VAT Ruling No. 100-92

August 20, 1992 VAT RULING NO. 100-92 100 (a) 112 000-00 Mr. Esteban C. Sia Certified Public Accountant 2412-A Floresca Street Pandacan, Manila S i r s : This refers to your letter dated March 10, 1992 stating that your client, Our Lady of Grace Hospital, does not operate a drug store but issues medicines to its patient from its stockroom of emergency medicines through the use of Requisition Slip. It is also stated that if the medicines prescribed are not available in the stockroom, the patient either buys the medicines from the nearest drugstore or the hospital buys the necessary medicines and issues it to the patient through the use of the Requisition Slips. Accordingly the prices of the medicines are billed to the patients, together with other hospital charges. Based on the foregoing representations, you now request for a ruling whether your client is subject to the 10% value-added tax. In reply, please be informed that your client, Our Lady Of Grace Hospital, is subject to the 10% value-added tax. The issuance of medicines from its stockroom constitutes sale of goods which is subject to value-added tax imposed under Section 100 (a) of the Tax Code. STHAID Accordingly, your client should register as a VAT taxpayer with the Revenue District Office having jurisdiction over its principal place of business if its gross sales in any 12-month period derived from the sale of medicines exceed P200,000.00. But if your client does not opt to register and its annual gross sales do not exceed P200,000.00 it shall be subject only to the percentage tax of 2% on its gross quarterly sales pursuant to Section 112 of the Tax Code. Very truly yours, (SGD.) JOSE U. ONG Commissioner of Internal Revenue