, the manufactured carpets and rugs are "textile" within the purview of Section 196(g) of the Tax Code, quoted as follows: casia "(g) Textiles wholly or in chief value of silk, wool, linen, nylon or other synthetic and/or chemical fabrics except those primarily intended for clothing; wool and silk halt; and furs and manufacturers thereof;" and, therefore, subject to the 25% sales tax as provided under said Section 196 of the Tax Code, as amended. BIR Ruling dated January 19, 1967, which subjected carpets and rugs to 7% (now 10%) sales tax on the ground that same articles are not enumerated under Section 185(p) (now section 196(g) is, therefore, deemed revoked by the provisions of P.D. No. 1358, effective April 21, 1978. All internal revenue officers, employees and others concerned are hereby enjoined to give this Revenue Memorandum Circular the evident possible publicity. (SGD.) TOMAS C. TOLEDO Acting Commissioner