Those who must register for GST are required to do so within 30 days of the date they became liable to register. Persons who are liable to register for GST under the retrospective view are to be registered following the third month of the calendar year, while those liable to register for GST under the prospective view are to be registered on the 31st day from the date of forecast. Anyone who registers late will be punished with the following: their date of registration will be backdated to the date that they were liable to be registered they will have to account for and pay GST on their past sales starting from the effective date of registration even if they did not collect any GST from their customers, and they may be fined up to S$10,000 and a penalty equal to 10% of the GST due. However, the IRAS is willing to make exceptions to the above in certain situations. Applicants who voluntarily disclose that their registration is late will generally have their late notification fine and penalties waived. The IRAS also allows those who are unable to pay the GST due on the backdated period to do so in instalments.
Sometimes, GST de-registration may be necessary. This usually occurs when a GST-registered person ceases to make taxable supplies. This person is then required to notify the Comptroller in writing within 30 days from the date of cessation. The Comptroller will then terminate the person’s registration if it is determined that the GST-registered person is no longer liable to be registered. However, if the Comptroller is not satisfied that the person no longer makes taxable supplies or thinks it is necessary to protect revenue, the Comptroller may refuse to cancel a voluntary registration.
Claiming and Charging of Singapore GST
When a consumer purchases anything from GST-registered suppliers or imports goods into Singapore, the consumer may incur input tax. The consumer may claim input tax incurred if all the conditions for making such a claim have been satisfied. However, the consumer is required to make the claim during the accounting period that matches the date shown in the tax invoice or accounting permit. There are seven conditions to be fulfilled in order for the consumer to claim input tax. These are as follows: the consumer is GST-registered; the goods or services must have been supplied to the consumer or the goods must have been imported by the consumer; the goods and services are used or will be used for the consumer’s business purposes; local purchases must be supported by valid tax invoices addressed to the consumer or simplified tax invoices at the time of claiming the input tax; imports must be accompanied by import permits proving the consumer to be the importer of the goods; the input tax is directly attributable to standard-rated or zero-rated supplies, or out-of-scope supplies which would either be standard-rated or zero-rated if made in Singapore; and the input tax claims are not prohibited under Regulations 26 and 27 of the GST (General) Regulations.
Either a valid tax invoice (for purchases of less than S$1,000) or a simplified tax invoice (for purchases of more than S$1,000) containing all required details is necessary for one to claim input tax on any purchases or expenses. If the tax invoice submitted to the IRAS is found to be invalid, the tax claims will be disallowed and penalties may be imposed. There are two common examples of factors that invalidate a tax invoice. One example occurs when the invoice has missing details. There are four ways this could be the case: if the supplier’s name, address, and GST registration number are not shown; if the purchase is worth more than S$1,000 and any of the words “tax invoice”, the customer’s name, or the GST amount are not shown; if the purchase is worth less than S$1,000 and either the GST amount or a statement similar to “price payable includes GST” is not shown; or if the purchase was made in foreign currency and the equivalent amount in Singapore dollars is not shown. Another example of an invalid tax invoice occurs when the supplier is not GST-registered. This is evidenced when the supplier does not have a GST registration number or has an expired or invalid GST number.
Paul Hype Page & Co is able to assist you with your tax invoices, as well as any other tax-related issues you may have. We will ensure that you and your business comply with existing tax regulations while also helping you receive the most benefits possible.
Tourists may also claim a refund of GST paid on purchases made in Singapore if certain criteria are fulfilled. To qualify as a tourist, a person must not be a Singapore citizen or permanent resident; have spent 365 days or less in Singapore over the two-year period before the date of purchase; have not been employed in Singapore over the six-month period before the date of purchase; must not be a member of the crew of the aircraft on which the person is departing Singapore; must be at least 16 years old at the time of purchase; and if the person is a student pass holder, must have purchased the goods within the four-month period before the expiry of the student pass. If the person qualifies as a tourist, the following criteria must be fulfilled to receive the tourist refund: the goods must be purchased and an electronic Tourist Refund Scheme (eTRS) ticket is received from the retailer; at least S$100 including GST must be spent; the GST refund must be applied for by using the Token or eTRS Tickets at an eTRS self-help kiosk; the tourist must depart with the goods within two months from the date of purchase; the tourist must depart with the goods within 12 hours after obtaining approval of the GST refund; and the tourist must claim the refund from the approved central refund counter operator within two months from the date of approval of the application. If the tourist holds a student pass, the tourist must also have purchased the goods within the four-month period before the expiry of the student pass and intend to depart with the goods and remain outside Singapore for a minimum period of 12 months.
Only GST-registered businesses are allowed to charge and claim GST from their effective date of GST registration. Businesses that are not GST-registered are prohibited from charging GST. If a business has wrongfully charged or collected GST from its customers, it must remit the GST collected to the IRAS. The exceptions to this rule are non-GST registered third-party businesses that sell or rent out GST-registered businesses’ assets in satisfaction of debt owed such as auctioneers, financiers, and mortgagees. Similarly, only GST-registered businesses may claim GST. However, non-GST registered businesses in specific industries have been granted concessions, subject to conditions, to claim any GST incurred. Qualifying funds that are managed by a prescribed fund manager in Singapore are allowed to claim any GST incurred on prescribed expenses at an annual fixed recovery rate via remission. Real Estate Investment Trusts (S-REITs) and qualifying Registered Business Trusts (S-RBTs) are allowed to claim GST on any expenses they incur for their business and Special Purpose Vehicles (SPVs). In order to claim the GST incurred, qualifying funds, S-REITs, and S-RBTs must submit a quarterly Statement of Claims to the IRAS. Each Statement of Claims is due one month after the end of the quarter it corresponds to. However, funds and trusts may submit their Statements of Claims every six months or every year as long as the claims are made within five years from the end of each respective quarter.
GST Voucher Scheme
In Budget 2012, the Singaporean government introduced a permanent GST voucher scheme to assist lower-income Singaporeans. This scheme gives out GST vouchers which are divided into three components: Cash, Medisave, and U-Save. The Cash component helps offset some immediate cash outlays and is given to eligible Singaporeans who live in HDB flats or lower-income private homes. The maximum payout for this component is S$300 per year. The Medisave component reduces elderly Singaporeans’ expenditure on medical goods and services. Eligible Singaporeans who live in HDB flats may receive up to S$450 a year, while those who live in lower-income private homes may receive a maximum of S$350 annually. The U-Save component is a rebate that cuts a household’s expenses on utilities. Only HDB households are eligible for this component; its value may range from S$240 to S$400, depending on the number of rooms in the flat.
Assessment and Refunding of GST
The Comptroller is entitled to assess GST due if a taxable person has not furnished a GST return or keep the necessary documents for verification of returns. The Comptroller may also assess GST in situations where GST returns appear to either be incorrect or incomplete, or where a certain amount of GST has been refunded or repaid to a taxable person when it should not have been.
When a person furnishes a GST return, the person is required to pay the Comptroller the GST due for the accounting period to which the return relates. According to the GST Regulations, this payment must be made on or before the last day on which the person is required to forward the GST return to the Comptroller. Should the input tax exceed the output tax, the Comptroller must refund the difference to the taxable person within one, three, or six months equivalent to the person’s prescribed accounting period.
GST truly permeates every aspect of daily life in Singapore. Although GST may seem simple on the surface, it is full of details and complexities that help it work the way it does. By adhering to GST laws, businesses and consumers play their part in helping Singapore’s GST system run smoothly, and thus provide a boost to Singapore’s economy.