VAT Ruling No. 006-91

January 29, 1991 VAT RULING NO. 006-91 Datagraphics, Inc. Orense corner del Carmen St., Guadalupe, Makati Metro Manila Attention: Mr . Antonio M . Inocentes Vice President - Finance S i r s : This refers to your letter dated September 25, 1990 requesting confirmation whether your sale to the Columbian Sisters is exempt from the Value-Added Tax. As verbally represented, the Columbian Sisters purchased a xerox copier from Datagraphics and pertinent to said transaction, the former is claiming VAT exemption on the basis of Section 4 paragraph 3 of Article XIV of the 1987 Constitution, as implemented by Finance Department Order No. 137-87, which provides for exemption from taxes and duties of all revenues and assets of non-stock, non-profit educational institutions earned from and used actually, directly and exclusively for educational purposes. In reply, please be informed that the exemption privilege granted to non-stock, non-profit educational institutions is limited only to the taxes for which they are directly liable. Since VAT is an indirect tax, it is not covered by the privileges; thus it can be shifted to such institutions and forms part of the cost of goods acquired. Such being the case, the Columbian Sisters, has to shoulder the VAT passed on to it by its supplier/s. This finds support in VAT Ruling No. 016-89. cdta Very truly yours, JOSE U. ONG Commissioner of Internal Revenue