VAT Ruling No. 064-99

July 6, 1999 VAT RULING NO. 064-99 Section 107 (A) VAT Ruling No. 189-90 064-99 Tien Yi, Inc . 2281 Taft Avenue Pasay City Metro Manila Attention: Ms . Sofia P . Hsu President Gentlemen : This refers to your letter dated 02 June 1999 requesting for the exemption from Value-Added Tax your importation of various equipment and supplies to be used in your fish farming operations consisting of fishing net, industrial motor, fish feeder, floating pipe, bolt and nut, emergency generator, electrical cable, etc. It is represented that TIEN YI is a newly registered agricultural corporation engaged in integrated fish farming operations; that it has imported the above-described equipment and supplies for its operations; that pursuant to the provisions of Republic Act No. 8435, otherwise known as the "The Agriculture and Fisheries Modernization Act of 1997", its importation of said equipment and supplies is exempt from the applicable taxes and duties; that Sec. 109 of the said Act provides as follows: "Sec. 109. All enterprises engaged in agriculture and fisheries as certified by the Department in consultation with the Department of Finance and with the Board of Investment, shall for five (5) years after the effectivity of this Act, be exempted from the payment of tariff and duties for the importation of all types of agriculture and fisheries inputs, equipment and machinery such as, but not limited to fertilizer, insecticide, pesticide, tractors, trailers, trucks, farm implements and machineries, harvesters, threshers, hybrid seeds, genetic materials, sprayers, . . ." In reply, please be advised that the incentives provided under the said act relates only to exemption from import duties under the Tariff and Customs Code and not to internal revenue taxes imposed under the National Internal Revenue Code, such as the Value-added Tax prescribed by Section 107(A) of the Tax Code of 1997. Such being the case, your importation of the said equipment and supplies remains subject to VAT and cannot be exempted for lack of legal basis (VAT Ruling No. 189-90). cdll Very truly yours, Commissioner of Internal Revenue By: (SGD.) SIXTO S. ESQUIVIAS IV Deputy Commissioner Local & Enforcement Group