REVENUE MEMORANDUM CIRCULAR NO. 55-2014 issued on June 27, 2014 clarifies the livestock and poultry feeds or ingredients used in the manufacture of finished feeds to be exempt from Value-Added Tax (VAT) under Section 4.109-1(B)(1)(b) of Revenue Regulations No. 16-2005.

     The provision under the said Section exempts from VAT the sale or importation of livestock and poultry feeds or ingredients used in the manufacture of finished feeds. It has been noted, however, that some ingredients of finished feeds may also be used for the production of food for human consumption.

      To give effect to the legislative intent that only livestock and poultry feeds or ingredients used in the manufacture of finished feeds are exempted from VAT, it is clarified that the sale or importation of ingredients which may also be used for the production of food for human consumption shall be subject to VAT. Thus, for the sale or importation of livestock and poultry feeds or ingredients used in the manufacture of finished feeds to be exempt from VAT, there must be a showing that the same is unfit for human consumption or that the ingredient cannot be used for the production of food for human consumption as certified by the Food and Drug Administration.