Tax Imposed on "Tablea"

May 19, 1987 BIR RULING NO. 132-87 161 (2) 039-86 132-87 Gentlemen : This refers to your letter dated March 12, 1987, requesting confirmation of your opinion that "tablea" which is derived from pure cacao beans is an agricultural product subject to 0% tax. It is represented that the pure cacao beans are naturally dried and then toasted. Thereafter, it is ground and in liquid/powder form placed in a mold to come out in tablet form. In reply, please be informed that since cacao beans are considered agricultural products and that toasting and grinding do not constitute manufacturing, the sale of your "tablea" is considered a sale of agricultural products in their original state and, therefore, subject to 0% sales tax. (Section 163(3), Tax Code, as amended by Executive No. 36). In other words, said "tablea" is not subject to the sales tax. However, a person who buys pure cacao beans and converts the same into "tablea" is subject to the C-13 graduated fixed tax imposed by Section 161(2) of the Tax Code. (Revenue Memorandum Circular No. 2-86) Very truly yours, (SGD.) BIENVENIDO A. TAN, JR. Commissioner