Exemption from Sales Tax of Shrimps Classified as Agricultural Product; Dealer Subject to Graduated Fixed Tax

March 21, 1978 BIR RULING NO. 001-78 Graduated Fixed Tax This refers to your letter dated June 28, 1977 informing this Office that you are an export company which was established in October, 1976 and duly registered with the Securities and Exchange Commission and other government agencies concerned; that upon opening, you paid your PTR of P50.00; that you also paid percentage tax for the quarter ending December 31, 1976; and that the goods which you sell undergo simple processing as follows: aisa dc "We buy shrimps, which we call raw materials, behead them, we pack them, and freeze them. These goods are now called frozen shrimps and are now ready for export." On the basis of the foregoing, you would like to be informed whether you are subject to the quarterly sales tax or just to the annual fixed tax, based on annual sales. In reply, you are advised that the shrimps which you behead and freeze are classified as agricultural food products under Section 202(b) of the Tax Code and is therefore, exempt from the sales tax prescribed in Section 201 of the same Code. Accordingly, your sales of said product, be they local or export sales, are exempt from the sales tax. As you are not a producer or manufacturer of shrimp products, you are not subject to the annual fixed tax of P100.00 imposed by Section 192(1) of the Tax Code of 1977. However, under the abovementioned facts, you come under the category of a dealer engaged in the buying and selling of shrimp, and therefore, subject to the graduated fixed imposed by Section 192(2) of the same Code. cdasia