Practice question
A VAT-registered enterprise removes equipment originally intended for business use and appropriates it for the proprietor's private consumption outside the business. It argues Section106(B)(1) covers only merchandise originally intended for resale. Which is best?
- The provision also identifies goods or properties originally intended for use in business.
- Only resale inventory can ever fall under that paragraph.
- Private appropriation automatically destroys every VAT rule.
- The equipment must first be shipped overseas to be considered.
- Business-use intent necessarily makes every later private transfer exempt.
Legal references
- NIRC Sections57-58,105-106 and110: https://lawphil.net/statutes/repacts/ra1997/ra_8424_1997.html
- RA11976, Sections9-10, current NIRC58(E) credit/refund conditions and trust-fund rule: https://lawphil.net/statutes/repacts/ra2024/ra_11976_2024.html
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