VAT Ruling No. 012-93

April 26, 1993 VAT RULING NO. 012-93 100 (a) 006-91 012-93 St. Paul College of Manila 680 Pedro Gil, Malate 2801 P.O. Box 2061, Manila Attention: Sr . Natividad Feraren, SPC President M a d a m : This refers to your letter dated August 31, 1992 stating that you are a non-stock, non-profit educational institution undertaking its physical plant development; that you want to improve on your Learning Resource Center which hopefully will house the different facilities that will supplement formal classroom teaching, i.e., library, media center, laboratories, etc; and that in your effort to upgrade your facilities, you are confronted by the limited funds you have on hand. It is for this reason that you are applying for an exemption from the value-added tax (VAT) on your purchases of construction materials, i.e., steel, wood, cement, glass for windows, GI sheets, paints, tiles, plumbing and electrical materials, etc. In reply, we regret to inform you that your request cannot be granted for lack of legal basis. 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 privilege; thus, it can be shifted to such institution and forms part of the cost of the goods sold. Such being the case, you can not claim exemption from VAT on your purchase of construction materials which may be passed on to you by your suppliers. LLjur Very truly yours, VICTOR A. DEOFERIO, JR. Deputy Commissioner (Officer-in-Charge)