EXERCISE 19 – 1

1. a. Goods temporarily imported for repair, renovation, - No

modification of processing
b. Goods in PEZA, Cavite - No
c. Goods entered for transit - No
d. Goods deposited in a bonded warehouse - No

2. The Court of Tax Appeals held that as evidenced by commercial invoices, the local buyers,
not the Philippine branch of the nonresident corporation are the importers who are liable for
VAT on such importation (Kanematsu Corp., Manila Branch vs. CIR, CTA Case 4875, Feb.
12, 1997).

3. Importation for resale, for use as raw material in the manufacture of a finished product, or
for personal use.

1. Value of goods per Bureau of Customs 250,000

Freight 20,000
Insurance 75,000
Bank charges 4,000
Customs duties 75,000
Arrastre charges 5,000
Wharfage dues 3,600
Brokerage fee 4,500
Total 437,100
Rate 12%
VAT payable 52,452

Note: The usual basis in computing the VAT is the dutiable value. However, if customs
duties is computed based on volume or quantity the proper basis is the invoice value.

2. The importation of the goods is subject to VAT. The amount of VAT payable on the
importation is P52,452.
3. If Atayza is a tax exempt person, he shall not be subject to VAT. However, Mr. Pusogac
shall be liable to pay the VAT because he shall be considered as the importer thereof.