VAT Ruling No. 077-89

April 3, 1989 VAT RULING NO. 077-89 Rhine Marketing Corporation MacArthur Blvd. cor. Don V. Sotto St. Cebu City Attention: Mr . Hernando O . Streegan President & Gen . Manager S i r s : This refers to your letter dated December 7, 1987 requesting that all marketing outfits specializing in and self-financing all installment sales be allowed to compute the 10% output VAT based on gross collections or receipts from cash sales, down payments and actual collections of monthly installments from all sales and to pay the tax due thereon after crediting it with input tax. In reply, please be informed that your request can not be granted because pursuant to Section 100 of the Tax Code, as amended by E.O. No. 273, in relation to Section 2(k) of Revenue Regulations No. 5-87, the output VAT to be declared in the quarterly VAT return is to be based on the gross selling price agreed upon at the time of sale. Furthermore, the monthly installments including increments for late payment shall not be included as part of gross selling price during the quarter in which such installments are actually paid. Accordingly, all input taxes pertaining to the sales thus computed may be deducted from the output tax. LexLib For additional information relating to sales on installment, attached herewith is a copy of VAT Ruling No. 254-88 (dated June 11, 1988) for your guidance. Very truly yours, EUFRACIO D. SANTOS Deputy Commissioner