VAT Ruling No. 008-90

January 4, 1990 VAT RULING NO. 008-90 103c-000-00-008-90 Sea Tech Hatchery 6th Floor, Century Tower Tordesillas, cor. de la Costa Salcedo Village Makati, Metro Manila Attention: Ms . Erlinda M . Nario S i r s : This refers to your letter dated July 7, 1989 stating that as a BOI-registered firm, you are engaged in a shrimp fry hatchery project by using (a) technology process involving spawner, larval rearing, nursery and harvesting and (b) capital goods such as hatchery tanks, seawater intake structure and air distribution system and that one of your incentives under Executive Order 226 (Omnibus Investment Code of 1987) is the exemption from the payment of contractor's tax. On the basis of the foregoing, you request a ruling: (a) if your activity is exempt from VAT since it is classified as a sale of nonfood agricultural, marine and forest products in their original state by a primary producer; and (b) if you are exempt from VAT on the services rendered for the development of your hatchery ponds and tanks. In reply, please be informed that your shrimp fry hatchery project is exempt from VAT pursuant to Section 103(c) of the Tax Code, as amended since it is classified as a sale of fingerlings. This exemption privilege, as well as your exemption from the payment of the contractor's tax, by virtue of your BOI registration, is not extended to the services rendered by VAT-registered firms contracted to develop your hatchery ponds and tanks. Very truly yours, JOSE U. ONG Commissioner of Internal Revenue