VAT Ruling No. 014-93

April 26, 1993 VAT RULING NO. 014-93 Section 2-88-000-00-014-93 International Garment Manufacturing Corporation 7th Floor, Solid Mills Bldg. Delarosa Street, Legaspi Village Makati, Metro Manila Attention: Ms . Fe Esperanza O . Yanga Export Manager S i r s : This refers to your letter dated February 25, 1992 stating that your company, International Garment Manufacturing Corporation (IGMC), was registered with the Board of Investments on January 22, 1974 and since then has undertaken one expansion. From 1987 to 1990, you have consistently maintained an export to domestic sales ratio of at least 85%; that it was only in 1991 that you did not achieve the average export ratio to domestic sales, plus 70% export performance record prescribed under Section 2 of Revenue Regulations No. 2-88 because of the freezing of your quota allocation and the embargo, by the U.S. government of garment exports to the U.S.A.; that as certified by the BOI, the said freeze of quota allocation and U.S. embargo is beyond your control and for this reason, the BOI, in its letters dated June 23 and July 17, 1992, requested this Office to approve the applications made by your various suppliers of materials for zero-rating, pursuant to Section 2 of Revenue Regulations No. 2-88, notwithstanding that, during the year 1991, you did not achieve the aforesaid plus 70% export performance rule, on your export sales of garments for the period April 1991 to March 1992. Based on the foregoing, you now request for a ruling exempting your company from the application of the rule of 70% export performance for VAT zero-rating purposes. In reply, please be informed that in view of the aforesaid BOI recommendation, your said request for the zero-rating of your various suppliers of materials used in the manufacture of garments exported during the period covered April 1991 to March 1992, is hereby granted, pursuant to Section 2 of Revenue Regulations No. 2-88, it appearing that your failure to achieve the said export performance/record during the year 1991 was due to factors which were beyond your control. This ruling authorizes the VAT Division to process and approve your suppliers' application for VAT zero-rating of your purchases of raw materials used in the manufacture of garments exported during the period April 1991 to March 1992, in accordance with Section 2 of Revenue Regulations No. 2-93, notwithstanding that, during the year 1991, you did not achieve the aforementioned plus 70% export performance record. Very truly yours, VICTOR A. DEOFERIO, JR. Deputy Commissioner (Officer-in-Charge)