BIR Ruling [DA-450-05]

November 3, 2005 BIR RULING [DA-450-05] JM Flower Farms 9421 Urma Drive, Baltao, Airport Village Paraaque City Attention: Mr. Jaime C. Masiclat Gentlemen : This refers to your letter dated October 26, 2005, requesting that you be exempt from the value-added tax under Section 109(d) of the Tax Code of 1997 on your importation of 139,450 pieces of flower bulbs consisting of the following: 3,000 Belforte 15,000 La Mancha 6,500 Universal 1,800 Calvados 4,600 Legend 2,100 Universal 7,500 Corda 7,875 Manissa 3,800 Valdernar 19,800 Corso 7,400 Manissa 4,375 Corte 15,000 Siberia 6,600 Corte 19,500 Sorbonne 10,000 La Mancha 4,600 Universal that the above will be used for the cultivation and propagation of liliums; that the importation will come from The Netherlands via Savannah Express; and that the estimated time of arrival will be on October 16, 2005. In reply, please be informed that Section 109 (d) of the Tax Code of 1997 provides: "SEC. 109. Exempt Transactions . (1) Subject to the provisions of Subsection (2) hereof, the following transactions shall be exempt from the value-added tax: xxx xxx xxx (d) 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 seeds (except specialty feeds for race horses, fighting cocks, aquarium fish, zoo animals and other animals generally considered as pets);" In the light of the foregoing, this Office is of the opinion and so holds that your importation of 139,450 pieces of flower bulbs is subject to the value-added tax since flower bulbs are not within the purview of the definition of seeds and seedlings pursuant to Section 109(d) of the Tax Code of 1997. Very truly yours, (SGD.) JOSE MARIO C. BUAG OIC-Commissioner of Internal Revenue