Exemption of the Sales to the New Armed Forces of the Philippines Commissary and Exchange Services from VAT

May 5, 1988 BIR RULING NO. 195-88 103 (u) 000-00 195-88 Gentlemen : This refers to your letter dated March 2, 1988 requesting confirmation of your opinion that sales to the New Armed Forces of the Philippines Commissary and Exchange Services are exempt from the value-added tax under Section 103(u) of the National Internal Revenue Code, as amended, in relation to Executive Order No. 76 which restored the duty and tax exemption privilege of the NAFP Commissary and Exchange Services. In reply, please be informed that your opinion is confirmed in view of Section 1 of Revenue Regulations No. 3-87 implementing Section 1(f) of Executive Order No. 76 which provides: "Sec. 1. The AFPCES and the INPSSS shall be the only agencies or units of the Armed Forces of the Philippines and the Integrated National Police of the Philippines who are authorized to purchase tax-free articles or commodities from local manufacturers, producers, suppliers or importers for sale to persons entitled to commissary or PX privileges ." (Emphasis supplied) Accordingly, sales to the New Armed Forces of the Philippines Commissary and Exchange Services are exempt from the 10% value-added tax pursuant to Section 103(u) of the Tax Code, as amended by Executive Order No. 273. cdtech Very truly yours, (SGD.) BIENVENIDO A. TAN, JR. Commissioner