Manufacture or Baking of Bread Not a Cottage Industry Under the NACIDA Law, Subject to Fixed Tax and Sales Tax

November 12, 1981 BIR RULING NO. 225-81 199-00 000-76 225-81 Mrs. Vicenta Co Sy Cebu La Fortuna Bakery 26 A. Borromeo Street Cebu City M a d a m : This refers to your letter dated February 4, 1980 requesting tax exemption under the provisions, of the NACIDA law. Investigation disclosed that you are engaged in the manufacture of bread, biscuits, cakes and pastries; that you started business operation on January 1979, with a capital investment of P80,000.00; and that you are registered with the NACIDA under Certificate of Registration No. 36602 dated January 15, 1980. In reply, I regret to inform you that your request cannot be granted for the reason that the manufacture of bread is not one of the economic activities included within the term "cottage industry" which activities are enumerated in Section 11 of Republic Act No. 3470, as amended by Republic Act No. 5326 and Presidential Decree No. 817. It may be stated that although other industries done in the home with aid of electrical gadgets and/or by hand manipulation is one of the economic activities enumerated in said law, the manufacture or baking of bread is not however an industry contemplated therein. In view thereof, you are subject to the fixed tax of P100.00 imposed in Section 192(1) of the Tax Code of 1977, as amended and to the 10% sales tax prescribed in Section 199 of the same Code. Very truly yours, RUBEN B. ANCHETA Acting Commissioner