BIR Regulation on Raw Cane Sugar VAT Advance

Raw Cane Sugar: Naturally extracted sugar from sugarcane through mechanical pressing, boiling, filtering by centrifuge, drying, resulting in crystallized brown sugar with color > 800 ICU and sucrose < 99.5A by polarimeter.
- Includes muscovado with specified polarization standards.
- Exempt from VAT or Percentage Tax if meeting these criteria.
- Sugar Regulatory Authority (SRA) collects biweekly quality samples and submits results to BIR monthly.
Sugar: Sugar other than Raw Cane Sugar, typically refined sugar with sucrose ≥ 99.5A or color ≤ 800 ICU.
- Presumed refined if produced by refining process, sugar refinery, or accredited sugar mill production line.
Sugar Refinery/Mill: Entity engaged in milling sugarcane into raw or refining raw sugar.
Sugar Owners: Persons with legal title to sugar including planters, traders, millers, cooperatives, and associations.

Business tax (VAT or Percentage Tax) on sugar sales must be paid in advance by sellers before issuance of warehouse receipts (quedans) or sugar withdrawal.
Persons exempt from VAT but not VAT-registered pay 3% advance percentage tax on gross monthly sales.

VAT amount based on 12% of base price P1,400 per 50 kg bag of sugar.
Commissioner may adjust the base price as market conditions change.
Advance Percentage Tax is 3% of gross sales for certain taxpayers; cooperatives exempt from this tax.

Sale or withdrawal of Raw Cane Sugar including muscovado is VAT exempt per Sec. 109(1)(A) of NIRC.
Withdrawals by accredited and registered agricultural cooperatives for sale to members are exempt from VAT and Percentage Tax.
- Sales to non-members subject to tax if cooperative is not the producer.
- Evidence showing joint ownership with another entity disqualifies cooperative exemption.
Sales between accredited agricultural cooperatives are VAT exempt and not subject to advance Percentage Tax.
- Non-producer cooperative sales to others are taxable.

Sugar refineries or mills must require proof of advance tax payment or exemption before issuing warehouse receipts or allowing withdrawals.
Proof of payment or exemption must be submitted by withdrawers.

Advance VAT paid is creditable against output tax based on actual gross selling price.
Certificate of Advance Payment and payment form copy must be filed with tax returns to claim credit.

Unused advance tax payments at the end of the taxable year may be claimed as Tax Credit Certificates (TCC) within two years.
Unutilized advance tax cannot be carried over to succeeding periods.
TCC issuance is limited to unutilized advance tax, excluding excess input tax.
TCC for input tax on zero-rated sales requires separate application.

Violations subject to penalties under Sections 254 and 275 and other relevant provisions of the Tax Code.

Any inconsistent rules or regulations are repealed, amended, or modified accordingly.

BIR to issue Revenue Memorandum Circular containing procedural details and required forms.

Regulations take effect immediately upon publication in a newspaper of general circulation.