VAT Ruling No. 064-92

May 18, 1992 VAT RULING NO. 064-92 NIRC Sec. 100 (a) (1) L.C. Diaz & Company 3F, Don Jacinto Building Dela Rosa corner Salcedo Sts., Legaspi Village, Makati Attention: Atty. Rogelio R. Nacorda Managing Director Tax Services Division S i r s : This refers to your letter dated January 23, 1991 requesting clarification whether sales by domestic suppliers of merchandise, supplies, machineries, equipment, spare parts, raw materials and other articles to ASAHI OPTICAL PHILIPPINES, INC. (an EPZA-registered enterprise located in Mactan Export Processing Zone, Lapulapu City) are considered export sales pursuant to Article 77(2) of the Omnibus Investments Code of 1987 and therefore zero rated in accordance with Section 100(a)(1) of the Tax Code. In reply, please be informed that your sale of merchandise, supplies, machineries, equipment, spare parts, raw materials, and wares of every description is not subject to internal revenue laws and regulations pursuant to Article 77(1) of the Omnibus Investment Code (E.O. 226). Such being the case, a domestic seller of goods shall be exempt from VAT under Section 103(u) of the Tax Code. However, in the case of sale of raw materials which form part of the finished goods manufactured in EPZA and subsequently exported, the seller if VAT-registered, may claim or apply for zero-rating pursuant to Revenue Regulations No. 2-88. Very truly yours, (SGD.) JOSE U. ONG Commissioner of Internal Revenue