VAT Ruling No. 005-92

January 16, 1992 VAT RULING NO. 005-92 NIRC Sec. 103 (u) 102 (a) Precedent Ruling 055-91 The Honorable Jesus Estanislao Secretary of Finance Department of Finance Manila Attention: Antonio P. Belicena Assistant Secretary Revenue Operations Group Department of Finance Dear Mr. Secretary : This refers to the letter of Oriental Petroleum and Mineral Corporation dated March 5, 1991, addressed to your Office and endorsed to us seeking opinion on whether or not it is subject to the payment of Value-Added Tax. As represented in its letter, Oriental Petroleum and Mineral Corporation, is a service contractor engaged in petroleum operations, which covers searching for and obtaining petroleum within the Philippines, and all other operations incidental thereto and as such it is exempted from the payment of all taxes, except income tax pursuant to P.D. 87. In reply, please be informed that Oriental Petroleum and Mineral Corporation is exempt from VAT under the provisions of Section 103(u) of the Tax Code, there being a special law (P.D. No. 87) exempting it therefrom. Such exemption does not, however, extend to the sellers of services to Oriental Petroleum. The exemption under P.D. 87 refers only to direct tax liabilities and does not embrace taxes which are tax liabilities of the sellers of goods and services, but passed on to Oriental Petroleum as component part of their selling price. ADHCSE Very truly yours, (SGD.) JOSE U. ONG Commissioner of Internal Revenue