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Question: B Development Corporation, a real estate developer organized in the 1970s, bought several

parcels of land in Tuba, Benguet during the mid 1970s. It has never registered as VAT liable since its
sales during the past years did not meet the mandatory liability for VAT. However, during the current year,
due to the increased transactions, it became liable for the first time for VAT. B Development Corporation
invoked entitlement to transitional input taxes on all its landholdings, but the same was disallowed
because according to the BIR, the purchase of these lands happened at a time when no VAT was imposed
in the country, and that no input VAT was actually paid on such lands. Was the action of the BIR proper?
B is entitled to transitional input VAT regardless of its prior non VAT registration
B is not entitled to transitional input VAT as it never registered itself in the past as VAT liable
B is not entitled to transitional input VAT because when the purchase was made, the VAT law was not yet
in force
B is entitled to transitional input VAT only if it can claim that it shouldered the burden of the VAT during
the prior years.

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