3 October 2011
The Ministry of Finance (MOF) has, on 30 September 2011 accepted for implementation 11 of the 22 suggestions on the draft Goods and Services Tax (Amendment) Bill 2011 received during the public consultation exercise held from 8 to 28 July 2011.
According to the MOF, one suggestion has also been accepted for further study. The remaining suggestions were not accepted for implementation as they are “inconsistent with legislative drafting conventions or the policy objectives for the proposed legislative changes”.
Key suggestions received that were accepted by the MOF are summarised as follows:
- To ease documentary requirements for a qualifying ship used for pleasure, recreation, sports or other similar events.
The importer is required that it “satisfies the senior officer of customs that the imported ship is one as defined in section 21(4)(a) of the GST Act”. It was proposed that this condition be removed as the GST Act has clearly provided for the definition of ‘ship’ and that documentary requirement has been waived for this item.
- To cater for the inclusion of the biomedical industry under the enhanced ACMT scheme, more clarity needs to be given and expansion on the types of value added activities which will be disregarded for GST purposes.
The GST legislation currently does not define “treatment” or “process”. The IRAS e-Tax Guide on the Approved Contract Manufacturer and Trader (ACMT) Scheme provides that the following value added activities are disregarded for GST purposes – “processing, assembly, testing and other manufacturing-related types of activities where the form and nature of the goods have changed.”
- Legislation to be amended to allow the taxable person to self-destruct failed or excess production under the ACMT scheme.
Amendments to section 37A do not seem to cater to the situation whereby the goods are destroyed or disposed by the approved taxable person himself. The proposed section 37A(2) suggested that
the treated or processed goods must be delivered. However there could be situations where the goods are simply destroyed during the process or treatment.
Amongst the suggestions rejected were those that relate to:
- The proposal to include, in the Second Schedule of the GST Act (“Matters to be treated as a supply of goods or services”), situations where the supplier provides a reconditioned ship part or components in exchange for the faulty part as part of the supply of repair services.
- The revamp of specific penalty provisions considered to be too severe for failure to comply with conditions or requirements of the Specialised Warehouses Scheme and the Approved Marine Customers Scheme.
The suggestions accepted will be incorporated into the revised Goods and Services Tax (Amendment) Bill 2011 or IRAS’ e-Tax Guides.
To view the responses given by MOF on the above, please click here.
To view the changes to the draft Goods and Services Tax (Amendment) Bill 2011, please click here.
Source: Ministry of Finance