BIR Ruling

June 19, 1975 The President Reliance Agricultural Development Corporation Rm. 215, Alliance Bldg. 410 Q. Paredes (Rosario) St. Manila S i r : In reply to your letter dated June 18, 1975, I have the honor to inform you that your corporation, for engaging in the piggery business, is not subject to any fixed tax nor to sales tax on its sale of live pigs or dressed pigs, whether such sales are effected in the piggery promises or outside thereof in your sales outlet pursuant to Sections 182(A)(1) and 188(b) of the National Internal Revenue Code. cdt Accordingly, if your corporation intends to open a store in the Quiapo area where you shall sell fresh pork of your own production, such store shall not be subject to any internal revenue fixed or percentage tax. If you are to convert the unsold pork into "tocino" and salted meat", your sale of such products remain exempt from the sales tax, they being still "agricultural product" in accordance with Section 188(b) of the Tax Code. However, if you are to convert the unsold pork into sausages (longaniza), this Office believes that the sausages already become a manufactured product and no longer an "agricultural product whether in their original state or not?, and, therefore, the sale thereof shall already be subject to sales tax but only at the rate of 5% pursuant to Section 186-B of the Tax Code. Since your corporation shall then be subject to sales tax, the store shall also become liable to the P50 fixed tax prescribed by Section 182(A)(1) of the Tax Code. Very truly yours, (SGD.) MISAEL P. VERA Commissioner of Internal Revenue TAN 1601-593-5