Pursuant to the provisions of BIR Revenue Regulations No. 6-97, dated January 2, 1997, port charges against foreign shipping is hereby reclassified under VAT Exempt PPA Charges. Sub-para. 4.1.10 of PPA Administrative Order No. 01-97 is hereby deleted and para. 4.2 is amended as follows:

"4.12 VAT Exempt PPA Charges

4.2.1. Fees and Charges which arise from the use of government facilities are exempt from VAT

4.2.1.1.       Harbor/Port Dues
4.2.1.2.       Berthing/Anchorage/
Dockage Fees
4.2.1.3.       Usage Fees
4.2.1.4.       Wharfage Dues
4.2.1.5.       Storage Fees
4.2.1.6.       Lay-Up Fees

4.2.2.      Charges against services to vessels engaged exclusively in international shipping (zero-rated or 0% VAT)

All charges against the vessels of foreign shipping companies paid thru the members of the Association of International Shipping Lines, Inc. (AISL)

4.2.3.      Other VAT exempt PPA Charges

4.2.2.1.       Administrative fines and penalties
4.2.2.2.       Water Supply Service Charges
4.2.2.3.       Electrical Consumption Charges
4.2.2.4.       Interest and penalty charges"

For compliance.

Adopted: 30 Apr. 1997