10% VAT on the Sales of Bagoong and Patis

March 4, 1988 BIR RULING NO. 070-88 100 000-00 070-88 Gentlemen : This refers to your letter dated January 28, 1988 requesting a ruling on whether your sales of bagoong and patis are subject to the value-added tax. It is represented that in the manufacture of "patis" and "bagoong" the raw materials and percentage contents of your product are as follows: Description Content Fresh fish 67.0% Salt 32.0% Vetsin 0.5% Benzoate 0.5% that the method of production involves fresh fish and salt being mixed and placed in the tanks; that the tanks are tightly closed and the mixture of the materials is aged for one year; that after a year of storage patis and bagoong are produced; that patis is the liquid substance produced from the fish during the aging process which emerged above the tank; that it is separated from the fish particles by allowing the liquid to pass through the filters and tanks after which the patis is placed in bottles; that bagoong is the undissolved fish particles which are grinded and mixed with vetsin and benzoate; and that plastic and half-open recycled cooking oil tin cans are used in packaging for bulk sales; while for household consumption, recycled bottles and milk cans are used. In reply, please be informed that patis is a processed food product and your sale thereof in bottles is subject to the value-added tax of 10% pursuant to Section 100 of the Tax Code as amended by E.O. No. 273. Likewise, your sales of bagoong which are placed even in recycled cooking oil tin cans or recycled bottles and milk cans are subject to the value-added tax of 10% pursuant to Section 100 of the Tax Code, as amended. (BIR Ruling No. 019-88) cdtech Very truly yours, (SGD.) BIENVENIDO A. TAN, JR. Commissioner