BIR Ruling [DA-025-99]

January 15, 1999 BIR RULING [DA-025-99] Mr. Jose V. Ramos Certified Public Accountant Room 205 Doll Building 6th Street, Bacolod City S i r : This refers to your letter dated December 28, 1998 requesting on behalf of your client, CAT Planters Cooperative Marketing Association, Inc . of Tarlac City, Tarlac, for exemption from VAT on sales to members as well as sale of its produce to non-members and importation of direct farm inputs and machineries pursuant to Section 109 (r) of the Tax Code of 1997. It is represented that CAT Planters cooperative Marketing Association, Inc. was originally formed as a marketing cooperative under the provisions of P.D. No. 775 and registered with the Philippine Sugar Commission under Certificate of Registration No. SC06 dated January 25, 1978; and that after amending its Articles of Incorporation and By-Laws, CAT Planters Cooperative Marketing Association, Inc. became a marketing cooperative and registered with the Cooperative Development Authority (CDA) on March 19, 1992 under Confirmation of Registration No. MLA-C-035. In reply, please be informed that as a primary agricultural cooperative duly registered with CDA, CAT Planters Cooperative Marketing Association, Inc. is exempt from VAT on its (1) sales to members, as well as sale of its produce, whether in its original state or processed form, to non-members; and (2) importation of direct farm inputs, machineries and equipment, including spareparts thereof to be used directly and exclusively in the production and/or processing of its produce, pursuant to Section 109 (r) of the Tax Code of 1997. Moreover, CAT Planters Cooperative Marketing Association, Inc. shall be exempt from the 3% gross receipts tax pursuant to Section 116 of the same Code. (ECCP-21-97 dated 11-27-97) It is of course understood that CAT Planters Cooperative shall be liable to the 10% VAT which might be passed on or billed by the seller/vendor as part of the cost of goods purchased by your client. This ruling is being issued on the basis of the facts as represented. However, if upon investigation, it shall be disclosed that the facts are different then this ruling shall be considered null and void. Very truly yours, (SGD.) SIXTO S. ESQUIVIAS IV Deputy Commissioner (Legal and Enforcement Group)