VAT Ruling No. 040-90

February 15, 1990 VAT RULING NO. 040-90 TMX Philippines Inc. Export Processing Zone Authority Mactan Airport Road Lapu-Lapu City Attention: Mr . Arnulfo Ramirez Senior Vice-President S i r s : This refers to your letter dated October 26, 1988 stating that your company has its watch assembly plant located at the Mactan Export Processing Zone and that you registered with the Export Processing Zone Authority (EPZA) under the provisions of P.D. 66, as amended. Based on the foregoing, you are requesting for a confirmation that your purchase of petroleum products is exempt from customs and internal revenue taxes (now VAT & Excise Tax) as expressly provided under Article 77(1) of Executive Order 226 (Omnibus Investment Code of 1987). In reply, please be informed that your purchase of petroleum products cannot quality for zero rating or exemption under Section 77(1) of the Omnibus Investment Incentive Code, for the reason that such petroleum products are not sold, stored, broken up, repacked, assembled, installed, sorted, cleaned, graded, or otherwise processed, manipulated, manufactured, mixed with foreign or domestic merchandise, but are used to run your machineries and rolling stocks. Such being the case, your request cannot be granted for lack of legal and factual basis. aisadc Very truly yours, JOSE U. ONG Commissioner of Internal Revenue