VAT Ruling No. 052-89

March 1, 1989 VAT RULING NO. 052-89 Messrs. Siguion Reyna, Montecillo & Ongsiako A. Soriano Bldg., Ayala Ave. Makati, Metro Manila Attention: Mr . Jose Lis C . Leagogo Gentlemen : This refers to your letter dated February 21, 1989 requesting for a ruling, in behalf of your client, Resins Inc. (Resins) as to whether or not your client could amend its books of accounts and sales tax return as of December 31, 1987 to reflect its payment of deficiency specific and ad valorem tax on certain solvents used in the manufacture of its finished products for the taxable years 1984-87. cdt Your request is premised on the following: "As you are probably aware, before the Bureau of Customs releases imported goods it requires the submission of an Authority to Release Imported Goods (ATRIG) from the Bureau of Internal Revenue. On said ATRIG which is prepared by the Bureau of Internal Revenue, the tax rates applicable on the imported goods are reflected in computing the specific and ad valorem taxes thereon. These tax rates are provided for by the Energy Regulatory Board to the BIR. During the period involved in this query (1984-87), our client, relying on the ATRIG prepared by the BIR, paid to the Bureau of Customs the specific and ad valorem taxes on the imported solvents based on the tax rates reflected thereon. It turned out during an investigation conducted by the Excise Tax Division that the tax rates reflected in the ATRIG and prepared by the BIR did not reflect the correct tax rates giving rise to a deficiency basic assessment of P10,947,599.51 which assessment was received only last November 2, 1988. This was due to the delay in the transmission by the Energy Regulatory Board of the applicable tax rates to the BIR. It is, thus, clear that the said deficiency arose through no fault of our client. Thus, on November 9, 1988, our client asked for a reconsideration of the assessment. The BIR reconsidered the assessment by cancelling the surcharge and interest but insisted to collect the basis tax assessment amounting to P10,947,599.51." In reply, please be informed that on the basis of the foregoing representation, your client, is hereby authorized to amend its books of accounts and sales tax returns as of December 31, 1987 to reflect its payment of deficiency specific and ad valorem tax on certain solvents used in the manufacture of its finished products for the taxable years 1984-87. cdta Very truly yours, VICTOR A. DEOFERIO, JR. Deputy Commissioner