VAT Ruling No. 085-91

November 8, 1991 VAT RULING NO. 085-91 Philippine Kim Luan Temple, Inc. 1644 M Adriatico Street Malate, Metro Manila Attention: Mr . Benjamin Gaw President S i r s: This refers to your letter dated February 8, 1991 stating that you are a religious organization giving free medical services and medicines to indigents and that you are requesting that your purchases of medicines be exempted from the 10% value-added tax so that the supposedly VAT thereon can be used to buy more medicines for your clinic. In reply, please be informed that your purchases of medicines cannot be exempted from VAT for lack of legal basis. The exemption granted to religious organizations pursuant to Sec. 26(e) of the Tax Code is limited only to taxes for which they are directly liable. VAT is an indirect tax and is the liability of the manufacturer/seller; and, even if the same is passed on to you as part of the cost of the goods you bought, you cannot ask for an exemption therefrom inasmuch as it is not embraced within the scope of your direct tax exemption. casia Very truly yours, JOSE U. ONG Commissioner of Internal Revenue