VAT Ruling No. 048-89
VAT Ruling No. 048-89 • Bureau of Internal Revenue (BIR) Issuances • VAT Rulings • Mar 8, 1989
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March 8, 1989 VAT RULING NO. 048-89 Antipolo Cottage Craft Corporation Road 26, Cogeo Village Antipolo, Rizal Attention: Celso P . Buccat President S i r s : This has reference to your letter dated December 3, 1988 requesting confirmation of the VAT exemption of Antipolo Cottage Craft Corporation. It was represented that Antipolo Cottage Craft Corporation has an existing agreement with Multicraft Development Corporation, a BIO-registered exporter, to process semi-processed items; that for the above service, Antipolo Cottage Craft Corporation supplies the labor and incurs incidental overhead costs; and, that Antipolo Cottage Craft Corporation bills Multicraft Development Corporation for the processing cost based on agreed rates. In reply please be informed that since Antipolo Cottage Craft Corporation supplies labor and incurs incidental expenses, the contracting transaction partakes the nature of a service subject to VAT. However, considering that Antipolo Cottage Craft Corporation is a subcontractor/ contractor processing goods for a BIO-registered exporter, it can qualify for VAT exemption upon registration with the Board of Investments (Section 3 of Revenue Regulations No. 2-88). LLpr Please be guided accordingly. Very truly yours, VICTOR A. DEOFERIO, JR. Deputy Commissioner
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