MOF Accepts 3 Changes To Draft GST Bill And Another 19 Comments As Feedback12 Dec 2006
1. The Ministry of Finance (MOF) has accepted 3 suggested amendments to the draft Goods and Services Tax (Amendment) Bill 2006. These were amongst the 32 comments received during the consultation exercise held from 8 September to 6 October 2006 on how the drafting could be improved for greater clarity and easier compliance. The 3 amendments relate to implementing an Advance Rulings System for GST and implementing revised GST rules for zero-rating of advertising services. Another 19 comments related to the application of the draft provisions have also been accepted as feedback, for which IRAS will make clarifications in their e-tax guides. The legislative amendments in the draft Goods and Services Tax (Amendment) Bill 2006 will be presented in Parliament in the first half of 2007, together with the 2007 changes to the GST Act.
2. Most of the comments covered:
a. Implementing an Advance Rulings System for GST
b. Aligning the GST treatment of Islamic financing arrangements with the GST treatment of conventional financing arrangements that they are economically equivalent to; and
c. Allowing insurers input tax claims based on the tax fraction of cash payments paid to qualifying policyholders under insurance contracts that are subject to GST
3. The comments which were not accepted included proposed changes that were inconsistent with drafting convention or terms used in other tax legislation. Others went beyond the purpose of the exercise. They covered changes in tax policy and administration. While comments on tax policy are beyond the scope of the consultation exercise, for better understanding, the MOF has explained the rationale for the introduction of the Advance Rulings System and the charging framework for the fees for the rulings in our summary of responses to the consultation exercise.
4. MOF thanks all respondents to this consultation exercise. MOF's responses to the major comments received can be found on the MOF's website.
MINISTRY OF FINANCE