Watson Industrial Sales

March 24, 1992 VAT RULING NO. 038-92 NIRC Sec 101 (a) Precedent Ruling 000-00 Atty. Armando S. Padilla Dizon, Padilla & Associates Law Office Rm. 403 Teodorica Apartment 1148 Roxas Blvd., Manila SUBJECT : Watson Industrial Sales S i r : Referring to your letter of February 5, 1991 please be informed that the 10% value-added tax imposed on importation of goods is "based on the total value used by the Bureau of Customs in determining tariff and customs duties. . ." (Sec. 101(a), NIRC, as amended by E.O. No. 273). The only issue on the importation of your said client is on the proper home consumption value of its imported "synthetic resin, polypropylene, in granules". The law pertaining to determination of home consumption values of imported goods is embraced by the Customs and Tariff Code over which the Bureau of Customs has exclusive jurisdiction. While it is true that, under Section 6(a), NIRC, the Bureau of Customs is an agent of the Bureau of Internal Revenue for the collection of national internal revenue taxes on importations, e.g., the 10% VAT, the supervisory authority of the BIR only pertains to collection of the said taxes. The said authority does not embrace a power to implement the provisions of the Customs and Tariff Code, e.g., its proviso on the meaning of the term "home consumption value" of imported goods. In view thereof, this Office regrets it may not intercede in your behalf in connection with the position taken by the Bureau of Customs on the home consumption value of your client's importation of the said synthetic resin. Very truly yours, (SGD.) JOSE U. ONG Commissioner of Internal Revenue