23 November 2011
The Goods and Services Tax (Amendment) Bill 2011 was read for the second time in Parliament on 22 November 2011 by Mrs Josephine Teo, Minister of State for Finance and Transport.
Key amendments are summarised as follows:
A. Budget 2011
- GST measures for the marine industry (Clause 4)
New GST scheme for approved marine customers to buy or rent goods at zero-rate GST automatically, so long as the goods are for use or installation on a commercial ship that is wholly for international travel.
- GST measures for the biomedical industry (8th Clause)
The Approved Contract Manufacturer and Trader (ACMT) scheme, which allows local contract manufacturers to disregard services rendered to their overseas clients for the purpose of GST, even if the treated or processed goods are delivered locally in Singapore, is extended to qualifying biomedical contract manufacturers.
Local contract manufacturers (including those in the biomedical sector) will be able to:
– Disregard the services rendered on failed or excess production; and
– Recover GST on local purchases of goods used in the contract manufacturing process.
- Zero-rating relief for specified services made to overseas persons in relation to goods kept in ‘approved warehouses’ (Clause 3 and 4)
A new zero-rating relief is also introduced for specified services made to overseas persons and performed on specified goods kept in approved warehouses in Singapore. The new relief aims to encourage overseas persons to store high value goods such as art, antiques and gold in specialised storage facilities in Singapore, and purchase related services such as auction, insurance and valuation in respect of the stored goods. The GST zero-rating also covers the renting of storage units used to store such high value goods.
B. Amendments from the ongoing review of GST policies and administration.
- Expand scope of GST recovery on goods imported on behalf of overseas persons (Clause 5,6 and 7)
The first change reduces the GST compliance burden of local agents who frequently import goods for overseas persons. Currently, local agents are not able to claim input GST on the goods imported for the overseas persons if the goods have undergone a treatment or process that changes the nature or form of the goods, before being supplied in Singapore. Given that any further value-add to the imported goods would have been priced into the subsequent supply and accounted for eventually, the Act will be amended to enable local agents to recover GST on such goods. In addition, local agents who are approved under GST suspension or deferment scheme would be able to use the scheme to also suspend or defer payment of import GST on goods imported for overseas persons for subsequent re-export.
- Clarify the GST accounting rules for specified transactions (Clause 2)
The final change is a technical clarification of the GST rules for determining when a supply is made and thus when GST needs to be accounted for. Rules for accounting of GST to be at the earlier of the tax invoice date or payment date was clarified in Budget 2010. This amendment clarifies that the alternative rules, that existed before the simplification in Budget 2010, will continue to apply for certain specialised transactions, such as the assignment of rights over land.
To view the GST Bill, please click here.
Source: Ministry of Finance