Deductibility of Tax-Free Value of Livestock and Other Farm Products When Used as Raw Materials

September 9, 1971 BIR RULING NO. 019-71 Value of livestock and other farm products which are tax-free under Section 188(b) of the Tax Code when used as raw materials, deductibility of In view of the decision of the Supreme Court in the case entitled "Republic Flour Mills, Inc. vs. Commissioner of Internal Revenue, G.R. No. L-25602, February 18, 1970" finding the provision of Section 186-A of the Tax Code "whether a tax-free product is utilized, etc." all encompassing to comprehend tax-free raw materials, even if imported, it is the opinion of this Office that the value of the agricultural products which are tax-free under Section 188(b) of the Tax Code and used by the manufacturer of food stuffs are deductible from the value of the finished product in the determination of the sales tax on the sales of such finished products. cdta