A & G Corporate

 

Singapore GST (Goods and Services Tax)

What is GST?

GST is a direct tax on goods and services. The tax is levied when the goods or services are provided, including imports. The current GST rate id 7% effective on 1 July 2007. GST will be levied on:

  1. goods and services supplied in Singapore by any taxable person in the course or furtherance of a business; and
  2. goods imported into Singapore by any person.

Types of GST Supplies

A supply is either taxable or exempt. A taxable supply is either standard-rated which is currently at 7% or zero-rated.

Concept of GST

"Output tax" is the GST a registered trader charges on his local supplies of goods and services. The tax is collected by him on behalf of the Comptroller of GST.

"Input tax" is the GST that the trader has paid on purchases of goods and services for the purpose of his business. The input tax is deductible from output tax to arrive at the GST payable by the trader, or amount to be refunded to him.

Zero-rated GST means applying GST at 0% for the transaction. A GST registered trader need not charge GST on his zero-rated supplies, but he is nevertheless allowed a refund of the tax he has paid on his inputs. In Singapore, only "exports" of goods and "international" services are zero-rated.

If a supply is exempt from GST, no tax is chargeable on it. A GST registered trader does not charge his customer any GST on his exempt supplies. At the same time, he is not entitled to claim input tax credits for any GST paid on goods and services supplied to him for the purpose of his business. The "sale and lease of residential properties" and "financial services" are exempt from GST in Singapore.

Compulsory registration of Singapore GST

GST is compulsory if:

GST registration At the end of a quarter and the immediate past 3 quarters, your taxable supplies exceed S$1 million.
GST registration You expect your taxable supplies to exceed S$1 million for the next 12 months.


If you are required to register for GST in Singapore, you must apply within 30 days of becoming liable.

Voluntary GST registration

Companies with annual turnover below $1 million need not register for GST. A company may however choose to register voluntarily depending on their on their business operations. Reasons to register GST may include:

GST registration If they have import and most of their products are exported overseas, registering GST enable them to claim the input if the tax input GST tax exceeds the out put taxes
GST registration Some companies may want to register for GST as it may make them appear larger as one would always assume that their turnover is more than a million.


One should evaluate they have the resources to fulfill the regular GST filing and record-keeping requirements. Once approved for voluntary GST registration, you must remain registered for at least 2 years. You need to ensure that GST invoices are issued to their customers; and to keep proper records of the GST claimed.

Filing GST Return

Usually companies need to file their GST returns quarterly unless they opt to file it monthly. GST has to file within one month of the GST reporting period. For example, if the GST quarter is 31 December, you should file your GST by end of January. You should always file your quarterly GST return on time to avoid penalty

GST Schemes

The Singapore Government has several assistance schemes relating to GST.

  1. Goods and Services Tax (GST) Assistance Scheme provides grant to lower the costs involved in becoming a GST -registered trader.
  2. Major Exporter Scheme (MES)  allows exporters to defer GST payments on goods imported mainly for re-export out of Singapore.
  3. Licensed Warehouse Scheme transform your warehouse into a licensed warehouse for storing dutiable goods. In licensed warehouses, duty and Goods and Services Tax (GST) are suspended until the goods are released for sale into Singapore.
  4. Zero GST Warehouse Scheme (ZGS)  allows businesses can transform their warehouses into zero-GST warehouses to minimise red tape and bypass the Goods and Services Tax (GST) process.

GST Penalties

If you do not submit and pay the GST by the due date, penalties will be imposed

  • 5% penalty
  • 2% additional penalty

 

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