Cargill Philippines, Inc.

October 22, 2007 VAT RULING NO. 013-07 Sec. 109 (B) (d) VAT Ruling No. 012-2001 Cargill Philippines, Inc. 14th Fl. Citibank Tower 8741 Paseo de Roxas Makati City Attention: Mr. Ricardo C. Cruz, Jr. Country Controller Gentlemen : This refers to your letter dated November 23, 2004 requesting in effect, for a ruling that your importation of raw materials used as ingredients and additives in the manufacture of animal feeds is exempt from VAT. aCTcDS It appears that your company, Cargill Philippines, Inc. (CPI) is engaged in the manufacture of animal feeds. You import a significant number of raw materials used as ingredients and additives in the production of your animal feeds, such as: 1) Canola meal - from Canada; 2) Rapeseed meal - from China; 3) Fish meal - from Peru; 4) Tapioca hard pellet - from Thailand; 5) Wheat Bran pellet - from Sri Lanka and Indonesia; 6) Deproteinized Whey Powder - from United States; 7) Totes Raw products raisins - from United States; 8) Feed Peas - from United States; 9) Wheat bran - from Singapore; and 10) Soybean Oil Meal - from Argentina. The aforestated items are contained in a Bureau of Animal Industry (BAI) Certification, dated November 18, 2004, that said registered raw materials are intended solely for the manufacture of animal feeds. In reply, please be informed that Sec. 4.109-1 (B) (2) (b) of Revenue Regulations No. 16-2005, implementing Section 109 (B) of the 1997 Tax Code, as amended, provides as follows: SIAEHC "SEC. 4.109-1. VAT-Exempt Transactions . xxx xxx xxx (B) Exempt Transactions. xxx xxx xxx (b) Sale or importation of fertilizers, seeds, seedlings and fingerlings, fish, prawn, livestock and poultry feeds, including ingredients, whether locally produced or imported, used in the manufacture of finished feeds (except specialty feeds for race horses, fighting cocks, aquarium fish, zoo animals and other animals generally considered as pets);" It is to be noted that the Certification issued by the BAI, dated November 18, 2004, attests to the fact that the foregoing imported ingredients are meant for the manufacture of animal feeds and that the same shall constitute as a confirmation that said items are to be used as component of feeds for purposes of VAT exemption. Accordingly, your importation of the above ingredients which are only raw materials used as ingredients and additives in the manufacture of animal feeds and do not include specialty feed for animals generally considered as pets shall be exempt from the imposition of the VAT. However, it is required that in all cases of importation of VAT-exempt items, the same shall not be released from Customs custody unless a duly approved Authority to Release Imported Goods (ATRIG) is secured from the Revenue District Officer where the port of entry is located. This ruling is being issued on the basis of the foregoing facts as represented. However, if upon investigation, it will be ascertained that the facts are different, then this ruling shall be considered as null and void. CTDHSE Very truly yours, Commissioner of Internal Revenue By: (SGD.) GREGORIO V. CABANTAC Deputy Commissioner