GOODS

1
INTRODUCTION TO GST
GOODS SERVICES TAX What You Need To Know
2
Your seminar package includes the following

• Seminar Notes
• List of Common Errors made by GST traders
• Application Form for Interbank Giro
• Feedback Form
• Q A slip

Kindly turn off your handphone or switch it to
silent mode.
3
COURSE CONTENT

• Introduction to GST
• Charging GST
• Claiming GST on purchases
• Filing your GST returns
• Obligations of GST registered traders
• Penalties and Recovery Actions
• Common misconceptions
• Tips on Compliance
• Where to get more help
• QA

4
INTRODUCTION TO GST

• What is Goods and Services Tax (GST)?
• What is taxable?
• Who collects GST?
• How GST works

Relevant e-tax guide GST General Guide For
Traders
5
INTRODUCTION TO GST

• What is Goods and Services Tax (GST)?
• Tax on domestic consumption of goods and services
  and importation of goods
• Tax is paid when
• - Goods or services are purchased from GST
  registered traders
• - Goods are imported into Singapore
• Self-assessed tax

6
INTRODUCTION TO GST

• What is taxable?
• All goods and services are taxable except those
  that are exempted
• For goods/services not exempted, two tax rates
  apply
• - Standard rate (7) (local consumption)
• - Zero rate (0) (exports international
  services)
• Only sale or lease of residential properties and
  financial services are exempted

7
INTRODUCTION TO GST

• Who collects GST?
• Supply of goods and services made in Singapore
• - traders like you who are registered with
  the Comptroller of GST
• Importation of goods
• - Singapore Customs at point of importation

8
INTRODUCTION TO GST
How GST Works
9
INTRODUCTION TO GST
How GST Works
10
INTRODUCTION TO GST
11
CHARGING GST

• Scope of Tax
• Type of Supplies
• When should you account for GST?
• Value of Supply Subject to GST

Relevant e-tax guide GST General Guide For
Traders
12
CHARGING GST
Scope of Tax 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
13
CHARGING GST

• Goods
• possessions obtained in exchange for money or
  in kind
• could be new or second-hand, and could be
  bought from a shop or from the Internet
• generally tangible objects
• Services
• broadly defined as anything that is not a good
• performance of any duties or work for another
• most often, this supply is intangible

14
CHARGING GST

• Supply Made in Singapore
• Goods are supplied in Singapore if they are in
  Singapore or from Singapore at the time of supply
• Services are supplied in Singapore if the
  supplier belongs in Singapore

15
CHARGING GST

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

16
CHARGING GST

• Taxable Supply
• A supply of goods or services made in
  Singapore other than an exempt supply
• Consists of standard-rated and zero-rated
  supplies

17
CHARGING GST
Type of Supplies
18
CHARGING GST

• - GST is a transaction based tax.
• Other than the main business transactions, also
  need to examine transactions such as
• (i) sales of business assets
• (ii) free gifts given away
• (iii) fringe benefits to staff
• (iv) recovery of expenses from another company

19
APPLICATION EXERCISE
?
?
?
20
APPLICATION EXERCISE
N (out-of-scope)
N Y Y
Y (0)
Y Y Y
Y (std-rated)
Y Y Y
21
APPLICATION EXERCISE
N (exempt)
N N Y
Y (7 - commercial, Exempt - residential)
Y (Commer
Y Y cial)
N (out-of-scope)
N Y Y
22
CHARGING GST

• When should you account for GST?
• Earliest of the following events
• Goods removed or made available and/or Services
  performed
• Tax invoice issued (subject to 14-day rule) or
• Payment received

23
CHARGING GST

• 14-day rule
• If tax invoice issued within 14 days when
  goods are removed or made available and/or
  services are performed
• ? Account GST based on tax invoice date,
  provided payment has not been made.

24
APPLICATION EXERCISE
Total value of goods sold 11,000
Account GST on
01/03/07 (for 5,000) 14/04/07 (for 6,000)
25
CHARGING GST
Value of Supply Subject To GST
26
CHARGING GST
27
CLAIMING GST ON PURCHASES

• Conditions for claiming input tax
• Disallowed input tax claim
• Conditions for pre-registration input tax claim
• Repayment of input tax
• Conditions for Bad Debt Relief Claim

Relevant e-tax guide GST General Guide For
Traders
28
CLAIMING GST ON PURCHASES

• Conditions for claiming input tax
• You can claim GST incurred on your purchases if
• You are GST-registered
• You are the recipient of the goods/services
• The goods/services are for business purpose
• The GST incurred is for the making of your
  taxable supplies
• The purchase is supported by valid tax invoice/
  import permit in your business name and
• The GST incurred are not specifically disallowed

29
CLAIMING GST ON PURCHASES

• Input tax claim specifically disallowed under the
  GST legislation
• a) Club Subscription Fee
• b) Medical and Accident Insurance Premium
• c) Medical Expenses
• d) Family Benefits
• e) Cost and Running Expenses of Motor Cars

30
CLAIMING GST ON PURCHASES

• To claim GST incurred on imports
• You must be the legal owner of the imports
• You must maintain the GST payment permit and
  other relevant documents (e.g. invoice from
  overseas supplier) to support the claim

31
CLAIMING GST ON PURCHASES
Situations Where Input Tax Claims Were Disallowed
32
APPLICATION EXERCISE
No
No
Yes (For business purpose only)
33
CLAIMING GST ON PURCHASES
Conditions for pre-registration input tax claim
34
APPLICATION EXERCISE

• GST registration date 01/06/07
• GST Incurred on Goods
• Invoice Date Description Amount
  Claimable?
• i) 01/04/07 Purchase of stocks
  1,000
• 30/04/07 Utilities charges 300
• iii) 15/05/07 Office rental 2,500
• iv) 01/05/07 Imports which 900
  
• are sold on 31/05/07

Yes
No
No
No
35
APPLICATION EXERCISE

• GST registration date 01/06/07
• GST Incurred on Services
• Invoice Date Description Amount
  Claimable?
• v) 01/11/06 Management fee 1,000
  
• vi) 30/04/07 Consultancy fee 2,000
  
• vii) 01/04/07 Commission paid 500
  for goods sold on
• 01/05/07

No
Yes
No
36
CLAIMING GST ON PURCHASES
Conditions for pre-registration input tax claim

• How to claim?
• Download and complete self-review form.
• (i) Visit www.iras.gov.sg
• (ii) Under Quick Links, click Forms, GST,
  and
• (iii) Download Self-Review for Eligibility to
  Claim Pre-Registration Input Tax.
• Ensure you have satisfied all conditions listed
  in the Self-review form.
• Do not submit the form to IRAS unless requested.
• Claim pre-registration input tax only in 1st GST
  F5 return. If the GST F5 return has been
  submitted, to request for GST F7 to amend the GST
  F5 submitted.

37
CLAIMING GST ON PURCHASES
Repayment of input tax

• If you have not paid your supplier within 12
  months from the due date of payment but have
  claimed the GST billed, you are required to repay
  the GST claimed.
• Do so by
• 1) Reducing the value of taxable purchases (Box 5
  of GST return) and
• 2) Reducing the input tax value (Box 7 of GST
  return)

38
CLAIMING GST ON PURCHASES
Conditions for Bad Debt Relief Claim
39
CLAIMING GST ON PURCHASES
Conditions for Bad Debt Relief Claim

• How to Claim?
• Download and complete Self-Review form.
• (i) Visit www.iras.gov.sg
• (ii) Under Quick Links, click Forms, GST
  and
• (iii) Download Self-Review for Eligibility to
  Claim Bad Debt Relief.
• Ensure you have satisfied all the conditions
  listed in the
• Self-review form.
• 3) Do not submit the form to IRAS unless
  requested.

40
FILING YOUR GST RETURNS

• e-Filing
• How to complete your GST F5
• GST F7 Disclosure of Errors

Relevant e-tax guide How Do I Prepare My GST
Returns?
41
FILING YOUR GST RETURNS
e-Filing
What you should do before e-Filing your GST F5

• Make sure you are already authorised by your EASY
  administrator to e-File GST returns on behalf of
  your company.
• If not, you need to get your EASY administrator
  to log in to our e-Services Authorisation System
  (EASY) to authorise yourself to e-File for your
  company.
• Get ready your figures to be declared in your GST
  F5 returns..

42
FILING YOUR GST RETURNS
Step 1 Go to http//mytax.iras.gov.sg
43
FILING YOUR GST RETURNS
Step 2 Select My Organisations/Business Tax
Matters
44
FILING YOUR GST RETURNS
Step 3 Key in Tax Reference Number
45
FILING YOUR GST RETURNS
Step 4 Click on Goods Services Tax
46
FILING YOUR GST RETURNS
Step 5 Click on File GST Return(s)
47
FILING YOUR GST RETURNS
Step 6 Click on GST F5
48
FILING YOUR GST RETURNS
Step 7 Fill in the figures for your GST F5
49
FILING YOUR GST RETURNS
Step 7 Fill in the figures for your GST F5 (cont)
50
FILING YOUR GST RETURNS
Step 8 Print the acknowledgement Page
TAN GEOK HWA S1234567A ACCOUNTS MANAGER MS
TAN 68765432
51
FILING YOUR GST RETURNS
Step 8 Print the acknowledgement Page (cont)
52
FILING YOUR GST RETURNS

• Box No. 1
• Total value of standard-rated supplies include
• Supply of Goods in the course of your business
  such as
• Deposit received as payment
• Sale of goods to customers
• inter-company sale of goods (if not under group
  or divisional registration)
• Supply of Services in the course of your business
  such as
• Lease of machinery
• Management fee
• Deemed Supplies such as
• Gifts gt200 or forms a series of gifts
• Business assets put to non-business use
• Sale of business assets
• DEDUCT
• The value of goods or services for which a credit
  note has been issued or a debit note received

53
FILING YOUR GST RETURNS

• Box No. 2
• Total value of zero-rated supplies such as
• Supplies of goods which are exported
• Supplies of international services as listed in
  section 21(3) of the GST Act
• DEDUCT
• The value of goods or services for which a credit
  note has been issued or a debit note received.

54
FILING YOUR GST RETURNS

• Box No. 3
• Total value of exempt supplies include
• Sale and Lease of Residential Properties
• Supply of Financial Services under 4th Schedule
• (i) Interest from local banks, bonds
• (ii) Sale of equities
• (iii) Net realized gain or loss of foreign
  exchange (ignore negative sign i.e. declare
  absolute value)
• Illustration For the quarterly return ending Dec
  2007
• Month Oct Nov Dec
• Exchange gain/(loss) (150) 100 (200)
• The net realized foreign exchange loss for the
  quarter is 250.
• Interest received from fixed deposit is 400.
• You need to report 250 400 650 in Box 3.

55
FILING YOUR GST RETURNS

• Box No. 5
• Total value of taxable purchases include
• Purchases from taxable traders (these are the
  amounts as reflected in the tax invoices issued
  by your suppliers)
• (i) Standard-rated purchases (7)
• (ii) Zero-rated purchases (0) such as
• - Purchase of air-tickets
• - Freight charges
• Imports (these are the amounts as reflected in
  the GST payment permits)
• DEDUCT
• The reduction in consideration (excluding GST)
  where a debit note has been issued or a credit
  note has been received
• EXCLUDE
• Wages and salaries
• Expenses where input tax is specifically
  disallowed

56
FILING YOUR GST RETURNS

• Box No. 6
• Output tax due include
• GST to be accounted for in respect of the items
  under the inclusion list in Box 1
• Bad debt relief you have previously claimed but
  have now recovered the debt
• Claim of a refund made to a tourist if it was
  previously allowed to you and you are no longer
  entitled to it
• DEDUCT
• The reduction in GST to be accounted for where a
  credit note has been issued or a debit note
  received

57
FILING YOUR GST RETURNS

• Box No. 7
• Input tax and refunds claim include
• The GST incurred in respect of the items under
  the inclusion list in Box 5 (exclude zero-rated
  purchases)
• Tourist refunds
• Bad debt relief
• Over or erroneous payments of GST on imports
• DEDUCT
• GST to be claimed where a debit note is issued or
  a credit note is received
• Box No. 8 Net GST Box 6 Box 7
• If the amount is under 5.00, you need not make
  any payment, nor will
• any repayment be made to you, but you must still
  fill in this form and submit it to the
  Comptroller.

58
FILING YOUR GST RETURNS

• Box No. 9
• Only applicable to traders registered under the
  Major Exporter Scheme/Approved Third Party
  Logistics Company Scheme. If you are under this
  scheme, fill in the value of your imports made
  during the accounting period. This figure should
  be equal to or less than your figure in Box 5.
• Box No. 13
• Revenue (i.e. gross sales/gross
  income/turnover) refers to the main income source
  of a company/business as reflected in its profit
  and loss account.
• (For instance, revenue of an investment company
  would be its investment income.)

59
FILING YOUR GST RETURNS

• To note
• To drop off cents for Boxes 1 to 5 9
• Declare figures in S, not in foreign currencies
• All boxes must be completed
• Filing due date is 1 month after the end of each
  accounting period E.g. Due date for period
  01/10/07 to 31/12/07 is 31/01/2008
• All Tax Returns must be filed by due date
• If no business is done, a Nil return is still
  required

60
APPLICATION EXERCISE
ABC company has the following business
transactions for one accounting period
5
1
1
5
2
61
APPLICATION EXERCISE
What about Box 6 (output tax) and Box 7 (input
tax) ?
7
6
6
7
NA
62
APPLICATION EXERCISE
63
FILING YOUR GST RETURNS

• GST F7 Rectification of errors
• Disclosure of Errors in GST Return
• To disclose errors made in the GST F5/F7/F8
• F7 will supercede the F5/F7/F8 that was
  submitted previously for the same period
• As a concession, can correct the errors in your
  next F5 Return, subject to conditions.
• Following chart helps to determine if you need to
  file
• F7 for your errors.

64
FILING YOUR GST RETURNS
ERRORS
Is the total of all errors gt 5 of total
supplies for each prescribed accounting period ?
NO
NO
Include the errors in the next return
Do the errors involve GST?
YES
NO
Is the amount of net GST in error gt 1,500?
YES
YES
File F7
65
FILING YOUR GST RETURNS
Step 1 Online Request of F7
66
FILING YOUR GST RETURNS
Step 2 Online Request of F7
31/12/2008
01/10/2008
Enter the Period and click on Continue to proceed.
67
FILING YOUR GST RETURNS
Step 2 Online Request of F7 (contd)
68
APPLICATION EXERCISE

• Increase Box 6 by 300
• Increase Box 7 by 200
• in current return.

You will need to re-declare all the figures (as
if you are filing for the 1st time) in Qtr 1.
69
BREAK
70
COURSE CONTENT

• Obligations of GST registered traders
• Penalties and Recovery Actions
• Common misconceptions
• Tips on Compliance
• Where to get more help
• QA

71
OBLIGATIONS OF GST REGISTERED TRADERS

• Liability to Register
• Filing of returns
• Payment of tax
• Keeping of records
• Issuing of tax invoices
• Displaying GST inclusive prices
• Notifying on change in business circumstances

72
OBLIGATIONS OF GST REGISTERED TRADERS
Relevant e-tax guides Do I need to
Register? GST General Guide For Traders How
Do I Prepare My GST Returns? How Do I Keep
Records and Accounts? Basic Record Keeping
Guide For Small Businesses Keeping Records of
Business Transactions In Microforms Transfer of
Business As A Going Concern GST Requirements
for Cash Transactions Exchange Rates For GST
Purposes A Guide on Exports
To retrieve the e-tax guides, please visit our
website at www.iras.gov.sg gt Quick Links gt e-Tax
Guides gt GST
73
OBLIGATIONS OF GST REGISTERED TRADERS

• Liability to Register
• Registering for GST is compulsory when
• Turnover of your business is more than
  1million for the past 12 months OR
• You are currently making sales and can
  reasonably expect the turnover to exceed
  1million for the next 12 months.
• An offence if above happened, but failed to come
  forward to register. Registration will be
  backdated if found to be liable earlier.

74
OBLIGATIONS OF GST REGISTERED TRADERS
Liability to Register

• You Are Registered As A Sole-Proprietor
• Qn What if you set up another
  sole-proprietorship business in the future, do
  you need to register this new business?
• Ans
• No. As a sole-proprietor, you are already GST
  registered in your individual name
• You should use the same GST registration number
  to charge GST with effect from the date of
  commencement of your new business
• To determine registration liability, to
  aggregate taxable turnover of all your
  sole-proprietorship businesses.
• What you must do
• Inform IRAS by sending in ACRA Business Profile
  extract of the new business

75
OBLIGATIONS OF GST REGISTERED TRADERS
Liability to Register

• You Are Registered As A Partnership
• Qn What should you do if you set up another
  partnership business with the same composition
  of partners?
• Ans
• Registration is in the name of the respective
  firms.
• Must register the new partnership.
• To determine registration liability, to
  aggregate taxable turnover of all partnerships
  having the same composition of partners.
• What you must do
• Submit GST F1 GST F3

76
OBLIGATIONS OF GST REGISTERED TRADERS

• Filing of returns
• Returns due 1 month after the end of the
  accounting period covered in the return.
• Failure to file return or make incomplete
  return is an Offence.
• Comptroller can assess amount of tax due.
• Notice of Assessment (estimated) will be sent
  to trader.

77
OBLIGATIONS OF GST REGISTERED TRADERS
Payment of tax

• Tax payable due within 1 month after end of
  each accounting period
• Modes of payment Giro, Cheque, AXS, etc
• Cross all cheques and make payable to
  Comptroller of Goods and Services Tax
• Indicate company name, tax reference number
  and accounting period on the reverse side of the
  cheque.

78
OBLIGATIONS OF GST REGISTERED TRADERS
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

79
OBLIGATIONS OF GST REGISTERED TRADERS
Keeping of records

• What Records To Keep?
• Business and accounting records
• Tax invoices and receipts issued/received
• Credit notes and debit notes
• Business contract and agreement
• Tourist refund claim forms
• Import and export documents
• (e.g. permit, bill of lading, airway bill)
• Other documents supporting GST declaration

80
OBLIGATIONS OF GST REGISTERED TRADERS

• 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
• Stock records
• Bank Statements and Bank-in Slips
• Relevant Business Correspondences
• GST Accounts
• Financial Statements etc.

81
OBLIGATIONS OF GST REGISTERED TRADERS

• 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

82
OBLIGATIONS OF GST REGISTERED TRADERS

• How to keep records and accounts?
• No specific guidelines
• Complete and up-to-date
• Figures in GST Returns can be easily verified

83
OBLIGATIONS OF GST REGISTERED TRADERS

• To keep the following listings in excel format
• Sales Listing
• Purchases Listing

84
OBLIGATIONS OF GST REGISTERED TRADERS

• How long do I keep records and accounts?
• Accounting Records
• From 1 January 2007 - to keep for 5 years
• Before 1 January 2007 to keep for 7 years

85
OBLIGATIONS OF GST REGISTERED TRADERS
Issuing tax invoices
86
OBLIGATIONS OF GST REGISTERED TRADERS
Issuing tax invoices
87
OBLIGATIONS OF GST REGISTERED TRADERS

• Contents of a Tax invoice
• An identifying number
• Invoice date
• Customers name (or
  trading name) and address
• Description of goods and services
• Your name, address and GST registration number
• 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 supply.

88
OBLIGATIONS OF GST REGISTERED TRADERS

• Simplified Tax Invoice
• When to Issue?
• amount payable including tax lt1,000
• only for standard-rated supplies
• What must Simplified Tax invoice show?
• your name, address and GST registration number
• an identifying number
• invoice date
• description of the goods or services
• total amount payable including GST
• the words Price Payable inclusive of GST

89
OBLIGATIONS OF GST REGISTERED TRADERS
Displaying GST inclusive prices

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

90
OBLIGATIONS OF GST REGISTERED TRADERS
Notification of changes in business circumstances

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

91
OBLIGATIONS OF GST REGISTERED TRADERS
Notification of changes in business circumstances

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

92
OBLIGATIONS OF GST REGISTERED TRADERS

• Cessation of business
• Notify Comptroller by submitting GST F9
  (Application for Cancellation of GST)
• To submit within 30 days
• Once application is approved, GST F8 (Final
  Goods and Services Tax Return) will be issued
• Need to account for deemed output tax if value
  of assets on hand including stock, fixed assets
  and non- residential properties (for which input
  tax has been allowed previously) exceeds 10,000

93
OBLIGATIONS OF GST REGISTERED TRADERS

• Transfer of business as a going concern
• Business is converted from a partnership to a
  private limited, etc.
• Notify the Comptroller 30 days before the date
  of transfer

94
PENALTIES RECOVERY ACTIONS

• Late Registration
• Non/Late submission of GST returns
• Non/Late payment of tax
• Submission of incorrect returns
• Failure to keeping proper records
• Recovery Actions
• Tips to avoid penalties/recovery actions

95
PENALTIES RECOVERY ACTIONS

• Late Registration
• Failure to register/late in registering is an
  offence
• Penalty
• - 10 of tax due and fine not exceeding 10,000
  
• - 5 late payment penalty on tax payable
• If registration is backdated, also need to
  repay GST on standard-rated supplies made,
  whether or not GST can be recovered from
  customers

96
PENALTIES RECOVERY ACTIONS

• Non/Late submission of GST returns
• If GST F5/F8 Return is not received by due
  date, Comptroller will estimate the tax payable
  and issue Notice of Assessment to inform you of
  estimated tax payable
• Will also impose 5 penalty on estimated tax
• Estimated assessment will only be revised upon
  receipt of GST F5/F8 Return
• Penalty of 200 for every completed month that
  GST F5/F8 Return remains outstanding, and not
  exceeding 10,000 for each GST F5/F8 Return

97
PENALTIES RECOVERY ACTIONS

• Non/Late submission of GST returns
• An offence if GST F5/F8 Return is not received
  by due date. On conviction
• Person responsible for the submission liable
  to a fine not exceeding 5,000 for each
  offence, and
• Imprisonment not exceeding 6 months for
  non-payment
• Directors liability (Section 74(1) of GST Act)

98
PENALTIES RECOVERY ACTIONS

• Non/Late payment of tax
• If tax is not paid or is paid late
• 5 penalty on estimated tax if returns not
  submitted
• 5 penalty on tax declared if returns submitted
• Additional penalty of 2 of tax outstanding for
  each completed month, up to 50 of tax
  outstanding

99
PENALTIES RECOVERY ACTIONS

• Submission of incorrect returns
• GST self assessed tax. Offence to submit
  incorrect GST returns
• Can be penalised at 2 times the amount of tax
  underaccounted/overclaimed and fined up to 5000
  and/or imprisonment up to 3 years

100
PENALTIES RECOVERY ACTIONS

• Failure to keep proper records
• Offence not to keep proper records
• Can be liable to fine not exceeding 5,000
  and/or imprisonment not exceeding 6 months
• Repeated offence Fine not exceeding 10,000
  and/or imprisonment not exceeding 3 years

101
PENALTIES RECOVERY ACTIONS
Recovery Actions
102
PENALTIES RECOVERY ACTIONS

• Tips to avoid Penalties/Recovery Actions
• Make sure necessary resources are available to
  ensure prompt filing of GST returns.
• Ensure able to log-on to myTax Portal and have
  access to necessary forms online much earlier
  than due date of filing.
• Make sure confirmation page reflected after
  submission of returns online.

103
PENALTIES RECOVERY ACTIONS

• Tips to avoid Penalties/Recovery Actions
• Ensure sufficient funds in GIRO account by 15th
  of the month when payment is to be deducted.
• If returns not submitted by due date, pay the
  tax assessed and submit the returns immediately
  so that tax assessed can be adjusted. 

104
APPLICATION EXERCISE
Displaying Prices Which are acceptable?
Yes
Yes
No
No
No
No
105
APPLICATION EXERCISE
No
NA
No
NA
106
APPLICATION EXERCISE
5 x 1000 2 x 1000
No
NA
Yes
5 x 1000 2 x 1000 Previous penalty on
assessment raised would be adjusted accordingly
200 5 of tax assessment raised
Yes
Yes
107
COMMON MISCONCEPTIONS

• Sales of business assets
• Free gifts given away
• Fringe benefits to staff
• Recovery of expenses from another company
• Trade-in
• Absorbing GST

108
COMMON MISCONCEPTIONS
Relevant e-tax guides GST General Guide for
Traders Fringe Benefit Use of Business
Premises By Third Party for Free Secondment of
Staff
109
COMMON MISCONCEPTIONS

• Is GST chargeable on sales of business assets?
• GST registered traders need to account for
  GST on all supplies made.
• Includes supplies not generated through main
  activities of business.
• For example, a printing house sells used
  printers. GST has to be accounted for on the
  sale.

110
COMMON MISCONCEPTIONS

• GST chargeable on free gifts given away?
• Need to account GST on gifts when
• (i) GST was incurred on purchase of gifts
• (ii) Cost of gift gt 200 or
• (iii) Cost of gift lt 200, but 3 or more gifts
  given to the same person within 3 months
• Account based on cost of the gifts

111
COMMON MISCONCEPTIONS

• For example
• Gift hampers given to regular customers during
  Chinese New Year
• Lucky draw prizes (TV, VCD player etc) given to
  staff during Dinner Dance function
• Company A purchases stationary in bulk for
  related companies, B C. Company A has to
  account output tax on the supply of stationary to
  B C.
• Company A purchased a commercial unit and allows
  B to occupy it for free. Company A has to
  account for GST at the prevailing rental rate.

112
COMMON MISCONCEPTIONS

• Is GST accountable on fringe benefits to staff?
• Goods and services given free to employees
• Required to account for output tax unless value
  of gift less than 200 and it does not form a
  series of gifts or if it is a free supply of
  food or accommodation
• Accounting of output tax not required if GST
  not incurred in purchase of benefit

113
COMMON MISCONCEPTIONS

• For example
• Company allows expatriate employee to stay in
  furnished apartment and incurs GST on utilities
  and furnishings. The company has to account for
  output tax on utilities and furnishings.

114
COMMON MISCONCEPTIONS

• Is GST chargeable on recovery of expenses from
  another company?
• Whether GST needs to be charged for the
  recovery depends on whether it is treated as
  reimbursement or disbursement
• Reimbursement GST chargeable
• Disbursement GST not chargeable

115
Is GST chargeable on recovery of expenses from
another company?
COMMON MISCONCEPTIONS
116
COMMON MISCONCEPTIONS

• How should GST be accounted for trade-in
  transactions?
• Treated as 2 separate supplies for GST purpose
• GST must be accounted on the value of the 2
  separate supplies
• Incorrect to account GST on the net difference
  only

117
COMMON MISCONCEPTIONS
How should GST be accounted for trade-in
transactions?
118
COMMON MISCONCEPTIONS

• Do I need to account for the GST that I absorb?
• If you are absorbing GST on your sales, still
  need to pay GST to IRAS.
• GST to be calculated as follows
• GST 7/107 x selling price

119
TIPS ON COMPLIANCE

• IRAS conducts random audit on GST registered
  traders

• The Comptroller has power to raise tax
  assessments to recover the taxes
  under-accounted/over-claimed.

120
TIPS ON COMPLIANCE
Mistakes are costly!

• Other than paying back taxes, there are
  penalties
• Other cost
• manpower to rectify errors
• reporting to business owners/ shareholders

121
TIPS ON COMPLIANCE

• Most cost efficient effective (for both IRAS
  traders) if good compliance established early
• - Cost to rectify errors higher, the longer
  the errors cascade
• - Having peace of mind, that tax obligations
  are under control

122
TIPS ON COMPLIANCE
Two Elements of Good Compliance
Systems processes to capture transactions
accurately
Mindset to comply fully
123
TIPS ON COMPLIANCE
Systems Processes
124
TIPS ON COMPLIANCE
Systems Processes
125
TIPS ON COMPLIANCE
Mindset to Comply
126
TIPS ON COMPLIANCE
Voluntary disclosure of errors attracts lower
penalties!
For a start, go through List of Common Errors
made by GST traders enclosed in this seminar
package
Write to us with details of errors to
Comptroller of Goods and Services Tax GST
Division 55 Newton Road Revenue House Singapore
307987
127
CONTACT INFO
- www.iras.gov.sg - email enquiries via
website - fax enquiries (6351 3553) - written
enquiries (The Comptroller of Goods and
Services Tax Inland Revenue Authority of
Singapore 55 Newton Road Revenue House,
Singapore 307987) - GST helpline (1800 356
8633) - counter service (_at_ Revenue House)
128
WHERE TO GET MORE HELP
www.iras.gov.sg
129
WHERE TO GET MORE HELP
Ask IRAS function
130
WHERE TO GET MORE HELP
2.
1.
131
WHERE TO GET MORE HELP
e-Tax Guides
132
WHERE TO GET MORE HELP
133
GST E-SERVICES 24 Hours, 7 days a week

• View Return Status
• Check submission status (e.g., date of receipt
  of return) of GST F5, F7 and F8
• Subscribe to e-mail Alert
• Receive email reminders to submit your GST F5
  returns on time
• Apply for Major Exporter Scheme
• Apply for Declaration of Agents (For 3PL/MES
  Approved Traders)
• Log onto myTax portal _at_ www.iras.gov.sg
• for all these and more ...

134
Infocomm_at_SME Accounting Software Assistance Scheme

• With effect from 1 Jul 2009, IRAS partners
  Infocomm Development Authority of Singapore (IDA)
  to provide a subsidy scheme to encourage SMEs who
  are registered for GST, to use accounting
  software that are compliant with IRAS e-Tax
  Guide Guide on Accounting Software for Software
  Developers.
• Scope of the Scheme
• Subsidy of up to 50 of qualifying costs of the
  following items, capped
• at S1,500 per SME
• - accounting software listed in IRAS Accounting
  Software Register
• installation/deployment of accounting software
  and
• training on the use of the accounting software.

135
Infocomm_at_SME Accounting Software Assistance Scheme

• Who is eligible?
• Non-users of accounting software or system
  subject to other qualifying conditions.
• Not applicable to
• Existing users of accounting software or business
  who has applied or obtained, or will be obtaining
  any other tax/ financial assistance (i.e.
  subsidy/grant) for software performing the same
  function.
• How to apply?
• Submit an application form to IDA and await IDAs
  reply before proceeding to purchase the
  accounting software.
• For more details on the scheme, please visit IDA
  at www.ida.gov.sg.

136
GST Course by Tax Academy of Singapore
Course Title Basic Course on GST Duration
3.5 days Course fee 749 For more details,
visit www.taxacademy.com.sgor contact Jocelyn
at 6351 3040, jocelyn_at_taxacademy.com.sg
137
Q A