VAT Ruling No. 038-89

March 7, 1989 VAT RULING NO. 038-89 Lakambini Garments Manufacturing 272 15th Avenue, Cubao Quezon City Attention: Ms . Marquita G . Tan Proprietress S i r s : This has reference to your letter dated November 4, 1988 requesting clarification on the applicability of the zero-rated VAT on your sales of services. As represented, an Australian importer compensates your firm for the services rendered in the manufacture of ready made garments for export. Such services are paid for in U.S. dollars through legitimate banking channels. casia In reply, please be informed that pursuant to Sec. 102 (a) (1) of the Tax Code, as amended by Executive Order No. 273, your service income as a VAT-registered person in manufacturing or processing goods for other persons doing business outside the Philippines which goods are subsequently exported and where the services are paid for in foreign currency inwardly remitted to the Philippines in accordance with Central Bank rules and regulations, is automatically zero-rated. Very truly yours, VICTOR A. DEOFERIO, JR. Deputy Commissioner