Taxability of the Sale of Non-Food Agricultural, Marine and Forest Products
BIR Ruling No. 162-88 • Bureau of Internal Revenue (BIR) Issuances • Rulings (Numbered) • Apr 21, 1988
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April 21, 1988 BIR RULING NO. 162-88 103 (a) 000-00 162-88 Gentlemen : This refers to your letter dated February 23, 1988 inquiring whether the raw rattan materials purchased from rattan growers in the mountains is subject to the value-added tax. It appears that said rattan is stripped of the outer skin and cut in different sizes in preparation for sale to the market or directly to rattan furniture manufacturers. In reply, please be informed that the sale of non-food agricultural, marine and forest products in their original state shall be exempt only when made by the primary producer or the owner of the land where the same are produced. (Sec. 103(a), Tax Code, as amended by Executive Order No. 273) Since you are not the primary producer nor the owner of the land where the rattan is produced, but merely buy them from the farmers/growers, you are not covered by the exemption. Accordingly, you are subject to the 10% value-added tax on your sales of rattan. (Sec. 100, Ibid.) cdti Very truly yours, (SGD.) BIENVENIDO A. TAN, JR. Commissioner
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