VAT Imposed on Mosquito Coils

August 18, 1989 BIR RULING NO. 178-89 100 (a) 103 (c) 000-00 178-89 Gentlemen : This refers to your letter dated April 15, 1989 requesting a ruling as to whether your importation of the raw materials used in the manufacture of mosquito coils as well as the sale of your product, mosquito coil is exempt from the value-added tax. cdtech It is represented that said mosquito coil is classified as a household pesticide by the Fertilizer and Pesticide Authority. In reply, please be informed that under Section 103(c) of the Tax Code, as amended by Executive Order No. 273, the "sale or importation of fertilizers, pesticides and herbicides chemicals for the formulation of pesticides" is exempt from the value-added tax. From the Webster's Dictionary we find that fertilizers are materials put on or in the soil to improve the quality or quantity of plant growth; that pesticides are chemicals used for killing insects, weeds, etc.; and that herbicides are chemical substances used to destroy plants, esp. weeds or to check their growth. Accordingly, and since these articles, namely fertilizers, pesticides and herbicides are enumerated in the same provision of law [Sec. 103(c), Tax Code] it is clear that said articles referred to are those which are used for agricultural purposes. Such being the case, the mosquito coils in question classified as household pesticides not being used for agricultural purposes do not fall within the purview of Section 103(c) of the Tax Code; hence, said mosquito coils are subject to VAT. Likewise, the raw materials used in the manufacture of mosquito coils are subject to VAT. Very truly yours, (SGD.) JOSE U. ONG Commissioner