19 Feb Integrating Ultimate Technologies for Goods and Services Tax (GST)
The Goods and Services Tax (GST), also known as the Value Added Tax (VAT), is the tax imposed on the consumption of products and services in Singapore. The current GST rate in Singapore is 7%. This tax is collected by GST registered business from their customers by way of payment for goods and is subsequently forwarded to the Inland Revenue Authority of Singapore (IRAS).
GST was introduced as an indirect consumption based tax in order to reduce the burden of direct taxes like personal income tax and corporate tax. More so, it made it easy to retrieve taxes from citizens since it is already calculated with the goods purchased. GST also covers products and services imported into Singapore.
Registering for GST is voluntary for all businesses in Singapore except for those that have a taxable turnover of $1 million excess for the past 12 months or expect that it exceeds the target in 12 months, which in their case is compulsory.
The perk of doing this is that GST registered businesses get credits from the IRAS on products and services purchased from their GST-registered suppliers. This freedom is not made available for businesses that are not GST registered.
Below is a list of GST schemes for the benefit of a registered business.
- Cash Accounting Scheme
- Import GST Deferment Scheme
- Discounted Sale Price Scheme
- Gross Margin Scheme
- Hand-Carried Exports Scheme
- Tourist Refund Scheme
- Major Exporter Scheme
- Zero GST Warehouse Scheme
To participate in schemes like Discounted Sale Price Scheme and Major Exporter Scheme, however, the business would a permission grant from officials at the IRAS. Genuine and complete tax filing is another thing to seek after because the authorities are stringent about it. They are, however, more stringent towards companies that try to evade the GST tax filing or those that surcharge their customers using the GST facade.