Applicability of BIR Ruling Nos. 532-88 and 587-88 to Rubber and Rubber Products
BIR Ruling No. 077-91 • Bureau of Internal Revenue (BIR) Issuances • Rulings (Numbered) • Apr 29, 1991
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April 29, 1991 BIR RULING NO. 077-91 103 (a) 587-88 077-91 M a d a m : This refers to your letter dated December 17, 1990 requesting clarification of BIR Ruling Nos. 532-88 and 587-88 in view of the information of your manager that a value-added tax is now being imposed on raw rubber that comes from your plantation and from other plantations nearby. cdtech In reply, we quote BIR Ruling Nos. 532-88 and 587-88 for reference: BIR Ruling No. 532: "In reply, please be informed that coagulated rubber/sap gathered from rubber plantations is an agricultural product. The transformation and/or processing of liquid latex (rubber juice/sap) into coagulated rubber latex is not considered manufacturing. (CIR vs. American Rubber Co., 18 SCRA 842) Accordingly, the coagulated rubber latex or cuplumps produced by your client are agricultural non-food products still in their original state; hence, exempt from VAT pursuant to Section 103 (a) of the Tax Code, as amended by Executive Order No. 273." BIR Ruling No. 587-88: "In reply, please be informed that coagulated rubber juice/sap or latex gathered from rubber plantation is an agricultural product. The transformation and/or processing of liquid latex (rubber juice/sap) into coagulated rubber latex is not considered manufacturing. (CIR vs. American Rubber Co., 18 SCRA 84). Accordingly, raw rubber is dried form produced from latex in your plantations is agricultural non-food product still in its original state; hence, exempt from VAT pursuant to Section 103(a) of the Tax Code, as amended by Executive Order No. 273." By way of clarification, please be informed that the aforesaid rulings apply only to the sale of rubber in dried form, cuplumps or coagulated rubber latex by the primary producer or owner of the land where the same is produced; and not when the same are sold by the subsequent purchaser, or one who is not a primary producer. This modifies BIR Ruling No. 532-88 and 587-88. cdti Very truly yours, (SGD.) JOSE U. ONG Commissioner
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