VAT Ruling No. 045-00

October 23, 2000 VAT RULING NO. 045-00 109 (g) VAT Ruling No. 060-99 AFI International Trading Corporation 105 Esteban Abada Loyola Heights 3 Quezon City Attention: Ms . Nora A . Tatad Gentlemen : This refers to your letter dated August 22, 2000, requesting for a ruling as to whether the importation of a second-hand fishing vessel from Japan with Gross Tonnage of 138 tons is exempt from the payment of value-added tax. cCAIaD In reply, please be informed that your importation of a second-hand fishing vessel from Japan with a Gross Tonnage of 138 tons is subject to VAT. Section 109(g) of the Tax Code of 1997 provides for the tax exemption of passenger and/or cargo vessels as follows: "Importation of passenger and/or cargo vessels of more than five thousand (5,000) tons, whether coastwise or ocean-going, including engine and spare parts of said vessel, to be used by the importer himself as operator thereof;" It is clear from the foregoing provision of the Tax Code that what is covered by the exemption are passenger and/or cargo vessels of more than five thousand tons and whether coastwise or ocean-going, and which vessel shall be used by the importer himself as the operator thereof, leaving no doubt nor room for further interpretation (VAT RULING NO. 060-99, Sec. 109(g) 000-00-060-99 dated May 17, 1999). Accordingly, your request for VAT exemption on your importation of second-hand fishing vessel is hereby denied for lack of legal basis. Very truly yours, (SGD.) LILIAN B. HEFTI Deputy Commissioner Legal & Inspection Group