BIR Ruling

January 28, 1976 Mrs. Elsa R. Ylizarde Proprietress, E.R.Y. Bakecraft 41-Annex, New York St. Quezon City M a d a m : This refers to your letter dated January 20, 1976 requesting exemption from the payment of fixed and percentage taxes under the provisions of the NACIDA Law. It is represented that you are engaged in home industry, manufacturing food products such as, pastries, cakes, sweet bread rolls, and the like; that you are registered as food preservation industry with the NACIDA under Certificate of Registration No. 29330 dated June 4, 1975. In reply, I regret to inform you that your request cannot be granted for lack of legal basis. Although Section 11 of Republic Act No. 3470, as amended by Republic Act No. 5326 includes food preservation as among the cottage industries registerable with the NACIDA, a bakery or bakecraft although registered with the NACIDA is not a cottage industry falling within the purview of Republic Act No. 3470, as amended. A bakery involves essentially the manufacture or baking of bread and cannot be classified as food preservation enumerated under Section 11(18) of Republic Act. No. 3470, as amended. Accordingly, you are subject to the fixed tax of P50.00 imposed in Section 182 (A)(1) of the Tax Code and to the 7% tax prescribed in Section 186 of the same Code. aisadc Very truly yours, EFREN I. PLANA Acting Commissioner of Internal Revenue TAN-1456-040-3