Limcoma Multi-Purpose Cooperative

February 22, 2007 BIR RULING [DA-112-07] 109 (r); DA 030-2000 Limcoma Multi-Purpose Cooperative Gen. Luna Street Sabang, Lipa City Attention: Mr. Nicanor M. Briones President Gentlemen : This refers to your letter dated February 6, 2007 requesting for a ruling exempting the two shipments of spare parts for feedmill equipment from the imposition of value-added tax on importation. It is represented that Limcoma Multi-Purpose Cooperative (LMC) formerly known as Limcoma Marketing Cooperative, Inc., is registered with the Cooperative Development Authority (CDA) as evidenced by Confirmation of Registration No. 498 dated March 1, 1992. It was formed primarily to engage in the purchase or procurement and sale of all kinds of farm inputs, such as supplies, materials, tools and equipment needed in farming, orchard growing, poultry and livestock raising, including fertilizers, seed, seedlings, poultry and animal feeds, veterinary drugs and farm chemicals. Other objectives are those set forth in its Articles of Cooperation and By-Laws. LMC imported spare parts for its feedmill equipment on board "M/V Savannah Express" which arrived on January 7 and 14, 2007, respectively. Accordingly, the imported spare parts are needed for the immediate replacement in the feedmill machines to restore operations at normal level. In reply, please be informed that Section 109 (L) of the Tax Code of 1997, as amended by Republic Act No. 9337, provides: "(L) Sales by agricultural cooperatives duly registered with the Cooperative Development Authority to their members as well as sale of their produce, whether in its original state or processed form, to non-members; their importation of direct farm inputs, machineries and equipment, including spare parts thereof, to be used directly and exclusively in the production and/or processing of their produce ." (emphasis supplied) THIECD Since the imported spare parts will be used directly as replacement in the machine used for livestock production and feed manufacturing of LMC, the importation thereof is exempt from value-added tax. (see BIR Ruling No. DA 030-2000 dated January 12, 2000.) This will therefore serve as your authority to secure Authority to Release Imported Goods (ATRIG) without paying the value-added tax on said importations. This ruling is being issued on the basis of the foregoing facts as represented. However, if upon investigation, it will be disclosed that the facts are different, then this ruling shall be considered null and void. Very truly yours, (SGD.) JAMES H. ROLDAN Assistant Commissioner Legal Service