Activities Subject to 10% Value-Added Tax

July 5, 1989 BIR RULING NO. 137-89 103 000-00 137-89 S i r : This refers to your letter dated February 23, 1989 stating that you are presently engaged in the following business activities, viz: 1. You buy dried fish, grind it and thereafter sell the same without any mixture to manufacturers of animal feeds; 2. You import meat and bone meal and upon arrival, sell the same to manufacturers of animal feeds; and 3. You buy rattan, split it with the use of splitting machine and thereafter sell it to handicraft makers. You now request a ruling as to whether your said activities are subject to the 10% value-added tax. In reply, please be informed as follows: 1. Your ground dried fish which constitutes fish meal is exempt from value-added tax pursuant to Section 103(c) of the Tax Code, as amended by E.O. No. 273. 2. Your imported meat and bone meal sold as is and not ground to manufacturers of animal feed is still in its original state and therefore, exempt from value-added tax (VAT) pursuant to Section 103(b) of the Tax Code, as amended. 3. Your sale of rattan bought from the primary producer or owner of the land where the same are produced is subject to the 10% VAT. However, if your sales do not exceed P200,000.00 during any 12-month period, you are exempt from VAT but subject to 2% of your gross quarterly sales pursuant to Section 103(w) in relation to Section 112 of the Tax Code, as amended. Very truly yours, (SGD.) JOSE U. ONG Commissioner