VAT Ruling No. 071-92

May 28, 1992 VAT RULING NO. 071-92 NIRC Sec. 103 (c) & (v) Precedent Ruling 197-90 Monsanto Philippines, Inc. Room 11-A APMC Bldg. 136 Amorsolo Street Legaspi Village, Makati Metro Manila Attention: Mr. Thelmo L. Du Finance Manager S i r : This has reference to your letter dated April 11, 1991 stating that your company is currently importing Butachlor Technical, an agri-chemical material under the category of herbicide; and that herbicide is exempt from the value-added tax (VAT) under Section 103(c) of the Tax Code, as amended, provided the Fertilizer Pesticide Authority (FPA) will certify that the same will be used for agricultural purposes (VAT Ruling No. 197-90, dated September 12, 1990). Based on the foregoing, you now request for a ruling whether the importation of the same material is also exempt from VAT if the resulting finished products are exported. In reply, please be informed as follows: 1. The importation of Butachlor Technical, an agri-chemical material under the category of herbicide is exempt from VAT, pursuant to Section 103(c) of the Tax Code, as amended, regardless of whether it is to be used in the manufacture of finished exportable products or to be sold as is. Products exported by VAT-registered enterprises are subject to 0% VAT in accordance with Section 100(a)(1) of the same Code and all input taxes attributable to said export sales can be refunded or credited. However, exports made by non-VAT enterprises are exempt from VAT pursuant to Section 103(v) of the same Code. 2. With reference to importation and/or sale of chemicals to be used in the formulation of pesticides, please refer to Revenue Memorandum Order No. 30-91 dated August 12, 1991 which prescribes the conditions/requirements for exemption from VAT on said transactions. Very truly yours, (SGD.) JOSE U. ONG Commissioner of Internal Revenue