Neph Commercial

April 22, 2009 VAT RULING NO. 008-09 Sec. 109 (A); VAT Ruling No. 081-2001 Neph Commercial No. 2B Santiago Street San Francisco del Monte Quezon City Attention: Nephtali C. Fernandez Owner Gentlemen : This refers to your letter dated May 10, 2007 requesting for a certification from this Office for the purpose of VAT exemption on your sale of agricultural products. caHASI It is represented that Neph Commercial (Neph) is a single proprietorship duly registered with DTI with business address at No. 2B Santiago St., San Francisco del Monte, Quezon City, is engaged in the sale/distribution (wholesale/retail) of agricultural products which Neph claims are VAT exempt. The products to be sold are listed as follows: Achuete, 100g/24 Banana Blossoms, 30g/36 Black Pepper Light, 30g/36 Black Pepper Crushed, 50g Black Pepper Whole, 50g/36 Ground Black Pepper, 80g/24 Kasuba, 10g/48 Laurel Leaves, 10g/48 Dried Mushrooms, 20g/120 Oregano Leaves, 5g/15 Sanque, 30g/24 Sesame Seeds, 100g/124 Tengang Daga, 10g/36 Black Pepper Crushed, 1Kg/10 Black Pepper Whole, 1Kg/10 Ground Black Pepper, 1Kg/10 Achuete, 10's/12 Black Pepper Crushed, 10's/12 Black Pepper Whole, 10's/12 Ground Black Pepper, 10's/12 Laurel Leaves, 10's/12 Cinnamon Bark, 30g/36 In reply, please be informed that Section 105 (A) of the Tax Code of 1997, as amended by Republic Act (R.A.) No. 9337, provides that: "Sec. 109. Exempt Transactions. (1) Subject to the provisions of Subsection (2) hereof, the following transactions shall be exempt from the value-added tax: (A) Sale or importation of agricultural and marine food products in their original state, livestock and poultry of a kind generally used as, or yielding or producing foods for human consumption; and breeding stock and genetic materials therefor." Products classified under this paragraph shall be considered in their original state even if they have undergone the simple processes of preparation or preservation for the market, such as freezing, drying, salting, broiling, roasting, smoking or stripping. . . .". TAaEIc Since the above enumerated agricultural food products are embraced by the term "agricultural food products in their original state", this Office is of the opinion that Neph's sale of such products to consumers is exempt from VAT pursuant to Section 109 (A) of the same Tax Code. This ruling is being issued on the basis of the foregoing facts as represented. However, if upon investigation, it will be disclosed that the facts are different, then this ruling shall be considered null and void. Very truly yours, Commissioner of Internal Revenue By: (SGD.) GREGORIO V. CABANTAC Deputy Commissioner