GST Class Presentation Slides

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GOODS AND SERVICES TAX (GST)
Introduction to GST
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 > GST > For GST-registered businesses > GST Course "Introduction to GST" (e-Learning/Seminar)
COURSE OUTLINE
1. 2. 3. 4. 5. 6. 7. GST and My Responsibilities Charging GST on Sales Charging GST on Other Transactions Claiming GST on Business Purchases and Imports Price Display, Invoicing and Record-keeping
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e-Filing GST returns and Correcting Mistakes Penalties and Recovery Actions
8.
9.
Tips on Compliance
Notifying of Changes to Business and Cancelling GST Registration GST Courses by Tax Academy
10. Where to Get Help
Q&A
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?

What is GST?
Tax on domestic consumption of goods and
services and importation of goods

Paid when:
- Goods or services are purchased from GSTregistered businesses - Goods are imported into Singapore (collected by Singapore Customs at point of importation)
Self-assessed tax

How does GST Work?
GST on supply of goods & services
(Output tax)
less
GST paid on business purchases

(Input tax)
equals
Net GST
+
Payable to Comptroller
Refundable from Comptroller
Overseas Supplier
$500 + $35 (7% GST)
Import GST = $35
GST-Registered Wholesaler
$700 + $49 (7% GST)
Output tax = $49 Input tax = $35 Net GST payable = $14
GST-Registered Retailer
$1000 + $70 (7% GST)
Output tax = $70 Input tax = $49 Net GST payable = $21
End-consumer

What are the Responsibilities of a GST-registered Business?
A GST-registered business must: 1.Submit returns and pay tax in a timely manner 2.Submit accurate GST returns 3.Maintain listings and keep business and accounting records for 5 years 4.Assist in GST audit 5.Display prices with GST 6.Reflect GST registration number on all tax invoices and receipts 7.Inform IRAS of changes to the business 8.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.
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? Accounting for GST Absorbed by Businesses
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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
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Goods or Services?
Goods 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. Services Anything that is not goods Performance of duty or work for another person Generally intangible Example: Hairdressing Service
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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
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ii) Is the supply taxable? Taxable supply refers to the supply of goods or services made in Singapore, other than an exempt supply and outof-scope supply.
Types of supplies
TAXABLE SUPPLIES 1. Standard-Rated Supply (7% GST) Local sales of goods & services Sale of Capital Assets NON-TAXABLE SUPPLIES 1. Exempt Supply Sale and Lease of Residential Properties Financial Services Local Sale of Investment Precious Metals (IPM) 2. Out-of-Scope Supply Third Country Sales (Sales outside Singapore) Transhipments Disbursements
2. Zero-Rated Supply (0% GST) Export of Goods International Services
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iii) Who is a taxable person? A person that is GST-registered or is required to be registered for GST under the GST Act.
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GST registration liability
Registering for GST is compulsory when: - Turnover of your business is more than $1 million in the current quarter and the past 3 quarters; or - You are currently making sales and can reasonably expect the turnover to exceed $1 million for the next 12 months Otherwise, the company need not register for GST, unless it chooses to do so voluntarily
Additional businesses
responsibilities
for
voluntarily
registered
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.
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GST registration liability - Rules for Sole-proprietor (SP) and Sole-proprietorship (SPship) businesses
For SPship businesses, GST registration is in the name of the SP, not the SPship business 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 (with effect from the date of commencement of the new business) Notify IRAS of any new SPship business by sending in its ACRA Business Profile
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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, all PP businesses with the same composition of partners will be liable to register for GST. This also includes future PP business set-up with the same composition of partners Submit GST F1 (Application for GST Registration) and GST F3 (Details of all Partnerships and Partners) for the new PP business
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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).
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APPLICATION EXERCISE
StandardRated (7% GST) Zero-Rated (0% GST)
Supplies
Exempt
Out-of-scope
a) Sale of $400,000 worth of goods sent to a local customer for his export 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.
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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)
Y (0%)
Y (7%)
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Scenarios g) A developer develops 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. Taxable Supply? Made by taxable person? In course or furtherance of business? Charge GST?
N (exempt)
Y Y (Commercial) Y Y
(7% - commercial) (Exempt residential)
N (out-of-scope)
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Value of Supply Subject to GST
Value of Supply Example If my customers pay me within 14 days from the issuance of my tax invoice, I will give a 10% prompt payment discount. GST will be chargeable on the discounted price whether or not the discount is subsequently given. Note: This clause should be clearly stated in the invoice.
a) Trade/ Cash discount given
Discounted price/ Prompt payment discount
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Value of Supply
Example 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%
b) Transactions with related parties
Open Market Value (OMV) of goods
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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
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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.
Note: Prior to 1 January 2011, the general time of supply rule is the earliest of the following events: 1.Goods removed/made available or Services performed; (Basic Tax Point) 2.Tax invoice issued (subject to 14-day rule); or 3.Payment received
BASIC TAX POINT & 14-DAY RULE NOW REMOVED
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Total value of goods sold = $11,000
Invoiced for $11,000 and received partpayment of $5,000 31/01/12 Received remaining payment of $6,000 01/02/12
Goods removed (Value = $11,000) 01/01/12
Account for GST on: 31/01/12 (on $11,000)
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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 I have supplied goods or services for a consideration in money and have accounted for and paid GST on the supply. I have written off the whole or any part of the consideration for the supply as a bad debt in my accounts. 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. I have taken reasonable steps to recover the debts.
1 2 3 4
Please complete the "Self-review of Eligibility to Claim Bad Debt Relief" form (www.iras.gov.sg> Quick links> Forms>GST) before making the claim in your current GST return. Do not submit the form to IRAS unless requested.
3. Charging GST on Other Transactions

Giving Goods and Services for Free Fringe Benefits to Staff Recovery of Expenses
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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

Giving Goods and Services for Free
Giving Services for Free No output tax to be accounted for
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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: 1. GST was incurred on purchase of goods; 2. Cost of gift > $200; or 3. Cost of gift $200, but 3 or more gifts were given to the same person within 3 months 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.
From 1 Oct 2012

Fringe Benefits to Staff
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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: 1. 2. 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: 1. A free supply of food or accommodation; 2. Gifts of value not more than $200 each; or 3. Gifts for which no credit for input tax has been allowed on its purchase.

Recovery of Expenses
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Whether GST needs to be charged for the recovery depends on whether it is treated as a reimbursement or disbursement
Re-bill to recover Reimbursement: Invoice addressedGST chargeable to you Supplier Payment Co A the amount paid (Charge GST) Payment Co B E.g. your subsidiary or customer
Invoice addressed to Co B Disbursement: GST not chargeable Re-bill to recover the amount paid (No GST) Payment Co B E.g. your subsidiary or customer
Supplier Payment
Co A

Reimbursements Disbursements
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Co A paid supplier on Co Bs behalf and recovered the cost subsequently Supplier issued tax invoice to Co A Supplier issued tax invoice to Co B (Co A is the contracting party with (Co B is the contracting party with supplier) supplier) Co A is legally responsible to pay supplier When Co A invoices Co B to recover the amount, Co B is legally responsible to pay supplier When Co A invoices Co B to recover the amount,
GST is chargeable
GST is not chargeable

Sale of Business/Capital Assets
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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
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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
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A Year End Sale Not to be Missed!!!

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If both buyer and supplier are GSTregistered and buyer traded-in an old photocopier for a new photocopier:
1) Buyer needs to issue a tax invoice to supplier for $200 x prevailing GST rate.
2) Supplier needs to issue a tax invoice to buyer for $650 x prevailing GST rate.
If buyer is GST-registered but supplier is not:
1) Buyer needs to issue tax invoice to supplier for $200 x prevailing GST rate.
2) Supplier cannot charge GST on $650.
4. Claiming GST on Business Purchases and Imports

Conditions for Claiming Input Tax Disallowed Expenses Claiming Input Tax
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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

Conditions for Claiming Input Tax
You can claim GST incurred on your purchases as input tax if: You are GST-registered;
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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

Disallowed Expenses
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You are not allowed to claim input tax incurred on the following expenses: a) Club subscription fees b) Medical and accident insurance premiums* c) Medical expenses* d) Benefits provided to family members/relatives of your staff e) Cost and running expenses of motor cars f) 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.

Claiming Input Tax
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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

Claiming Input Tax on Purchases Paid in Foreign Currency
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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
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Situations where Input Tax Claims are Disallowed

Case 1 No valid supporting document Invoice issued in Co Xs name without the words Tax Invoice stated on the document The purchases were for Co Xs use Co X claimed input tax based on this invoice which does not comply with the requirements of a tax invoice Co Xs input tax claims will be disallowed Mr. X (GST-registered sole-proprietor) holds tax invoices issued to him The GST was incurred for construction of his own residential property Expenditure is of private nature Mr. X's input tax claims will be disallowed
Case 2
Private Expenditure
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No Scenarios My company owns a motorcar for business use. Can I claim for the purchase, petrol and parking charges? My company purchased goods from overseas and will import the goods into Singapore. My forwarder has declared my related company as the importer. Can my related company or my company claim the GST on import? I allow my staff to claim for their handphone bills. The handphone bill is in my staffs name. Can I claim the GST? Yes or No
No
No
Yes
(For business purposes only)

Claiming Pre-registration Input Tax
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For purchases made before your GST registration, you can claim the GST incurred if all the following conditions are satisfied:
GOODS 1. Goods are purchased or imported in the course of business for making taxable supplies. 2. Goods are not consumed or supplied before date of GST registration. 3. A stock account is maintained with these details - date of purchase , quantities purchased etc. SERVICES 1. Services are purchased for and supplied in the course of business for the making taxable supplies. 2. Services are not related to goods/services already supplied or consumed before date of GST registration. 3. Services are not supplied more than 6 months before date of GST registration. 4. Record is maintained with these details description of services; date of purchase; and date of disposal (if any).

Claiming Pre-registration Input Tax
How to claim?
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1) Download and complete the Self-Review for Eligibility to Claim Pre-Registration Input Tax form (www.iras.gov.sg > Quick links > Forms > GST) 2) Do not submit the form to IRAS unless requested. 3) 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.
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GST registration date : 01/01/2012 GST Incurred on Goods:

Invoice Date i) ii) 01/11/11 30/11/11 Description Purchase of stocks Utilities charges Office rental Amount $1,000 $300 $2,500 Claimable? Yes No No No
iii) 15/12/11
iv)
01/12/11
Imports which are sold on 31/12/11
$900
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GST registration date : 01/01/2012 GST Incurred on Services:

Invoice Date Description Amount Claimable? No Yes
v) 01/05/11
vi) 30/11/11 vii) 01/11/11
Management fee
Consultancy fee Commission paid for goods sold on 01/11/11
$1,000
$2,000 $500
No

Repayment of Input Tax
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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: 1. Reducing the value of your taxable purchases (Box 5, Value of taxable purchases); and 2. Reducing the value of the input tax claim (Box 7, Input tax and refunds claimed).
5. Price Display, Invoicing and Record-keeping

Displaying Prices
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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

Displaying Prices
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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 (F&B) 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
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Displaying prices: Which are acceptable?
Price Displayed as
$107 $107 (inclusive of GST) $100 + $100 + GST $100 + 7% GST $100 + $7 GST
Acceptable?
Yes Yes No No
No
No

Invoicing Customers
Issuing tax invoices Importance of tax invoice When to issue a tax invoice?
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Primary supporting document for input tax claims Must be issued if making a standardrated supply to a taxable person Within 30 days from the receipt of payment No need to issue tax invoices for: zero-rated supplies exempt supplies deemed supplies
When not to issue a tax invoice?
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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.

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TAX INVOICE
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Contents of a tax invoice

Gallery Photo Supplier 888 Jalan Ang Teng Singapore 560009 GST Reg No: M2-1234567-K
1. 2. 3. 4. 5.
(Customers Name) (Customer's Address) (Customer's Address)
3 1 4
Total ($) 90 1,000 900 20,000 Discount ($) 45 Total ($) 855.00 Date: 01/07/2007 Invoice No: F012345
Type of Supply: Cash / Credit Sale S/No 1 2 Description Yashica MG2
Qty Unit Price ($) 10
6. 7.
Pentax Z-1 Body 20 Total Add GST @ 7% Amount Due:
1,000 19,000.00 19,855.00 1,389.85
7 8
8. 9.
21,244.85
Thank you. We look forward to being of service to you again.
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

Issuing simplified tax invoices When to Issue? Amount payable including tax $1,000 Only for standard-rated supplies
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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

Keeping Records
Income, purchase and business expense records
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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.

Other records to support GST declarations
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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

Statements and accounting schedules
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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.

Sales and purchase listings
Recommended format as follows:
Sales Listing
Invoice date Invoice number Name of customer Description of supply Invoice amount excluding GST ($) GST ($) (if applicable)
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Destination of goods (if applicable)
Purchases Listing
Invoice date Invoice number Name of supplier Suppliers GST registration number Description of purchase Invoice amount excluding GST ($) GST ($)
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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
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(Please note that no refreshments will be provided)
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6. e-Filing GST Returns and Correcting Mistakes

Overview of e-Filing
Completing GST F5 Important Things to Note on e-Filing
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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

Overview of e-Filing
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Step 1
Authorise Staff/Third Party to act for your organisations GST matters online You need your organisations e- via e-Services Authorisation System (EASY) Services Access Code to log in This step is required only if you are http://mytax.iras.gov.sg/easy e-Filing GST return for the first time or if you need to edit an earlier authorisation
Retrieve and Complete GST F5 via myTax Portal http://mytax.iras.gov.sg
Step 2
For detailed instructions, you may download the GST e-Filing User Guide at www.iras.gov.sg> Quick links> e-Services> GST.

Completing GST F5
Box 1: Total value of standard-rated supplies
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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.
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 > $200 or forms a series of gifts OR Business assets put to non-business use
Reduction in the value of standard-rated supplies for which a credit note has been issued or a debit note has been received
What to include
What to deduct

Box 2: Total value of zero-rated supplies What to include
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Supplies of goods which are exported Supplies of international services as listed in section 21(3) of the GST Act
Reduction in the value of zero-rated supplies for which a credit note has been issued or a debit note has been received
What to deduct
Box 3: Total value of exempt supplies Sales and leases of residential properties Supplies of financial services under the Fourth Schedule to What to the GST Act include 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

Box 3: Total value of exempt supplies (continue)
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Illustration: For the quarterly return ending Dec 2010 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
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.

Box 5: Total value of taxable purchases
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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. 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) 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 Wages and salaries Expenses where input tax is specifically disallowed
What to include
What to deduct What to exclude

Box 6: Output tax due
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In general, the amount to report in Box 6 is the GST charged on your standardrated supplies.
Example: If you sell goods for $100 with $7 of GST, you should include the $7 of GST in Box 6.
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 Reduction in GST to be accounted for where a credit note has been issued or a debit note received
What to include
What to deduct

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.
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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)
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
What to deduct

Box 8: Net GST to be paid to/claimed from IRAS
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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.

Box 12: Did you make any pre-registration claims?
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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.

Important Things to Note on e-Filing
Due Dates for Submission of GST Return and GST Payment
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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 Jan12 - 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 > Quick links > Payments > GST If net GST amount to be paid or claim is < $5, no payment or refund will be made

Important Things to Note on e-Filing
Things to look out for when completing the GST Return
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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
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ABC company has the following business transactions for one accounting period: Transaction 1) Imports 2) Local sale 3) Local sale of fixed asset 4) Local purchase 5) Export sales* Value $20,000 $50,000 $5,500.50 $8,100.40 $50,070.80 Fill in Box 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.
74
What figures to fill for Box 6 (output tax) and Box 7 (input tax) ?
Transaction 1) Imports 2) Local sale 3) Local sale of fixed asset 4) Local purchase 5) Export sales Value $20,000 $50,000 $5,500.50 $8,100.40 $50,070.80 Fill in Box 5 1 1 5 2 GST Value $1,400 $3,500 $385.04 $567.03 $0 Box 6 or 7? 7 6 6 7 NA
75
55,500 50,070
0
105,570 28,100
3,885.04 1,967.03 1,918.01

76
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

77
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. As a concession, you may correct the errors in your next GST F5 return, subject to certain conditions as shown in the following flowchart.

ERRORS
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Do the errors involve GST?
NO
YES
NO
Is the sum of nonGST errors** for each prescribed accounting period > 5% of total supplies?
NO
Include the errors in the next GST F5/F8 return
Is the net GST error* for all affected accounting period(s) > $1,500? YES
YES
*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.
File F7
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Scenario 1. Errors involve GST amount only (value of supplies and purchases are correct) Errors Qtr 1: Under-declared output GST by $300 Qtr 1: Under-declared input GST by $200 Net GST error +$300 - $200 = +$100 Net GST error < $1,500; Non-GST error < 5% of total supplies. Correct mistake in next GST F5/F8 return. Adjustments 1. Increase Box 6 by $300 & 2. 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.
2. Errors do not involve GST amount (GST values are correct)
Qtr 1: Standard-rated $200 + $10,000 + $500 supplies over-declared by = $10,700 $200 $10,700 / $105,570 * 100 = 10.1% Qtr 1: Zero-rated supplies Non-GST errors > 5% of under-declared by total supplies. $10,000 Need to file GST F7. Qtr 1: Taxable purchases under-declared by $500
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:
80
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

Late Registration
81
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

Non/Late Submission of GST Return
82
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)

Non/Late Submission of GST Return
83
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

Non/Late Payment of Tax
84
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

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 underaccounted/over-claimed; and - Fine up to $5,000 and/or imprisonment up to 3 years
85

Failure to Keep Proper Records
86
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
87
Scenario a) F5 for 01 Oct 11 31 Dec 11 e-filed on 20 Jan 12. Sufficient funds were maintained for a successful GIRO deduction on 15 Feb 12.
Late submission?
Penalty?
Late payment?
Penalty?
No
NA
No
NA
88
Scenarios b) F5 for 01 Oct 11 31 Dec 11 e-filed on 28 Jan 12 with net tax payable of $1,000 which was paid to IRAS on 01 Apr 12. Late Submission? Penalty? Late Payment? Penalty?
No
NA
Yes
5% x $1,000 + 2% x $1,000 + 2% x $1,000 5% x $1,000
c) F5 for 01 Oct 11 31 Dec 11 e-filed on 15 Mar 12 with net tax payable of $1,000 which was paid to IRAS on 15 Mar 12.
Yes
$200
Yes
Previous penalty on assessment raised would be adjusted accordingly
89
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
90
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
91
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
92
How to Ensure Accurate GST Reporting The 4 Building Blocks
1. People
Know the e-Filing and GST payment procedures
Have adequate GST knowledge Authorised staff doing the Ensure that GST treatment is correctly applied to transactions and clarify when unsure of GST treatment GST reporting Keep abreast of GST developments by visiting IRAS website and attending relevant courses
Directors/Shareholders to take interest in accuracy of GST reporting Management 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)
93
2. Systems
Coded table to classify your sales (type of supply) and purchases (whether claimable) when they are recorded Use of suitable computerised accounting system/ software 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 For a list of accounting software that can produce IAF, please refer to www.iras.gov.sg > Businesses > IRAS Accounting Software Register.
94
3. Record-keeping
To comply with the record-keeping requirements stated under Section 5.
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)
Good record-keeping Ensure all transactions are captured accurately and in a timely manner in your practices
accounting system Keep all IRAS correspondences (e.g. Approval for GST registrations and schemes, updates on GST changes, GST clarifications sought from IRAS etc.)
95
4. Internal Controls
Claiming input tax only upon receipt of tax invoice to avoid double claiming Good internal control
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
96
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 > For GST-registered Businesses > GST Initiatives to Facilitate Voluntary Compliance > GST Assisted Self-help Kit (ASK)
GOOD GST COMPLIANCE

GST Practices PreFiling Checklist ASK Annual Review
SECTION 1
GST Practices list down the essential requirements and good practices that you can include in the internal processes of your business.
SECTION 2
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.
SECTION 3
ASK Annual Review guides you to do a selfreview of your GST returns filed in the past financial year(s).
97
Voluntary disclosure of errors attracts lower penalties!

For a start, you can go through List of Common Errors made by GST-Registered Businesses enclosed in this seminar package and the GST Assisted Self-help Kit For more information, refer to www.iras.gov.sg > About IRAS > Taxpayer Compliance > IRAS Voluntary Disclosure Program
98
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

Notifying Changes to Business
Changes to Business
Change in business details (E.g. business name, address or GST GIRO bank account number) Cessation of business
99
Action Required
Write in (post/fax/email) with supporting documents (e.g. ACRA Business Profile) to inform IRAS within 30 days of change. 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)

Changes to Business
Change in business constitution or ownership Transfer of business from one person to another (E.g. convert from soleproprietorship to private limited company) Transferor
100
Action Required
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. Transferee
Transferor: previous business Assess if business is liable to be GSTconstitution/owner registered Transferee: new business constitution/owner Submit GST F1 (Application for GST Registration) and the latest ACRA Business Profile within 30 days of the date of transfer should taxable turnover exceed S$1 million

Cancelling GST Registration
101
Other than cessation of business, you may cancel your GST registration if your business turnover is below the compulsory registration threshold To notify the Comptroller by submitting GST F9 (Application for cancellation of GST) Once application is approved, you will be notified of the effective date of de-registration and will be required to submit a GST F8 (Final GST return) To account for 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
102
10. Where To Get Help

IRAS website (www.iras.gov.sg) Email enquiries (www.iras.gov.sg > Contact Info > Email Us) Fax enquiries (6351 3553) Letter 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

(Monday to Friday only: From 8am to 5pm)
103
10. Where To Get Help

Ask IRAS
www.iras.gov.sg > GST
e-Tax Guides
GST E-SERVICES
24 Hours, 7 days a week
1.
104
View Return Status Check the status (e.g. if GST return is successfully submitted to IRAS) of GST F5, F7 and F8
2.
Update contact details and subscribe to Alert View or update your contact information online, such as your GST mailing address and to subscribe to GST alerts.
View Correspondence/ Notices Retrieval of Acknowledgement page View Account Summary/ Payments View tax account details; Request statement of accounts; View payment plan schedules; Make payment via internet banking; Request payment voucher to make payment via other payment modes
3. 4.
5.
6.
Apply for GST Registration/ Cancellation of GST Registration

Apply for Declaration of Agents Maintain list of authorised declaring agents for businesses approved under Major Exporter Scheme (MES)/Third Party Logistics Company Scheme (3PL) Log onto myTax portal @https://mytax.iras.gov.sg
105
iSPRINT (Packaged Solutions)

With effect from 1 Apr 2012, all businesses (GST-registered and nonGST-registered) can apply to IDA for a grant under IDAs iSPRINT (Packaged Solutions) scheme to defray the costs of purchasing accounting software that are listed on IRAS Accounting Software Register.
Businesses can claim up to 50% of the qualifying costs for the purchase of the first packaged solution (listed) under each solution category. For more details on the list of packaged solutions, please refer to IDA website.
Please note that businesses must obtain IDA's grant approval before purchase can be made.
106
iSPRINT (Packaged Solutions)

Who is eligible?
How Do I Qualify? You are a local SME with minimum 30% local shareholding and
You do not already own/ use any other solutions that you are going to adopt (i.e. accounting, payroll or POS solution) and Company's Group annual sales turnover not more than S$100 million or Company's Group employment size not more than 200 workers. For more details on the scheme, please visit IDA at www.ida.gov.sg.
107
GST Course by Tax Academy of Singapore

Course Title : Executive Tax Programme Level I (GST) Duration : 3.5 days Course fee : $802.50* (before subsidy)
(*IRAS is offering up to 50% subsidy on all the Executive Tax Programmes. )
For more details, visit: www.taxacademy.com.sg or contact Ms Toh Hui Bin Eunice at 6351 3061, eunicetoh@taxacademy.com.sg
108
Answers to Application Exercises

Slide 19: 7%, exempt, 0% Slide 20: N (out-of-scope), Y (0%), Y (7%) Slide 21: N (exempt), Y (7% commercial; Exempt residential), N (out-of-scope) Slide 42: 1) No 2) No 3) Yes (For business purposes only) Slide 45: (i) Yes, (ii) No, (iii) No, (iv) No Slide 46: (v) No, (vi) Yes, (Vii) No Slide 50: Yes, Yes, No, No, No, No Slide 84: 1) 5, 2) 1, 3) 1, 4) 5, 5) 2 Slide 85: 1) 7, 2) 6, 3) 6, 4) 7, 5) NA
Slide 98: No, NA, No, NA

Slide 99: No, NA, Yes Yes, $200, Yes
109
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1

GOODS AND SERVICES TAX (GST)

10. Where to Get Help

1. GST and My Responsibilities

1. GST and My Responsibilities

services and importation of goods

1. GST and My Responsibilities

GST paid on business purchases

Refundable from Comptroller

1. GST and My Responsibilities

Import GST = $35

1. GST and My Responsibilities

2. Charging GST on Sales

Value of Supply Subject to GST

2. Charging GST on Sales

2. Charging GST on Sales

2. Charging GST on Sales

2. Charging GST on Sales

2. Zero-Rated Supply (0% GST) Export of Goods International Services

2. Charging GST on Sales

2. Charging GST on Sales

remain GST-registered for at least 2 years

2. Charging GST on Sales

2. Charging GST on Sales

GST registration liability - Rules for Partnership (PP)

2. Charging GST on Sales

iv) What is meant by in course or furtherance of the business?

2. Charging GST on Sales

a) Trade/ Cash discount given

Discounted price/ Prompt payment discount

2. Charging GST on Sales

b) Transactions with related parties

Open Market Value (OMV) of goods

2. Charging GST on Sales

2. Charging GST on Sales

BASIC TAX POINT & 14-DAY RULE NOW REMOVED

Goods removed (Value = $11,000) 01/01/12

Account for GST on: 31/01/12 (on $11,000)

2. Charging GST on Sales

3. Charging GST on Other Transactions

Sale of Business/Capital Assets

3. Charging GST on Other Transactions

Giving Goods for Free (i.e. Free Gifts)

From 1 Oct 2012

3. Charging GST on Other Transactions

3. Charging GST on Other Transactions

3. Charging GST on Other Transactions

GST is not chargeable

3. Charging GST on Other Transactions

3. Charging GST on Other Transactions

3. Charging GST on Other Transactions

A Year End Sale Not to be Missed!!!

4. Claiming GST on Business Purchases and Imports

Claiming Input Tax on Purchases Paid in Foreign Currency

Repayment of Input Tax

4. Claiming GST on Business Purchases and Imports

4. Claiming GST on Business Purchases and Imports

4. Claiming GST on Business Purchases and Imports

4. Claiming GST on Business Purchases and Imports

4. Claiming GST on Business Purchases and Imports

Situations where Input Tax Claims are Disallowed

4. Claiming GST on Business Purchases and Imports