November 17, 2008
VAT RULING NO. 011-08
Sec. 109 (R), 6-2001; VAT Ruling No. 022-2000
Rex General Merchandising
International Corporation
Unit 50, Fiesta Carnival Arcade, Araneta Center
Cubao, Quezon City
Attention: Ms. Purita M. Buhain
General Manager, RGMIC
Gentlemen :
This refers to your undated letter requesting for an exemption from the 3% Creditable Value Added Tax pursuant to the provisions of Section 109 of the Tax Code of 1997, as amended. aCTHDA
It is represented that your company REX GENERAL MERCHANDISING INTERNATIONAL CORPORATION (REXGEN) is engaged in the publishing, printing, distribution and sale of textbooks to both national and local government units (e.g. provincial, municipal and city government); and that in the course of your recent transactions with the different LGU's, they continue to impose VAT, a 1% tax on income, while others impose an expanded tax of 2%, hence, this request.
In reply, please be informed that Section 109 (R) [then Section 109 (y)] of the Tax Code of 1997 as amended by Republic Act (RA) No. 9337 provides, viz.:
"SEC. 109. Exempt Transactions. — The following shall be exempt from the value-added tax:
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