VAT Ruling No. 026-93

April 30, 1993 VAT RULING NO. 026-93 Section 100 (a)-000-00-026-93 Garcia, Lugue, Vidal & Co. Ninth Floor, Strata 100 Bldg., Emerald Avenue Pasig, Metro Manila Attention: Mr . Adelino T . Lugue Managing Partner Gentlemen : This has reference to your letter dated December 1, 1992 in behalf of your client, MAPECON GREEN CHARCOAL PHILS., INC. a corporation engaged in the manufacture and export of activated carbon. It is represented that your client, in effect, authorizes Phinma, as its agent, to negotiate for prospective foreign buyers of your activated carbon; that since the prospective foreign buyer is also a client of Phinma, it will open a letter of credit (L/C) in favor of Phinma who will, in turn, open a domestic letter of credit for you, or give you an advance payment of certain percentage of the purchase order with specification of the quantity to be shipped to the foreign buyer; and that you will then pack and ship the activated carbon to the said foreign buyer. Based on the foregoing, you now request for a ruling whether or not your client would be subject to value-added tax. In reply, please be informed that based on the foregoing facts, your client is considered the domestic seller to Phinma. Accordingly, your client's sale to Phinma is subject to VAT, while the latter's export sale shall be zero-rated: provided, Phinma will show proof of actual exportation and inward remittance of foreign currency. cdtech Very truly yours, VICTOR A. DEOFERIO, JR. Deputy Commissioner (Officer-in-charge)