BIR Ruling [DA-104-99]

February 18, 1999 BIR RULING [DA-104-99] Quezon City Evangelical Church 90 Cordillera Street Quezon City Attention: Mr . Samuel S . Chuason, Sr . Chairman of the Board of Trustees Gentlemen : This refers to your letter dated December 16, 1998 requesting for VAT exemption on your purchase of Mitsubishi L-300 FB Jeepney type. It is represented that the Quezon City Evangelical Church is a non-stock, non-profit religious corporation; that the church members have raised funds to purchase a new service vehicle because the old service vehicle is not safe and suitable for travelling within or outside Metro Manila where you have numerous outreach mission. In reply, please be informed that your request cannot be granted for lack of legal basis. The value-added tax is the direct liability of the suppliers of goods, properties or services made in the course of trade or business. However, VAT is an indirect tax and the amount of tax may be shifted or passed on to the buyer, transferee or lessee of the goods, properties or services. (Sec. 105, 2nd par., Tax Code of 1997) Once shifted, it is no longer a tax but an additional cost which the customer has to pay to obtain the goods. (Philippine Acetylene Co. vs. Commissioner of Internal Revenue, G. R. No. 19707, August 17, 1967) Very truly yours, (SGD.) SIXTO S. ESQUIVIAS IV Deputy Commissioner (Legal & Enforcement Group)