VAT Ruling No. 030-91

May 29, 1991 VAT RULING NO. 030-91 Ms. Angelita A. Alegre 9848 Legaspi Street Makati, Metro Manila M a d a m : This refers to your letter dated May 15, 1989 stating that your client is a textile manufacturer/exporter registered with the BOI; and that one of the incentives enjoyed by your client is the right to claim and ultimately received a Tax Credit Certificate (TCC) from the BOI for import taxes and duties paid on the raw materials used in the finished product exported. cdt Based on the foregoing, you now ask the following questions: "1. Can we claim as input tax ,the import tax on the raw materials we import regardless of whether the tax was being paid by cash or by TCC? "2. Is there any effect on our input tax the TCC for import tax we received ? Or this TCC from BOI has nothing to do with our input tax and we can still claim the import tax as credited input tax in filing of BIR form Number 2550? "3. Can you advise us on the proper treatment of TCC on our books of accounts as soon as we received it?" In reply, please be informed as follows: 1. It is only the VAT, and not any other kind of import duties and charges paid on imported raw materials that can be claimed as input tax credit (Sec. 10, Rev. Reg. No. 5-87) against output tax liabilities. 2. Any Tax Credit Certificate received covering the VAT paid on imported materials, whether issued by the BIR, BOI, or Bureau of Customs, shall reduce your client's available input tax credit pursuant to Section 11, Revenue Regulations No. 5-87. 3. The TCC issued by BOI does not form part of the taxable gross income of the grantee pursuant to Section 21 of Executive Order No. 226. Upon receipt thereof and pursuant to Revenue Regulations No. 9-89, the book entries shall be: TCC ... Input tax ... cdtech Very truly yours, JOSE U. ONG Commissioner of Internal Revenue