Momarco Import Co., Inc.

February 5, 2007 BIR RULING [DA-061-07] Section 109 (c); VAT Ruling No. 024-2003 Momarco Import Co., Inc. 60 Maginoo St., Brgy. Central District Quezon City Attention: Dr. Florante E. Jonsay President and General Manager Gentlemen : This refers to your letter dated October 7, 2006 requesting for an exemption from the value-added tax on your sale and importation of various animal feeds. It is represented that Momarco Import Co., Inc. is a corporation duly registered with the Securities and Exchange Commission with Registration No. 158151 dated December 15, 1998; that it is, among others, engaged in the buying and selling of animal feed products and other related products like: 1. Auron a feed ingredient of light brown material rich in amino acids. It mixes easily in the feed and has excellent digestibility. It is intended for use as replacement for soy protein, potato protein, soybean meal, milk by-products, fish meal and meat by-products. 2. Grocon the typical analysis per kilogram is stated in the attached documents of the taxpayer. 3. Micphos Monodicalcium Phosphate is a white granular powder which easily mixes with feed. It is a rich source of calcium and phosphorous. 4. Chonplex and Procon are commercial brands of fish meal analogues and are one of the most important animal protein products produced as a by-product from the removal of fat from animal tissues. 5. Multi-UF and UG40 is one product that effectively replaces the growth factor component in fish meal. In reply, please be advised that Section 109 of the 1997 Tax Code, as amended by Republic Act No. 9337 provides: "Section 7. Section 109 of the same Code, as amended, is hereby further amended to read as follows: "SEC. 109. Exempt Transactions. (1) Subject to the provisions of subsection (2) hereof, the following transactions shall be exempt xxx xxx xxx (B) Sale or importation of fertilizers; seeds, seedlings and fingerlings; fish, prawn, livestock and poultry feeds, including ingredients, whether locally produced or imported, used in the manufacture of finished feeds (except specialty feeds for race horses, fighting cocks, aquarium fish, zoo animals and other animals generally considered as pets);" Such being the case, this Office is of the opinion that your sale of Chonplex, Procon, Grocon, Multi-UF, UG40, Auron and Micphos, is within the purview of finished animal feeds and not specialty feeds, pursuant to the provisions of Section 109 (B) of R.A. No. 9337, hence exempt from the 12% Value Added Tax. TACEDI This ruling is being issued on the basis of the foregoing facts as represented. If upon investigation, it will be discovered that the facts are different, then this ruling shall be considered null and void. Very truly yours, Commissioner of Internal Revenue By: (SGD.) JAMES H. ROLDAN Assistant Commissioner Legal Service