Sale of Coffee Beans or Roasted and Ground Coffee Beans Subject to the C-13 Graduated Fixed Tax

June 19, 1986 BIR RULING NO. 079-86 161 (2) 039-86 079-86 S i r : This refers to your letter dated May 5, 1986 stating that your client, KOFIL TRADING CORPORATION desires to engage in the business of selling coffee beans purchased from local producers and traders; and that some of its purchases would be sold here and abroad while some coffee beans would also be roasted and placed in a row of divided transparent glass boxes for sale to the public. Base on the foregoing facts, you now request information as to the correct rate of tax to be paid by your client. In reply, please be informed that since coffee beans are considered agricultural products and that roasting coffee does not constitute manufacturing, the sale by your client of coffee beans or roasted and ground coffee beans is considered a subsequent sale of agricultural products in their original state and, therefore, not subject to the 1.5% sales tax. (Sec. 165(B), Tax Code, as amended by P.D. No. 2006) However, your client would be subject to the C-13 graduated fixed tax imposed by Section 161(2) of the Tax Code. (Revenue Memorandum Circular No. 2-86) cdta Very truly yours, (SGD.) BIENVENIDO A. TAN, JR. Commissioner