Importation of Meat from the US. and Other Countries Exempt from Value-Added Tax

1999 BIR RULING NO. 022-99 109 (c)-000-00-022-99 Gaviola Law Offices Roofdeck "D" VERNIDA I Condominium 120 Amorsolo St., Legaspi Village Makati City Attention: Atty . A . B . F . Gaviola , Jr . Gentlemen : This refers to your letter dated May 7, 1998 stating that your client, the Facilitator Foods Processing Philippines, Inc. is engaged in the business of meat processing; that the meat being processed is imported from the U.S.A. and other countries; and that the brief description and flow in the imported meat processing process of your client is as follows: 1. Thaw and wash frozen meat. 2. Cut into estimated 4x4x8 blocks. 3. Boil on big "kawans" with clear plain water for about 45 minutes. 4. Chop boiled meat into cubes [bite size]. 5. Pack on a clean polyethylene bags, seal and label. 6. Blast freeze the meat. Based on the foregoing, you now request for a ruling whether or not the above transaction of your client is subject to VAT. cdpr In reply please be informed that Section 109 of the Tax Code of 1997 provides, viz: "SEC. 109. Exempt transactions . The following shall be exempt from the value-added tax: xxx xxx xxx "(c) Sale or importation of agricultural and marine food products in their original state, livestock and poultry of a kind generally used as, or yielding or producing foods for human consumption; and breeding stock and genetic materials therefor. "Products classified under this paragraph and paragraph (a) shall be considered in their original state even if they have undergone the simple processes of preparation or preservation for the market, such as freezing, drying, salting, broiling, roasting, smoking or stripping. Polished and/or husked rice, corn grits, raw cane sugar and molasses, and ordinary salt shall be considered in their original state; xxx xxx xxx" As can be gleaned from the foregoing, the brief description and flow in the imported meat processing falls within the meaning of the said provision. Accordingly, your client's importation of meat from U.S.A. and other countries is exempt from value-added tax. LibLex 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. Very truly yours, (SGD.) BEETHOVEN L. RUALO Commissioner of Internal Revenue