VAT Ruling No. 061-97

October 10, 1997 VAT RULING NO. 061-97 Sec 103 (k); 000; 061-97 Pililla Poultry Processing Plant, Inc. #1 Aguinaldo corner F. Castillo St., Project 4, Quezon City Attention: Mr . Ramon L . Peralejo Gentlemen : This refers to your letter dated June 17, 1997 requesting in effect, confirmation of your opinion that fees paid for contract growing and toll dressing are exempt from VAT. It is represented that you are a domestic corporation primarily engaged in contract growing and toll dressing; that contract growing is described as receiving day-old chicks/broker's, sorting, fumigating, sexing of day old broilers and growing into marketable chicken; and that toll dressing is described as a package of services including receiving of live broilers from contract growers, weighing, killing, dressing, delivery, cut-ups and packing. In reply, please be informed that pursuant to Section 4(B)(k) of Revenue Regulations No. 6-97 implementing Section 103 (k) of the Tax Code, as amended, agricultural contract growers , referring to those persons producing for others poultry, livestock or other agricultural and marine food products in their original state, are exempt from VAT. In this case, contract growing described as receiving day-old chicken/broilers, sorting, fumigating, sexing of day-old broilers and growing into marketable chicken, and toll dressing described as a package of services including receiving of live broilers from contract growers, weighing, killing, dressing, delivery, cut-ups and packing come within the purview of services of agricultural contract growers which are exempt from VAT pursuant to Section 103 (k) of the Tax Code, as amended (BIR Ruling No. 127-95 dated August 25, 1995). In view of the foregoing, we hereby confirm your opinion that contract growing and toll dressing by agricultural contract growers are exempt from VAT. 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. LLpr Very truly yours, SIXTO S. ESQUIVIAS IV OIC, Asst. Commissioner Legal Service