In Singapore, most purchases involve the charging of Goods and Services Tax (GST) money. Whether deliberately or inadvertently, many people have either been charged or themselves charged an excessive amount of GST. This article contains information about wrongful collection of GST and what to do if you have done so.

Goods and Services Tax

Persons who are Goods and Services Tax (GST)-registered are allowed to charge GST owed against their customers on behalf of the Singaporean government. However, GST-registered persons may not deliberately collect or attempt to collect GST when the customer’s purchase is not to have GST charged against it or collect an amount of GST in excess of what the customer rightfully owes. The phrase used to describe inadvertent but excessive charging of GST is “without reasonable excuse or through negligence”. Those found guilty of such an offense are liable to a fine, imprisonment, or both. Despite this fact, a person who has wrongfully collected GST may avoid punitive action if the person voluntarily accounts for and pays to the Comptroller the amount of GST overcharged as long as it is done in a timely manner.

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Examples of instances classified as wrongful collection of GSTinclude the following: charging GST on GST-exempt or out-of-scope supplies, charging GST on a supply made by another person, charging GST on a zero-rated supply, charging GST on a transaction that does not constitute a supply, or charging GST at a rate in excess of 7%.

In cases where it has been claimed that GST has been wrongfully collected, the Comptroller will assess all evidence related to each case, then determine whether this collection was made without reasonable excuse or through negligence. In situations where an incorrect GST treatment has been applied to a complex transaction and the correct GST treatment is not publicly available, or where external circumstances led to the inadvertent wrongful collection of GST, the Comptroller will usually regard such a collection as not having been committed through negligence or reasonable excuse.