November 28, 2006
VAT RULING NO. 014-06
Sec. 109 (1) (A) BIR Ruling 170-91
Cassava Planters And Millers Association
of the Philippines, Inc.
3/F Penthouse Ermita Center Bldg.
Roxas Blvd., Ermita, Manila
Attention: Atty. Rassendell Rex F. Gingoyon
Legal Counsel
Gentlemen :
Reference is made to your letter dated September 12, 2005 requesting, in effect, for a confirmation of your opinion that the sale of cassava starch is exempt from the 10% (now 12%) value-added tax (VAT) pursuant to Section 109(1)(A) of the National Internal Revenue Code (Tax Code) of 1997, as amended.
It is represented that the Cassava Planters and Millers Association of the Philippines, Inc. is composed of domestic corporations and farmers cooperatives engaged in the processing of cassava starch; that in preparing cassava starch, the following simple steps are followed: washing and peeling, grating of cassava tubers, starch milk extractions through cone screens, centrifugation in separators to increase starch density, dewatering and drying; that although cassava starch undergoes some manual and mechanical process in its production, the same does not alter its original state inasmuch as no chemical substances are added...
