IRAS revises GST guides to reflect legislative changes from 1 October 2012

2 October 2012

Various GST e-Tax Guides have been amended by the Inland Revenue Authority of Singapore (IRAS) to take into account the 2012 legislative changes which took effect from 1 October 2012.

A summary of the changes are as follows:

  • Gift rules
    “Series of gifts” rule means that when three or more gifts are given to the same person within a period of three months, these gifts will be considered as a “series of gifts.” With effect from 1 October 2012, the “series of gifts” condition is removed and businesses only need to deem a supply and account for output tax for gift of goods only if each gift costs more than S$200 and input tax on those goods has been allowed. Hence, if the GST incurred was not claimed when the goods were purchased, a supply need not be deemed nor the output tax accounted for when those goods are subsequently given away for free. The change also applies to business goods put into non-business use.
  • Exemption of investment precious metals (IPM)
    With effect from 1 October 2012, the supply of investment precious metals is exempt from GST. This is provided for under paragraph 1A of Part I of the Fourth Schedule to the GST Act.
  • Fourth Schedule to the GST Act
    As a result from budget 2012 changes on the exemption of IPM, the Fourth Schedule will be amended by deleting the Schedule heading “Exempt Supplies” and substituting it with “Part I Exempt Supplies”. A new “Part II Exempt Imports” will be introduced while paragraphs 3 and 4 will be parked under “Part III Interpretation and Applications”.
    All prior references made to paragraph 1 and 2 of the Fourth Schedule will now be changed to “paragraph 1 and 2 of Part I of the Fourth Schedule” and paragraph 3 and 4 of the Fourth Schedule will also be renamed as “paragraph 1 of Part III of the Fourth Schedule” and “paragraph 3 of Part III of the Fourth Schedule” respectively.
  • Amendment to section 21(3)(h) of the GST Act
    Currently, zero-rating is provided for prescribed financial services supplied directly in connection with goods for export (in section 21(3)(h) of the GST Act). Examples of zero-rated financial services include export credit and trade credit insurance provided by insurance companies or bank services to facilitate payment under letters of credit and factoring of receivables. The GST Act has been amended to extend zero-rating to include situations where the prescribed financial services relate to supplies where the goods are moved between two places outside Singapore. In addition, the word, “directly” has been removed from section 21(3)(h) of the GST Act to bring about a more practical application of the zero-rating provision for prescribed financial services in connection with exports.

The affected e-Tax Guides revised on 1 October 2012 are listed as follows:

  1. GST: Assisted Compliance Assurance Programme (ACAP) (Second Edition)
  2. GST: Clarification on “Directly in Connection With” and “Directly Benefit” (Fourth Edition)
  3. GST: Clarification on the GST Treatment of Hire Purchase and Other Financing Instruments (Second Edition)
  4. GST: Do I need to register? (Seventh Edition)
  5. GST: Fringe Benefits (Sixth Edition)
  6. GST: General Guide for Businesses (Ninth Edition)
  7. GST: Guide for the Banking Industry (Second Edition)
  8. GST: Guide for e-Commerce (Fourth Edition)
  9. GST: Guide for the Fund Management Industry (Third Edition)
  10. GST: Guide on Imports (Fourth Edition)
  11. GST: How Do I Prepare My GST Return? (Tenth Edition)
  12. GST: Import GST Deferment Scheme (Sixth Edition)
  13. GST: Major  Exporter Scheme (Eight Edition)
  14. GST: Manufacturing Sector (Fourth Edition)
  15. GST: Questions and Answers Relating to the Hotel Industry (Third Edition)
  16. GST: The Insurance Industry (Fourth Edition)
  17. GST: Travel Industry (Sixth Edition)
  18. GST: Use of Business Premises by Third Party for Free (Third Edition)
  19. GST: Treatment for Advertising Services (Fourth Edition) (Revised on 28 September 2012)

These e-Tax Guides can be found on the IRAS website.

Source: Inland Revenue Authority of Singapore (IRAS) and Ministry of Finance (MOF)