BIR Ruling [UN-231-95]

June 26, 1995 BIR RULING [UN-231-95] H.R. Lopez Co., Inc. Unit 504 Tower I Tektite Towers Tektite Rd., Ortigas Center Pasig, Metro Manila Attention: Mr . Horacio A . Gonzalez President Gentlemen : This refers to your letter dated December 2, 1994 relative to your request for exemption from the payment of value added tax as project contractor of the Legaspi Socialized Housing Project. Documents submitted disclosed that you entered into an agreement with the City Government of Legazpi to undertake the construction work of the Socialized Housing Project at Taysan, Legazpi City. 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" the project contractor engaged in the construction of the Socialized Housing Project at Taysan, Legazpi City is exempt from the payment of value added tax pursuant to the aforecited provision. However, purchases of 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 be disclosed that the facts are different, then this ruling shall be considered null and void. (BIR Ruling No. UN-103-94 dated March 28, 1994) Very truly yours, ALICIA P. CLEMENO Assistant Commissioner (Legal Service)