Corn Germ Meal which is an Animal Feed is Subject to the Sales Tax at the Present Rate of 10%

June 2, 1987 BIR RULING NO. 149-87 163 (2) 000-00 149-87 S i r : This refers to your memorandum dated February 16, 1987 recommending the issuance of an assessment in the amount of P2,872,681.72 against Cenapro, Inc. as deficiency percentage tax, surcharge and penalty on its sale of corn germ meal during the year 1984, which recommendation was approved by this Office. It appears that your recommendation is based on the fact that BIR Ruling No. 033-79 holding that corn germ meal is not subject to the sales tax is erroneous. In connection therewith, please be informed that after a careful re-study of BIR Ruling No. 033-79 dated June 6, 1979, this Office hereby sustains your stand regarding the taxability of corn germ meal. Since corn oil is a manufactured product (BIR Ruling No. 091-80, RMC No. 19-77), corn germ meal which is the residue after extracting corn oil from corn germ should, likewise, be treated as a manufactured product. Such being the case, like corn oil, corn germ meal which is an animal feed is subject to the sales tax at the present rate of 10% in accordance with Section 163 (2)(1) of the Tax Code, as amended by Executive Order No. 36. This ruling revokes BIR Ruling No. 033-79. However, the revoking ruling, being prejudicial to the taxpayer concerned, takes effect prospectively as of this date. (Section 278, Tax Code) On this basis, the above proposed assessment shall not be given due course because the ruling applicable thereto is still BIR Ruling No. 033-79. (Commissioner vs. Burroughs LTD., G.R. No. 66653, June 19, 1986) Very truly yours, (SGD.) EUFRACIO D. SANTOS Deputy Commissioner