VAT Ruling No. 017-91

March 19, 1991 VAT RULING NO. 017-91 National Trucking and Forwarding Corporation Lubiran St., Bacood Sta. Mesa, Manila Attention: Ms . Felradita U . Albinto OIC, Corporate Controller S i r s : In connection with your application for zero rated VAT (filed last July 13, 1989), please be informed that your application is disapproved for the following reasons: (1) With the withdrawal of the tax exemption privileges enjoyed by private and government-owned corporations by virtue of E.O. 93 the transactions undertaken by Catholic Relief Services are not exempt from VAT. (2) Effective zero-rating is extended only to the main contractor (i.e., Hyundai Engineering and Construction Co.), for the ADB Headquarters Building project; hence, services rendered to the main contractor as well as to its subcontractor (i.e., Samwhan Corporation) cannot qualify for zero-rating, pursuant to E.O. No. 161 and Sec. 8(b) (2) (ii) of Revenue Regulations No. 5-87. (3) There is no provision in the Tax Code that allows exporter's purchase of forwarding service to be zero-rated, although his export sales can either be exempt or zero-rated. On the basis of the above cited reasons, your sale of services to the organizations and business firms mentioned in your application is subject to 10% VAT pursuant to Section 102(a) of the Tax Code, as amended. cdpr Very truly yours, JOSE U. ONG Commissioner of Internal Revenue