VAT Ruling No. 039-98

November 23, 1998 VAT RULING NO. 039-98 109 (c)-000-00-039-98 Anjo Farms, Inc. 1610-A Singalong Street Paco, Manila Attention: Mr . Apolonio S . Tanjangco President Gentlemen : This refers to your letter dated July 3, 1998 stating that you are the owner/operator of a fishpond in San Fabian, Pangasinan; that the proliferation of fishpens and cages in Pangasinan has severely depressed the price of fresh bangus while that of feeds, electricity and labor has increased and has been continuing to increase; that for your survival and to avail of higher prices in Metro Manila, you process the bangus into "Deboned Marinated (daing) Bangus"; that the process involved in the preparation/production of Deboned Marinated (Daing) Bangus consists of washing, stripping (removal of bones and innards) and marinating for one (1) hour in a solution of water (1 part), vinegar (3 parts), salt, garlic and pepper; and that the bangus is then vacuum packed and frozen. Based on the foregoing, you are requesting for a ruling as to whether or not you are subject to the 10% value-added tax. In reply, please be informed that pursuant to Section 109 (c) of the Tax Code of 1997, the sale or importation of agricultural and marine products is exempt from the value-added tax if sold in their original state. Agricultural and marine food products shall be considered in their original state even if they have undergone the simple process of preparation or preservation for the market, such as freezing, drying, salting, boiling, for the market, hence, the sale thereof is exempt from VAT pursuant to said Section 109 (c) of the Tax Code of 1997. This ruling is being issued on the basis of the foregoing facts as represented. However, if after investigation the facts are different from those as represented, then this shall be considered null and void. Very truly yours, (SGD.) BEETHOVEN L. RUALO Commissioner of Internal Revenue