VAT Ruling No. 037-91

May 29, 1991 VAT RULING NO. 037-91 Fernandez, Santos & Lopez 20th/21st Floors, Metrobank Plaza Sen. Gil J. Puyat Avenue Makati, Metro Manila Attention: Mr . W . Z . Palad Gentlemen : This refers to your letter dated January 21, 1991 in behalf of your client Bagumbuhay Industrial Corporation (BIC), No. 14 Duhat (formerly Kasoy) Road, Potrero, Malabon, Metro Manila, requesting confirmation of your opinion that the input taxes paid on the purchase of raw materials and supplies for the production of finished products sold to AFPCES and INPSSS are available for set-off against your client's output tax liability or, at BIC's option, be refunded or credited against other internal revenue taxes. prll Record shows that your client has an approved application for zero-rating filed on November 2, 1989 but effective as of January 1, 1988, with a note that the zero-rated sales must be indicated in the invoice receipt. In reply, please be informed that the tax exemption privileges of AFPCES and PC/INPSSS granted under the terms and conditions of Executive Order No. 76 which were withdrawn by Executive Order No. 76 which were withdrawn by Executive Order No. 93 and temporarily restored pursuant to the Fiscal Incentives Review Board (FIRB) Resolution No. 5-87 issued on April 13, 1987 were finally withdrawn under FIRB-Resolution No. 12-89 effective January 1, 1990. (RMC No. 14-90 dated February 9, 1990). Such being the case, all approved applications for zero-rating granted to any seller of goods to AFPCES and PC/INPSSS became ineffective and/or considered revoked effective January 1, 1990. Nonetheless, your opinion that with respect to the sale of goods to AFPCES and PC/INPSSS prior to January 1, 1990, the effectivity of the revocation of your approved application for zero-rating, the input tax generated by your client on its purchases of raw materials and supplies used in the production of finished goods sold to AFPCES and PC/INPSSS, may be credited against your client's output tax liability or claimed as refund and/or tax credit pursuant to Section 104(b) and Section 106(b) of the Tax Code is hereby confirmed. LLpr Very truly yours, JOSE U. ONG Commissioner of Internal Revenue