VAT Ruling No. 057-02

September 16, 2002 VAT RULING NO. 057-02 109 (d) 043-2001 Agchem Manufacturing Corporation 7F Liberty Building, A. Arnaiz Avenue Legaspi Village, Makati City Attention: Mr. Jose J. Cruz General Manager Gentlemen : This refers to your letter dated June 27, 2002, requesting for a value-added tax (VAT) exemption of your importation of Sodium Nitrate , which was certified by the Fertilizer and Pesticide Authority (under the Department of Agriculture) to be registered with their Office as a "fertilizer material use for the formulation of mango flower inducer". In reply, please be informed that Section 109(d) of the Tax Code of 1997 provides that the "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)" shall be exempt from the VAT. The foregoing provision refers only to three (3) transactions as being exempted from VAT, namely: 1. Sale or importation of fertilizers, seeds, seedlings and fingerlings; 2. Sale or importation of fish, prawn, livestock and poultry feeds; and 3. Sale or importation of feed ingredients used in the manufacture of finished feeds (fish, prawn, livestock and poultry feeds) except specialty feeds. Accordingly, your importation of Sodium Nitrate , which is only a fertilizer material and not a fertilizer per se , does not qualify for VAT exemption under Section 109(d) of the Tax Code of 1997. Very truly yours, (SGD.) EDMUNDO P. GUEVARA Deputy Commissioner Legal & Inspection Group