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    2004 BIR - Ruling - DA 320 04 - 20180419 1159 Ho7dm4

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    Yya Ladignon
    The document discusses whether processed bangus products are exempt from VAT tax in the Philippines. It details 8 processed bangus products from a company and analyzes whether they qualify as agricultural food products in their 'original state' and are therefore VAT exempt under Section 109(c) of the Tax Code. It determines that the processed products, which undergo simple preparation processes like deboning, smoking, marinating, are within the definition of a food product in its original state and exempt from the 10% VAT.

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    2004 BIR - Ruling - DA 320 04 - 20180419 1159 Ho7dm4

    Uploaded by

    Yya Ladignon
    124 views2 pages
    The document discusses whether processed bangus products are exempt from VAT tax in the Philippines. It details 8 processed bangus products from a company and analyzes whether they qualify as agricultural food products in their 'original state' and are therefore VAT exempt under Section 109(c) of the Tax Code. It determines that the processed products, which undergo simple preparation processes like deboning, smoking, marinating, are within the definition of a food product in its original state and exempt from the 10% VAT.

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    BIR_Ruling__DA-320-04

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    12504-2004-BIR_Ruling__DA-320-04_20180419-1159-ho7dm4

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    The document discusses whether processed bangus products are exempt from VAT tax in the Philippines. It details 8 processed bangus products from a company and analyzes whether they qualify as agricultural food products in their 'original state' and are therefore VAT exempt under Section 109(c) of the Tax Code. It determines that the processed products, which undergo simple preparation processes like deboning, smoking, marinating, are within the definition of a food product in its original state and exempt from the 10% VAT.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    124 views2 pages

    2004 BIR - Ruling - DA 320 04 - 20180419 1159 Ho7dm4

    Uploaded by

    Yya Ladignon
    The document discusses whether processed bangus products are exempt from VAT tax in the Philippines. It details 8 processed bangus products from a company and analyzes whether they qualify as agricultural food products in their 'original state' and are therefore VAT exempt under Section 109(c) of the Tax Code. It determines that the processed products, which undergo simple preparation processes like deboning, smoking, marinating, are within the definition of a food product in its original state and exempt from the 10% VAT.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
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    of 2

    June 11, 2004

    BIR RULING [DA-320-04]

    Section 109 (c)


    VAT Ruling No. 007-2001

    Anjo Farms, Inc.


    1610-A Singalong St., Paco Manila

    Attention: Mr. Apolonio S. Tanjangco


    President

    Gentlemen :

    This refers to your letter dated October 1, 2003 requesting for a clari cation as
    to whether or not your processed Bangus are VAT-exempt.
    It is represented that you are an owner/operator of a bangus sh pond in San
    Fabian, Pangasinan; that the proliferation of sh pens and sh cages has severely
    depressed the price of fresh bangus while the cost of feeds, electricity and labor has
    increased and continues to increase; that you are registered as a non-vat taxpayer; and
    that the following is a list of your processed bangus products:
    1. Plain Deboned Bangus — the bangus is washed, gutted, deboned, soaked
    in brine (water and salt) solution for 30 minutes, drip-dried, packed in
    cellophane, vacuum packed then last frozen;
    2. Smoked Deboned Bangus — The bangus sh is washed, gutted, deboned,
    soaked in brine (water and salt) solution for 30 minutes, drip-dried,
    smoked in a smoking chamber, packed in cellophane, vacuum packed
    then blast frozen;
    3. Marinated Deboned Bangus — The bangus sh is washed, gutted,
    deboned, soaked in marinade (vinegar, salt, garlic and pepper)
    solution for 30 minutes, drip-dried, packed in cellophane, vacuum
    packed then blast frozen;
    4. Bangus Belly — the bangus is washed, gutted, deboned, soaked in brine
    (water and salt) solution for 30 minutes, drip-dried, cut out belly
    section, packed in cellophane, vacuum packed and blast frozen;
    5. Boneless Bangus Fillet — the scrap bangus meat leftover after cutting out
    belly section is packed in cellophane, vacuum packed and blast
    frozen; EcTDCI

    6. Whole Gutted Milk sh — the bangus sh is washed, gutted, drip-dried,


    packed in cellophane, vacuum packed then blast frozen;
    7. Bangus Longaniza — the scrap bangus meat leftover after cutting out the
    belly section is skimmed then ground with a grinder into small
    particles then mixed with textured vegetable protein (TVP), re ned
    CD Technologies Asia, Inc. © 2018 cdasiaonline.com
    sugar, salt, garlic, pepper and erythorbate nitite then wrapped in
    collagenic casing, shrink wrap in plastic then blast frozen;
    8. Bangus Spring Roll — the scrap bangus meat leftover after cutting out the
    belly section is skinned then ground with a grinder into small particles
    then mixed with diced carrots, diced onions, pepper, soy sauce and
    egg then wrapped with spring roll (lumpia) wrapper, shrink wrap in
    plastic then blast frozen.
    In reply, please be informed that the "sale or importation of agricultural and
    marine food products in their original state, livestock and poultry of a kind generally
    used as, or yielding or producing foods for human consumption; and breeding stock
    and genetic materials therefore" is exempt from VAT. (Section 109(c) Tax Code of
    1997) The term "original state" is amplified to mean as follows:
    "Meat, fruits, sh, vegetable and other agricultural and marine food
    products shall be considered in their original state even if they have undergone
    the simple processes of preparation or preservation for the market, such as
    freezing, drying, salting, broiling, roasting, smoking, or stripping, including those
    using advanced technological means of packaging, such as shrink wrapping in
    plastics, vacuum packing, tetra-pack, and other similar packaging method."
    (Section 4.103-1(B) RR 7-95)

    In a related ruling, pursuant to the above provisions of law and regulations, this
    O ce has the occasion to hold that "ground beef, chopped and frozen, quali es for
    exemption from VAT" as agricultural food product in its original state. ( VAT Ruling No.
    064-88). Verily, deboning is a simple process which does not alter the substance of the
    thing, much less transform the meat into another distinct product altogether. What
    would be outside of the scope of the term "simple process" is the kind of physical or
    chemical process which would alter the exterior texture or form or inner substance of a
    product in such a manner as to prepare it for special use to which it could not have
    been put in its original form or condition.
    In the light of the foregoing, this O ce is of the opinion and so holds that your
    processed bangus products, namely Plain Deboned Bangus, Smoked Deboned Bangus,
    Marinated Deboned Bangus, Bangus Belly, Boneless Bangus Fillet, Whole Gutted
    Milk sh, Bangus Longaniza, and Bangus Spring Roll are within the purview of the
    de nition of a food product in its original state, hence, exempt from the 10% Value
    Added Tax.

    Very truly yours,

    Commissioner of Internal Revenue


    By:

    (SGD.) JOSE MARIO C. BUÑAG


    Deputy Commissioner
    Legal and Inspection Group

    CD Technologies Asia, Inc. © 2018 cdasiaonline.com

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