BIR Ruling [DA-349-98]

July 28, 1998 BIR RULING [DA-349-98] Mitsumi Philippines Inc. 4th Flr., Port Royal Place Bldg. 118 Rada St., Legaspi Village Makati City Attention: Mr . Hector B . Taleon, Jr . Senior Supervisor Manila Office Gentlemen : This refers to your letter dated July 24, 1997 requesting in effect for a ruling that the sale of raw materials to Cebu Mitsumi, Inc. would qualify as zero-rated sale. cdtech It is represented that Cebu Mitsumi, Inc. exported more than 70% of its total annual production; and that it is included in the 1997 Board of Investments Masterlist of Registered Companies qualified for zero-rating. In reply, please be informed that pursuant to Section 106 (A)(2)(a)(3) of the National Internal Revenue Code of 1997, "sale of raw materials or packaging materials to export-oriented enterprise whose export sales exceed seventy percent (70%) of the total annual production will qualify for effective zero-rating." Such being the case, the sale of raw materials or packaging materials to Cebu Mitsumi shall be effectively zero-rated. It shall be understood that the VAT-registered sellers shall apply with the Revenue District Officer concerned having jurisdiction over their principal place of business for the effective zero-rating of their sales of raw materials or packaging materials to Cebu Mitsumi. Without an approved application for zero-rating, the transactions otherwise entitled to zero-rating shall be considered exempt. (VAT Ruling Nos. 015 dated August 07, 1996; 033 dated October 30, 1996) This ruling is being issued on the 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. cdll Very truly yours, (SGD.) SIXTO S. ESQUIVIAS IV Deputy Commissioner (Legal and Enforcement Group)