Are you a business owner thinking about registering for GST in Singapore but don’t know whether you should go ahead with it or not? Well, you’ve come to the right place. To help you make up your mind, we will go over what it is and how and when you should register.
GST is basically the same as Value Added Tax (VAT). It applies to the goods and services supplied by businesses in Singapore. This includes imported goods and services. GST is a consumption tax which is collected from businesses with turnovers from taxable supplies, that go over a million Singapore dollars. It is applied to the taxable supplies over a period of 12 months. The turnover varies from business to business. The variation is in terms of the proprietorship and is inclusive of the standard rated GST, and the zero-rated GST.
If your business’s taxable turnover from taxable supplies exceeds a Million Singapore Dollars, you are bound by law to register for GST. However, if it is not applicable, a business may still be allowed to register for it voluntarily.
To voluntarily register for GST, the business owners are required to take two e-learning courses. The purpose of these courses is to educate the volunteers on the responsibilities that come with registering for GST. A quiz is taken next, to ensure the business owners understand the gist of the courses. This is necessary to oblige to the requirements of GST registered businesses. They are also required to pass it to qualify for the submission of the registration form. GIRO is a software whereby refund or payments of GST are made. Therefore the businesses need to sign up for that as well.
The main advantage that comes with registering for GST is that the input and the goods and services tax on purchases can be claimed. It, however, applies only to the purchases that are used to make taxable supplies. The taxes incurred on the purchases of zero-rated supplies are also claimable. These are, however, not claimable by businesses that have both business and non-business activities.
Following are a few cases in which a business may be exempted from GST:
- If the business supplies mostly zero-rated supplies and is GST registered, then the business may be allowed to submit a GST F2 form for exemption.
- It may also be exempted from GST if there are reasons to believe that the taxable turnover will be lower than or will not exceed 1 Million Singapore Dollars in the coming 12 months. The supporting documents, in this case, require to be provided and taxable turnover for the duration is monitored.
There are a few duties that come with being GST registered, and businesses are obliged to fulfil. These include:
- The GST registered business is required to charge 7% GST on supplies that are standard rated. This also needs to be debited and credited.
- GST returns need to be filed on time. In case no transactions take place during the accounting period submission of a ‘Nil’ GST returns is required.
- Records are to be kept for a minimum of 5 years.
- The prices that are displayed should include GST. Compliance is mandatory.
- The business is required to pay the due tax within a period of 1 month of the accounting period.
- If the business makes any changes in the circumstances, it is required to inform the comptroller in a period of 30 days.
This is all the information you need to come to a conclusion. Now it is up to you to decide whether it is a yay or nay in accordance with your business.