VAT Ruling No. 071-91

July 5, 1991 VAT RULING NO. 071-91 Bendana, Brown, Pizarro & Associates, Inc. 5th Floor Quad Alpha Centrum Bldg. 125 Pioneer St., Mandaluyong Metro Manila Attention: Mr . Barker H . Brown Chairman & Manager-Food Division S i r s : This refers to your letter dated February 13, 1990, requesting confirmation of your opinion that the following products being processed by your Food Division are exempt from Value-Added tax, to wit: 1. Dried Fruits like mangoes, papayas and others Production process Fresh mangoes are dried by the use of a locally fabricated dryer Marketing procedure packed in bulk plastic bags and sold to wholesalers/repackers without brand name/labels. 2. Drying and grinding of fruits and tubers such as guava, tamarind, ubi, etc. Production process blanching, slicing, drying and grinding without adding preservatives Marketing procedure same as No. 1 above (packing 25 kg. plastic bags) also sold to blenders for incorporation in soup mixes, etc. 3. Fruits preserved in syrup (ex. jackfruits, banana, mango, etc.) Production process sugar is added to raw fruits, heat sterilized, packed in bulk plasting bags, chilled and delivered to manufacturer for their use in production of various products such as ice-cream by Magnolia and others. Marketing procedure similar to above. In reply, please be informed that the finished food products produced from the above processes are no longer in its original state as contemplated in Section 103(b) of Tax Code. In other words, dried fruits like mangoes, papayas and others which are packed in bulk plastic bags and sold to blenders for incorporation in soup mixes are no longer in their original state; hence, the producers thereof shall be subject to 10% VAT pursuant to Section 100(a) of the Tax Code, as amended. Very truly yours, JOSE U. ONG Commissioner of Internal Revenue