VAT Ruling No. 091-92

July 15, 1992 VAT RULING NO. 091-92 NIRC Sec. 103 (r) 100 (a) Precedent Ruling 000-00 Benjamin G. Sabater Certified Public Accountant Suite 315-317 Victoria Bldg. Rizal Ave. Ext. Corner 11th. Ave. Grace Park, Caloocan City S i r : This is with reference to your letter dated September 26, 1990 stating that your client is a practicing optometrist with an optical clinic; that patients come to her clinic for eye examinations and prescribes thereafter, corrective lenses, when necessary which she herself has processed in her small laboratory inside her clinic; that the lenses are then fitted on a frame selected by the patient from among the different frames displayed on the showcase in her clinic; that she does not sell nor display fancy or outdoor type glasses or ready to use optical accessories; that consultation and eye examination are offered for free to any patient, whether fitted with an eyeglass or not; and that she receives payment for her services on the lenses she had prescribed and processed herself and/or ordered eyeglasses by patients. Based on the foregoing, you now request clarification whether the value-added-tax is applicable on your client's activity. In reply, please be informed that under the facts presented, the eye examination by the optician was the means to effect the sale of eyeglasses (lens and frame). What is being sold are the eyeglasses, so that the same is subject to 10% VAT or 2% percentage tax depending upon whether the annual sales exceed P200,000.00 or not. There is no sale of service because the optician does not receive any "fee, remuneration or consideration" for the eye examination as provided under section 102 of Tax Code. CDESIA Very truly yours, (SGD.) JOSE U. ONG Commissioner of Internal Revenue