VAT Ruling No. 107-92

September 23, 1992 VAT RULING NO. 107-92 NIRC Sec. 100, 102 Precedent Ruling 000-00 OOCL (Philippines) Inc. 7th Flr., Equitable Bank Bldg. 203 Salcedo St., Legaspi Village Makati, Metro Manila Attention: Mr. Wilfredo A. Hans Finance/Administrative Manager S i r s : This has reference to your letter dated May 18, 1992 stating that your company is zero-rated under VAT Ruling No. 030-92 and in connection thereto, you now seek a ruling whether or not you can refuse payment of the VAT portion in the invoice of your suppliers and vendors and inform your vendors and suppliers not to charge the 10% VAT in their billings to you. Further, you are seeking advice on what you should do with the input tax. In reply, please be informed that the zero-rating of your sale of goods or services to your buyer/purchaser, pursuant to VAT Ruling No. 030-92 dated May 18, 1992, means that you do not have to pay VAT on such transactions and therefore, there was also no VAT to be passed on to the buyer. On the otherhand, the sale to you of goods/services by your sellers/suppliers is subject to VAT which, in turn, could be passed on to you as part of the selling price. You cannot tell them to desist from such kind of price billing, inasmuch as this tax component of the price could be applied as input to your output tax liabilities. If there are no such liabilities refund/tax credit may be claimed as long as the input taxes are established to be attributable to the sales (of goods or services) that are zero-rated. Very truly yours, (SGD.) JOSE U. ONG Commissioner of Internal Revenue