INLAND REVENUE AUTHORITY OF SINGAPORE. COURSE MATERIAL GST General Guide for Traders How do I keep Records and Accounts How do I prepare my GST Return?

INLAND REVENUE

AUTHORITY

OF SINGAPORE

COURSE MATERIAL 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

Q&A question slip

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

CONTENTS

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

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)

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

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

HOW GST WORKS

Basic GST Process (Output Tax)

GST collected

from customers

HOW GST WORKS

Basic GST Process (Output Tax) (Input Tax)

GST collected less GST paid on

from customers business purchases

HOW GST WORKS

Basic GST Process (Output Tax) (Input Tax)

GST collected less GST paid on

from customers business purchases

equals

Net GST

Basic GST Process Net GST

+ -

Payable to Refundable from

Comptroller Comptroller

HOW GST WORKS

HOW GST WORKSSELLING PRICE GST Payable

Import Value = $ 5,000 GST paid on import = $350

Manufacturer’s Price = $10,000 Manufacturer GST Collected = $700GST Amount = $ 700 Less: GST Paid = $350Selling Price = $10,700 GST Payable = $350

Retailer’s Price = $20,000 GST Collected = $1,400GST Amount = $ 1,400 Retailer Less: GST Paid = $ 700Selling Price = $21,400 GST Payable = $ 700

Consumer pays = $21,400 Total GST Paid = $1,400 Consumer

CONCEPTS OF GST

1. Scope of Tax

2. Types of Supply

3. When Should You Account for GST?

4. What Is the Value of Supply That Is Subject to GST?

Section 8 of GST ActGST will be charged on any supply of goods or services if it is :i) made in Singaporeii) a taxable supplyiii) made by taxable personiv) in the course or furtherance of business

SCOPE OF TAXSCOPE OF TAX

SCOPE OF TAX

Supply includes all forms of supply done for a consideration.

Forms of supply can be either goods or services

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

SCOPE OF TAX

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

SCOPE OF TAX

Taxable Person

- A person that is GST-registered or

is required to be registered for GST

under the Act

Non-Taxable

Taxable

TYPES OF SUPPLY

Out-of-Scope

Exempt

Non-Taxable

Taxable

Out-of-Scope

Exempt

Zero-rated (0%)

Standard-rated (7%)

TYPES OF SUPPLY

Out -of-scope Supply Private Transactions Third Country Sales

(Sales outside Singapore)Exempt Supply Sale and Lease of Residential

Properties Financial Services

NON-TAXABLE SUPPLY

Goods are shipped from China to U.S.A.

without coming into S’pore

Supply is out-of-scope

Zero-rated Supply (0% GST) Export of Goods International Services

Standard-rated Supply (7% GST) All Others Eg: Sale of Fixed Assets

TAXABLE SUPPLY

TAXABLE SUPPLY

SALE OF FIXED ASSETS GST must be charged on the sale of Fixed

AssetsEg : Non residential properties, furniture, computers,

etc

GST to be accounted on Selling

Price of Asset

TAXABLE SUPPLY

GST is a transaction based tax Need to review all transactions

including those not in the normal course of business

Taxable supply

Made by taxable person

In course or furtherance of business

GST

A GST registered art dealer buys painting in London and sells it to customer in Japan

X

NO

Taxable supply



GST


X

NO

A GST registered art dealer sells his personal piano

X

NO

Taxable supply



GST


X

NO

A GST registered art dealer sells his personal piano X

NO

A residential property developer who develops and sells executive condominiums

X X

NO

Taxable supply



GST

A GST registered art dealer buys painting in London and sells it to customer in Japan X

NO

A GST registered art dealer sells his personal piano

X

NO

A residential property developer who develops and sells executive condominiums

X X

NO

A GST registered developer of both residential and commercial properties who develops and sells a mixed development project

(commercial portion)

YES

GOODSTime of Supply for Goods Goods are removed or made available; Tax invoice issued; or Payment receivedwhichever is the earliestSubject to 14-day rule

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



Total value of supply - $11,000

Invoice for payment Goods Invoice for Balancereceived $5,000 Removed Amount

$11,000 ($11,000 - $5,000)

01/03/07 31/03/07 14/04/07

Time of supply : ?

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)

14-day Rule

SERVICES

Time of Supply for Services Services are completed; Tax invoice issued; or Payment received

whichever is the earliest

Subject to 14-day rule


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


Value of Supply Consideration in money

Value + GST = Consideration

Eg: $100 (Value) + $7 (GST) = $107

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


Transactions with related parties

Value of supply = open market value Eg: Co. X, a GST-registered business, sold the

company’s furniture (market value $5,000) to one of its directors at $800.

Value of supply should be $5,000.


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

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

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

1. Importance of Tax Invoice

2. When to issue a Tax Invoice?

3. When not to issue a Tax Invoice?

4. Contents of a Tax Invoice

5. Simplified Tax Invoice

TAX INVOICE

IMPORTANCE OF TAX INVOICE

primary document for input tax claim

documentary evidence that GST has been charged on the standard-rated supply

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

WHEN NOT TO ISSUE A TAX INVOICE?

No need to issue tax invoices for: zero-rated supplies

exempt supplies

deemed supplies

CONTENTS OF A TAX INVOICE

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

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

SIMPLIFIED TAX INVOICE

When to Issue? amount payable including tax <$1,000 only for standard-rated suppliesParticulars 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”

PURCHASES

1. Claiming of input tax

2. Imports

3. Disallowed Input Tax Claims

4. Conditions for Pre-registration Input Tax

Claims

CLAIMING OF INPUT TAX

Tax Invoice

Evidence for claiming GST incurred on business purchases

Tax invoice addressed to business name

ABC Co.


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


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

IMPORTS

Importer - Person who is entitled to claim GST paid on imports

GST payment permit - Evidence to support input tax claims

DISALLOWED INPUT TAX CLAIMS(REG 26 & 27)

a) Club Subscription Feeb) Medical and Accident Insurance Premiumc) Medical Expensesd) Family Benefitse) Cost and Running Expenses of Motor Cars

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

PRE-REGISTRATION CLAIMSGST registration date : 01/06/07Expenses 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

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

PRE-REGISTRATION CLAIMSGST 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

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

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 ...

BREAKBREAK

Do you know you can access GST information at IRAS homepage?

Come visit us now @

http://www.iras.gov.sg(click ‘Information on Goods & Services Tax’)

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

CONTENTS

Obligations GST F5 & F7 Common Misconceptions Application Exercise

OBLIGATIONS

1. Record Keeping

2. Filing Of GST F5

3. Payment Of Tax

4. Registration

5. Change Of Business Circumstances

6. GST - Inclusive Price

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

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

RECORD KEEPINGExamples 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

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’

RECORD KEEPING

Business goods put to non-business use

Disposal of business assets

Supplies of goods and services received

Removal of goods from Customs-licensed warehouse

Other Records

RECORD KEEPINGHow do you keep records and accounts?

no specific guidelines

complete and up-to-date

figures in GST Returns can be easily verified

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

RECORD KEEPING Comptroller’s 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’

RECORD KEEPINGFailure to keep records

Guilty of an offence fine < $5,000 and/or imprisonment <6 months

2nd or subsequent conviction fine < $10,000 and/or imprisonment < 3 years

FILING OF GST F5

FILING One GST F5 for One Prescribed Accounting Period

YOU MUST NOT USE:

Forms issued for Other Periods

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

FILING OF GST F5

All Tax Returns Must Be Filed By Due Date

If No Trading Is Done, a ‘Nil’ Return Is Still Required.

FILING OF GST F5

FAILURE TO FILE RETURN ORMAKE INCOMPLETE RETURN:

An Offence

Comptroller Can Assess Amount of Tax Due

Notice of Assessment (Estimated) Will Be Sent to Trader

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”

PAYMENT OF TAX

If Net Amount Payable <$5, No Payment Is Required

If Net Amount Repayable <$5, No Refund Will Be Made

The Amount Will Not Be Carried Forward

REGISTRATION

Just A Reminder ... Compulsory Registration Voluntary Registration

- must remain registered for at least 2

years

Registration

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

GST Certificate

Registration

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

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

If You Are Registered As A Sole-ProprietorQn: 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.

If You Are Registered As A Sole-Proprietor

You should use the same GST registration number to charge GST with effect from the dateof commencement of new business

What you must do: Send in ACRA instant information extract of the

new business

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

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?

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.

CHANGE OF BUSINESS CIRCUMSTANCES Changes involve

Business name and address

Giro bank account number

De-registration

Transfer of business as a going concern

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

CEASE TO MAKE TAXABLE SUPPLIES

Notify Comptroller by submitting GST F9 (Application for Cancellation of GST)

Within 30 days

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

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

GST-INCLUSIVE PRICEGST-INCLUSIVE PRICE

ABC Co. Pte Ltd

$107.00

Any price displays, Any price displays, advertisements, or quotations in advertisements, or quotations in respect of goods or services respect of goods or services made to the public should be made to the public should be inclusive of GSTinclusive of GST

Failure to comply with the GST-Failure to comply with the GST-inclusive price display inclusive price display requirement is an offence requirement is an offence

GST RETURNS

How To Complete :

1. GST F5

2. GST F7

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


Box 1: Total value of standard-rated supplies

(excluding GST Amount)

Include: Hire of goods to someone else Gift of goods costing > $200

Deduct: Credit note issued to customers Debit note received from customers


Box 2: Total value of zero-rated supplies

Include:

Supplies of goods which are exported

Supplies of international services


Box 3: Total value of exempt supplies

Include:

Supplies of financial services

(4th Schedule)

Sale and lease of residential properties


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)


...cont’d (taxable purchases)

Deduct:

Debit note issued to suppliers

Credit note received from suppliers


* Not to enter for taxable purchases*

Wages & salaries Purchases for private use Purchases from non GST-registered suppliers


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


Box 7 (input tax)

Includes: allowable input tax incurred on your taxable

purchases refund of GST to tourists bad-debt relief


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


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


Example:

ABC company has the following business transactions for one accounting period:1) Imports - $20,0002) Local sale - $10,0003) Sale of fixed asset - $5,0004) Local purchase - $8,0005) Export sales - $50,000


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)


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%

HOW TO COMPLETE GST F5Box 1 Standard-rated supplies $15,000Box 2 Zero-rated supplies $50,000 Box 3 Exempt supplies $0Box 4 Total of Box 1+2+3 $65,000Box 5 Taxable purchases $28,000Box 6 Output tax $1,050.00Box 7 Input tax $1,960.00Box 8 Net GST to be claimed $910.00Box 9 Total imports under MES $0

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

ERRORS

Do the errors involve GST?

Is the amount of net GST errors > $500?

File in F7

Is the total of all errors > 5% of total supplies?

Include the errors in the next return

NO

NO

NO

YES

YES

YES

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

GST F7 (Disclosure of Errors in GST Return)

Net GST error =+300 - 200 +250 = $350

As the net error is $350 (<$500), no need to file GST F7. Just adjust in Box 7 of current GST F5.


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)


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% (>5%)

=> File GST F7 for the quarter the error was made


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

VOLUNTARY DISCLOSURE

Take steps to ensure compliance with GST Legislation

File true and complete returns Remember: Always do it right the first time

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.

Submission of incorrect return Omission/understatement of output tax or

overstatement of input tax; or Gives any incorrect information

Penalty = Amount of tax undercharged

Submission of incorrect return Without reasonable excuse or negligence

Penalty = 2 X Amt of tax undercharged; and

Fine < $5,000; or Imprisonment < 3 years; or both

COMMON MISCONCEPTIONS


1. Gifts : need not account GST

2. Trade-in : charge GST on net amount

3. Non-reporting of supplies On-charging of supplies Absorption of GST


4. Tourist Refund Scheme:

Tourist can claim GST based on tax invoices only

Misconception No. 1Gifts : Need not account GST

Conditions for accounting GST on gifts :

Incurred GST on purchase of goods Cost of gift > $ 200 or

Cost of gift < $ 200, but 3 or more gifts given to the same person within 3 months

GIFTS >$200 / 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

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

ON-CHARGING OF SUPPLIES

Reimbursements vs Disbursements

Reimbursements - supply attracts GST

Disbursements - do not attract GST

DISBURSEMENTS OR REIMBURSEMENTSDISBURSEMENTS 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

GST CONCEPTGST 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.”

WHAT IS A SUPPLY?WHAT IS A SUPPLY?

“…includes all forms of supply, but not anything done otherwise than for a consideration”

Section 10(2)(a) of the GST Act:

•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.

DISBURSEMENTS OR REIMBURSEMENTSDISBURSEMENTS OR REIMBURSEMENTS

3rd party(Supplier)

Co A Co B(Main Contractor)

Disbursement: No Supply, no GST chargeable

•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.

•Onward supply

Reimbursement: A supply exists and GST chargeable

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 price=$100GST = 7/107 x $100 = $6.54

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

Global Refund Singapore Pte Ltd : 6225 6238

Premier Tax Free (Singapore) Pte Ltd : 6293 3811

Singapore Retailer Association : 6223 6221

TOURIST REFUND SCHEME

Application Exercise

APPLICATION EXERCISEAnswers to Exercise

Supplies :

1) Export sales : zero-rated supply <0%>

2) Local sales : standard-rated supply <7%>

3) Disposal of business asset <7%>

4) Interest income : <exempt supply>

5) Value of gift >$200 : Deemed supply <7%>

6) Payment of wages and salaries <Out-of-scope supply>

APPLICATION EXERCISE

Answers to Exercise

Purchases/ Payment :

7) Taxable purchase <claimable>

8) Taxable purchase <claimable>

9) Non-taxable purchase <not applicable>

10) Not allowable under Regulation 26 <not claimable>

CONTENTS

Penalties & Recovery Actions

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 2007No. of months late = 3 (Feb to Apr)Amount of penalties = $600.00 (3 x $200)

PENALTIES ON NON / LATE SUBMISSION OF GST F5

FINE NOT EXCEEDING $5,000 AND IN DEFAULT OF PAYMENT TO IMPRISONMENT NOT EXCEEDING 6 MONTHS

DIRECTOR’S LIABILITY (S74(1) OF THE GST ACT)

USEFUL INFORMATION RE: GST F5 ISSUANCE OF GST F5

NOTIFICATION OF CHANGE OF ADDRESS

CONFIRMATION OF RETURN RECEIVED GST HELPLINE: 1800-356 8633

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

RECOVERY ACTIONSNON-FILING OF GST RETURN

ISSUE OF DEFAULT ASSESSMENT

IMPOSE PENALTIES ON NON / LATE SUBMISSION OF GST F5

ISSUE SUMMONS TO ATTEND COURT

RECOVERY ACTIONSNON 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

Q & A Session

Last update on 17 April 2007

INLAND REVENUE AUTHORITY OF SINGAPORE. COURSE MATERIAL GST General Guide for Traders How do I keep Records and Accounts How do I prepare my GST Return?

Documents

gst act gst

taxable supply gst

net gst slide

comptroller of gst

total gst

manufacturer gst

gst return

basic gst process net