VAT Ruling No. 015-96

August 7, 1996 VAT RULING NO. 015-96 100 (a) (2) A-000-015 Way Corporation No. 1-B Sikap St., Plainview Mandaluyong City Attention: Ms . Lynette A . Desphy Accountant Gentlemen : This refers to your letter dated March 15, 1996 requesting for a clarification on the effect of your failure to apply for zero rating on your sale/supply of raw materials to Uniden, which exports eighty-five percent (85%) of its finished products as certified by the Board of Investments (BOI). In reply, please be informed that pursuant to Section 100 (a)(2)(A)(iii) of the Tax Code, as amended by R.A. No. 7716, "sale of raw materials or packaging materials to export-oriented enterprise whose export sales exceed seventy percent (70%) of total annual production will qualify for effective zero-rating. However, to avail of such privilege the VAT registered seller should file an application and secure prior approval for effective zero-rating with the Revenue District Office having jurisdiction over its principal place of business, otherwise the said transaction shall be considered exempt from VAT. aisadc Very truly yours, LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue