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Chan Robles Virtual Law Library
PRESIDENTIAL DECREE NO. 1358
PRESIDENTIAL DECREE NO.
1358 - FURTHER AMENDING CERTAIN SectionS OF TITLE V OF THE
NATIONAL INTERNAL REVENUE CODE, AS AMENDED
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chanroblesvirtualawlibrary
WHEREAS,
there is a need to restructure the sales tax system to make it more
progressive and responsive to the requirements of a developing economy;chanroblesvirtualawlibrary
WHEREAS, certain luxury and semi-luxury articles should be reclassified
based on their inherent essentialities consistently with present
economic levels and conditions;chanroblesvirtualawlibrary
WHEREAS, to minimize the adverse effects of worldwide inflation, the
sales tax rate of basic commodities should be reduced from 7% to 5%;chanroblesvirtualawlibrary
WHEREAS, local governments are in need of additional revenue to augment
the funds needed in their development projects;chanroblesvirtualawlibrary
WHEREAS, in the interest of equity and in order to eliminate the double
taxation of the present sales tax system as regards raw materials used
in the manufacture of articles, there is need to adopt the tax credit
method in computing the sales tax;chanroblesvirtualawlibrary
WHEREAS, in order to make the administration of the customs duty and
advance sales tax or compensating tax simple, it is desirable to adopt
a common base of valuation of imported articles for such
levies; chanroblesvirtualawlibrary
NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Republic of
the Philippines, by virtue of the powers vested in me by the
Constitution, do hereby decree:cralaw:red
Section 1. Certain sections of Title V of the
National Internal Revenue Code as amended, are hereby further amended
to read as follows:cralaw:red
"Sec. 193. Payment of percentage taxes. — (a) In
general. — Unless otherwise specifically provided, it shall be the duty
of every person conducting a business on which a percentage tax is
imposed under this Title, to make a true and complete return of the
amount of his, her or its gross value of output actually removed from
the factor or mill warehouse and within twenty days after the end of
each quarter pay and the tax due thereon: Provided, That any person
retiring from a business subject to the percentage tax shall notify the
nearest internal revenue officer thereof, file his return or
declaration, and pay the tax due thereon within twenty days after
closing his business.
"For purposes of this section, sales on consignment shall be considered
actually sold on the day of sale or sixty days after the date
consigned, whichever is earlier.
"If the percentage tax on any business is not paid within the times
specified above, the amount of the tax shall be increased by
twenty-five per centum the increment to be a part of the tax and the
entire unpaid amount shall be subject to interest at the rate of
fourteen per centum per annum. chanroblesvirtualawlibrary
"In case of willful neglect to file the return within the period
prescribed herein, or in case of false or fraudulent return is
willfully made there shall be added to the tax or to the deficiency tax
in case any payment has been made on the basis of such return before
the discovery of the falsity or fraud, a surcharge of fifty per centum
of its amount and the entire unpaid amount shall be subject to interest
at the rate of fourteen per centum per annum. The amount so added to
any tax shall be collected at the same time and in the same manner and
as a part of the tax unless the tax has been paid before the discovery
of the falsity or fraud, in which case, the amount so added shall be
collected in the same manner as the tax.
"(b) Sales tax on imported articles. — When the
articles are imported, the percentage taxes established in Sections
194, 195, 196, 197, 198, 199 and 201 of this Code shall be paid in
advance by the importer, in accordance with the regulations promulgated
by the Secretary of Finance and prior to the release of such articles
from customs' custody, based on the home consumption value or price
(excluding internal excise taxes) thereof, plus ten (10) percent of
such home consumption value or price, including postage, commission,
customs duty and all similar charges, except freight and insurance,
plus one hundred per centum of such total value in the case of articles
enumerated in Sections 194 and 195; fifty per centum in the case of
articles under Sections 196 and 197; and twenty-five per centum in the
case of articles under Sections 198, 199 and 201. The tax imposed in
this section shall not apply to articles to be used by the importer
himself in the manufacture or preparation of articles subject to
specified tax; Provided, however, That where the National Economic and
Development Authority certifies to the availability of local raw
materials of sufficient quantity, comparable quality and price to meet
the needs of manufactures subject to specific tax the importation of
such raw materials shall be subject to the tax herein
imposed. chanroblesvirtualawlibrary
The home consumption value or price under this section shall be the
value or price declared in the consular, commercial, trade or sales
invoice, certified to as correct under penalties of perjury by the
Philippine consul at the port of origin if there is any. Where there
exists a reasonable doubt as to the value or price of the imported
article declared in the entry, the correct value of the article shall
be ascertained from the reports of the revenue attache or commercial
attache (foreign trade promotion attache), pursuant to Republic Act
Numbered Fifty-Four Hundred and Sixty six or other Philippine
diplomatic officers and from such other information that may be
available to the Bureau of Customs.
From the data gathered, the Commissioner of Customs shall ascertained
and establish the home consumption values of articles exported to the
Philippines and shall publish such lists of values from time to time.
When the dutiable value provided for in the preceding paragraphs cannot
be ascertained for failure of the importer to produce the documents
mentioned above or where there exists a reasonable doubt as to dutiable
value of the imported articles declared in the entry, it shall be the
domestic wholesale selling price of such or similar article in Manila
or other principal markets in the Philippines on the date the tax
becomes payable on the articles in the usual wholesale quantities and
in the ordinary course of trade, minus —chanroblesvirtualawlibrary
(a) Twenty percent thereof for expenses and profits;
and
(b) Duties and taxes paid thereon.
"The tax herein shall be collected in all cases where the original
importer sold, transferred, or negotiated the imported articles to
third persons before released thereof from customs' custody, regardless
of the tax status of the original importer and the indorsee or
transferee, the same to be paid by the transferee and/or indorsee.
"The provisions of this Code shall not be construed as nullifying
whatever interpretation the government has given to the word `importer'
heretofore.
"In the case of tax-free articles brought or imported into the
Philippines by persons, entities or agencies exempt from tax which
subsequently sold, transferred, or exchanged in the Philippines to
non-exempt private persons or entities, the purchasers shall be
considered the importers thereof. The tax due on such articles shall
constitute a lien on the article itself superior to all other charges
or liens irrespective of the possessor thereof."
(c) Flexibility Clause. — In the interest of the
national economy and general welfare, and subject to the limitations
herein prescribed, the President, upon recommendation of the Secretary
of Finance and the National Economic and Development Authority, is
hereby empowered to:cralaw:red
a. Revise the rates of percentage taxes;chanroblesvirtualawlibrary
b. Change the classification of the articles
enumerated in Sections 194, 195, 196, 197, 198, 199 and 201; and
c. Revise the taxable base levels in Sections 195 and
197.
The existing rates may be increased by not more than 50% or decreased
by not more than 10%. The existing price levels may be increased or
decreased by not more than 50%.
The above authority may be exercised by the President if any of the
following conditions exists:cralaw:red
(1) Economic conditions render it necessary to
increase revenue, or re-direct expenditure or consumption patterns by
increasing or decreasing the rate of percentage tax on certain
commodities; or
(2) Where, in the light of technological and social
changes, it is necessary to classify new products or to reclassify
articles subject to the sales tax on the basis of the changed concepts
of essentiality or the degree of manufacturing done; or chanroblesvirtualawlibrary
(3) Whenever by reason of fluctuation of currency
and/or inflation, the existing taxable base levels are no longer
realistic or consistent with current price levels, it is necessary to
revise the same to conform to existing conditions; or chanroblesvirtualawlibrary
(4) Where it is necessary to counter adverse action
on the part of another country.
(d) Value-Added Tax. — The provision of this title to
the contrary notwithstanding, when public interest so requires, the
President, upon recommendation of the Secretary of Finance, may subject
the second sale of any article taxable under this title to a
value-added tax at the same rates hereinafter provided, based on the
gross selling price or gross value in any of the articles sold,
bartered, exchanged or transferred. In case an article has been made
subject to the value-added tax by the President, the tax credit method
shall be applied in computing the tax due.
"Sec. 194. Percentage tax on sales of non-essential
articles. — There shall be levied, assessed and collected once only on
every original sale, barter, exchange, or similar transaction for
nominal or valuable consideration intended to transfer ownership of, or
title to, the articles hereinbelow enumerated a tax equivalent to fifty
per centum of the gross value in money of the articles so sold,
bartered, exchanged or transferred, such tax, to be paid by the
manufacturer or producer:cralaw:red
"(a) all articles commonly or commercially known as
jewelry, whether real or imitation, pearls, precious and semi-precious
stones and imitations thereof; articles made of, or ornamented, mounted
or fitted with, precious metals or imitations thereof or ivory (not
including surgical and dental instruments, silver plated wares, frames
or mounting for spectacles or eyeglasses, and dental gold or gold
alloys and other precious metals used in filling, mounting or fitting
of the teeth); opera glasses, and longnettes. The term "precious
metals" shall include platinum, gold, silver, and other metals of
similar or greater value. The term "imitation thereof" shall include
plating and alloys of such metals.
"(b) Perfumes, essences, extracts, toilet waters,
cosmetics, hair dressings, hair dyes, hair restoratives, aromatic
cachous, toilet powders, except tooth and mouth washes, dentifrices,
tooth paste, talcum and medicated toilet powders, hair oils and
pomades.
"(c) Dice, mahjong sets and playing cards.
"(d) Juke boxes.
"(e) Similar or analogous articles, substances or
preparations to those enumerated above as determined by the Secretary
of Finance upon the recommendation of the Commissioner of Internal
Revenue based on the inherent essentiality of the product.
Any percentage, specific or mining tax paid under this title, title IV
or title VII, respectively, on domestically manufactured, processed or
produced, or imported raw materials, part, accessory or other article
forming part of the finished product shall be credited against the
sales tax due on the finished product: Provided, however, That in case
the total tax paid on the raw material, part, accessory or other
article exceeds the amount of the sales tax due on the finished
product, the excess shall be credited against the sales tax liabilities
of the manufacturer for the succeeding taxable quarter: And, provided,
furthermore, That the amount of the tax on the raw material, part,
accessory or other article shall be indicated as a separate item in the
sales invoice.
Whenever the finished product subject to sales tax is manufactured or
produced out of any raw material, part, accessory of other article
which is exempt from tax, the tax otherwise due on the latter shall be
deemed to have been paid for purposes of the next preceding paragraph.
Any material, part or accessory of the abovementioned articles shall be
taxed under this section.
"Sec. 196. Percentage tax on sales of semi-essential
articles. — There shall be levied, assessed, and collected once only on
every original sale, barter, exchange, or similar transaction intended
to transfer ownership of, or title to, the articles hereinbelow
enumerated, a tax equivalent to twenty-five per centum of the gross
selling price or gross value, in money of the articles so sold,
bartered, exchanged or transferred, such tax to be paid by the
manufacturer or producer. chanroblesvirtualawlibrary
(a) Luggage, trunks, valises, travelling bags,
suitcases, satchels, overnight bags, hat boxes for use of travelers
beach bags, bathing suit bags, brief cases made of leather or imitation
leather, and salesman's sample and display cases; handbags, card, pass
and key cases; toilet cases and other cases, bags and kits (without
regard to size, shape, construction, or material from which made) for
use in carrying toilet articles of wearing apparel;chanroblesvirtualawlibrary
(b) Harpsichord and accordions;chanroblesvirtualawlibrary
(c) Firearms and cartridges or other form of
ammunitions;chanroblesvirtualawlibrary
(d) Electric, gas or oil water heaters; electric gas
or oil appliances, other than stoves and ranges, of the type use for
cooking, warming, or keeping warm food or beverage for consumption on
the premises; electric mixers, whippers, and juicers; and household
type electric vacuum cleaners or polishers;chanroblesvirtualawlibrary
(e) Washing machines, cloth dryers and combination
washing machines and cloth dryers of all types;chanroblesvirtualawlibrary
(f) Mechanical lighters;chanroblesvirtualawlibrary
(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 hats; and furs and
manufacturers, thereof;chanroblesvirtualawlibrary
(h) Toys and plaything of all sorts;chanroblesvirtualawlibrary
(i) Beverage coolers, ice cream cabinets, water
coolers, food and beverage storage cabinets, ice-making machines, and
mild cooler cabinets, each having, or being primarily designated for
used with a mechanical refrigerating unit operated by electricity, gas,
kerosene or other means;chanroblesvirtualawlibrary
(j) Air-conditioning units;chanroblesvirtualawlibrary
(k) Electricity and/or battery operated beauty
equipments and accessories;chanroblesvirtualawlibrary
(l) Pianos, electric or electronic musical organ; and
(m) Similar or analogous article to those enumerated
above, as determined by the Secretary of Finance upon recommendation of
the Commissioner of Internal Revenue based on the inherent essentiality
of the product.
Any percentage, specific, or mining tax paid under this title, title IV
or title VII, respectively, on domestically manufactured, processed or
produced, or imported raw materials, part accessory or other article
forming part of the finished product shall be credited against the
sales tax due on the finished product: Provided, however, That in case
the total tax paid on the raw material, part, accessory or other
article exceeds the amount of the sales tax due on the finished
product, the excess shall be credited against the sales tax liabilities
of the manufacturer for the succeeding taxable quarter. And, provided,
further, That the amount of the tax on the raw material, part,
accessory, or other article shall be indicated as a separate item in
the sale invoice.
Whenever the finished product subject to sales tax is manufactured or
produced out of any raw material, part, accessory or other article
which is exempt from tax, the tax otherwise due on the latter shall be
deemed to have been paid for purposes of the next preceding paragraph.
Any material, part or accessory of the abovementioned articles shall be
taxed under this section.
"Sec. 197. Percentage tax on sales of certain
semi-essential articles. — there shall be levied, assessed, and
collected once only on every original sale, barter, exchange, or
similar transaction for nominal or valuable consideration intended to
transfer ownership of, or title to, the articles hereinbelow
enumerated, a percentage tax to be paid by the manufacturer or producer
determined in accordance with the following schedules: chanroblesvirtualawlibrary
I. Locally Manufactured —chanroblesvirtualawlibrary
(A) Fountain pens and ball pens: —
If the gross selling price does not exceed P25, the tax shall be 10% of
such selling price; if it exceeds P25 but does not exceed P35, the tax
shall be P2.50 plus 15% of the excess over P25;chanroblesvirtualawlibrary
If it exceeds P35 but does not exceed P45, the tax shall be P4 plus 20%
of the excess over P35, chanroblesvirtualawlibrary
If it exceeds P45, the tax shall be P6 plus 25% of the excess over P45.
(B) Chairs, sofas, beds, desk, show cases, book
cases, lockers, cabinets except filing cabinets, medical and dental
chairs: —chanroblesvirtualawlibrary
If the gross selling price does not exceed P200, the tax shall be 10%
of such selling price; if it exceeds P200 but does not exceed P300, the
tax shall be P20 plus 15% of the excess over P200;chanroblesvirtualawlibrary
If it exceeds P300 but does not exceed P400, the tax shall be P35 plus
20% of the excess over P300;chanroblesvirtualawlibrary
If it exceeds P400, the tax shall be P55 plus 25% of the excess over
P400.
(C) Watches, clocks, cases and movements therefore: —chanroblesvirtualawlibrary
If the gross selling price does not exceed P200, the tax shall be 10%
of such selling price; if it exceeds P200 but does not exceed P300, the
tax shall be P20 plus 15% of the excess over P200;chanroblesvirtualawlibrary
If it exceeds P300 but does not exceed P400, the tax shall be P35 plus
20% of the excess over P300;chanroblesvirtualawlibrary
If it exceeds P400, the tax shall be P55 plus 25% of the excess over
P400.
(D) Electric fans and exhaust fans: —
If the gross selling price does not exceed P200, the tax shall be 10%
of such selling price; if it exceeds P200 but does not exceed P300, the
tax shall be P20 plus 15% of the excess over P200; chanroblesvirtualawlibrary
If it exceeds P400, the tax shall be P55 plus 25% of the excess over
P400.
If it exceeds P400, the tax shall be P55 plus 25% of the excess over
P400.
(E) Electric, gas and oil stoves and ranges: —
If the gross selling price does not exceed P500, the tax shall be 10%
of such selling price; if it exceeds P500 but does not exceed P750, the
tax shall be P50 plus 15% of the excess over P500;chanroblesvirtualawlibrary
If it exceeds P750 but does not exceeds P1,000, the tax shall be P87.50
plus 20% of the excess over P750;chanroblesvirtualawlibrary
If it exceeds P1,000, the tax shall be P137.50 plus 25% of the excess
over P1,000.
(F) On phonographs or gramophones; combination radio
phonograph sets; tape recorders, video tapes recorders, tape decks, car
stereos, cassette radio; and similar articles for reproducing and/or
recording music, sound and image: —chanroblesvirtualawlibrary
If the gross selling price does not exceed P500, the tax shall be 10%
of such selling price; if it exceeds P500 but does not exceed P750, the
tax shall be P50 plus 15% of the excess over P500;chanroblesvirtualawlibrary
If it exceeds P750 but does not exceed P1,000, the tax shall be P87.50
plus 20% of the excess over P750;chanroblesvirtualawlibrary
If it exceeds P1,000, the tax shall be P137.50 plus 25% of the excess
over P1,000.
(G) On television sets, combination radio and
television sets; and combination radio-phonograph television sets: —
If the gross selling price does not exceed P1,300, the tax shall be 10%
of such selling price; if it exceeds P1,300 but does not exceed P1,600,
the tax shall be P130 plus 15% of the excess of over P1,300;chanroblesvirtualawlibrary
If it exceeds P1,600 but does not exceed P1,900, the tax shall be P175
plus 20% of the excess over P1,600;chanroblesvirtualawlibrary
If it exceeds P1,900, the tax shall be P235 plus 25% of the excess over
P1,900.
(H) On household type refrigerators and freezers: —
If the gross selling price does not exceed P1,900, the tax shall be 10%
of such selling price; if it exceeds P1,900 but does not exceed P2,300
the tax shall be P190 plus 15% of the excess of over P1,900;chanroblesvirtualawlibrary
If it exceeds P2,300 but does not exceed P2,700, the tax shall be P250
plus 20% of the excess over P2,300;chanroblesvirtualawlibrary
If it exceeds P2,700, the tax shall be P330 plus 25% of the excess over
P2,700.
(I) Similar or analogous articles: —
Similar or analogous articles of those mentioned above, as determined
by the Secretary of Finance upon the recommendation of the Commissioner
of Internal Revenue based on the inherent essentiality of the product,
shall be subject to their respective classifications and rates as
indicated above.
II. Imported Articles: —
When the articles above-mentioned are imported the tax shall be
twenty-five (25%) per centum of landed cost plus mark-up. chanroblesvirtualawlibrary
Any percentage, specified or mining tax paid under this title, title IV
of title VII, respectively, on domestically manufactured, processed or
produced, or imported raw materials, part, accessory or other article
forming part of the finished product shall be credited against the
sales tax due on the finished product: Provided, however, That in case
the total tax paid on the raw material, part, accessory or other
article exceeds the amount of the sales tax due on the finished
product, the excess shall be credited against the sales tax liabilities
of the manufacturer for the succeeding taxable quarter: And, provided,
further, That the amount of the tax on the raw material, part,
accessory, or other article shall be indicated as a separate item in
the sales invoice.
When the finished product subject to sales tax is manufactured or
produced out of raw materials, part, accessory or other article which
is exempt from tax, the tax otherwise due on the latter shall be deemed
to have been paid for purposes of the next preceding paragraph.
Any material, part, accessory of the above- mentioned articles shall be
taxed under this section. chanroblesvirtualawlibrary
"Sec. 198. Percentage tax on sale of agricultural
products. — There shall be levied, assessed or collected once only on
every original sale, barter, exchange and similar transaction either
for nominal or valuable consideration, intended to transfer ownership
of, or title to, the articles enumerated hereinbelow, a tax equivalent
to one (1%) per centum of the gross selling price or gross value in
money of the article so sold, bartered, exchanged or transferred, such
tax to be paid by producers:cralaw:red
(a) Agricultural food products including ordinary
salt and all kinds of fish and its by-products, whether in their state
or not, except those subject to tax under Sections 201 and 203; and
(b) Agricultural Non-food products, whether in their
original state or not when sold, bartered, or exchanged by the producer
or owner of the land where produced except those subject to tax under
Section 203.
When the articles mentioned in (a) and (b) above are imported, the tax
shall be ten (10%) per centum of the landed cost plus mark-up.
The phrase "whether in their original state or not" means the
transformation of said products by the application of simple processes
to preserve or otherwise prepare said products for the market such as
freezing, drying, salting, smoking or stripping.
"Sec. 199. Percentage tax on sales of other articles.
— There shall be levied, assessed or collected once only on every
original sale, barter, exchange and similar transaction either for
nominal or valuable consideration, intended to transfer ownership of,
or title to, the articles not covered in Sections 194, 195, 196, 197,
198, and 201, a tax equivalent to ten (10%) per centum of the gross
selling price or gross value in money of the articles so sold,
bartered, exchanged, or transferred, such tax to be paid by the
manufacturer or producer: Provided, That any percentage, specific, or
mining tax paid under this title, title IV or title VII, respectively,
on domestically manufactured, processed or produced, or imported raw
materials, part, accessory or other article forming part of the
finished product shall be credited against the sales tax due on the
finished product: Provided, however, That in case the total tax paid on
the raw material, part, accessory or other article exceeds the amount
of the sales tax due on the finished product, the excess shall be
credited against the sales tax liabilities of the manufacturer for the
succeeding taxable quarter: And, provided, further, That the amount of
the tax on the raw material, part, accessory, or other article shall be
indicated as a separate item in the sales invoice.
Whenever the finished product subject to sales tax is manufactured or
produced out of any raw material, part, accessory or other article
which is exempt from tax, the tax otherwise due on the latter shall be
deemed to have been paid for purposes of the next preceding paragraph.
Any material, part or accessory of the abovementioned articles shall be
taxed under this section.
"Sec. 200. Tax on tax-exempt products deemed paid. —
Whenever a tax-exempt product is used in the manufacture or production
of any article, the sales, specific or mining taxes otherwise due on
such tax- exempt product shall be credited against the sales and tax
due on the manufactured article.
"Sec. 201. Percentage tax on sales of essential
articles. — There shall be levied, assessed and collected once only on
every original sale, barter, exchange and similar transaction either
for nominal or valuable consideration, intended to transfer ownership
of, or title to, the articles enumerated hereinbelow, a tax equivalent
to five (5%) per centum of the gross selling price or gross value in
money of the articles so sold, bartered, exchanged, or transferred,
such tax to be paid by the manufacturer or producer. chanroblesvirtualawlibrary
"(a) Locally processed meat, milk, fish, and other
sea foods;chanroblesvirtualawlibrary
"(b) Wheat flour;chanroblesvirtualawlibrary
"(c) Locally manufactured medicine;chanroblesvirtualawlibrary
"(d) Locally manufactured laundry soap and detergents;chanroblesvirtualawlibrary
"(e) Locally manufacture writing pads, notebooks and
ordinary lead pencils;chanroblesvirtualawlibrary
"(f) Poultry, swine and cattle feeds; and
"(g) Cement.
Provided, That any percentage, specific, or mining tax paid under this
title, title IV or title VII, respectively, on domestically
manufactured, processed or produced, or imported raw materials, part,
accessory or other article forming part of the finished product shall
be credited against the sales tax due on the finished product:
Provided, however, That in case the total tax paid on the raw material,
part, accessory or other article exceeds the amount of the sales tax
due on the finished product, the excess shall be credited against the
sales tax liabilities of the manufacturer for the succeeding taxable
quarter: And, provided, further, That the amount of the tax on the raw
material, part, accessory, or other article shall be indicated as a
separate item in the sales invoice. chanroblesvirtualawlibrary
Whenever the finished product subject to sales tax is manufactured or
produced out of any raw material, part, accessory or other article
which is exempt from tax, the tax otherwise due on the latter shall be
deemed to have been paid for purposes of the next preceding
paragraph. chanroblesvirtualawlibrary
Any material, part or accessory of the above articles shall be taxed
under this section.
For purposes of this section, processed meat, milk, fish and other sea
foods include such food products, which have undergone the process of
curing, canning, bottling or similar processes, but excludes such food
product which have undergone only simple preserving processes of
freezing, refrigerating, drying, salting or smoking.
"Sec. 202. Articles not subject to percentage tax on
sales. — The following shall be exempt from the percentage taxes
imposed in Sections 194, 195, 196, 197, 198, 199, and 201:cralaw:red
(a) Articles subject to tax under Title IV of this
Code.
(b) Minerals and mineral products, whether in their
original state or not when sold, bartered, or exchanged by the lessee,
concessionaire or owner of the mineral land from which removed.
(c) Article subject to tax under Section 203 of this
code.
(d) .22 caliber firearms and cartridges as well as
other forms of ammunitions sold or delivered directly to the Armed
Forces of the Philippines or any government instrumentality or agency
engaged in maintaining peace and order for their use or issue. chanroblesvirtualawlibrary
(e) Articles shipped or exported by the manufacturer
of producer, irrespective of any shipping arrangement that may be
agreed upon which may influence or determine the transfer of ownership
of the articles so exported.
Any percentage tax paid under this title, title IV or title V,
respectively, on domestically manufactured or imported raw materials
used in the manufacture of finished products exported shall be allowed
to be credited against other tax liabilities of the
manufacturer-exporter: Provided, however, That the amount of the tax on
the raw material, part, accessory, or other article shall be indicated
as a separate item in the sales invoice.
Sales to foreign tourists paid for in acceptable foreign currency
directly made by manufacturers or producers shall be considered export
sales if the articles purchased are actually brought out of the
Philippines by the buyers upon their departure. chanroblesvirtualawlibrary
"Sec. 203. Percentage tax upon proprietors or
operators of rope factories, sugar central and mills, coconut oil
mills, cassava mills, and desiccated coconut factories. — Proprietors
or operators of rope factories, sugar centrals and mills, coconut oil
mills, cassava mills, and desiccated coconut factories shall pay a tax
equivalent of two (2%) per centum of the gross value in money of all
the rope, sugar, coconut oil, cassava flour or starch, dessicated
coconut, manufactured, processed or milled by them, including the
by-product of the raw materials from which said articles are produced,
processed, or manufactured, such tax to be based on the actual selling
price or market value of these articles at the time they leave the
factory or mill warehouse: Provided, however, That this tax shall not
apply to rope, coconut oil, and the by-product of copra from which it
is produced or manufactured, and dessicated coconuts, if such rope,
coconut oil, copra by-products and dessicated coconuts shall be removed
for exportation and are actually exported without returning to the
Philippines, whether so exported in their original estate, or an
ingredient or part of any manufactured article of product.
In case the raw materials are processed, manufactured or milled in
pursuance of a contract where the factory, central, or mill receives a
share of the finished products, the tax on the share pertaining to the
planter or owner of the raw materials shall be charged to the planter
or owner and withheld by the proprietor or operator of the factory,
central, or mill and paid by him to the Commissioner.
A proprietor or operator of a refined sugar factory shall be subject to
the tax imposed by this section but any percentage tax paid under this
section on the raw sugar shall be credited against the tax due on the
refined sugar. chanroblesvirtualawlibrary
Where articles are manufactured out of the materials subject to tax
under this section, the percentage tax paid herein shall be credited
against the sales tax due on the finished product.
Section 2. Repealing Clause. — Any provision of
existing general and special laws inconsistent with the provisions of
this Decree are hereby modified, amended or repealed accordingly.
Section 3. Effectivity. — This Decree shall take
effect upon approval: Provided, That the provisions hereof relating to
the computation and payment of the quarterly percentage tax on sales
shall take effect beginning July 1, 1978.
DONE in the City of Manila,
this 21st day of April, in the year of Our Lord, nineteen hundred and
seventy-eight.
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