Betson's Industries, Inc.

March 28, 2008 BIR RULING [DA-204-08] Sections 100 & 101 (a); VAT Ruling No. 087-91 Betson's Industries, Inc. Ground Floor BII Building 28 Karpa St., Mendoza Village Talipapa, Novaliches, Quezon City Attention: Dr. Estelito C. Baguas President Gentlemen : This refers to your letter dated January 16, 2008, requesting a ruling to the effect that BETSON'S INDUSTRIES, INC. be qualified as a VAT zero-rated taxpayer. It is represented that BETSON'S INDUSTRIES, INC. is a domestic company incorporated on March 19, 1984 with the Securities and Exchange Commission (SEC); that your company is engaged in the manufacture of ready-to-wear garments which you totally export abroad for which you derive foreign-currency inward remittances; that while you entirely export all your products, most of your production materials are sourced locally where your suppliers charge you the usual value-added tax; that you are a VAT-registered taxpayer per your Certificate of Registration with this Bureau. In reply, please be informed that since you are a VAT-registered taxpayer and you export 100% of your finished products abroad and which were paid for in acceptable foreign currency and accounted for in accordance with BSP rules, your export sale shall be subject to zero-rate value-added tax pursuant to Section 106 (A) (2) (a) of the Tax Code. However, the VAT that has been passed on by your suppliers of raw materials pursuant to Section 112 of the Tax Code of 1997, may the subject of claim for refund or issuance of TCC. This ruling is being issued on basis of the foregoing facts as represented. However, if upon investigation, it will be disclosed that the facts are different, then this ruling shall be considered null and void. IESDCH Very truly yours, (SGD.) JAMES H. ROLDAN Assistant Commissioner Legal Service