Whether the Input tax Credits Generated in the Purchases and Exportation of Silver by the Mint and Refinery Operations Department can be Deducted against VAT Liability

February 13, 1995 BIR RULING NO. 021-95 107-00 000-00 021-95 Bangko Sentral ng Pilipinas Manila, Philippines Attention: Mr . Nestor B . Salenio Director, Mint and Refinery Operations Department Gentlemen : This refers to your letter dated July 19, 1994 stating that Bangko Sentral ng Pilipinas Mint and Refinery Operations Department (formerly Mint and Gold Refinery Department) has filed an application for tax credit certificate for its unused input tax credits amounting to P43,797,805.25 generated from its purchases and exportation of silver from December 1, 1988 to May 31, 1993. The records also disclosed that the Bangko Sentral ng Pilipinas (BSP) under its former name Central Bank of the Philippines was registered as a VAT taxpayer (Reg. No. 30A-3-005568) as on January 1, 1988 particularly, its mint and gold refinery operations. On the other hand, another department of BSP, the Banknote Security Printing Department (BSPD) has been paying and remitting VAT payments to the Bureau of Internal Revenue. prcd Based on the foregoing premises, you now request for a confirmation of your opinion that you can deduct the input tax credits generated in the purchases and exportation of silver by the Mint and Refinery Operations Department against the VAT liability of the BSPD. In reply, please be informed that under Section 107 of the Tax Code, as amended by Republic Act No. 7716, any person subject to Value-Added Tax under Sections 100 and 102 of the Tax Code is required to register with the appropriate Revenue District Office which has jurisdiction over its main or branch office. The registration of the Central Bank of the Philippines as a VAT taxpayer suffices as the VAT registration of the BSP covering all its transactions subject to VAT. The VAT taxable activities of the Mint and Gold Refinery Department and the Banknote Security Printing Department are necessarily covered by the single registration of the Central Bank as an institution. Consequently, the input tax credit generated by one VAT taxable department shall be available as input tax credit of another VAT taxable department of BSP. llcd Accordingly, instead of claiming a refund or tax credit certificate in behalf of its Mint and Refinery Operations Department, BSP might as well apply the input tax credits of said department against the output tax liability of BSPD. Very truly yours, LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue