VAT Ruling No. 090-89

April 6, 1989 VAT RULING NO. 090-89 Union Packaging Corporation Phinma Building 166 Salcedo Street Legaspi Village, Makati Metro Manila Attention: Eduardo A . Mendoza Vice-President/Treasurer S i r s : This refers to your letter dated June 27, 1988 stating that you are a BOI-registered firm (effective November 3, 1987) engaged in the service of vapor heat treatment and packaging that under the specific terms and conditions of your certificate of registration, you are exempt from the contractor's tax under Article 39(e) of Executive Order 226 (Omnibus Investment Code of 1987) and that as a VAT registered entity you have filed your VAT return for the whole year of 1988. LLpr Based on the foregoing facts, you now request for the cancellation of your VAT registration and a refund of the value added taxes paid in 1988. In reply, please be informed that on the basis of certification from the Bureau of Plant Industry the vapor heat treatment partakes the nature of processing of agricultural products for export. Such being the case and pursuant to Section 3 of RR 2-88 the said activity is exempt from the value-added tax effective January 1, 1989 provided that: (a) Your contracting activity is registered with the Board of Investment. (b) Your services is for the manufacture, repacking and processing of goods exported by a BOI registered firm exporting at least 70% of its output as certified by the Board of Investments. (c) The value-added taxes remitted from January 1, 1988 to December 31, 1988 shall not be entitled to a tax refund or tax credit inasmuch as input taxes have already been generated by the recipients of your services. Finally, there is no need to cancel your VAT registration inasmuch as the services that you render to non-BOI contractees are subject to the 10% VAT which must be reported quarterly together with your exempt sales. In this connection, two sets of invoices shall be maintained i.e. exempt invoice (no VAT invoice registration number) for the exempt transactions and VAT invoice (with VAT registration number) for the taxable transactions. Very truly yours, VICTOR A. DEOFERIO, JR. Deputy Commissioner