VAT Ruling No. 024-88

February 10, 1988 VAT RULING NO. 024-88 103 (u)-000-00-024-88 Philippine Shipyard & Engineering Corporation 2nd Floor, PPL Bldg. U.N. Avenue, Manila Attention: Mr . Manuel C . Salientes, Jr . SVP-Finance and Treasurer Gentlemen : In reply to your letters dated January 13 and February 2, please be informed of the confirmation of the following: cdta 1. PHILSECO remains exempt from the value-added tax under Sec. 103 (u) of the NIRC as amended by E.O. 273. 2. It is not allowed optional registration under Sec. 107 (d) of the NIRC as amended by E.O. 273. In this connection, Philseco's VAT Registration Certificate should be cancelled by submitting a request to the Revenue District Office. 3. Since the corporation cannot be VAT-registered, it is not qualified for the application of zero rate. Moreover, its exemption under EPZA law (P.D. 63 as amended) does not effectively subject to zero-rate its purchases of goods/services from VAT-registered suppliers/contractors since the EPZA law does not expressly provide that suppliers of EPZA are also exempt from tax. 4. The tax credit privilege enjoyed by the corporation under Sec. 18 (i) of the EPZA law does not include value-added tax (in lieu of sales tax) on its purchases of goods and services. cdtech Very truly yours, BIENVENIDO A. TAN, JR. Commissioner of Internal Revenue