VAT Ruling No. 007-92

January 20, 1992 VAT RULING NO. 007-92 Secs. 115, 102 (a); 041-90 Gullas Malilong & Gawchua Law Offices Ground Floor, Avon Plaza 80 Osmea Boulevard, Cebu City Attention: F.M. Malilong, Jr. Sirs : This refers to your letter dated May 15 and October 24, 1990 requesting clarification whether your client, ANSECA Enterprises is subject to common carrier's tax or value-added tax. It is represented that your client is one of the haulers of Atlas Consolidated Mining and Development Corporation; and as such, it is engaged in the following activities, to wit: ITESAc 1. Hauling various cargoes dumptrucks are loaded with fertilizers, sand and gravel and other items which are transferred or delivered to certain destinations; that charges for this kind of services are on a per metric ton per kilometer basis; and that in some cases, these dumptrucks are also being rented on a per operated hour basis. 2. Heavy equipments such as payloaders and bulldozers; these are rented on a per operated hour basis doing construction mining operation and other related activities. In reply, please be informed that based on the foregoing facts, your client's business activity of hauling various cargoes fall under category of a transportation contractor. (BIR Ruling No. 033-84) Accordingly, it is subject to the 3% common carrier's tax based on its quarterly gross receipts pursuant to Section 115 of the Tax Code, as amended. However, leasing of heavy equipments such as payloaders and dumptrucks, in some cases, partakes the nature of leasing of personal property subject to the 10% VAT under Sec. 102 (a) of the same Code, if its gross sales or receipts exceed P200,000.00 in any 12-month period. (Section 107 of the Tax Code) Since your client is engaged in two (2) lines of services, i.e., the VAT taxable and exempt transaction, (hauling subject to 3% percentage tax), it is required to issue two types of receipts/invoices. Where a non-VAT registered person is also engaged in VAT taxable sales, it is mandatory that it shall issue a non-VAT invoice/receipt for the VAT-exempt transaction and a VAT invoice/receipt for the VAT taxable transaction. (Section 21 of Revenue Regulations No. 5-87) Please be guided accordingly. Very truly yours, (SGD.) JOSE U. ONG Commissioner