VAT Ruling No. 053-97

September 10, 1997 VAT RULING NO. 053-97 Sec. 20 (R.A. 7279) 393-93-053-97 Triad Construction & Development Corporation 46 Road I, Project 6 Quezon City Attention: Mr . Joseph Anthony V . Cruz President and General Manager Gentlemen : This refers to your letter dated June 4, 1997 requesting for tax exemption from the payment of Value Added Tax. LexLib It is represented that TRIAD CONSTRUCTION & DEVELOPMENT CORPORATION is a project contractor engaged in the construction of low-cost housing projects; and that a Notice of Award of the project was issued by the National Housing Authority dated January 3, 1996 in relation to Resolution Nos. 3344 and 1995 dated December 15, 1995 and August 23, 1990, respectively, for the construction of Patin-ay Resettlement Project located at Prosperidad, Agusan del Sur. In reply, please be informed that pursuant to Section 20, R.A. No. 7279, otherwise known as the Urban Housing Development Act, pertinent provision of which reads: "SEC. 20. Incentives for Private Sector Participating in Socialized Housing . To encourage greater private sector participation in socialized housing and further reduce the cost of housing units for the benefit of the underprivileged and homeless, the following incentives shall be extended to the private sector. xxx xxx xxx (d) Exemption from the payment of the following: (1) project-related income taxes; (2) capital gains tax on raw lands used for the project; (3) value-added tax for the project contractor concerned; xxx xxx xxx Triad Construction & Development Corporation is exempt from payment of project-related income tax, as the project contractor for the construction of socialized housing at Patin-ay Resettlement Project in Prosperidad, Agusan del Sur for the underprivileged. However, purchases of goods/articles by the project contractor shall be subject to value-added tax, even if the said purchases are to be used for the socialized housing project. (BIR Ruling No. 393-93 dated October 1, 1993 and S20-12-97 dated February 24, 1997) aisadc This ruling is being issued on the basis of the foregoing facts as represented. However, if upon investigation it will be disclosed that the facts are different, then this ruling shall be considered null and void. Very truly yours, SIXTO S. ESQUIVIAS IV OIC, Asst. Commissioner Legal Service