Question & AnswerQ&A (BIR REVENUE MEMORANDUM CIRCULAR NO. 43-92)
The memorandum reiterates that meat and bone meal are subject to Value-Added Tax (VAT) and are not VAT-exempt ingredients of animal feeds.
Section 103(c) of the Philippine Tax Code is the relevant provision mentioned regarding VAT-exemption of animal feed ingredients.
The ingredients mentioned as VAT-exempt under Section 103(c) include fertilizers, pesticides, herbicides, chemicals for formulating pesticides, seeds, seedlings, fingerlings, fish, animal and poultry feeds, soya beans, and fish meals.
No, meat and bone meals are not considered VAT-exempt ingredients. The memorandum clarifies that only fish meal and soya beans are VAT-exempt.
The memorandum upheld VAT Ruling Nos. 021-90 dated January 20, 1990, and 244-90 dated December 28, 1990, which limit VAT exemption only to fish meal and soya beans.
He invoked the principle 'dura lex sed lex' meaning 'the law is harsh, but it is the law,' emphasizing that clear law needs no interpretation.
The case establishes the principle that when the law is clear, no additional interpretation is needed, supporting the memorandum's strict reading of VAT exemption provisions.
Jose U. Ong signed and adopted the memorandum as Commissioner of Internal Revenue on July 28, 1992.
All concerned are enjoined to give the memorandum wide publicity to ensure awareness and compliance.
Because the law specifically exempts soya beans and fish meals, but does not include meat and bone meals, showing a legislative intent to exclude the latter from VAT exemption.