VAT Ruling No. 046-88

March 1, 1988 VAT RULING NO. 046-88 103 (a)-000-00-046-88 The Fiber Development Authority Philfinance Bldg.,Benavidez St. Legaspi Village, Makati Metro Manila Attention: Mr . Joaquin M . Teotico Officer-in-Charge S i r s : In reply to your query dated February 2, 1988, please be informed that pursuant to Section 103 (a) of the Tax Code as amended by E.O. No. 273, natural fibers like abaca, ramie, buntal, coco coir, jute, maguey and pia fiber are considered as non-food agricultural products and are only exempt from the value-added tax if they are in their original state and are sold by the producer or owner of land where the same are produced. This implies that the fiber regardless of whether it is in its original or processed form is already subject to VAT when it is in the hands of a subsequent seller. In case the final product from abaca is sold in the export market, the export sales are either exempt or zero rated (if the exporter is VAT-registered).Being zero-rated, the VAT-registered exporter can obtain a refund of all inputs attributed to the export. Very truly yours, BIENVENIDO A. TAN, JR. Commissioner of Internal Revenue