VAT Ruling No. 070-88

March 23, 1988 VAT RULING NO. 070-88 100 (a)-000-00-070-88 MERALCO Industrial Engineering Services Corporation Meralco Center Ortigas Avenue, Pasig, M.M. Attention: Mr . Jaime O . Roda Asst . Vice President S i r s : This has reference to your letter dated February 19, 1988 requesting clarification as to the application of VAT at zero rate on your bid for the construction of NEA's Janopol Mini-Hydro Project, an Asian Development Bank funded project. In reply, please be informed that under Section 102a (3) of the Tax Code, as amended, by E.O. 273 your transactions with NEA being exempt under a special law is effectively zero rated, in accordance with Sections 8 (b) of P.D. 269, to wit: ". . . Any indebtedness contracted under this sub-paragraph and the payment of the principal thereof and of any interest or other changes thereon, as well as the importation of machinery, equipment, materials, supplies and services by the NEA paid from the proceeds of any such contracted indebtedness shall also be exempt from all direct and indirect taxes, fees, imposts . . ." This grant of zero-rated privilege to the transactions undertaken by MIESCOR is made on the condition that the funding of the project shall purely be derived from the loan granted by ADB. cdtech Very truly yours, EUFRACIO D. SANTOS Deputy Commissioner