VAT Ruling No. 011-97

February 10, 1997 VAT RULING NO. 011-97 Sec. 102 (a); 1-96; 011-97 IMR Construction Barangay Bato Naguilian, La Union 2511 Attention: Mr . Isagani M . Rimando General Manager Gentlemen : This refers to your letter dated September 18, 1996 requesting for exemption from the payment of value added tax as a contractor of a socialized housing project which is being jointly undertaken by the National Housing Authority ("NHA") and IMR Construction ("IMR") at the Sagayad Resettlement Project located at Sagayad, San Fernando, La Union. In support of your request, you submitted to this Office your land development contract with NHA. LexLib In reply, please be informed that pursuant to Section 20 of Republic Act No. 7279, pertinent portion of which reads: "SEC. 20. Incentives for Private Sector Participating in Socialized Housing . To further encourage greater 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;" the private contractor engaged by NHA to undertake land development and construction in the Sagayad Resettlement Project, Sagayad, San Fernando, La Union is exempt from the payment of the value added tax imposed under Section 102 (a) of the Tax Code as amended. However, purchases of goods/articles by the project contractor shall be subject to the value added tax, even if said purchases are to be used for the socialized housing project. Accordingly, your request for exemption from the value added tax for the land development and construction of socialized housing units at the Sagayad Resettlement Project, Sagayad, San Fernando, La Union is hereby granted; provided, however, that the purchases of goods/articles by your contractor shall be subject to the value added tax, even if said purchases are to be used for the said 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. Very truly yours, ALICIA L. TOMACRUZ Head Revenue Executive Assistant Chairman, VAT Review Committee