VAT Ruling No. 043-98

November 26, 1998 VAT RULING NO. 043-98 Sec. 109-000-00-043-98 Abotrans Brokerage Corporation 7577 dela Rosa Street Makati City Attention: Ms . Maria Teresa B . Santos Principal Broker Gentlemen : This refers to your letter dated September 5, 1998 requesting exemption from value-added tax of the importation of breeding stock by your client, FIL-AM FOODS, INC., in accordance with the provisions of the Tax Code as amended by Republic Act No. 8424. prLL It is represented that FIL-AM FOODS, INC. is a domestic corporation with postal address at 110 Legaspi St., Legaspi Village, Makati City; that it is registered with the Board of Investments under BOI Certificate of Registration No. 97-143 issued on August 7, 1997; that it is a bona fide livestock breeder; that it has contracted to import 1,710 head of swine (36 heads male and 1,674 head female) from Oklahoma, United States which shall arrive on September 22, 1998 via Evergreen Airlines to be discharged at the Clark Pampanga airport; and that the Bureau of Animal Industry (BAI) has issued Import Permit No. Hg-25 dated September 23, 1998 covering the importation of 36 heads male (Landrace) and 1,674 heads female (Yorkshire), swine for breeding purposes. You now request for a ruling confirming your opinion that the importation of the 1,710 heads of swine are exempt from the value-added tax. In reply, please be informed that under the Tax Code of 1997, particularly Section 109(c), provides: "SEC. 109. Exempt Transactions . The following shall be exempt from the value-added tax: xxx xxx xxx (c) Sale or importation of agricultural and marine good 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." (Emphasis supplied) Since the above-cited provision exempts the importation of breeding stock from the value-added tax, the importation of 1,710 heads of swine confirmed as breeding stock is, thus, exempt from the value-added tax. In view thereof, this Office hereby holds that the importation by FIL-AM FOODS, INC. of 1,710 heads of swine for breeding purposes is exempt from the value-added tax. 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, (SGD.) SIXTO S. ESQUIVIAS IV Deputy Commissioner Legal & Enforcement Group