Taxability of Imported Utility Van with an Engine Displacement of 7,300 cc specially Designed for the Use of a Disabled Person

May 30, 1994 BIR RULING NO. 116-94 149-00 000-00 116-94 Atty. Froilan D. Cabaltera 6th Flr.,Producers Bank Bldg. 371 Sen. Gil J. Puyat Ave. Extn. Makati, Metro Manila S i r : This refers to your letter dated April 18, 1994, in behalf of your client, MR. YAO KA PHO, requesting a ruling on the taxability of imported utility van with an engine displacement of 7,300 cc specially designed for the use of a disabled person. It is represented that your client, Mr. Yao Ka Pho, who has been diagnosed to be suffering from multiple strokes, bihemispheris with residual quadriparesis, imported one (1) unit of 1993 Ford cargo van E-350 VIN # IFDJE34M8PH661241 with engine displacement of 7,300 cc, a motor vehicles exclusively designed to enhance the mobility of a wheelchair borne patient; that the importation of aforesaid motor vehicle was duly authorized by the BOC under BIS Authority No. MO134-0007 dated September 7, 1993; and that initial physical inspection of said motor vehicle conducted by Customs and BIR authorities at the port of MICP upon arrival of the same on October 30, 1993 disclosed that subject vehicle is a "utility cargo van" built exclusively for the use of handicapped Mr. Yao Ka Pho. Inspection report of Revenue Officer Julius Clemente dated January 4, 1994 describes said vehicle as a 1993 Ford cargo van E-350 VIN #IFDJE34M8PH661241 with engine displacement of 7,300 cc. In reply, please be informed that since said imported vehicle exceeds the engine displacement limit covered by Department of Finance Order No. 34-93, implementing Executive Order No. 90, and being exceptionally large in size and appearance and designed as a special transport of a disabled person, it cannot be categorized as an automobile, hence, not subject to Ad Valorem Tax under Section 149 of the Tax Code. However, the same is subject to the 10% Value-Added Tax (VAT) under Section 100(a) of the same Code. aisadc Very truly yours, LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue