Sales Tax Payable by Those Engaged in the Processing and Sales of Processed Meat, Pork, Poultry, and Fish Products for Human Consumption

October 16, 1987 BIR RULING NO. 317-87 163 (c) 157-87 317-87 Gentlemen : This refers to your letter dated April 2, 1987 requesting in effect a ruling as to the sales tax payable by those engaged in the processing and sales of processed meat, pork, poultry, and fish products for human consumption, which are generally known in the market as "tapa, tocino, longanizas, bacon, cooked or smoked hams, sausages, smoked fish, chicken ham, and similar food products." Per documents submitted, you have represented the following: (1) that the processed meat products include seven beef products namely: (a) Biltong (an uncooked, cured, dried beef product which is eaten raw), (b) Charqui (cured dried product which is cooked before consumption), (c) Fresh beefburgers (a minced raw beef product which is cooked before consumption), (d) Various types of cooked, cured beef, (e) Chili con Carne (a heavily spiced minced beef product sold cooked and almost dry) (f) Beef frankfurters; and (g) Beef Cervelat (2) that processed pork products include the following: (a) sausage (fresh & uncooked, smoked) (b) Cooked Ham (c) Bacon In reply, please be informed as follows: adc 1. As far as the aforementioned processed meat products are concerned, only fresh beefburgers, biltong, charqui and beef Cervelat can be considered as agricultural food products in its original state subject to the percentage tax at 0% rate under Section 164 of the Tax Code, as amended by Executive Order No. 36, considering that they have undergone only the simple process of preservation such as freezing, drying, salting, smoking or stripping to produce a characteristic flavour for each of the above mentioned particular product. Chili con Carne, cooked cured beef, and frankfurters which have undergone the process of curing, canning or other manufacturing process are classified as processed food products for human consumption subject to 10% sales tax under Section 163(2)(a) of the Tax Code, as amended by Executive Order No. 36. 2. As far as processed pork products are concerned, only fresh, uncooked and smoked sausages and smoked and unsmoked bacon can be considered as agricultural products in their original state subject to 0% tax under Section 164 of the Tax Code, as amended by Executive Order No. 36, considering that the processing stages of the aforementioned food products simply undergo the simple process of preservation to produce a characteristic flavour for each particular product. Cooked hams are classified as "processed food products for human consumption subject to 10% sales tax under Section 163(2)(a) of the Tax Code, as amended by Executive Order No. 36. 3. Poultry and fish products which have undergone the simple process of preservation are still classified as agricultural food products in their original state subject to the 0% sales tax. The resale thereof is still considered a subsequent sale of agricultural products in their original state, hence, subject to the percentage tax at 0% rate. (Section 164, Tax Code, as amended by Executive Order No. 36) In other words, such resale is not subject to the C-13 graduated annual fixed tax imposed by Section 161(2) of the Tax Code. (Revenue Memorandum Circular No. 2-86) (BIR Ruling No. 193-86) Very truly yours, (SGD.) EUFRACIO D. SANTOS Deputy Commissioner