VAT Ruling No. 033-97

April 1, 1997 VAT RULING NO. 033-97 Sec. 99; 000; 033-97 University of Bohol College of Commerce, Accountancy & Secretarial Tagbilaran City Attention: Mr . Cesario O . Edulana Gentlemen : This refers to your letter dated February 29, 1996 stating that a taxpayer is a gasoline operator with servicing (including change oil and greasing); that she is a VAT registered operator; and that in a certain occasion she was able to sell the used engine oil (waste oil or the drained oil as a result of changed oil) to a certain buyer. Your question is whether or not the sale of used engine oil is still subject to VAT. In reply, please be informed that Section 99 of the National Internal Revenue Code, as amended states that the phrase "in the course of trade or business" means the regular conduct or pursuit of commercial or economic activity, including transactions incidental thereto. Unlike virgin oil sold to motorists for motive power, the sale of waste or used engine oil is not exempt from VAT under Section 103 of the Tax Code, as amended. Such being the case, sales of waste or used oil shall be included in the taxable sales of gas station operator. Very truly yours, LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue