Nurich Vitameal Corporation

November 4, 2009 BIR RULING [DA-(VAT-096) 644-09] Nurich Vitameal Corporation No. 140 Barangay San Miguel Calasiao, Pangasinan Attention: Engr. William G. Co President Gentlemen : This refers to your letter dated July 29, 2009 stating that your company is a corporation duly registered with the Securities and Exchange Commission (SEC) under SEC Registration No. 134266 dated August 4, 1986 with TIN 000-252-470; that it is engaged in the business of manufacturing and selling quality mineral feed ingredients essential to the production of finished feeds for livestock, poultry, and aquaculture industry in the Philippines; and that its main composition is calcium, which is hugely abundant in the country, and is a macro mineral that is an integral part of growth of all live beings. DaTISc Based on the foregoing representations, you now request for an opinion as to whether or not the sale of animal feeds is exempt from value-added tax (VAT) pursuant to Section 4.109-1 (B) (1) (b) of Revenue Regulations No. 16-2005, as amended, implementing Republic Act (RA) No. 9337. In reply thereto, please be informed that Section 4.109-1 (B) (1) (b) of Revenue Regulations No. 16-2005, as amended, provides that "(B) Exempt transactions. (1) Subject to the provisions of Subsection (2) hereof, the following transactions shall be exempt from VAT: 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); 'Specialty feeds' refers to non-agricultural feeds or food for race horses, fighting cocks, aquarium fish, zoo animals and other animals generally considered as pets." The foregoing provision refers to three (3) 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 finished feeds (fish, prawn, livestock and poultry feeds) except specialty feeds. It is significant to note that since the manufacture, importation, sale or distribution of feeds or feeding stuff require prior registration and prior permit from the Bureau of Animal Industry (BAI) under Republic Act No. 1556, as amended by Presidential Decree No. 7, the certification on the nature and composition of the commodities/items as stated in the registration and import permit issued by BAI will govern the classification of the said items for purposes of VAT exemption as provided above. (BIR Ruling No. 028-98 dated September 15, 1998). Thus, in the absence of a showing that the manufacture, importation and sale of the animal feeds by your company has been certified by the BAI as required under Republic Act No. 1556, this Office cannot as yet issue the corresponding certificate of VAT exemption under Section 4.109-1 (B) (1) (b) of Revenue Regulations No. 16-2005, as amended. 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. TDESCa Very truly yours, (SGD.) JAMES H. ROLDAN Assistant Commissioner Legal Service