BIR Ruling

October 27, 1977 Processor of Meat ; Exemption from Sales Tax This refers to your letter bearing on the case of your client, Mr. Ciriaco Herrera, a meat vendor in the public market of Cavite City, who purchases live cattle which he causes to be slaughtered and reduced into marketable quantities of meat, selling said meat in its natural state in said public market. On the basis of said facts your request confirmation of your opinion that your client is not subject to the graduated fixed tax imposed by Section 192(A)(2) [formerly Section 182(a)(2)] of the Tax Code of 1977. In reply, I have the honor to inform you that under the abovementioned facts your client is considered a processor of meat as defined under Section 187(x) [formerly Section 194(x)] and since the meat is an agricultural product, the processing of curing, canning, bottling or similar processes, he is exempt from the sales tax, pursuant to Section 202 [formerly Section 188(b)] of the Tax Code of 1977, the pertinent provisions of which read thus: "SEC. 202. Transactions and persons not subject to percentage tax . In computing the tax imposed in Sections 194, 195, 196, 197, 198, 199 and 201, transactions in the following commodities shall be excluded: xxx xxx xxx "(b) Agricultural food products, ordinary salt and all kinds of fish and its by-products, whether in their original state or not, except those enumerated under Section 201. . . ." As your client is a processor of meat and is the original seller thereof, he would be taxable under Section 201 of the Tax Code of the meat products he sells were not declared exempt by said law, in relation to Section 202 of the same Code. In other words, your client comes under the category of a producer or manufacturer and not that of a retailer or merchant. Such being the case, he is not subject to the graduated fixed tax imposed by Section 192(A)(2) of the Tax Code of 1977. cdta