Exemption from VAT of Century Eggs Importation

May 25, 2000 BIR RULING NO. 025-00 107 (A); 109 (c) 000-00 025-2000 Metro Subic Mfg. Inc. Rm. 410 Natividad Bldg. T. Pinpin Cor. Escolta St. Binondo, Manila Attention: Ms . Grace P . Cruz General Manager M a d a m : This refers to your letter dated April 3, 2000 requesting for a confirmation of your opinion that your importation of the so-called "century eggs" is not subject to VAT as they are agricultural products in their original state. It is represented that the process by which century eggs are being prepared is by soaking the eggs of peking ducks under a shallow body of soft mud with mixed bran of grains for about seven (7) days or more after which they are harvested, cleaned and ready to cook/boil to be eaten. In reply, please be informed that Section 109(c) of the Tax Code of 1997 provides that the sale or importation of agricultural and marine food products in their original state shall be exempt from the value-added tax. Agricultural products 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, boiling, roasting, smoking or stripping. The process of making century eggs as described by you is a simple process to prepare or preserve the same for the market. It is similar to the making of "balut, penoy" and salted eggs. (VAT Ruling No. 110-98) Accordingly, we hereby confirm your opinion that your importation of century eggs is exempt from the 10% VAT imposed under Section 107(A) of the Tax Code of 1997. 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.) ROMEO S. PANGANIBAN Deputy Commissioner (Operations Group) Officer-in-Charge