Taxability of An Incoming Shipment

March 7, 1989 BIR RULING NO. 033-89 103 (c) 133-88 033-89 Gentlemen : This refers to your letter dated February 17, 1989 requesting a ruling regarding the taxability of your incoming shipment of about 250 MT Xylene in bulk which is expected to arrive in Manila on February 23, 1989. In reply, please be informed that pursuant to Section 103(c) of the Tax Code, as amended by Executive Order No. 273, the sale or importation of chemicals for the formulation of pesticides is exempt from the value-added tax. Thus, BIR Ruling No. 133-88, this Office ruled that the importation of Xylene is exempt from VAT because the same was used as raw material in the manufacture of pesticides such as Thiodan EC, Decis 2.5 EC, etc. Accordingly, since as represented, your incoming shipment of Xylene will be for sale and distribution to various manufacturers of pesticides, the same is exempt from VAT pursuant to the aforesaid Section of the Tax Code. However, you will be subject to VAT in case you will sell Xylene to non-manufacturers of pesticides. For this purpose, you will record separately in your books of accounts your sale of Xylene to manufacturers and non-manufacturers of pesticides. aisadc Very truly yours, (SGD.) JOSE U. ONG Commissioner