VAT Ruling No. 034-92

March 13, 1992 VAT RULING NO. 034-92 NIRC Sec. 100 (a) Precedent Ruling 141-89 Mr. Rudolf Dela Cruz Pilipinas Hino, Inc. EDSA Cor. Madison, Mandaluyong, Metro Manila. S i r : This has reference to your letter dated October 4, 1991 requesting clarification on whether or not Bataan International Garments Inc. (BIGI), an EPZA-registered company, is exempted from the 10% VAT on its purchase of Nissan Cefiro and Suzuki Samurai vehicles from your company, Pilipinas Hino, Inc. In reply, please be informed that Article 77(1) of the Omnibus Investments Code of 1987 (E.O. 226) provides that the sale of merchandise to an EPZA-registered company is considered export sale and is subject to VAT at zero-rate under Section 100(a)(1) of the Tax Code, as amended. The exemption granted under the BOI Law is limit only to sales of raw materials, supplies, spare parts, etc. which are directly or indirectly used in the export activity of zone enterprises; hence your sale of vehicles to BIGI cannot qualify for zero-rating. Such being the case, your sale of vehicles to said entity are subject to 10% VAT pursuant to Section 100(a) of the same Code, notwithstanding that BIGI is a duly registered EPZA enterprise. ITCcAD Very truly yours, (SGD.) JOSE U. ONG Commissioner of Internal Revenue