VAT Ruling No. 065-91

June 27, 1991 VAT RULING NO. 065-91 Monterey Farms Corporation P.O. Box 1351, MCC, Makati Metro Manila Attention: Mr . Amadeo P . Veloso President & Chief Operating Officer Gentlemen : This refers to your letters dated June 28 and August 27, 1990 requesting information whether HAMBURGER PATTIES can be legally classified as agricultural food product in its original state, hence, VAT-exempt under Section 103(b), NIRC, pertinent portion of which reads: "Products classified under this paragraph and paragraph (a) shall be considered in their original state even if they have undergone the simple processes of preparation or preservation for the market, such as freezing, drying, salting, smoking or stripping. Polished and/or husked rice, corn grits and raw cane sugar shall be considered in their original state for purposes of this paragraph." It is represented that hamburger patties are made by mixing ground fresh meat with natural seasoning, e.g., fresh onion, salt, ground black pepper, garlic powder, monosodium glutamate, hydrolyzed vegetable protein and water; that, for marketing purposes, the hamburger patties are freezed and packed by hand (6 patties in one styrofoam wrapped in plastic). It is your opinion that, since the same is produced thru what you perceive a simple process, the same should be considered agricultural food product in its original state and should be embraced under Section 103(b), NIRC. In reply, please be informed that hamburger patties are "processed meat products". Having undergone manufacturing processes thru mixture of salt, pepper, garlic powder, monosodium glutamate, hydrolyzed vegetable protein and water, the same are no longer meat product in its original state. Accordingly, your sales thereof are subject to 10% value added tax, pursuant to Sections 99 and 100, NIRC. aisadc Very truly yours, JOSE U. ONG Commissioner of Internal Revenue