INLAND REVENUE

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• INLAND REVENUE
• AUTHORITY
• OF SINGAPORE

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COURSE MATERIAL

• QA question slip

• GST General Guide for Traders
• How do I keep Records and Accounts
• How do I prepare my GST Return?
• Lecture Notes on GST Class
• GST Class Feedback Form
• Slip on IRAS Homepage

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CONTENTS

• Overview Of GST System
• How GST works
• Concepts Of GST
• Scope Of Tax
• Exports
• Tax Invoice
• Purchases
• Obligations
• GST F5 F7

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CONTENTS

• Common Misconceptions
• Application Exercise
• Penalties Recovery Actions
• Q A session
• Feedback

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OVERVIEW OF GST SYSTEM

• What is GST?
• - tax on domestic consumption
• - paid whenever customers buy goods
• or services from GST registered
• businesses
• - charged and accounted for at a rate of
• 7 (with effect from 1 July 2007)

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OVERVIEW OF GST SYSTEM

• Are All Goods And Services Taxable?
• - All Goods and Services within the GST System
• are taxable except those which have been
• specifically exempted by the Act
• - Main exempt items are financial services and
• the sale or lease of residential properties

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OVERVIEW OF GST SYSTEM

• Who Collects GST?
• - For supply of goods or services in
• Singapore, GST is collected by traders
• like you who have registered with the
• Comptroller of GST
• - For importation of goods, GST is collected
• by the Singapore Customs at the point of
• importation

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HOW GST WORKS

• Basic GST Process
• (Output Tax)
• GST collected
• from customers

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HOW GST WORKS

• Basic GST Process
• (Output Tax) (Input Tax)
• GST collected less GST
  paid on
• from customers business
  purchases

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HOW GST WORKS

• Basic GST Process
• (Output Tax)
  (Input Tax)
• GST collected less GST
  paid on
• from customers business purchases
• equals
• Net GST

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HOW GST WORKS

• Basic GST Process
• Net GST
• -
• Payable to Refundable from
• Comptroller Comptroller

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HOW GST WORKS

• SELLING PRICE GST Payable
• Import Value 5,000 GST paid on import
  350
• Manufacturers Price 10,000 Manufacturer
  GST Collected 700
• GST Amount 700 Less GST Paid
  350
• Selling Price 10,700 GST Payable
  350
• Retailers Price 20,000 GST Collected
  1,400
• GST Amount 1,400 Retailer Less GST
  Paid 700
• Selling Price 21,400 GST Payable
  700
• Consumer pays 21,400 Total GST Paid
  1,400
• Consumer

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CONCEPTS OF GST

• Scope of Tax
• Types of Supply
• When Should You Account for GST?
• What Is the Value of Supply That Is Subject to
  GST?

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SCOPE OF TAX
Section 8 of GST Act GST will be charged on any
supply of goods or services if it is i) made
in Singapore ii) a taxable supply iii) made by
taxable person iv) in the course or furtherance
of business
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SCOPE OF TAX

• Supply includes all forms of supply done for a
  consideration.

Forms of supply can be either goods or services
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SCOPE OF TAX

• MADE IN SINGAPORE?
• PLACE OF SUPPLY
• Goods are supplied in Singapore if
• goods are in Singapore or from Singapore
• Services are supplied in Singapore if
• supplier belongs in Singapore

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SCOPE OF TAX

• TAXABLE SUPPLY
• - A supply of goods or services made in
• Singapore other than an exempt
• supply
• - Consist of standard-rated and zero-
• rated supplies

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SCOPE OF TAX

• Taxable Person
• - A person that is GST-registered or
• is required to be registered for GST
• under the Act

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TYPES OF SUPPLY

• Non-Taxable
• Taxable

Out-of-Scope
Exempt
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TYPES OF SUPPLY

• Non-Taxable
• Taxable

Out-of-Scope
Exempt
Zero-rated (0)
Standard-rated (7)
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NON-TAXABLE SUPPLY

• Out -of-scope Supply
• Private Transactions
• Third Country Sales
• (Sales outside Singapore)
• Exempt Supply
• Sale and Lease of Residential
  Properties
• Financial Services

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Goods are shipped from China to U.S.A. without
coming into Spore
Supply is out-of-scope
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TAXABLE SUPPLY

• Zero-rated Supply (0 GST)
• Export of Goods
• International Services
• Standard-rated Supply (7 GST)
• All Others
• Eg Sale of Fixed Assets

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TAXABLE SUPPLY

• SALE OF FIXED ASSETS
• GST must be charged on the sale of Fixed Assets
• Eg Non residential properties, furniture,
  computers, etc
• GST to be accounted on Selling
• Price of Asset

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TAXABLE SUPPLY

• GST is a transaction based tax
• Need to review all transactions including those
  not in the normal course of business

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WHEN SHOULD YOU ACCOUNT FOR GST?

• GOODS
• Time of Supply for Goods
• Goods are removed or made available
• Tax invoice issued or
• Payment received
• whichever is the earliest
• Subject to 14-day rule

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WHEN SHOULD YOU ACCOUNT FOR GST?

• 14-day Rule
• Tax invoice issued within 14 days when the goods
  are removed
• Time of supply is the tax invoice date, provided
  payment is not made yet

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WHEN SHOULD YOU ACCOUNT FOR GST?
14-day Rule

• Total value of supply - 11,000
• Invoice for payment Goods Invoice for
  Balance
• received 5,000 Removed
  Amount 11,000
  (11,000 - 5,000)
• 01/03/07 31/03/07 14/04/07
• Time of supply ?

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WHEN SHOULD YOU ACCOUNT FOR GST?
14-day Rule

• Total value of supply - 11,000
• Invoice for payment Goods Invoice for
  Balance
• received 5,000 Removed
  Amount
• 11,000 (11,000 - 5,000)
• 01/03/07 31/03/07
  14/04/07
• Time of supply 01/03/07 (5,000)
• 14/04/07 (6,000)

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WHEN SHOULD YOU ACCOUNT FOR GST?

• SERVICES
• Time of Supply for Services
• Services are completed
• Tax invoice issued or
• Payment received
• whichever is the earliest
• Subject to 14-day rule

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WHEN SHOULD YOU ACCOUNT FOR GST?

• 14-day Rule
• Tax invoice issued within 14 days when the
  services are completed
• Time of supply is tax invoice date, provided
  payment is not made yet

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WHAT IS THE VALUE OF SUPPLY THAT IS SUBJECT TO
GST?

• Value of Supply
• Consideration in money
• Value GST Consideration
• Eg 100 (Value) 7 (GST) 107

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WHAT IS THE VALUE OF SUPPLY THAT IS SUBJECT TO
GST?

• Consideration not in money
• Value of supply open market value
• Trade/cash discount given
• Value of supply discounted price

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WHAT IS THE VALUE OF SUPPLY THAT IS SUBJECT TO
GST?

• Transactions with related parties
• Value of supply open market value
• Eg Co. X, a GST-registered business, sold the
  companys furniture (market value 5,000) to one
  of its directors at 800.
• Value of supply should be 5,000.

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WHAT IS THE VALUE OF SUPPLY THAT IS SUBJECT TO
GST?

• Goods for private use
• Eg Mr Y, a renovation contractor who is GST
  registered, uses business goods such as marble
  tiles for his own home
• If the cost of materials is 10,000,
• GST 10,000 x 7
• 700

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EXPORTS

• Zero-rated
• Evidence of exports required
• Supporting export documents
• Bill of Lading , Airway Bill
• IESGP permit (previously known
• as TDB permit). Please note that permit
• must be taken before the export of goods,
• otherwise, the Comptroller may not
• accept it as evidence

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EXPORTS

• Supporting export documents
• invoice to overseas customer
• purchase order
• insurance documents
• packing list or delivery note addressed to
  overseas customer
• evidence of payment received

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TAX INVOICE

• Importance of Tax Invoice
• When to issue a Tax Invoice?
• When not to issue a Tax Invoice?
• Contents of a Tax Invoice
• Simplified Tax Invoice

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IMPORTANCE OF TAX INVOICE

• primary document for input tax claim
• documentary evidence that GST has been charged on
  the standard-rated supply

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WHEN TO ISSUE A TAX INVOICE?

• must be issued if making a standard-rated supply
  to a taxable person
• within 30 days after time of supply

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WHEN NOT TO ISSUE A TAX INVOICE?

• No need to issue tax invoices for
• zero-rated supplies
• exempt supplies
• deemed supplies

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CONTENTS OF A TAX INVOICE

• Tax invoice must show
• an identifying number
• invoice date
• your customers name (or trading name) and
  address
• description of the goods and services
• your name, address and GST registration number

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CONTENTS OF A TAX INVOICE

• the words tax invoice
• total amount payable excluding tax, the rate of
  GST and the total tax chargeable shown separately
• total amount payable, including tax
• breakdown of exempt, zero-rated or other supply,
  stating separately the gross amount payable in
  respect of each

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SIMPLIFIED TAX INVOICE

• When to Issue?
• amount payable including tax lt1,000
• only for standard-rated supplies
• Particulars
• name, address and registration number
• date of issue
• description of the goods or services
• total amount payable including GST
• the words Price Payable inclusive of GST

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PURCHASES

• Claiming of input tax
• Imports
• Disallowed Input Tax Claims
• Conditions for Pre-registration Input Tax Claims

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CLAIMING OF INPUT TAX

• Tax Invoice
• Evidence for claiming GST incurred on business
  purchases
• Tax invoice addressed to business name

ABC Co.
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CLAIMING OF INPUT TAX

• Case 1 Lack of Evidence
• Tax invoice issued to another person
• Co. claimed input tax based on tax invoices
  issued to their related company
• The input tax was for purchases made by the
  related co.
• Input tax claims were disallowed

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CLAIMING OF INPUT TAX

• Case 2 Private Expenditure
• holds valid tax invoices
• GST trader made claims on redevelopment of
  residential property
• expenditure is of a private nature
• input tax claims were disallowed and trader was
  compounded

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IMPORTS

• Importer - Person who is entitled to claim GST
  paid on imports
• GST payment permit - Evidence to support input
  tax claims

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DISALLOWED INPUT TAX CLAIMS(REG 26 27)

• a) Club Subscription Fee
• b) Medical and Accident Insurance Premium
• c) Medical Expenses
• d) Family Benefits
• e) Cost and Running Expenses of Motor Cars

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CONDITIONS FOR PRE-REGISTRATION INPUT TAX CLAIMS

• GOODS
• Goods supplied to or imported by taxable person
• NOT supplied or consumed before date of
  registration
• Proper stock account is maintained

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PRE-REGISTRATION CLAIMS

• GST registration date 01/06/07
• Expenses Incurred
• Invoice Date Description Amount
  Claimable?
• i) 01/04/07 Purchase of stocks 1,000
  Yes
• ii) 30/04/07 Utilities charges 300
  No
• iii)15/05/07 Office rental 2,500
  No
• iv)01/05/07 Imports which 900
  No
• are sold on 31/05/07

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CONDITIONS FOR PRE-REGISTRATION INPUT TAX CLAIMS

• SERVICES
• Services provided to taxable person
• NOT related to goods supplied or consumed before
  date of registration
• NOT supplied to taxable person more than 6 months
  before date of registration
• NOT provided by taxable person before date of
  registration

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PRE-REGISTRATION CLAIMS

• GST registration date 01/06/07
• Expenses Incurred
• Invoice Date Description Amount Claimable?
• i) 01/11/06 Management fee 1,000
  No
• ii) 30/04/07 Consultancy fee 2,000
  Yes
• iii) 01/04/07 Commission fee 500
  No for goods sold on
• 01/05/07

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BAD DEBT RELIEF

• Entitled to claim Bad Debt Relief if you satisfy
  conditions under Reg. 83
• A Self-Review of Eligibility to claim Bad Debt
  Relief Form available from website
• If you satisfy conditions, claim in Box 7 of
  current GST return
• No need to write in for approval

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GST Integrated Phone Service
Want to check whether we have received your GST
return? Request for Statement of account? JUST
CALL 1800 356 8633 (24-hour automated voice
response system) for all these and more ...
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BREAK
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Do you know you can access GST information at
IRAS homepage?Come visit us now
_at_http//www.iras.gov.sg(click Information on
Goods Services Tax)

• You can ...
• Download GST forms and handbooks
• Find guides on GST form filling!

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CONTENTS

• Obligations
• GST F5 F7
• Common Misconceptions
• Application Exercise

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OBLIGATIONS

• Record Keeping
• Filing Of GST F5
• Payment Of Tax
• Registration
• Change Of Business Circumstances
• GST - Inclusive Price

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RECORD KEEPING

• What Records To Keep?
• Business and accounting records
• Tax invoices and receipts issued/received
• Credit notes and debit notes
• Business contract and agreement

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RECORD KEEPING

• What Records To Keep?
• Tourist refund claim forms
• Import and export documents
• (e.g. permit, bill of lading, airway bill)
• Other documents supporting
• change in consideration

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RECORD KEEPING

• Examples of Business and Accounting Records
• General Ledgers
• Debtors and Creditors Ledgers
• Purchase Orders and Delivery Notes
• Purchase and Sales Books
• Cash Books and other account books
• Records of daily takings

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RECORD KEEPING

• Stock records
• Bank Statements and Pay-in Slips
• Relevant Business Correspondences
• GST Accounts
• Annual Account (e.g. balance sheet, profit loss
  statement)
• Any other documents and records
• GST guide on How do I keep records and accounts

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RECORD KEEPING

• Other Records

• Business goods put to non-business use
• Disposal of business assets
• Supplies of goods and services received
• Removal of goods from Customs-licensed warehouse

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RECORD KEEPING

• How do you keep records and accounts?
• no specific guidelines
• complete and up-to-date
• figures in GST Returns can be easily verified

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RECORD KEEPING

• From 1 January 2007
• Can start to keep only 5 years of records
• Records relating to accounting periods in 2007
  and after
• Keep records for 7 years
• - Records relating to accounting periods ending
  before 2007

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RECORD KEEPING

• Comptrollers written approval not required to
  keep records in non-paper form
• IRAS circular on Wavier of requirement to seek
  IRAS approval for keeping of records in Machine
  Sensible Form / Imaging System and Electronic
  Invoicing.
• GST guides on Keeping Machine Sensible Records
  Electronic Invoicing and Keeping of Records in
  Imaging Systems

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RECORD KEEPING

• Failure to keep records
• Guilty of an offence
• fine lt 5,000 and/or
• imprisonment lt6 months
• 2nd or subsequent conviction
• fine lt 10,000 and/or
• imprisonment lt 3 years

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FILING OF GST F5

• FILING
• One GST F5 for One Prescribed Accounting Period
• YOU MUST NOT USE
• Forms issued for Other Periods

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FILING OF GST F5

• DUE DATE
• within 1 month after the end of each accounting
  period
• Eg Due date for period 01/10/06 to 31/12/06 is
  31/01/2007

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FILING OF GST F5

• All Tax Returns Must Be Filed By Due Date
• If No Trading Is Done, a Nil Return Is Still
  Required.

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FILING OF GST F5

• FAILURE TO FILE RETURN OR
• MAKE INCOMPLETE RETURN
• An Offence
• Comptroller Can Assess Amount of Tax Due
• Notice of Assessment (Estimated) Will Be Sent to
  Trader

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PAYMENT OF TAX

• DUE DATE
• within 1 month after end of each accounting
  period
• MODES OF PAYMENT
• Giro or Cheque
• Cross all cheques and make them payable to
  Comptroller of Goods and Services Tax

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PAYMENT OF TAX

• If Net Amount Payable lt5, No Payment Is Required
• If Net Amount Repayable lt5, No Refund Will Be
  Made
• The Amount Will Not Be Carried Forward

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REGISTRATION

• Just A Reminder ...
• Compulsory Registration
• Voluntary Registration
• - must remain registered for at least 2
• years

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Registration
GST Certificate

• With effect from 15 Sep 1999, we no longer issue
  GST registration certificate and you are not
  required to display at your business premises

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Registration

• As a GST registered trader, you must print your
  GST registration number on your tax invoices,
  simplified tax invoices and serially printed
  receipts

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If You Are Registered As A Sole-Proprietor

• Registered for GST in your individual name
• Value of taxable supplies is the aggregate
  taxable turnover of all your sole-proprietorship
  businesses
• Charge GST on supplies made by all your
  sole-proprietorship businesses

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If You Are Registered As A Sole-Proprietor

• Qn What if you set up another sole-
• proprietorship business in future, do
  
• you need to register this new business?
• Ans No, because you, as the sole-proprietor,
• are already registered.

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If You Are Registered As A Sole-Proprietor

• You should use the same GST registration
• number to charge GST with effect from the date
• of commencement of new business
• What you must do
• Send in ACRA instant information extract of the
  new business

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If You Are Registered As A Partnership

• Registration is in the name of the respective
• firms
• Value of taxable supplies is the aggregate
  taxable turnover of all
  partnerships having the same composition of
  partners

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If You Are Registered As A Partnership

• Charge GST on supplies made by all other
  partnerships with the same composition of
  partners
• Qn What should you do if you set up another
  partnership business with the same composition of
  partners?

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If You Are Registered As A Partnership

• Ans Send in ACRA instant information extract of
  the new business and GST F3 immediately.
• A separate GST registration number will be
  given for the new business.
• You are required to charge and account for
  GST from date of commencement of new business.

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CHANGE OF BUSINESS CIRCUMSTANCES

• Changes involve
• Business name and address
• Giro bank account number
• De-registration
• Transfer of business as a going concern

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CHANGE OF BUSINESS CIRCUMSTANCES

• Write in to inform Comptroller within 30 days
• Do not delay
• - Refund could be delayed
• - Transfer of Business, penalties may
• apply for late notification

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CEASE TO MAKE TAXABLE SUPPLIES

• Notify Comptroller by submitting GST F9
  (Application for Cancellation of GST)
• Within 30 days

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CEASE TO MAKE TAXABLESUPPLIES

• Once your application is approved, GST F8 (Final
  Goods and Services Tax Return) will be issued
• Need to account for deemed output tax
• - if value of your assets on hand including
  stock, fixed assets and non-residential
  properties (for which input tax has been allowed
  previously) exceeds 10,000

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TRANSFER OF BUSINESS AS A GOING CONCERN

• Eg Business was converted from a partnership to
  a private limited
• Notify the Comptroller 30 days before the date of
  transfer

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GST-INCLUSIVE PRICE

• Any price displays, advertisements, or quotations
  in respect of goods or services made to the
  public should be inclusive of GST
• Failure to comply with the GST-inclusive price
  display requirement is an offence

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GST RETURNS

• How To Complete
• 1. GST F5
• 2. GST F7

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HOW TO COMPLETE GST F5

• Box 1 Total value of standard-rated supplies
• (excluding GST Amount)
• Include
• Sale of goods services (generally local
  supplies)
• Sale of business assets
• Deposits received as part payment
• Supplies to staff

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HOW TO COMPLETE GST F5

• Box 1 Total value of standard-rated supplies
• (excluding GST Amount)
• Include
• Hire of goods to someone else
• Gift of goods costing gt 200
• Deduct
• Credit note issued to customers
• Debit note received from customers

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HOW TO COMPLETE GST F5

• Box 2 Total value of zero-rated supplies
• Include
• Supplies of goods which are exported
• Supplies of international services

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HOW TO COMPLETE GST F5

• Box 3 Total value of exempt supplies
• Include
• Supplies of financial services
• (4th Schedule)
• Sale and lease of residential properties

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HOW TO COMPLETE GST F5

• Box 5 Total value of taxable purchases
• (excluding GST Amount)
• Include
• Standard-rated purchases
• Imports
• Zero-rated purchases
• (Egs IDD calls, International Freight Charges,
  
• Air Tickets)

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HOW TO COMPLETE GST F5

• ...contd (taxable purchases)
• Deduct
• Debit note issued to suppliers
• Credit note received from suppliers

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HOW TO COMPLETE GST F5

• Not to enter for taxable purchases
• Wages salaries
• Purchases for private use
• Purchases from non GST-registered suppliers

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HOW TO COMPLETE GST F5

• Not to enter for taxable purchases
• Purchases and maintenance of motor cars
• Family benefits
• Employee medical insurance expenses
• Club subscription entrance fees

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HOW TO COMPLETE GST F5

• Box 7 (input tax)
• Includes
• allowable input tax incurred on your taxable
  purchases
• refund of GST to tourists
• bad-debt relief

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HOW TO COMPLETE GST F5

• Input tax errors
• Eg Computational Errors
• Double claiming of input tax
• A company used a spreadsheet program to prepare
  input tax claims
• The formula in the spreadsheet was wrong
  resulting in double claiming of input tax

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HOW TO COMPLETE GST F5

• Please note
• To drop off cents for Boxes 1 to 5 9
• Declare figures in S, not in foreign currencies
• All boxes must be completed

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HOW TO COMPLETE GST F5

• Example
• ABC company has the following business
  transactions for one accounting period
• 1) Imports - 20,000
• 2) Local sale - 10,000
• 3) Sale of fixed asset - 5,000
• 4) Local purchase - 8,000
• 5) Export sales - 50,000

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HOW TO COMPLETE GST F5

• To which boxes do they belong ?
• 1) Imports - 20,000 (Box 5)
• 2) Local sale - 10,000 (Box 1)
• 3) Sale of fixed asset - 5,000 (Box 1)
• 4) Local purchase - 8,000 (Box 5)
• 5) Export sales - 50,000 (Box 2)

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HOW TO COMPLETE GST F5

• What about Box 6 (output tax) and Box 7
• (input tax) ?
• 1) Imports - 20,000 GST - 1,400 (Box 7)
• 2) Local sale - 10,000 GST - 700 (Box 6)
• 3) Fixed asset - 5,000 GST - 350 (Box 6)
• 4) Local purchases - 8,000 GST - 560 (Box 7)
• 5) Export sales - 50,000 GST charged at 0

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HOW TO COMPLETE GST F5

• Box 1 Standard-rated supplies 15,000
• Box 2 Zero-rated supplies 50,000
• Box 3 Exempt supplies 0
• Box 4 Total of Box 123 65,000
• Box 5 Taxable purchases 28,000
• Box 6 Output tax 1,050.00
• Box 7 Input tax 1,960.00
• Box 8 Net GST to be claimed 910.00
• Box 9 Total imports under MES 0

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GST F7 (Disclosure of Errors in GST Return)

• Purpose To disclose errors made in the
  GST F5
• But you do not use it for all errors!
• The following chart will help you determine if
  you need to file F7(s) for your errors

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ERRORS
Is the total of all errors gt 5 of total
supplies?
Do the errors involve GST?
Include the errors in the next return
NO
NO
NO
YES
Is the amount of net GST errors gt 500?
YES
YES
File in F7
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GST F7 (Disclosure of Errors in GST Return)

• Example 1
• Errors involve GST (values of supplies and
  purchases are correct)
• Qtr 1 Overdeclared by 300
• Qtr 2 Underdeclared by 200
• Qtr 3 Overdeclared by 250

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GST F7 (Disclosure of Errors in GST Return)

• Net GST error 300 - 200 250 350
• As the net error is 350 (lt500), no need to file
  GST F7. Just adjust in Box 7 of current GST F5.

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GST F7 (Disclosure of Errors in GST Return)

• Example 2
• Errors do not involve GST
• Standard-rated supplies error 200 (output tax
  is correct)
• Zero-rated supplies error 10,000
• Taxable purchases error 500 (input tax is
  correct)

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GST F7 (Disclosure of Errors in GST Return)

• Total errors 200 10,000 500 10,700
• Total supplies 150,000
• Percentage of error to total supplies
• 10,700/150,000 X 100
• 7 (gt5)
• gt File GST F7 for the quarter the error was made

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GST F7 (Disclosure of Errors in GST Return)

• How can I obtain the GST F7?
• You can
• call GST Integrated Phone Service at 1800-356
  8633 (Option 4)
• request through your TaxPortal
• write in
• visit us personally at our Taxpayer Services
  Centre (1st floor, Revenue House)
• Letter of Authority required

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VOLUNTARY DISCLOSURE

• Take steps to ensure compliance with GST
  Legislation
• File true and complete returns
• Remember Always do it right the first time

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VOLUNTARY DISCLOSURE

• Good practice To review past returns and
  disclose errors by filing the GST F7 and make the
  necessary adjustments.
• Otherwise, heavier penalty will be imposed if the
  errors are discovered by us.

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Submission of incorrect return

• Omission/understatement of output tax or
  overstatement of input tax or
• Gives any incorrect information
• Penalty Amount of tax undercharged

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Submission of incorrect return

• Without reasonable excuse or negligence
• Penalty 2 X Amt of tax undercharged and
• Fine lt 5,000 or
• Imprisonment lt 3 years or both

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COMMON MISCONCEPTIONS

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COMMON MISCONCEPTIONS

• Gifts need not account GST
• Trade-in charge GST on net amount
• Non-reporting of supplies
• On-charging of supplies
• Absorption of GST

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COMMON MISCONCEPTIONS

• Tourist Refund Scheme
• Tourist can claim GST based on tax invoices only

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Misconception No. 1Gifts Need not account GST

• Conditions for accounting GST on gifts
• Incurred GST on purchase of goods
• Cost of gift gt 200 or
• Cost of gift lt 200, but 3 or more gifts
  given to the same person within 3 months

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GIFTS gt200 / SERIES OF GIFTS.

• GST must be accounted on goods given out as Lucky
  Draw prizes eg. Dinner Dance lucky draw prizes
• Hampers/Gifts to clients

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Misconception No. 2Trade-in Charge GST on net
amount

• GST must be accounted on the value of the 2
  separate supplies
• Incorrect to account GST on the net difference
  only

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Misconception No. 3Non-reporting of supplies

• On-Charging of Supplies
• Absorption of GST

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ON-CHARGING OF SUPPLIES

• Reimbursements vs Disbursements
• Reimbursements - supply attracts GST
• Disbursements - do not attract GST

132
DISBURSEMENTS OR REIMBURSEMENTS

• Both involve payments to third parties on
  behalf of another party.

GST treatment depends on whether the payment is
treated as a disbursement or a reimbursement
(rebilling). Disbursement No GST
chargeable Reimbursement GST chargeable
133
GST CONCEPT

• Section 8(1)of GST Act
• Tax shall be charged on any supply of goods or
  services made in Singapore where it is a taxable
  supply in the course or furtherance of any
  business carried on by him.

134
WHAT IS A SUPPLY?
Section 10(2)(a) of the GST Act

• includes all forms of supply, but not anything
  done otherwise than for a consideration

135
DISBURSEMENTS OR REIMBURSEMENTS

• Contract for gds and svcs is between Co A 3rd
  party.
• Tax Invoice is issued to Co A.
• Co A is legally responsible to pay 3rd party for
  the gds svcs.

• Onward supply

3rd party (Supplier)
Co A
Co B (Main Contractor)

• Contract for goods and services is directly
  between Co B and 3rd party.
• Tax invoice is issued to Co B.
• Co B is legally responsible to pay 3rd party for
  the goods and services.

Disbursement No Supply, no GST chargeable
Reimbursement A supply exists and GST chargeable
136
ABSORPTION OF GST

• I wish to absorb the GST on my sales. Do I have
  to pay any GST to IRAS?
• GST must be accounted to IRAS on supplies even if
  you absorb GST. The GST is calculated as follows
• GST 7/107 x selling price
• Eg selling price100
• GST 7/107 x 100 6.54

137
Misconception No. 4Tourist Refund Scheme
Tourist can claim GST based on tax invoices only

• For tourist who buys goods from you to qualify
  for refund
• - You must participate under Tourist Refund
  Scheme
• - You must issue tax-free shopping cheque(s)
  or refund claim form(s) to tourists so as to
  enable them to claim GST

138
TOURIST REFUND SCHEME

• Global Refund Singapore Pte Ltd 6225 6238
• Premier Tax Free (Singapore) Pte Ltd
• 6293 3811
• Singapore Retailer Association 6223 6221

139
Application Exercise
140
APPLICATION EXERCISE

• Answers to Exercise
• Supplies
• 1) Export sales zero-rated supply lt0gt
• 2) Local sales standard-rated supply lt7gt
• 3) Disposal of business asset lt7gt
• 4) Interest income ltexempt supplygt
• 5) Value of gift gt200 Deemed supply lt7gt
• 6) Payment of wages and salaries ltOut-of-scope
  supplygt

141
APPLICATION EXERCISE

• Answers to Exercise
• Purchases/ Payment
• 7) Taxable purchase ltclaimablegt
• 8) Taxable purchase ltclaimablegt
• 9) Non-taxable purchase ltnot applicablegt
• 10) Not allowable under Regulation 26 ltnot
  claimablegt

142
CONTENTS

• Penalties Recovery Actions

143
PENALTIES ON NON / LATE SUBMISSION OF GST F5

• 200.00 PER COMPLETED MONTH
• ( MAXIMUM 10,000 FOR EACH RETURN )
• Eg GST F5 for the quarter ended 31 Dec 2006
• due on 31 Jan 2007.
• GST F5 filed on 14 May 2007
• No. of months late 3 (Feb to Apr)
• Amount of penalties 600.00 (3 x 200)

144
PENALTIES ON NON / LATE SUBMISSION OF GST F5

• FINE NOT EXCEEDING 5,000 AND IN DEFAULT OF
  PAYMENT TO IMPRISONMENT NOT EXCEEDING 6 MONTHS
• DIRECTORS LIABILITY
• (S74(1) OF THE GST ACT)

145
USEFUL INFORMATION RE GST F5

• ISSUANCE OF GST F5
• NOTIFICATION OF CHANGE OF ADDRESS
• CONFIRMATION OF RETURN RECEIVED GST HELPLINE
  1800-356 8633

146
PENALTIES ON NON / LATE PAYMENT OF GST

• 5 ON OUTSTANDING TAX
• ADDITIONAL PENALTY OF 2 OF TAX OUTSTANDING ADDED
  FOR EACH COMPLETED MONTH UP TO MAXIMUM 50 OF TAX
  OUTSTANDING

147
RECOVERY ACTIONS

• NON-FILING OF GST RETURN
• ISSUE OF DEFAULT ASSESSMENT
• IMPOSE PENALTIES ON NON / LATE SUBMISSION OF GST
  F5
• ISSUE SUMMONS TO ATTEND COURT

148
RECOVERY ACTIONS

• NON PAYMENT OF TAX
• IMPOSE PENALTIES ON TAX OUTSTANDING
• APPOINT OTHER PARTY AS AGENT eg.
  BANK, TENANT
• STOP INDIVIDUAL FROM LEAVING THE COUNTRY
• TAKE LEGAL ACTIONS

149
Q A Session
150
Last update on 17 April 2007