VAT Ruling No. 082-91

September 9, 1991 VAT RULING NO. 082-91 Mr. Guillermo Realin and Mrs. Glenora Darvin Revenue Officers VAT Division, BIR Quezon City S i r s : This refers to your letter dated October 1, 1990 requesting clarification as to whether or not EDS Manufacturing, Inc. is entitled to a refund of input taxes under the following facts. cdt EDS Manufacturing, Inc., a VAT-registered person, engaged the services of CCT Contractors Corporation to construct its factory building and other civil works to be used exclusively in its VAT-registered business operation; and that it was also verbally represented that all the manufactured products of EDS are exported abroad and therefore, subject to Value-Added Tax at zero percent. In connection therewith, please be informed that in VAT Ruling No. 086-90 dated April 5, 1990, it was held that a VAT-registered company is entitled to a tax credit for input taxes on its purchases of building materials used in the construction of its warehouse against its output tax on sale of its manufactured products [Sec. 104(a)(1)] of the Tax Code.]. Sec. 106(a) of the same Code provides that an exporter, who is a VAT-registered person may within two years from the date of exportation, apply for the issuance of a tax credit certificate or refund of the input tax attributable to the goods exported, to the extent that such input tax has not been applied to output tax and upon presentation of proof that the foreign exchange proceeds has been accounted for in accordance with the regulations of the Central Bank. Under the foregoing circumstances and it being represented that all the manufactured products of EDS Manufacturing, Inc., are exported, its claim for refund of the input taxes on its purchases of services is in accordance with law, provided that CCT Contractors Corporation is a VAT-registered person; that it issued VAT official receipts to EDS upon receipt of its compensation or service fee; and that the proceeds of the export sales of EDS has been accounted for in accordance with Central Bank Regulation. LibLex Very truly yours, JOSE U. ONG Commissioner of Internal Revenue By: EUFRACIO D. SANTOS Deputy Commissioner Officer-In-Charge