VAT Ruling No. 074-97

December 19, 1997 VAT RULING NO. 074-97 Sec. 20; 190-95; 074-97 National Housing Authority Elliptical Road, Diliman Quezon City Attention: Mr . Neofito A . Hernandez Manager Regions IV-A and V Gentlemen : This refers to your letter dated 01 September 1997 requesting for and in behalf of Northern Builders, a single proprietorship owned and managed by Victor M. Angeles, an exemption from the payment of the value added tax (VAT) as a contractor undertaking the land development of the Bulan Resettlement Project, Bgy. Managa-naga, Bulan, Sorsogon, a socialized housing project of the National Housing Authority (NHA). In reply, please be informed that pursuant to Sec. 20 of RA 7279, pertinent portion of which reads: cdLL "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: xxx xxx xxx "3) Value added tax for the project contractor concerned: xxx xxx xxx Such being the case, Victor M. Angeles, doing business under the name Northern Builders, the project contractor engaged by NHA to undertake land development and construction of socialized housing units of the Bulan Resettlement Project, is exempt from the payment of the value added tax on receipts derived from said project. However, purchases of goods/articles by the project contractor shall be subject to the value added tax, even if the said purchases are to be used for the socialized housing project. 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 (BIR Ruling No. 190-95 dated July 10, 1995). Very truly yours, SIXTO S. ESQUIVIAS IV OIC, Deputy Commissioner Legal & Enforcement Group