BIR Ruling [DA-185-06]

March 8, 2006 BIR RULING [DA-185-06] 109 (d); VAT Ruling 060-02 General Milling Corporation 33rd Floor, Export Bank Plaza Gil Puyat corner Chino Roces Avenue Makati City Attention: Cesar G. Avila, Jr. Director for Accounting Gentlemen : This refers to your letter dated March 24, 2005 requesting confirmation of your opinion that the sale of pollard as an ingredient to poultry feeds is exempt from VAT. It is represented that General Milling Corporation is a domestic corporation engaged among others, in flour milling. In the said operation, the wheat is milled into flour and pollard is produced as its by-product. Eventually, Pollard is sold as an ingredient to feeds for poultry products. In reply, please be informed that Section 109(d) of the Tax Code of 1997 provides that 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) shall be exempt from the value-added tax (VAT). In BIR Ruling No. 060-02 dated September 16, 2002, the Bureau clearly stated that the foregoing provision refers to three transactions as being exempted from VAT, namely: 1. Sale or importation of fertilizers, seeds, seedlings and fingerlings; 2. Sale or importation of fish, prawn, livestock and poultry feeds; and 3. Sale or importation of feed ingredients used in the manufacture of fish, prawn, livestock and poultry feeds. Thus, if "Pollard" will be used as a feed ingredient in the manufacture of fish, prawn, livestock and poultry feeds, such sale will be exempt from VAT. 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. aTCAcI Very truly yours, (SGD.) PABLO M. BASTES, JR. OIC, Head Revenue Executive Assistant Legal Service