Request that Importation of Butter Oil or Anhydrous Milk, Whey Powder, etc. Be Subject Only to 10% Advance Sales Tax

July 28, 1986 BIR RULING NO. 131-86 162 (c) 000-00 131-86 Gentlemen : This refers to your letter dated April 25, 1986, requesting that your importation of butter oil or anhydrous milk (AMF), whey powder or demineralized whey powder (DWP) and protomalt or malt extract be subject only to 10% advance sales tax. You have represented that Nestle Philippines, Inc. is engaged in the business of processing such food products as powdered milk, infant milk formulas, liquid milk, tonic chocolate-flavoured food beverages, coffee culinary and other processed food products; and that brochures submitted show the description and uses of the above importation as follows: cd Butter oil or anhydrous milk fat (AMF) and Demineralized whey powder (DWP) They are milk products from which some of the natural milk constituents have been removed for industrial and technical reasons, i.e., to preserve food and to diversify the industrial uses of natural milk (fresh) which has a limited keeping or storage property. Butter oil or AMF is used exclusively in the manufacture of NIDO, ALPINE, PELARGON, NESTOGEN, AL 110, NAN, LACTOGEN, MILKMAID, BEAR BRAND, MILO, CERELAC and CERESOY while demineralized whey powder (DWP) is used exclusively for infant milk formulas. Protomalt or malt extract This product is produced by the enzymatic degradation of starch in barley and other grains. The enzymes which come from malted barley grains break down the starch into smaller polysaccharide molecules, e.g. maltose. This is used exclusively in the manufacture of Milo Tonic chocolate-flavoured beverage (Milo). In reply, I have the honor to inform you that your processed milk products as well as MILO, a beverage, are subject to the 10% sales tax; hence, your aforementioned importations which can only be used in the manufacture of said finished articles are subject to the same rate (10%) of advance sales tax, pursuant to Section 162(c) in relation to Section 165(A)(3), both of the Tax Code, as amended (Sec. 6. Revenue Regulations No. 5-86 dated April 17, 1986). cdtech Very truly yours, (SGD.) BIENVENIDO A. TAN, JR. Commissioner