BIR Ruling [UN-103-94]

March 28, 1994 BIR RULING [UN-103-94] National Housing Authority Quezon Memorial Elliptical Road Diliman, Quezon City Attention: Mr . Robert P . Balao General Manager Gentlemen : This refers to your letter dated 29, November 1993, in effect, requesting for exemption from the payment of Value added tax of the project contractors which constructed the socialized housing units in several resettlement sites of the Mount Pinatubo Commission (MFC) located at: cdtech 1. Barangay Pulong Cacutud, Angeles City; 2. Barangay Camachiles, Mabalacat, Pampanga; 3. Barangay Pandacaqui, Mexico, Pampanga; 4. Barangay Palmayo, BASA Air Base, Floridablanca, Pampanga; and 5. Barangay Pio, Porac, Pampanga in favor of the: 1. Angeles Neighborhood Homeowners Association; 2. Mabalacat Homeowners Association; 3. Pandacaqui Homeowners Association; 4. Floridablanca Homeowners Association; and 5. Porac Homeowners Association. Records disclosed that the above-mentioned associations are duly registered with the Home Insurance and Guaranty Corporation; that the housing units have been completed, turned over and accepted by the beneficiaries; that the actual occupants of the sites mentioned are qualified beneficiaries as defined by law that approximately 15% of the sites are still unoccupied; and that the cost of each housing units are uniformity priced at P49,699.76; and therefore BIR Revenue Enforcement Officer II Rogelio D. Sagun of BIR Revenue District No. 21 in San Fernando, Pampanga who conducted the field verifications strongly recommended that the VAT exemption request be granted and enclosed in the report are the documents submitted by each of the several resettlement areas, viz: 1) HIEC Registration of Homeowners Association; 2) List of Beneficiaries; 3) Color Coded Subdivision Plan indicating the location of the housing units and the unoccupied portion of the resettlement area: 4) Agency Estimates/Bid Estimates; 5) Housing Unit Plans; and 6) Certification from the Mt. Pinatubo Commission that the beneficiary occupants of the aforementioned resettlement sites were victims of the Mt. Pinatubo eruption in 1991 and have been rendered homeless and under privileged and that the NHA through its contractors have actually completed the core housing units which the beneficiaries presently occupy. In reply, please be informed that pursuant to Section 20 of R. A. No. 7279, pertinent portion of which reads: "SEC. 20. Incentives for Private Sector Participating in Socialized Housing To encourage greater private sector participation in socialized housing and further reduce the cost of housing units for the benefit of the underprivileged and homeless, the following incentives shall be extended to the private sector. xxx xxx xxx (d) Exemption from the payment of the following: xxx xxx xxx (3) Value-added tax for the project contractor concerned; xxx xxx xxx However, purchases or goods/articles by the project contractor shall be subject to value-added tax, even if the said purchases are to be used for the socialized housing project. This ruling is being issued on the basis of the foregoing facts as represented. However, if upon investigation, it will disclosed that the facts are different, and/or any of the requirements imposed in this letter are not complied with, then this ruling shall be considered null and void. (BIR Ruling No. 393-93 dated October 1, 1993) aisadc Very truly yours, ALICIA P. CLEMENO Officer-in Charge Legal Service