Advance payment of value added tax on sale of refined sugar

November 8, 1989 REVENUE REGULATIONS NO. 07-89 SUBJECT : Advance Payment of Value Added Tax on Sale of Refined Sugar TO : All Internal Officers and Others Concerned SECTION 1 . Scope . Pursuant to the provisions of Section 245, in relation to Section 4, both of the National Internal Revenue Code, as amended, these Regulations are hereby promulgated to prescribe procedures for the advance payment of value added tax (VAT) on the sale of refined sugar. cd SECTION 2 . (a) " Refined sugar " defined . For purposes of these Regulations, the term "refined sugar" includes cane sugar commonly known as "washed sugar" plantation white sugar" and "blanco directo" sugar "standard" sugar and "premium" sugar. It does not include crystalized or solidified juice of sugar cane, distinctly brown in color resulting from the simple and primary milling process such as treating the juice with lime to remove impurities, boiling and spinning the syrup to force out the molasses. (b) " Sugar refinery " defined . For purposes of these Regulations, the term 'sugar refinery' includes refiner and/or miller of refined sugar as defined in the preceding paragraph. SECTION 3 . Requirement to pay in advance VAT on sale of refined sugar . The value added tax on the sale of refined sugar shall be paid in advance by the owner/seller to the Bureau of Internal Revenue (BIR), thru the sugar refinery. The advance payment shall be made prior to or upon issuance of the refined sugar release order (RSRO) or similar instruments. SECTION 4 . Prohibition of withdrawal . The proprietor or operator of a sugar refinery shall not allow any withdrawal of refined sugar from its premises without prior advance payments of value added tax made by the owners/sellers thereof. SECTION 5 . Proof of advance payment . The sugar refinery shall issue a certificate of advance payment in a form prescribed therefore to each owner/seller upon payment in advance of the VAT as required in Section 3 of these Regulations. This certificate and the official receipt issued by the BIR for the advance payment shall serve as proof of the credit for such advance payment against output tax as provided in Section 7 of these Regulations. cdt SECTION 6 . Basis for determining the amount of advance payment of the VAT . (a) initial base price . The amount of advance payment shall be determined by applying the VAT rate of 10% on the applicable base price per 50 kilogram (kg.) bag refined sugar. For purposes of these Regulations, the base price shall be initially prescribed as follows: Owned by Owners by Sugar Refinery Others (P per 50 kg. bag) (P per 50 kg. bag.) Refined Sugar P550 P460 Plantation while 500 440 Blanco directo 500 440 Washed sugar 480 430 Subsequent base price adjustments . The base price upon which the advance payment of VAT will be computed under the preceding paragraph of this Section shall be adjusted when deemed necessary by the Commissioner of Internal Revenue, upon consultation with the Chairman of the Sugar Regulatory Administration. SECTION 7 . Credit for advance payments . In addition to the input tax credits allowed under Section 104 of the Tax Code as implemented by Section 10 of Revenue Regulations No. 5-87, the amount of advance payments made by sellers of refined sugar under these Regulations shall be allowed as a credit against their output tax on the actual gross selling price of refined sugar. The advance payment certificate issued under Section 5 hereof shall be adjusted to the quarterly VAT returns to support the claim for credit of advance tax payment. SECTION 8 . Place and time of remittance of advance payment of VAT . It shall be the duty of the proprietor or operator of a sugar refinery to render a declaration on a prescribed form therefore of the amounts of VAT paid in advance by him and/or thru him and remit these payments to the BIR on or before the day immediately following. The filing of the declaration and remittance of the advance payments shall be made to the Revenue District Office having jurisdiction over the principal place of the sugar refinery. The BIR shall issue individual official receipts/confirmation receipts as evidence of the advance payments of the owners/sellers. SECTION 9 . Information returns to be filed by the proprietor or operator of a sugar refinery . Every proprietor or operator of a sugar refinery shall render an information return to the Revenue District Office having jurisdiction over the principal place of the sugar refinery which issues the RSRO not later than the 10th day of the month following the taxable quarter of the proprietor operator of the sugar refinery. SECTION 10 . VAT on tolling fees, and sale of molasses and bagasse . The proprietor or operator of a sugar refinery shall continue to be liable to pay the value added tax on sale of services for milling and/or refining raw sugar into refined sugar for others, pursuant to Section 6(g) of Revenue Regulations No. 5-87. The owners/sellers of molasses and bagasse shall continue to be liable to pay the VAT on sale thereof and shall not be subject to the advance payment required in Section 3 of these Regulations. SECTION 11 . Penalty Clause . Any violation of the provisions of these Regulations shall be subject to the penalties provided for in Sections 254 and 274 of the National Internal Revenue Code, as amended. acd SECTION 12 . Transitory Provisions . For RSRO's issued prior to the effectivity of these Regulations, the advance payment for VAT shall be made by the owner/seller of the refined sugar covered by such before any withdrawal of the refined sugar from the premises of the sugar refinery shall be allowed. SECTION 13 . Effectivity . These Regulations shall take effect immediately upon its publication in the Official Gazette or in a newspaper of general circulation. (SGD.) VICTOR C. MACALINCAG Acting Secretary of Finance Recommending approval: (SGD.) JOSE U. ONG Commissioner of Internal Revenue