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GST
Tax Act
Goods and services tax (GST) is a tax on domestic consumption.
The tax is paid when money is spent on goods or services,
including imports. It is a multi-stage tax which is
collected at every stage of the production and distribution
chain.
"Output tax" is the GST a registered trader
charges on his local supplies of goods and services.
The tax is collected by him on behalf of the Comptroller
of GST. "Input tax" is the GST that the trader
has paid on purchases of goods and services for the
purpose of his business. The input tax is deductible
from output tax to arrive at the GST payable by the
trader, or amount to be refunded to him.
GST was first introduced in Singapore on 1 April 1994
at 3%. The GST rate was increased to 4% in
2003 and
to 5% in 2004. As announced in Budget 2007,
the GST rate was raised to 7% on 1 July 2007.
GST will be levied on:
- goods and services supplied in Singapore by any
taxable person in the course or furtherance of a business;
and
- goods imported into Singapore by any person.
In general, a supply is either taxable or exempt.
A taxable supply is one that is standard-rated or
zero-rated.
Only a standard-rated supply is liable to GST at 7%.
Zero-rating a supply means applying GST at 0% for the
transaction. A GST registered trader need not charge
GST on his zero-rated supplies, but he is nevertheless
allowed a refund of the tax he has paid on his inputs.
In Singapore, only "exports" of goods and
"international" services are zero-rated.
If a supply is exempt from GST, no tax is chargeable
on it. A GST registered trader does not charge his customer
any GST on his exempt supplies. At the same time, he
is not entitled to claim input tax credits for any GST
paid on goods and services supplied to him for the purpose
of his business. The "sale and lease of residential
properties" and "financial services"
are exempt from GST in Singapore.
If you are a trader, click
here for information on how to register GST and
to download forms.
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