VAT Ruling No. 017-97

March 5, 1997 VAT RULING NO. 017-97 102 (a); 01-96; 17-97 National Housing Authority Quezon Memorial Elliptical Road Diliman, Quezon City Attention: Ms . Virginia R . Domingo Department Manager Northern Luzon/Central Luzon M a d a m : This refers to your letter dated February 24, 1996 requesting for exemption from the payment of value added tax with respect to the contractor of the socialized housing project intended for the victims of the Mt. Pinatubo eruptions which is being jointly undertaken by the National Housing Authority ("NHA") and First United Constructors Corporation ("FUCC") at the Pandacaqui Resettlement Project, Phase-III-C, Arayat, Pampanga. In support of your request, you submitted to this Office your land development contract with FUCC. In reply, please be informed that pursuant to Section 20 of Republic Act No. 7279, pertinent portion of which reads: "SEC. 20. In centives 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 Pandacaqui Resettlement Project, Phase-III-C, Arayat, Pampanga 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 Pandacaqui Resettlement Project, Phase-III-C, Arayat, Pampanga 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 (VAT Ruling 1-96 dated may 9, 1996). This ruling is being issued on the basis of the foregoing facts as represented. However, if upon investigation, it will disclosed that the facts are different, then this ruling shall be considered null and void. casia Very truly yours, ALICIA L. TOMACRUZ Head Revenue Executive Assistant Chairman, VAT Review Committee