VAT Ruling No. 036-88

March 1, 1988 VAT RULING NO. 036-88 102 (a)/104-000-00-036-88 Mr. Fernando Punzalan Accountant Newtronix International Corp. Room 309, Doa Amparo Bldg. U.N. Ave., Ermita, Manila Dear Sir : This refers to your letter dated January 11, 1988 requesting reply to your queries to wit: (a) Whether or not the company which is VAT registered, can charge tax-exempt customer the 10% VAT. (b) If the company can ask for refund of the input tax paid on purchases of materials. aisadc You have represented that as a VAT taxpayer and a repair service contractor, you buy local and imported materials parts used in the service contract and charge acquisition cost plus profit margin. You sell materials to the same customers who avail themselves of your services. And one of the customers is a multinational semi-conductor company that is tax exempt because it exports 100% of its manufactured items. In reply, please be informed that regardless of whether the multinational semi-conductor company is tax-exempt or qualified for zero-rate, you can charge the 10% VAT. Its exemption from VAT is only limited to the tax for which it is directly liable. Since you are VAT-registered, you are allowed to use the input taxes charged by your suppliers of materials on the output taxes that you pay quarterly. Very truly yours, VICTOR A. DEOFERIO, JR. Deputy Commissioner