Question & AnswerQ&A (SRA Sugar Order No. 2-16)
The main purpose is to establish the procedure for the withdrawal of raw cane sugar from mill warehouses pursuant to BIR Revenue Regulations No. 8-2015, specifically concerning the exemption of certain raw cane sugar from VAT or Percentage Tax.
Raw cane sugar must have a color that is greater than 800 ICU and a sucrose content by weight in the dry state corresponding to a polarimeter reading of less than 99.5A to qualify for exemption.
Both the sugar mills and the Sugar Regulatory Administration (SRA) conduct laboratory analyses on composite samples to verify if the raw cane sugar meets the qualifications for exemption.
If the sugar meets the criteria, the mills should print or stamp "Raw Cane Sugar" on the quedans for the sugar production of that weekending, indicating VAT or Percentage Tax exemption upon withdrawal.
If SRA's analysis shows the sugar does not conform to the definition of raw cane sugar, the sugar production for that weekending shall be subject to VAT on post-audit by the BIR.
Executive Order No. 18 grants the SRA the authority to promulgate rules and procedures on the withdrawal of sugar from warehouses.
The SRA must send original copies of its analysis results to the Assistant Commissioner for Large Taxpayers Service, BIR National Headquarters; the BIR Revenue District or Regional Office with jurisdiction over the mill; the BIR Office where the mill is registered; and the Resident Manager of the concerned mill.
Sugar mills must take composite samples every weekending, send part to SRA for analysis, and conduct their own laboratory analysis on the remaining samples as provided in SRA Memorandum Circular Nos. 6 and 6a.
Mills must provide SRA with the original copies of their analysis results and samples of the sugar they submit for SRA's analysis.
Such sugar does not meet the definition of raw cane sugar and is subject to VAT or Percentage Tax before withdrawal from the mill warehouses.