VAT Ruling No. 049-91

May 29, 1991 VAT RULING NO. 049-91 Tristar Trading Corporation 719 Camba St., Tondo M a n i l a Attention: Mr . Ronaldo R . Cruz Accountant S i r s : This refers to your letter dated November 20, 1990 requesting confirmation on the tax liability of VAT registered export traders of agricultural products particularly coffee beans supplied by growers. It is represented that local sales are made during the year for which non-VAT invoices, are issued. In reply, please be informed that coffee beans is an agricultural food product in its original state; hence, the sale and subsequent sale thereof is not only exempt from VAT pursuant to Section 103(b) of the Tax Code, but the seller is likewise exempt from registering as a VAT taxpayer. However when the seller opts to register as such pursuant to Section 107(d) of the same Code, it becomes subject to the 10% VAT. Consequently, when it exports the same, it is zero-rated under Section 100(a)(1) of the Tax Code. On the other hand, if the coffee bean trader is not registered as a VAT taxpayer, its sale, subsequent sale, or export of coffee beans shall be exempt in accordance with said Section 103(b) of the Tax Code. LLphil Very truly yours, JOSE U. ONG Commissioner of Internal Revenue