Manila, July 6 -- The Supreme Court (SC) has ruled that a law to refund value-added tax (VAT) for non-resident foreign tourists is "not unconstitutional".

In a 39-page decision penned by Associate Justice Amy Lazaro-Javier, the high court said Republic Act (RA) 12079, or a law "granting VAT refund to foreign tourists was not arbitrarily done (and ) it is a policy decision based on legitimate state interests, i.e. the need to remain competitive as a global tourist destination."

"(T)he court takes judicial notice that the concept of VAT refund for foreign tourists is a well-established international practice," the court said in its ruling published on the SC website on Monday, noting that "the Philippines is among the last few countries ...