Publishing Questions and Answers on the Classification of Certain Articles for Sales Tax Purposes

April 23, 1986 REVENUE MEMORANDUM CIRCULAR NO. 08-86 SUBJECT : Publishing Questions and Answers on the Classification of Certain Articles for Sales Tax Purposes TO : All Internal Revenue Officers and Others Concerned The following are questions and answers clarifying the provisions of the Tax Code, as amended, on particular topics which were discussed among the members of the BIR-Customs Working Group, pursuant to Revenue Special Order No. 7-86. "1. Question : When is the effectivity of the new rates of sales tax for purposes of advance sales tax and compensating tax? casia Answer : The new rates of sales tax prescribed in the Tax Code, as amended, are applicable to all importations entered or withdrawn on or after January 1, 1986, as determined by the Bureau of Customs in accordance with the Tariff and Customs Code of the Philippines and its implementing regulations. 2. Question : What is meant by the word "processed" as used in Sec. 165(A)(3) of the Tax Code, as amended? Answer : For purposes of Sec. 165(A)(3) of the Tax Code, as amended, the word "processed" means that such products/articles as meat, milk, fruits, vegetables, fish, etc. have undergone the process of curing, canning, bottling or other manufacturing process, but excludes such simple processes as freezing, refrigerating, drying, salting or smoking. 3. Question : What are the rates of advance sales tax or compensating tax on the importation of the following articles? (a) Live hogs, piglets, chicken and cattle; (b) Processed fish, such as fishmeal; (c) Processed agricultural products of the soil which are either fruits or vegetables, such as soya-bean meal, feed barley and oats; (d) Processed (chopped or granulated) meat and bone, but free of big bone chips and not adulterated with foreign materials, and (e) Natural sun-dried and salted seeds of watermelon. Answer : For sales tax purposes (a) For live hogs, piglets, chicken and cattle 0% as agricultural products. (b) Processed fish/fishmeal 10% under Sec. 162(c) of the Tax Code, as amended by PD 2031. acd (c) Processed agricultural products of the soil (fruits or vegetables) such as soybean meal, barley or oats 10% under Sec. 162(c) of the Tax Code, as amended by PD 2031. (d) Processed meat and bone 10% under Sec. 162(c) of the Tax Code, as amended by PD 2031. (e) Natural sundried and salted seeds of watermelon, not having undergone the process of curing, canning, bottling or other process of manufacturing, other than the simple process of freezing, refrigerating, drying, salting or smoking 0% as an agricultural product in its original state." All internal revenue officers and others concerned are enjoined to give this Revenue Memorandum Circular the widest publicity possible. (SGD.) BIENVENIDO A. TAN, JR. Commissioner TAN - T-5150-J0923-A-4