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A public consultation exercise on the draft Goods and
Services Tax (Amendment) Bill 2004 was held from 15
July to 11 August 2004 to obtain feedback on areas of
the draft legislation that require greater clarity or
could be modified to facilitate compliance by businesses.
2. The draft Goods and Services Tax (Amendment) Bill
2004 put up for consultation covers tax changes or refinements
to existing tax policies and administration resulting
from on-going review of the Goods and Services Tax (GST)
system.
3. The summary
table lists all the tax changes and explains the
amendments to the GST Act.
4. A total of 20 comments were received, most of the
feedback being from professional bodies and companies.
The responses were of high quality and helpful for improving
the GST legislation.
5. 14 of the 20 comments received (70%) related to
the drafting of the GST (Amendment) Bill 2004. The other
comments were requests to review the tax policies and
tax administration or comments on tax provisions not
covered in the Bill. The tax changes that received the
most comments on the drafting of the legislation were
related to the amendments which seek to clarify that
zero-rating is allowed only where the services are made
contractually to and beneficially for a person outside
Singapore.
6. MOF has considered all comments carefully. Of the
14 comments on the drafting of the legislation, 10 have
been accepted as they help clarify policy intentions
and improve the formulation of the legislation. Most
of the comments sought clarification on the interpretation
of the amendments to the zero-rating provisions, thus
IRAS will issue an e-Tax guide shortly to clarify the
interpretation. Where appropriate, changes have been
made to the Bill to take in the accepted suggestions.
7. Comments not accepted were mainly those where the
suggested changes to the legislation were inconsistent
with drafting convention or existing terms used in the
GST Act, or which do not meet policy intentions.
8. The major comments received and MOF's responses
to them are summarised below:
Respondents
suggested defining the terms 'contract' and 'directly
benefiting' in the proposed amended section 21(3)(j),
(k) and (s) which provide for the circumstances
where services provided for and to overseas persons
can be zero-rated. Alternatively, Comptroller of
GST should issue guidelines on the interpretation
of these words.
MOF's response: Accepted.
IRAS will issue an e-Tax guide to clarify the interpretation
of the words 'contract' and 'directly benefiting'
in the proposed amended section 21(3)(j), (k) and
(s).
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One
respondent suggested prescribing the services that
can be zero-rated under section 21(3)(l) (which
provide for zero-rating of prescribed services that
relate to handling of ships, aircrafts or goods)
at the same time the amended section 21(3)(l) is
enacted.
MOF's response: Accepted.
The services under section 21(3)(l) will be prescribed
in a separate order when the amendment is enacted. |
One
respondent proposes to amend section 42(3)(a) and
42(4)(a) (which provides for the activities that
can be rendered through electronic services) to
allow a person to request for exemption from GST
registration through electronic services.
MOF's response: Rejected.
Application for exemption from GST registration
will not be made available via the electronic service
as the volume of such applications is low and detailed
information may be required from the applicant. |
9. MOF thanks all who have responded for their comments.
We will continue the practice of consulting the public
before finalising the amendments to our tax laws.
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