Tax Exemption on the Sale of Bottled Pasteurized Milk

July 15, 1958 BIR RULING NO. 361-58 The Regional Director BIR Regional District No. 5 Lipa City S i r : This is in connection with the case of the Canlubang Cairies, Canlubang, Laguna, which was referred to this Office for advice on the question of whether or not pasteurized milk sold by the aforesaid taxpayer is subject to the percentage tax. "Pasteurization" is defined by Webster as the partial sterilization of a fluid at a temperature (131 158F) which does not greatly change its chemical composition. It is of common knowledge that milk left alone as it is, will spoil easily. The taxpayer has to pasteurize the milk to prevent it from spoiling before it is delivered to his customers. Pasteurization does not however, alter the nature of milk as a drink. It only makes it safer to drink. In view of the foregoing, it is the opinion of this Office that the sale of pasteurized milk in bottles is exempt from the percentage tax under the provisions of Section 188(b) of the National Internal Revenue Code as amended by Republic Act 1612, as well as under our present law. Please be guided accordingly. Very truly yours, (SGD.) JOSE P. TRINIDAD Acting Commissioner of Internal Revenue