Goods and Services Tax

Goods and services tax (GST) was first introduced in Singapore as part of the Goods and Services Tax Act (GSTA) of 1994 on 1 April 1994. The Comptroller of Goods and Services levies this tax upon the supply of goods and services in Singapore by any taxable person in the course or furtherance of a business, as well as upon the import of goods into Singapore. Singapore Customs collects GST upon the importation of goods.

A GST-registered trader must charge GST on taxable supplies of goods and services made to its customers. The tax charged is known as the output tax. The GST suffered on purchases and expenses incurred in the course of business is known as input tax and can be claimed as an input tax credit against the output tax collected. The tax is collected at each stage of the transaction process involving a good or service, with the ultimate consumer bearing the tax. In this regard, GST does not normally become a business cost to a GST-registered business as they merely act as collecting agents for the Comptroller of Goods and Services Tax.

Rates of tax

In general, for GST purposes, a supply is either taxable or exempt. A taxable supply is one that is standard-rated or zero-rated. A standard-rated supply is liable to GST at 9%. A zero-rated supply means that GST applies to a specific supply at a 0% rate. Only goods that are exported and services that qualify as international services are zero-rated. GST-registered traders need not charge GST on their zero-rated supplies but may request a refund of any GST they have paid on purchases for the purposes of their business.