VAT Ruling No. 002-98

January 15, 1998 VAT RULING NO. 002-98 Section 103-000-002-98 Most Holy Redeemer Parish Multipurpose Coop. Brixton Hill, Araneta Avenue Quezon City Attention: Mr . Edilberto Lagrimas General Manager Gentlemen : This refers to your letter dated April 10, 1997 requesting exemption of your cooperative's gross receipts from lending activities to its members and gross sales of its store and drugstore from value-added tax pursuant to Section 103 of the NIRC, as amended by R.A. No. 8241. LexLib It is represented that the Most Holy Redeemer Parish Multipurpose Cooperative is a multipurpose cooperative duly registered with the Cooperative Development Authority (CDA) per CDA Certificate of Registration No. MLA-1692 dated October 18, 1991; that it was issued Income Tax Exemption Certificate No. ECCP-015-93 dated January 28, 1993; and that as per notarized Certification dated August 12, 1997 the share capital contribution of each member does not exceed Fifteen Thousand Pesos (Php 15,000.00) and that the Cooperative does not transact with non-members. In reply, please be informed that in accordance with Section 103 of the National Internal Revenue Code (NIRC), as amended by Republic Act No. 8241, pertinent portions of which provides: "SEC. 103. Exempt Transactions . The following shall be exempt from the value-added tax: xxx xxx xxx (t) Gross receipts from lending activities by credit or multipurpose cooperatives duly registered with the Cooperative Development Authority whose lending operation is limited to their members; cdll (u) Sale by non-agricultural, non-electric and non-credit cooperatives duly registered with the Cooperative Development Authority: Provided, That the share capital contribution of each member does not exceed Fifteen Thousand Pesos (P15,000.00) and regardless of the aggregate capital and net surplus ratably distributed among the members." the gross receipts from the lending activities to the members of a multipurpose cooperative and the gross sales from its store wherein the capital contribution of each member does not exceed Fifteen Thousand Pesos (P15,000.00) regardless of the aggregate capital is a transaction exempt from the value-added tax. In view of the foregoing, the Most Holy Redeemer Parish Multi-Purpose Cooperative, being a duly registered multipurpose cooperative wherein lending activities are restricted to its members and the capital contribution does not exceed Fifteen Thousand Pesos (P15,000.00) per member, is hereby confirmed as exempt from the value-added tax with respect to its gross sales and receipts derived from the abovementioned activities. 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. Very truly yours, SIXTO S. ESQUIVIAS IV Deputy Commissioner Legal & Enforcement Group