VAT Ruling No. 037-88
VAT Ruling No. 037-88 • Bureau of Internal Revenue (BIR) Issuances • VAT Rulings • Mar 1, 1988
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March 1, 1988 VAT RULING NO. 037-88 108-000-00-037-88 Mr. Armando Cleofe 36 West Ave., Quezon City Dear Mr. Cleofe : This is a reply to your request for an opinion as to whether or not the 10% VAT imposed by Ardex Motor Corporation on your purchase of a used engine assembly is legal or illegal. In reply, please be informed that such transaction is subject to VAT. For a total gross selling price of P15,000 (as evidenced by two separate invoices) the VAT would have been P1,500 (10% x P15,000); but then Ardex Motor Corporation has charged you only P750 (5% x P15,000). This is not only legal but also appropriate since the seller has taken into consideration an initial tax credit that he has to enjoy for his unsold goods as of Dec. 31, 1987. Please be guided accordingly. Very truly yours, BIENVENIDO A. TAN, JR. Commissioner of Internal Revenue
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