What is GST?

By on Jan 20, 2014 in Informative Posts | 0 comments

What is GST?

The Goods & Services Tax or GST refers to the tax imposed on the domestic consumption in Singapore. The tax is paid whenever the money is used to buy goods and avail services, including imports. It is considered as a multi-stage tax that is collected in each stage of producing and distributing goods and services.

When a registered dealer or seller charges on his/her local supplies of goods and services, it is called “output tax.” This means that the tax is collected by him/her in lieu of the Comptroller of the GST.

When the registered dealer or seller pays he purchases of goods and services for his/her business, it is known as “input tax.” This tax is deducted from the output tax to reach the GST payable by the seller, or the value that may be refunded to him/her.

GST: An Overview

It was on April 1, 1994 when Goods & Services Tax or GST was instituted at about 3%. The rate was raised to 4% in 2003 and in 2004, it increased to 5%. In 2007 Budget, it was increased to 7% effective July 2007.

The GST will be taxed on the following:

  1. Goods that are imported in Singapore by any individual; and
  2. Goods and services that are supplied in Singapore by any taxable individual to continue or expand the business.

Generally, any supply can either be taxable or exempted. A supply is taxable when it is standard-rated or zero-rated. The standard-rated supply is responsible to GST at 7%. To zero-rate a supply, 0% is charged for the transaction. The GST registered dealer or seller is not charged on his/her zero-rated supplies but he/she is allowed a refund of the tax he/she paid on his/her input. “Exports” of goods and “international” services are classified as zero-rated in Singapore.

There is no tax imposed on supplies that are exempted from GST. GST dealers or sellers do not charge their customers on their supplies that are exempted. They are not allowed to claim the input tax credits for the GST that are paid on goods and services for their businesses. In Singapore, the “sale and lease of the residential properties” and “financial services” are exempted from GST.

If you are a trader or dealer, you can visit the official website of IRAS for more information about GST registration and to download its official forms.

Although, any trader can work out on fulfilling his/her responsibilities to the government through tax, there are many advantages when you employ the services of a Singaporean agency to look after your tax records and duties while you focus on how to expand your business. Find the best and experienced tax experts in Singapore to help you on taxes.

At Corpworldbiz, we help our client to look after their tax record and GST. Contact us today .

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