GOODS AND SERVICES TAX

1
GOODS AND SERVICES TAX (GST) Introduction to
GST
2
E-LEARNING

• Introduction to GST course can now be done
  online!
• e-Learning mode is strongly encouraged over
  seminar
• Benefits include
• On-demand availability accessible anytime and
  anywhere at your convenience
• Self-pacing control over the pace of learning
  and modules can be reviewed as often as needed
• Interactivity higher knowledge retention through
  active learning and use of examples and
  interactive exercises etc.

For more information, please visit
www.iras.gov.sg gt GST gt For GST-registered
businesses gt GST Course "Introduction to GST"
(e-Learning/Seminar) 
3
COURSE OUTLINE

• GST and My Responsibilities
• Charging GST on Sales
• Accounting for GST on Other Transactions
• Claiming GST on Business Purchases and Imports
• Price Display, Invoicing and Record-keeping
• BREAK
• 6. e-Filing GST returns and Correcting
  Mistakes
• 7. Penalties and Recovery Actions
• 8. Tips on Compliance
• 9. Notifying of Changes to Business and
  Cancelling GST Registration
• 10. Where to Get Help
• Useful Information
• QA

4
1. GST and My Responsibilities

• What is GST?
• How does GST Work?
• What are the Responsibilities of a
  GST-registered Business?

Relevant e-Tax Guides GST General Guide For
Businesses Do I Need to Register?
5
1. GST and My Responsibilities

• What is GST?
• Tax on domestic consumption of goods and services
  and importation of goods
• Paid when
• - Goods or services are purchased from
  GST-registered businesses
• - Goods are imported into Singapore (collected by
  Singapore Customs at point of importation)
• Self-assessed tax

6
1. GST and My Responsibilities
How does GST Work?
-

Payable to Comptroller
Refundable from Comptroller
7
1. GST and My Responsibilities
Overseas Supplier
8
1. GST and My Responsibilities
What are the Responsibilities of a GST-registered
Business?

• A GST-registered business must
• Submit returns and pay tax in a timely manner
• Submit accurate GST returns
• Maintain listings and keep business and
  accounting records for 5 years
• Assist in GST audit
• Display prices with GST
• Reflect GST registration number on all tax
  invoices and receipts
• Inform IRAS of changes to the business
• Account for GST on business assets held at point
  of de-registration
• In the subsequent parts of this course, you will
  learn how to fulfill these 8 basic
  responsibilities.

9
2. Charging GST on Sales

• Scope of Tax
• Value of Supply Subject to GST
• Absorbing GST
• Accounting for GST
• Bad Debt Relief Claim

Relevant e-Tax Guides GST General Guide For
Businesses GST Time of Supply Rules GST A
Guide on Export Do I Need to Register? Account
ing for GST Absorbed by Businesses
10
2. Charging GST on Sales
Scope of Tax
GST-registered businesses should charge GST on
any supply of goods or services if it is
i) made in Singapore ii) a taxable
supply iii) made by a taxable person iv) in the
course or furtherance of the business
11
2. Charging GST on Sales
Goods or Services?
Goods Services
Possessions obtained in exchange for money or in kind Generally tangible objects Could be new or second-hand   Example Furniture   Utilities (e.g. water, electricity) and space for rent/ sale are treated as goods for GST purposes. Anything that is not goods Performance of duty or work for another person Generally intangible Example Hairdressing Service
12
2. Charging GST on Sales

• i) Is the supply made in Singapore?
• Goods are supplied in Singapore if the goods are
  in Singapore or from Singapore at the time of
  supply
• Services are supplied in Singapore if the
  supplier belongs in Singapore

13
2. Charging GST on Sales
ii) Is the supply taxable?
Taxable supply refers to the supply of goods or
services made in Singapore, other than an exempt
supply and out-of-scope supply.
Examples of types of supplies
TAXABLE SUPPLIES NON-TAXABLE SUPPLIES
1. Standard-Rated Supply (7 GST) Local sales of goods services Sale of Capital Assets 1. Exempt Supply Sale and Lease of Residential Properties Financial Services Local Sale of Investment Precious Metals (IPM)
Zero-Rated Supply (0 GST) Export of Goods International Services Out-of-Scope Supply Third Country Sales (Sales outside Singapore) Transhipments Disbursements
14
2. Charging GST on Sales
iii) Who is a taxable person?
A person that is GST-registered or is required to
be registered for GST under the GST Act.
15
2. Charging GST on Sales

• GST registration liability
• Registering for GST is compulsory when
• Your taxable turnover for the current quarter and
  the past 3 quarters is more than 1 million
  (unless you are certain that your turnover in the
  next 12 months will not exceed 1 million) or
• You have started or intend to start making sales,
  and you can reasonably expect your taxable
  turnover to exceed S1 million in the next 12
  months
• Otherwise, the business need not register for
  GST, unless it chooses to do so voluntarily

• Additional responsibilities for voluntarily
  registered businesses
• remain GST-registered for at least 2 years
• make taxable supplies within 2 years if you have
  not started making taxable supplies at the point
  of registration
• The Comptroller may also impose other conditions
  and may cancel your GST registration if any of
  the conditions are not met.

16
2. Charging GST on Sales

• GST registration liability - Rules for
  Sole-proprietorship (Owned by an Individual)
• Combine the turnover of all SPship businesses
  to ascertain the liability to register
• GST registration is in the name of the SP, not
  the SPship business (i.e. Mr Tan owns ABC
  Company, GST registration will be in the name of
  Mr Tan)
• All SPship businesses under the SPs name will
  be GST-registered. This includes any SPship
  business which you may set-up in the future
• SP should use the same GST registration number
  to charge GST for all existing SPship businesses
  and any newly set-up SPship business
• Notify IRAS of any new SPship business by
  sending in its ACRA Business Profile

17
2. Charging GST on Sales
GST registration liability - Rules for
Sole-proprietorship (example) You are a sole
proprietor with 2 sole-proprietorship businesses
(Business A and B) and you drive a taxi on a
part-time basis.  In the past 12 months, the
turnover of Business A is 500,000,  the turnover
of Business B is 490,000 and the income derived
from your taxi driving is 30,000.
Total Turnover/Income 500,000 490,000
30,000 1,020,000 As the combined turnover
(including the income from the taxi driving) has
exceeded 1 million, you must register for GST
immediately if you can reasonably expect your
total turnover to be more than 1 million for the
next 12 months.
18
2. Charging GST on Sales

• GST registration liability - Rules for
  Partnership (PP)
• GST registration will be in the name of the
  respective PP businesses
• Once your PP is GST-registered, you are required
  to account for output tax on all taxable supplies
  in connection with any separate businesses
  comprising of the same partners.

19
2. Charging GST on Sales
GST registration liability - Rules for
Partnership (example) You and Mary are partners
and have 2 partnership businesses (Business C and
D). You also have another partnership business
(Business E) with John. In the past 12 months,
the turnover of Business C is 200,000, the
turnover of Business D is 300,000 and the
turnover for Business E is 600,000.
Business Turnover (partnership with Mary)
200,000 300,000 500,000 As the combined
turnover for all partnership businesses with the
same composition of partners is 500,000, you
need not register for GST if you can reasonably
expect your business turnover to be less than 1
million for the next 12 months. However, you may
wish to apply for voluntary GST registration.
20
2. Charging GST on Sales
iv) What is meant by in course or furtherance of
the business?
Activities carried out in connection to the
business either directly (e.g. sales of trading
stocks) or incidentally (e.g. recovery of
expenses from a related company).
21
APPLICATION EXERCISE
Supplies Standard-Rated (7 GST) Zero-Rated (0 GST) Exempt Out-of-scope
a) Sale of 400,000 worth of goods sent to a local customer which he exports to Japan.
b) Deposit of 35,000 in a local bank, which yielded an interest of 1,500.
c) Deposit of 35,000 in an overseas bank, which yielded an interest of 1,500.
?
?
?
22
APPLICATION EXERCISE
Scenarios Taxable Supply? Made by taxable person? In course or furtherance of business? Charge GST?
d) A GST-registered art dealer bought a painting in London, sells and directly sends it to his customer in Japan.
e) A GST-registered art dealer imported a painting from London, sells and exports it to his customer in Japan.
f) A GST-registered sole-proprietor receives income (fares) from part time taxi-driving.
N (out-of-scope)
N Y Y
Y (0)
Y Y Y
Y (7)
Y Y Y
23
APPLICATION EXERCISE
Scenarios Taxable Supply? Made by taxable person? In course or furtherance of business? Charge GST?
g) A non-GST registered developer constructs and sells solely residential properties.
h) A GST-registered developer develops and sells residential and commercial properties in a mixed development project in Singapore.
i) A GST-registered developer develops and sells commercial properties outside Singapore.
N (exempt)
N N Y
Y (7 - commercial) (Exempt - residential)
Y (Commercial)
Y Y
N (out-of-scope)
N Y Y
24
2. Charging GST on Sales
Value of Supply Subject to GST
Value of Supply Example
a) Trade discount Net discounted price I give a 10 discount as a sales promotion. GST will be chargeable on the net discounted price. Note This clause should be clearly stated in the invoice.
25
2. Charging GST on Sales
Value of Supply Example
b) Transactions with related parties Open Market Value (OMV) of goods Co. A (GST-registered), sold the companys furniture (market value 5,000) to one of its directors at 800. Value of supply 5,000 GST 5,000 x 7
26
2. Charging GST on Sales

• Absorbing GST
• To maintain competitiveness or as a form of
  goodwill, you may choose to absorb the GST
  payable by your customer
• The sum of money received from your customer
  will be treated as inclusive of GST
• The GST to be accounted for is based on the tax
  fraction of 7/107 of the consideration received
•  
• Example You sell a good at 100. If you choose
  to absorb the GST, 100 is treated as inclusive
  of GST.
• Value of Supply 100 X 100/107 93.46
• GST 100 X 7/107 6.54

27
2. Charging GST on Sales

• Accounting for GST
• In general, you should account for GST at the
  earlier of the following events
• Invoice issued or
• Payment received
• For more information, you may refer to the e-Tax
  Guide GST Time of Supply Rules.

BASIC TAX POINT 14-DAY RULE NOW REMOVED

• Note Prior to 1 January 2011, the general time
  of supply rule is the earliest of the following
  events
• Goods removed/made available or Services
  performed (Basic Tax Point)
• Tax invoice issued (subject to 14-day rule) or
• Payment received

28
APPLICATION EXERCISE
Total value of goods sold 11,000
Account for GST on
31/01/12 (on 11,000)
29
2. Charging GST on Sales
Bad Debt Relief Claim A bad debt situation
occurs when money owed cannot be recovered. Bad
debt relief claim can be made on output tax that
was previously accounted for and paid to IRAS if
you meet the conditions below    
Conditions Conditions
1 I have supplied goods or services for a consideration in money and have accounted for and paid GST on the supply.
2 I have written off the whole or any part of the consideration for the supply as a bad debt in my accounts.
3 A period of 12 months beginning with the date of supply has elapsed or the debtor has become insolvent before the period of 12 months has elapsed.
4 I have taken reasonable steps to recover the debts.
Please complete the "Self-review of Eligibility
to Claim Bad Debt Relief" form (www.iras.gov.sggt
Quick linksgt FormsgtGST) before making the claim
in your current GST return. Do not submit the
form to IRAS unless requested.
30
3. Accounting for GST on Other Transactions

• Giving Goods and Services for Free
• Fringe Benefits to Staff
• Recovery of Expenses
• Sale of Business/Capital Assets
• Trade-in Transaction

Relevant e-Tax Guides GST General Guide for
Businesses Fringe Benefit Use of Business
Premises By Third Party for Free GST Guide on
Reimbursement and Disbursement of Expenses
31
3. Accounting for GST on Other Transactions

• Giving Goods and Services for Free
• Giving Services for Free
• No output tax needs to be accounted for as there
  is no supply
• Giving Goods for Free (i.e. Free Gifts)
• Prior to 1 Oct 2012
• Deemed as supply of goods
• Output tax to be accounted for based on the OMV
  of goods in the following situations
• GST was incurred on purchase of goods
• Cost of gift gt 200 or
• Cost of gift 200, but 3 or more gifts were
  given to the same person within 3 months
• From 1 Oct 2012
• You only need to account for output tax if the
  cost of each gift exceeds 200 and
• If input tax on those goods has been allowed to
  you.

32
3. Accounting for GST on Other Transactions

• Fringe Benefits to Staff
• Prior to 1 Oct 2012
• Goods and services given free to all employees
• Output tax to be accounted for on goods given
  free except in the following situations
• Cost of gift 200 and it does not form a series
  of 3 or more gifts (regardless of value) given to
  the same person within 3 months
• It is a free supply of food or accommodation
• Output tax to be accounted for if GST was
  incurred on the purchase
• With effect from 1 Oct 2012
• Output tax to be accounted for on goods given
  free except in the following situations
• A free supply of food or accommodation
• Gifts of value not more than 200 each or
• Gifts for which no credit for input tax has been
  allowed on its purchase.

33
3. Accounting for GST on Other Transactions

• Recovery of Expenses
• Prior to 31 May 2013
• A recovery of expense is considered as a separate
  supply for GST purposes (i.e. a reimbursement)
  and hence, subject to GST, as long as it does not
  meet the following conditions for disbursements
• Conditions for disbursements
• The other party is responsible for paying the
  supplier
• The other party knows that the goods or services
  would be provided by that supplier
• The other party authorised you to make the
  payment on his behalf
• The other party is the recipient of the goods or
  services
• The payment is separately itemised when you
  invoice the other party
• You recover only the exact amount paid to the
  supplier and
• The goods or services paid for are clearly
  additional to the supplies you make to the other
  party.

34
3. Accounting for GST on Other Transactions

• Recovery of Expenses
• With effect from 31 May 2013
• GST treatment for any recovery of expenses will
  be as follows

If you incur the expenses as a principal If you pay the expenses as an agent
The recovery of expenses is a reimbursement a disbursement
GST treatment The recovery of the expenses from another party may amount to a supply and may be subject to GST or exempt from GST, as the case may be. The recovery of expenses does not constitute a supply and hence will not be subject to GST.
Input tax claim You are entitled to claim input tax incurred on goods or services procured by you if the subsequent recovery of such expenses constitute a taxable supply. You are not entitled to any input tax claim since the goods or services are not supplied to you but to your principal.
35
3. Accounting for GST on Other Transactions

• Sale of Business/Capital Assets
• GST-registered businesses must account for GST on
  all taxable supplies made
• GST is chargeable on the sale of business/capital
  asset though it is not considered the main
  business activity
• For example, sale of office equipment, factory or
  old furniture is subject to GST

36
3. Accounting for GST on Other Transactions

• Trade-in Transaction
• Treated as 2 separate supplies for GST purpose
• GST must be accounted for on the value of the 2
  separate supplies
• Incorrect to account for GST on the net
  difference only

37
3. Accounting for GST on Other Transactions
A Year End Sale Not to be Missed!!! Photocopiers are going at an unbeatable price of 650 only!! Even more incredible news!!! Trade in your old photocopier for a BRAND NEW photocopier for only 450!! Unbelievable but true!! So come on down to our stores now !!! If both buyer and supplier are GST-registered and buyer traded-in an old photocopier for a new photocopier Buyer needs to issue a tax invoice to supplier for 200 x prevailing GST rate. Supplier needs to issue a tax invoice to buyer for 650 x prevailing GST rate. If buyer is GST-registered but supplier is not Buyer needs to issue tax invoice to supplier for 200 x prevailing GST rate. Supplier cannot charge GST on 650.
38
4. Claiming GST on Business Purchases and Imports

• Conditions for Claiming Input Tax
• Disallowed Expenses
• Claiming Input Tax
• Claiming Input Tax on Purchases Paid in Foreign
  Currency
• Situations where Input Tax Claims are Disallowed
• Claiming Pre-registration Input Tax
• Repayment of Input Tax

Relevant e-Tax Guides GST General Guide For
Businesses Exchange Rates for GST
Purposes GST Guide on Imports
39
4. Claiming GST on Business Purchases and Imports

• Conditions for Claiming Input Tax
• You can claim GST incurred on your purchases as
  input tax if
• You are GST-registered
• The goods or services have been supplied to you
  or the goods have been imported by you
• The goods or services are used or to be used for
  the purpose of your business
• The input tax is directly attributable to taxable
  supplies or out-of-scope supplies which would be
  taxable if made in Singapore
• The input tax claims are supported by tax
  invoices/ simplified tax invoices addressed to
  you. For imports, the claims should be supported
  by import permits showing you as the importer of
  the goods and
• The input tax claims are not disallowed expenses
  under Regulation 26 and 27 of the GST (General)
  Regulations

40
4. Claiming GST on Business Purchases and Imports

• Disallowed Expenses
• You are not allowed to claim input tax incurred
  on the following expenses
• Club subscription fees
• Medical and accident insurance premiums
• Medical expenses
• Benefits provided to family members/relatives of
  your staff
• Cost and running expenses of motor cars
• Any transaction involving betting, sweepstakes,
  lotteries, fruit machines or games of chance
• Except those obligatory under the Work Injury
  Compensation Act or under any collective
  agreement within the meaning of the Industrial
  Relations Act.

41
4. Claiming GST on Business Purchases and Imports

• Claiming Input Tax
• Tax invoices and import permits are the primary
  documents for input tax claim and must be
  maintained to support the claim
• Other relevant documents like payment evidence,
  invoice from overseas supplier etc. must also be
  maintained
• Import permits should reflect your company as
  the importer of the goods
• Input tax to be claimed in the accounting period
  corresponding to the date shown in the tax
  invoice and import permit

42
4. Claiming GST on Business Purchases and Imports

• Claiming Input Tax on Purchases Paid in Foreign
  Currency
• For invoicing in foreign currency, your supplier
  must convert the following items in the tax
  invoice into Singapore dollars using an approved
  exchange rate for GST purposes
• - Total amount payable excluding GST
• - Total GST payable and
• - Total amount payable including GST
• You should claim the GST incurred based on the
  Singapore dollar amount shown on the tax invoice

43
4. Claiming GST on Business Purchases and Imports
Situations where Input Tax Claims are Disallowed
Case 1 No valid supporting document Tax invoice issued in Co Xs name The purchases were for Co Ys use Co Y claimed input tax based on this tax invoice Co Ys input tax claims will be disallowed
Case 2 Private Expenditure Mr. X (GST-registered sole-proprietor) holds tax invoices issued to him The GST was incurred for the purchase for a piano used at home Expenditure is of private nature Mr. X's input tax claims will be disallowed
44
APPLICATION EXERCISE
No
No
Yes (For business purposes only)
45
4. Claiming GST on Business Purchases and Imports
Claiming Pre-registration Input Tax For purchases
made before your GST registration, you can claim
the GST incurred if all the following conditions
are satisfied
GOODS SERVICES
Goods are purchased or imported in the course of business for making taxable supplies. Services are purchased for and supplied in the course of business for the making taxable supplies.
Goods are not consumed or supplied before date of GST registration. Services are not related to goods/services already supplied or consumed before date of GST registration.
A stock account is maintained with these details - date of purchase , quantities purchased etc. Services are not supplied more than 6 months before date of GST registration.
A stock account is maintained with these details - date of purchase , quantities purchased etc. Record is maintained with these details - description of services date of purchase and date of disposal (if any).
46
4. Claiming GST on Business Purchases and Imports
Claiming Pre-registration Input Tax

• How to claim?
• Download and complete the Self-Review for
  Eligibility to Claim Pre-Registration Input Tax
  form (www.iras.gov.sg gt Quick links gt Forms gt
  GST)
• Do not submit the form to IRAS unless requested.
• Claim pre-registration input tax only in your
  first GST F5 return. If the GST F5 return has
  been submitted, to request for GST F7 to amend
  the GST F5 submitted.

47
APPLICATION EXERCISE

• GST registration date 01/01/2013
• GST Incurred on Goods
• Invoice Date Description Amount
  Claimable?
• 01/11/12 Purchase of stocks which were sold
  on 15/1/13
• 30/11/12 Utilities charges
• iii) 15/12/12 Office rental
• iv) 01/12/12 Goods imported and
• sold on 31/12/12

Yes
1,000
No
300
No
2,500
No
900
48
APPLICATION EXERCISE

• GST registration date 01/01/2013
• GST Incurred on Services
• Invoice Date Description Amount
  Claimable?
• v) 01/05/12 Management fee 1,000
  
• vi) 30/11/12 Consultancy fee 2,000
  
• vii) 01/11/12 Commission paid 500
  for goods sold on
• 01/11/12

No
Yes
No
49
4. Claiming GST on Business Purchases and Imports
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 as input tax in your GST F5
  return, you are required to repay the GST claimed
• Do so in the first GST F5 after the 12-month
  period by
• Reducing the value of your taxable purchases (Box
  5, Value of taxable purchases) and
• Reducing the value of the input tax claim (Box 7,
  Input tax and refunds claimed).

50
5. Price Display, Invoicing and Record-keeping

• Displaying Prices
• Invoicing Customers
• Keeping Records

Relevant e-Tax Guides GST General Guide For
Businesses Exchange Rates for GST
Purposes Basic Record Keeping Guide for
GST-registered Businesses Keeping
Machine-sensible Records and Electronic
Invoicing Keeping of Records in Imaging Systems
51
5. Price Display, Invoicing and Record-keeping
Displaying Prices

• Any price displays (e.g. price tags, price lists,
  publicity brochures, advertisements) or
  quotations in respect of goods or services made
  to the public, be it written or verbal, must be
  shown inclusive of GST
• Failure to comply is an offence
• Exception
• Hotel and Food Beverage (FB) industries where
  goods and services are subject to service charge
  may display GST exclusive price
• A statement informing customers that prices
  displayed are subject to GST and service charge
  must be prominently shown

52
APPLICATION EXERCISE
Displaying prices Which are acceptable?
Price Displayed as Acceptable?
107
107 (inclusive of GST)
100
100 GST
100 7 GST
100 7 GST
Yes
Yes
No
No
No
No
53
5. Price Display, Invoicing and Record-keeping
Invoicing Customers
Issuing tax invoices
Importance of tax invoice Primary supporting document for input tax claims
When to issue a tax invoice? Must be issued if making a standard-rated supply to a taxable person Within 30 days from the receipt of payment
When not to issue a tax invoice? No need to issue tax invoices for zero-rated supplies exempt supplies deemed supplies
54
5. Price Display, Invoicing and Record-keeping
Issuing tax invoice in foreign currency For tax invoice issued in foreign currency, the following items on the tax invoice must be converted into Singapore dollars total amount payable excluding GST total GST amount and total amount payable including GST The conversion must be based on an approved exchange rate.
55
5. Price Display, Invoicing and Record-keeping

• Contents of a tax invoice
• An identifying number
• Invoice date
• Customers name (or business name) and address
• Description of goods and services
• Suppliers name, address and GST registration
  number
• The words tax invoice
• Total amount payable excluding GST, total GST
  amount shown separately
• Total amount payable, including GST
• Breakdown of standard-rated, zero-rated, exempt
  or other supply if any and the gross amount
  payable in respect of each supply
• Convert into SGD if billing is in foreign
  currency

56
5. Price Display, Invoicing and Record-keeping

• Issuing simplified tax invoices
• When to Issue?
• Amount payable including tax 1,000
• Only for standard-rated supplies
• What must be shown on a simplified tax invoice?
• Suppliers name, address and GST registration
  number
• An identifying number (e.g. invoice number)
• Invoice date
• Description of the goods or services
• Total amount payable including GST
• The words Price Payable inclusive of GST

57
5. Price Display, Invoicing and Record-keeping
Keeping Records

• Income, purchase and business expense records
• Tax invoices/simplified tax invoices/receipts
  issued/received
• Business contract and agreement
• Credit notes and debit notes
• Import and export documents (e.g. import and
  export permit, bill of lading, air waybill)
• Payment evidence (e.g. bank statement)
• Tourist refund claim forms etc.

58
5. Price Display, Invoicing and Record-keeping

• Other records to support GST declarations
• Source documents of all other business
  transactions which affect the output and input
  tax reported in the GST return
• Examples include
• Usage of business assets for private purposes
• Disposal of business assets
• Removal of goods from customs-licensed warehouse

59
5. Price Display, Invoicing and Record-keeping

• Statements and accounting schedules
• The following should be maintained for the
  tracking and summary of 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
• Statement of accounts such as Balance sheet and
  Profit and Loss Statements etc.

60
5. Price Display, Invoicing and Record-keeping

• Sales and purchase listings
• Recommended format as follows
• Sales Listing
• Purchases Listing

Invoice date Invoice number Name of customer Description of supply Invoice amount excluding GST () GST () (if applicable) Destination of goods (if applicable)
Invoice date Invoice number Name of supplier Suppliers GST registration number Description of purchase Invoice amount excluding GST () GST ()
61
5. Price Display, Invoicing and Record-keeping

• How long do I keep records and accounts?
• Accounting records pertaining to prescribed
  accounting
• period ending
• On or after 1 January 2007 to keep for at least
  5 years
• Before 1 January 2007 to keep for at least 7
  years

62
BREAK
63
6. e-Filing GST Returns and Correcting Mistakes

• Overview of e-Filing
• Completing GST F5
• Important Things to Note on e-Filing
• Correcting Mistakes in GST Return

Relevant e-Tax Guide/ User Guide How Do I
Prepare My GST Returns? GST e-Filing User
Guide GST A Guide on Exports
64
6. e-Filing GST Returns and Correcting Mistakes
Overview of e-Filing
Step 1 Authorise Staff/Third Party to act for your organisations GST matters online You need your organisations e-Services Access Code to log in This step is required only if you are e-Filing GST return for the first time or if you need to edit an earlier authorisation via e-Services Authorisation System (EASY) http//mytax.iras.gov.sg/easy
Step 2 Retrieve and Complete GST F5 via myTax Portal http//mytax.iras.gov.sg
For detailed instructions, you may download the
GST e-Filing User Guide at www.iras.gov.sggt
Quick linksgt e-Servicesgt GST.
65
6. e-Filing GST Returns and Correcting Mistakes
Completing GST F5

• Box 1 Total value of standard-rated supplies
• The amount to report in Box 1 is the value of
  supplies which are subject to GST.
• This value should exclude the GST amount.
• Example If you sell goods for 100 with 7 of
  GST, you should include 100 in Box 1.
•  

What to include Supplies of goods made in the course of your business E.g. Inter-company sale of goods (if not under Group/ Divisional Registration), lease of machinery Supplies of services made in the course of your business Sale of business assets Deemed supplies E.g. Gifts gt 200 or forms a series of gifts OR Business assets put to non-business use
What to deduct Reduction in the value of standard-rated supplies for which a credit note has been issued or a debit note has been received
66
6. e-Filing GST Returns and Correcting Mistakes

• Box 2 Total value of zero-rated supplies

What to include Supplies of goods which are exported Supplies of international services as listed in section 21(3) of the GST Act
What to deduct Reduction in the value of zero-rated supplies for which a credit note has been issued or a debit note has been received

• Box 3 Total value of exempt supplies

What to include Sales and leases of residential properties Supplies of financial services under the Fourth Schedule to the GST Act E.g. Interest from local banks, sale of equity, absolute value (i.e. to ignore any negative sign) of net realised exchange gain/loss for each prescribed accounting period Supply of Investment Precious Metals (IPM) (with effect from 1 Oct 2012)
67
6. e-Filing GST Returns and Correcting Mistakes

• Box 3 Total value of exempt supplies (continue)
• Illustration For the quarterly return ending Dec
  2012
• Month Oct Nov Dec
• Exchange gain/(loss) (150) 100 (200)
• The net realised 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
• Box 4 Total value of Box (1) Box (2) Box (3)
•  
• The value in this box will be automatically
  computed after you have filled in
• the amounts in Box 1, Box 2 and Box 3.

68
6. e-Filing GST Returns and Correcting Mistakes
Box 5 Total value of taxable purchases   The
amount to report in Box 5 is the value of
purchases and imports where the GST incurred can
be claimed, and zero-rated purchases. This value
should exclude the GST amount.   Example If you
buy or import goods for 100 with 7 of GST, you
should include 100 in Box 5.
What to include Standard-rated purchases Imports Zero-rated purchases from GST-registered suppliers (e.g. purchase of air tickets, international freight charges, international call charges) Business purchases made before your date of GST registration which satisfy pre-registration input tax claim conditions (in first GST F5 only)
What to deduct Reduction in the value of taxable purchases for which a credit note has been received or a debit note has been issued Value of taxable purchases corresponding to repayment of input tax
What to exclude Wages and salaries Expenses where input tax is specifically disallowed
69
6. e-Filing GST Returns and Correcting Mistakes
Box 6 Output tax due   In general, the amount to
report in Box 6 is the GST charged on your
standard-rated supplies.   Example If you sell
goods for 100 with 7 of GST, you should include
the 7 of GST in Box 6.
What to include GST charged on the items included in Box 1 GST on debts that are recovered after you have claimed for your bad debt relief Claim of a refund made to a tourist if it was previously allowed to you and you are no longer entitled to it
What to deduct Reduction in GST to be accounted for where a credit note has been issued or a debit note received
70
6. e-Filing GST Returns and Correcting Mistakes

• Box 7 Input tax and refunds claimed
•  
• In general, the amount to report in Box 7 is the
  GST incurred on your business purchases, and
  other GST refunds to claim.
•  
• Example If you buy or import goods for 100 with
  7 of GST, you should include 7 in Box 7.

What to include GST incurred on the standard-rated purchases included in Box 5 GST incurred on imports included in Box 5 Tourist refunds made to your customers (Applicable to businesses that operate the Tourist Refund Scheme only) Bad debt relief claim in which all the bad debt relief claim conditions can be satisfied Input tax claim for business purchases made before your date of GST registration which satisfy pre-registration input tax claim conditions (in first GST F5 only)
What to deduct Reduction in GST to be claimed where a credit note has been received or a debit note issued Repayment of input tax claimed from IRAS but not paid to your supplier
71
6. e-Filing GST Returns and Correcting Mistakes

• Box 8 Net GST to be paid to/claimed from IRAS
•  
• The value in this box will be automatically
  computed after you have filled in the amounts in
  Box 6 and Box 7.
•  
• Box 9 Total value of goods imported under this
  scheme
•  
• This box is only applicable to businesses under
  the
• Major Exporter Scheme or
• Approved Third Party Logistics Company Scheme or
  
• Other Approved Schemes
•   
• Box 10 Did you claim for GST you had refunded to
  tourists?
•  
• If you have claimed any GST refunds made to
  tourist under the Tourist Refund Scheme in Box 7
  (Input tax and refunds claimed), please indicate
  Yes and state the amount claimed in this box.
• Box 11 Did you make any bad debt relief claims?
•  
• If you have made bad debt relief claims in Box 7
  (Input tax and refunds claimed), please indicate
  Yes and state the amount that you have claimed
  in this box.

72
6. e-Filing GST Returns and Correcting Mistakes
Box 12 Did you make any pre-registration claims?
  This box is applicable to your first GST
return only and will not be available in your
subsequent GST returns. If you have made
pre-registration input tax claims in Box 7 (Input
tax and refunds claimed), please indicate Yes
and state the amount that you have claimed in
this box.   Box 13 Revenue   In general,
revenue refers to income derived from your main
income sources such as from the provision of
services, sale of goods and any other operating
income (i.e. gross sales/ gross income/
turnover). This value should be extracted from
the revenue items (e.g. sales) in your profit
loss accounts, whether they have been audited or
not.   As this value is based on your accounting
treatment, it may be different from the amount
declared in Box 4 which is your total supplies
based on GST requirements.
73
6. e-Filing GST Returns and Correcting Mistakes
Important Things to Note on e-Filing

• Due Dates for Submission of GST Return and GST
  Payment
• Filing and payment due date is 1 month after the
  end of each prescribed accounting period (E.g.
  due date for GST F5 return covering 1 Jan 12 - 31
  Mar 12 is 30 Apr 12)
• Penalties will be imposed for late submission of
  return and payment of tax
• Payment can be made via GIRO (deduction will be
  made on the 15th day of the following month after
  the filing due date), cheque or AXS. For details,
  refer to www.iras.gov.sg gt Quick links gt Payments
  gt GST
• If net GST amount to be paid or claim is lt 5, no
  payment or refund will be made

74
6. e-Filing GST Returns and Correcting Mistakes
Important Things to Note on e-Filing

• Things to look out for when completing the GST
  Return
• To drop off cents for Boxes 1 to 5 9
• Declare figures in S, not in foreign currencies
• All boxes must be completed
• If no business is done, a Nil return is still
  required

75
APPLICATION EXERCISE
ABC company has the following business
transactions for one accounting period
Transaction Value Fill in Box
1) Imports 20,000
2) Local sale 50,000
3) Local sale of fixed asset 5,500.50
4) Local purchase 8,100.40
5) Export sales 50,070.80
5
1
1
5
2
Please note that export sales qualify for
zero-rating only if all the relevant export
documents can be maintained within 60 days from
the time of supply. You can refer to the e-Tax
Guide GST A Guide on Exports for the relevant
documents to be maintained.
76
APPLICATION EXERCISE
ABC company has the following business
transactions for one accounting period
Transaction Value Fill in Box
1) Imports 20,000
2) Local sale 50,000
3) Local sale of fixed asset 5,500.50
4) Local purchase 8,100.40
5) Export sales 50,070.80
5
1
1
5
2
Box 1 Total standard-rated supplies (2)
(3) 50,000 5,500.50
55,500.50 Box 2 Total zero-rated supplies
50,070.80
77
APPLICATION EXERCISE
ABC company has the following business
transactions for one accounting period
Transaction Value Fill in Box
1) Imports 20,000
2) Local sale 50,000
3) Local sale of fixed asset 5,500.50
4) Local purchase 8,100.40
5) Export sales 50,070.80
5
1
1
5
2
Box 5 Total value of taxable purchases (1)
(4) 20,000 8,100.40
28,100.40
78
APPLICATION EXERCISE
What figures to fill for Box 6 (output tax) and
Box 7 (input tax) ?
Transaction Value Fill in Box GST Value Box 6 or 7?
1) Imports 20,000 5 1,400
2) Local sale 50,000 1 3,500
3) Local sale of fixed asset 5,500.50 1 385.04
4) Local purchase 8,100.40 5 567.03
5) Export sales 50,070.80 2 0
7
6
6
7
NA
Box 6 Output Tax Due (2) (3)
3,500 385.04 3,885.04
79
APPLICATION EXERCISE
What figures to fill for Box 6 (output tax) and
Box 7 (input tax) ?
Transaction Value Fill in Box GST Value Box 6 or 7?
1) Imports 20,000 5 1,400
2) Local sale 50,000 1 3,500
3) Local sale of fixed asset 5,500.50 1 385.04
4) Local purchase 8,100.40 5 567.03
5) Export sales 50,070.80 2 0
7
6
6
7
NA
Box 7 Input Tax and Refunds Claimed (1)
(4) 1,400 567.03
1,967.03
80
APPLICATION EXERCISE
81
6. e-Filing GST Returns and Correcting Mistakes

• Correcting Mistakes in GST Return
• Mistakes made in your GST F5/F7/F8 return
  submitted can be corrected by filing a GST F7
  Disclosure of errors on GST return
• To fill in the total revised figures inclusive
  of error adjustments (i.e. treat the GST F7 as a
  new GST return for the accounting period)
• GST F7 filed will supersede the F5/F7/F8 that
  was submitted previously for the same accounting
  period

82
6. e-Filing GST Returns and Correcting Mistakes

• Correcting Mistakes in GST Return
• GST F7 can be requested and submitted
  electronically via myTax Portal.
• For detailed instructions on requesting for GST
  F7, you may refer to the GST e-Filing User
  Guide.GST gt For GST-registered businesses gt
  Complete File GST return gt Correct errors made
  in GST return (request for GST F7).
• As a concession, you may correct the errors in
  your next GST F5 return, subject to certain
  conditions as shown in the following flowchart.

83
6. e-Filing GST Returns and Correcting Mistakes
ERRORS
NO
Is the sum of non-GST errors for each
prescribed accounting period gt 5 of total
supplies?
NO
Include the errors in the next GST F5/F8 return
Do the errors involve GST?
NO
YES
Is the net GST error for all affected accounting
period(s) gt 1,500?
GST error refers to a mistake made to the value
declared in Box 6 and/or Box 7 of your submitted
GST return. Non-GST errors refer to all other
mistakes made that are not GST errors.
YES
YES
File F7
84
APPLICATION EXERCISE
Scenario Errors Net GST error Adjustments
1. Errors involve GST amount only (value of supplies and purchases are correct) Qtr 1 Under-declared output GST by 300 Qtr 1 Under-declared input GST by 200 300 - 200 100 Net GST error lt 1,500 Non-GST error lt 5 of total supplies. Correct mistake in next GST F5/F8 return.
2. Errors do not involve GST amount (GST values are correct) Qtr 1 Standard-rated supplies over-declared by 200 Qtr 1 Zero-rated supplies under-declared by 10,000 Qtr 1 Taxable purchases under-declared by 500 200 10,000 500 10,700 10,700 / 105,570 100 10.1 Non-GST errors gt 5 of total supplies. Need to file GST F7.

• Increase Box 6 by 300
• Increase Box 7 by 200
• in next GST F5/F8 return.

You will need to revise all the figures (as if
you are filing for the 1st time) in the GST F7
for Qtr1.
85
7. Penalties and Recovery Actions

• Late Registration
• Non/Late Submission of GST Return
• Non/Late Payment of Tax
• Submission of Incorrect GST Return
• Failure to Keep Proper Records

Relevant e-Tax Guides Do I Need to
Register? How Do I Prepare My GST
Return Basic Record Keeping Guide for
GST-registered Businesses Keeping of Records in
Imaging Systems Keeping Machine-sensible
Records and Electronic Invoicing
86
7. Penalties and Recovery Actions
Late Registration

• If a business fails to apply for GST registration
  within 30 days of the date its registration
  liability arises, the Comptroller has the power
  to
• Back-date the GST-registration
• Business must account for GST on standard-rated
  supplies made from their effective date of GST
  registration. This is regardless of whether GST
  can be recovered from its customers
• Impose penalties
• 5 late payment penalty will be imposed on the
  tax that should have been paid earlier
• On conviction, the following shall be imposed
• 10 penalty on tax due and
• Fine not exceeding 10,000

87
7. Penalties and Recovery Actions

• Non/Late Submission of GST Return
• If a business fails to submit GST return by the
  due date, the Comptroller can
• Impose late submission penalty
• 200 late submission penalty for every completed
  month that GST F5/F8 remains outstanding (not
  exceeding 10,000 in penalty for each GST F5/F8)
• Raise estimated tax assessment and impose late
  payment penalty (LPP)
• Tax unpaid 60 days after the imposition of 5 LPP
  may be subject to an additional 2 penalty for
  each completed month (not exceeding 50 of tax
  outstanding)

88
7. Penalties and Recovery Actions

• Non/Late Submission of GST Return
• Raise estimated tax assessment and impose late
  payment penalty (LPP)
• The estimated tax assessment and LPP will be
  adjusted upon receipt and finalisation of GST
  F5/F8.
• On conviction, the following will be imposed
• 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

89
7. Penalties and Recovery Actions

• Non/Late Payment of Tax
• If a business fails to make GST payment by due
  date, the Comptroller can
• Impose late payment penalty and issue a demand
  note
• 5 penalty on tax payable and
• Tax unpaid 60 days after the imposition of 5 LPP
  may be subject to an additional 2 penalty for
  each completed month (not exceeding 50 of tax
  outstanding)
• Appoint agent (e.g. banks, tenants) for payment
  of tax
• Stop individual from leaving the country
• Take legal action

90
7. Penalties and Recovery Actions

• Submission of Incorrect GST Return
• If a business submits an incorrect GST return,
  the Comptroller can
• Raise additional tax assessment
• IRAS conducts random audits on GST-registered
  businesses
• Additional tax assessment will be raised to
  recover the taxes under-accounted/over-claimed
• On conviction, the following shall be imposed
• Penalty up to 2 times the amount of tax
  under-accounted/over-claimed and
• Fine up to 5,000 and/or imprisonment up to 3
  years

91
7. Penalties and Recovery Actions

• Failure to Keep Proper Records
• On conviction of failure to keep proper records,
  the following shall be imposed
• Fine not exceeding 5,000 and/or
• Imprisonment not exceeding 6 months
• Repeated offence Business will face fine not
  exceeding 10,000 and/or imprisonment not
  exceeding 3 years

92
APPLICATION EXERCISE
Scenario Late submission? Penalty? Late payment? Penalty?
a) F5 for 01 Oct 12 31 Dec 12 e-filed on 20 Jan 13. Sufficient funds were maintained for a successful GIRO deduction on 15 Feb 13.
No
NA
NA
No
93
APPLICATION EXERCISE
Scenarios Late Submission? Penalty? Late Payment? Penalty?
b) F5 for 01 Oct 12 31 Dec 12 e-filed on 28 Jan 13 with net tax payable of 1,000 which was paid to IRAS on 01 Apr 13.
c) F5 for 01 Oct 12 31 Dec 12 e-filed on 15 Mar 13 with net tax payable of 1,000 which was paid to IRAS on 15 Mar 13.
5 x 1,000 2 x 1,000 2 x 1,000
No
NA
Yes
5 x 1,000 Previous penalty on assessment
raised would be adjusted accordingly
Yes
200
Yes
94
8. Tips on Compliance

• How to Avoid Late Submission Penalty
• How to Avoid Late Payment Penalty
• How to Ensure Accurate GST Reporting The Four
  Building Blocks
• GST Assisted Self-help Kit (ASK)

Relevant e-Tax Guides GST General Guide for
Businesses How Do I Prepare My GST
Return Basic Record Keeping Guide for
GST-registered Businesses Keeping of Records in
Imaging Systems Keeping Machine-sensible
Records and Electronic Invoicing IRAS Voluntary
Disclosure Programme
95
8. Tips on Compliance
How to Avoid Late Submission Penalty

• Ensure necessary resources are available for
  prompt filing of GST F5/F8 returns
• Ensure the person authorised for e-filing is able
  to log-in to myTax Portal much earlier than the
  due date of filing
• Ensure that the Acknowledgement Page is generated
  after each submission of GST F5/F7/F8 return
  online

96
8. Tips on Compliance
How to Avoid Late Payment Penalty

• For payment through GIRO, ensure you have
  sufficient funds in your GIRO bank account by the
  15th of the month when payment is to be deducted
• Follow payment instructions on the
  Acknowledgement page generated with each
  successful submission of GST return
• Submit your GST returns and pay the tax declared
  by the due date. If you have not submitted the
  GST F5/F8 return, pay the tax assessed and submit
  the return immediately so that tax assessed can
  be adjusted

97
8. Tips on Compliance
How to Ensure Accurate GST Reporting The 4
Building Blocks

1. People

Authorised staff doing the GST reporting Know the e-Filing and GST payment procedures Have adequate GST knowledge Ensure that GST treatment is correctly applied to transactions and clarify when unsure of GST treatment Keep abreast of GST developments by visiting IRAS website and attending relevant courses
Management Directors/Shareholders to take interest in accuracy of GST reporting Engage qualified people for GST reporting or provide adequate training to staff Ensure proper handover during staff turnover (e.g. authorise the new staff at EASY to e-File GST returns)
98
8. Tips on Compliance
2. Systems  For a list of accounting
software that can produce IAF, please refer to
www.iras.gov.sg gt Businesses gt IRAS Accounting
Software Register.
Use of suitable computerised accounting system/ software Coded table to classify your sales (type of supply) and purchases (whether claimable) when they are recorded In-built logic to detect duplicate records, discrepancies in GST rate and GST value, etc Function to generate a GST report to assist you in completing your GST returns Function to generate sales and purchases listings in the format of an IRAS Audit File (IAF) and/or softcopy sales and purchases listings in Microsoft Excel file format
99
8. Tips on Compliance
3. Record-keeping To comply with the
record-keeping requirements stated under Section
5.  
Good record-keeping practices Set up a good filing system Keep clear records with cross-references (e.g. credit notes issued should make reference to the original tax invoice) Ensure all transactions are captured accurately and in a timely manner in your accounting system Keep all IRAS correspondences (e.g. Approval for GST registrations and schemes, updates on GST changes, GST clarifications sought from IRAS etc.)
100
8. Tips on Compliance
4. Internal Controls
Good internal control Claiming input tax only upon receipt of tax invoice to avoid double claiming Ability to track all creation, amendment and approval of transactions GST return to undergo second level of review before submission Regular reviews to assess the accuracy of submitted GST returns
101
8. Tips on Compliance
GST Assisted Self-help Kit (ASK)

• ASK is a self-assessment package designed to help
  you enhance your GST compliance
• You can learn more about ASK at www.iras.gov.sg gt
  For GST-registered Businesses gt GST Initiatives
  to Facilitate Voluntary Compliance gt GST Assisted
  Self-help Kit (ASK)

GOOD GST COMPLIANCE
GST Practices
Pre-Filing Checklist
ASK Annual Review
SECTION 1
SECTION 2
SECTION 3
GST Practices list down the essential
requirements and good practices that you can
include in the internal processes of your
business.
Pre-Filing Checklist is a set of questions and
answers for you to go through before you file
your GST return, so that you can avoid errors.
ASK Annual Review guides you to do a self-review
of your GST returns filed in the past financial
year(s).
102
8. Tips on Compliance
Voluntary disclosure of errors attracts lower
penalties!
For a start, you can go through Avoid Costly
GST Errors enclosed in this seminar package and
the GST Assisted Self-help Kit
For more information, refer to www.iras.gov.sg gt
About IRAS gt Taxpayer Compliance gt IRAS Voluntary
Disclosure Program
103
9. Notifying of Changes to Business and
Cancelling GST Registration

• Notifying Changes to Business
• Cancelling GST Registration

Relevant e-Tax Guide Do I Need to
Register? GST General Guide for Businesses
Transfer of Business as a Going Concern
104
9. Notifying of Changes to Business and
Cancelling GST Registration
Notifying Changes to Business
Changes to Business Action Required
Change in business details (E.g. business name, address or GST GIRO bank account number) Write in (post/fax/email) with supporting documents (e.g. ACRA Business Profile) to inform IRAS within 30 days of change.
Cessation of business GST registration will not be automatically cancelled upon cessation of business To apply for cancellation of GST registration within 30 days of business cessation by submitting form GST F9 (Application for Cancellation of GST)
105
9. Notifying of Changes to Business and
Cancelling GST Registration
Changes to Business Action Required
Change in business constitution or ownership Transfer of business from one person to another (E.g. convert from sole-proprietorship to private limited company) Transferor previous business constitution/owner Transferee new business constitution/owner Transferor To apply for cancellation of GST registration within 30 days of the date of transfer by submitting GST F9 if transferor ceases to make taxable supplies after the transfer.
Change in business constitution or ownership Transfer of business from one person to another (E.g. convert from sole-proprietorship to private limited company) Transferor previous business constitution/owner Transferee new business constitution/owner Transferee Assess if business is liable to be GST-registered Submit GST F1 (Application for GST Registration) and Documentation Checklist within 30 days of the date of transfer should taxable turnover exceed S1 million
106
9. Notifying of Changes to Business and
Cancelling GST Registration

• Cancelling GST Registration
• Other than cessation of business, you may cancel
  your GST registration if your business