Tag: GST (Amendment) Bill

GST (Amendment) Bill 2012 read for the second time in Parliament

On By taxsgIn Goods and Services Tax, Latest Tax News

10 September 2012

The Goods and Services Tax (Amendment) Bill 2012 was read for the second time in Parliament on 10 September 2012 by Mrs Josephine Teo, Minister of State for Finance and Transport.

Key provisions of the Bill are summarised as follows:

A. Budget 2012

  • GST exemption for investment-grade gold and precious metals (Clauses 3, 6 and 14 of the Bill and clauses 2, 7, 11, 13 and 15 are consequential amendments to administer the change)
  • A new GST scheme introduced for qualifying refiners of precious metals and consolidators of scrap materials for refining (Clauses 4 and 10).

B. Non-budget 2012 GST changes

  • The extension of the scope of GST zero-rating of prescribed financial services relating to goods for export (Clause 5(b))
  • Allowing the Comptroller and Minister to set conditions when granting remission (Clause 12)
  • The extension of the Temporary Removal Scheme to goods removed temporarily from approved warehouses for repairs (Clause 8)
  • Allowing GST zero-rating of repair services performed on qualified goods outside of Approved Specialised Warehouse (Clause 5(c))
  • Incorporating two sets of technical amendments with no change in policy – the first amendment aligns the general provision on zero-rating of exports and international services with that for the Approved Marine Customers Scheme and Specialised Warehouse Scheme and the other standardises the text used in the different subsections for the Approved Contract Manufacturer & Trader (ACMT) Scheme.

Source: Ministry of Finance

Results of public consultation on the draft Goods and Services Tax (Amendment) Bill 2012

On By taxsgIn Goods and Services Tax, Latest Tax News

9 September 2012

The Ministry of Finance (MOF) has accepted for implementation 24 of the 57 suggestions on the draft Goods and Services Tax (Amendment) Bill 2012. The suggestions were received during the public consultation exercise held from 2 to 27 July 2012.
Key suggestions received that were accepted by the MOF are summarised as follows:

  • To clearly define the declaration method for hand carry of precious metals into Singapore to facilitate investors who intend to repatriate precious metals stored offshore back to Singapore, bearing in mind that some were bought when the prices of precious metals were cheaper.

MOF responded that at present, there is no change to the import procedures for hand carrying investment-grade precious metals into Singapore, as compared to other goods. To qualify for the new import GST exemption for investment-grade precious metals, importers need to declare an exemption permit which has certain compulsory permit fields, such as type of metal, purity content, name of refiner, name of the coin, value of the goods etc. The importer is to declare the value based on the CIF (cost, insurance and freight) value plus all other chargeable costs, whether or not shown on the commercial invoice.  If an invoice is unavailable, the customs officers may use the current spot rate of the precious metal to determine the value. If the import qualifies as investment-grade precious metals, there is no need to pay GST.

  •  To include the Silver American Eagle in the list of GST-exempt coins as they are in purity of 99.9%, which satisfies the minimum purity content specified as ‘investment-grade’.

MOF accepted the suggestion to have the America Eagle (silver) and America Eagle (platinum) included for exemption since they meet the minimum purity 99.9% for silver and 99% for platinum respectively.

  • With the change, a supply of investment grade precious metals will be treated as an exempt supply, similar to the supply of financial services. However, it is not clear if an export of investment grade precious metals should be treated as an exempt supply of a zero- rated supply. Based on section 21(2) of the GST  Act,  it would appear that such a supply should be treated as zero-rated. If that is not the case, MOF may wish to consider if it is necessary to amend section 21(2). In addition, a person who makes supplies of financial services specified in paragraph 8(1) of the Fourth Schedule, where such supplies qualify for zero-rating under section 21(3) of the GST Act, is eligible for voluntary GST registration. It is noted there is no amendment to paragraph 8(1) of the First Schedule to allow voluntary GST registration of a person who makes exempt supplies of IGPM that qualify for zero-rating. If the policy intent is to accord the same GST treatment between an exempt supply of investment grade precious metals and an exempt supply of financial services, MOF may wish to consider if it is necessary to amend paragraph 8 of the First Schedule.

The MOF replied that paragraph 8 of the First Schedule of the GST Act will be amended to clarify the voluntary GST registration rules for a person who makes exempt supplies of investment grade precious metals. The MOF also clarified that an export of investment grade precious metals should be zero-rated, and not exempt. There is no need to amend section 21(2) since zero-rating overrides exemption, similar to all other supplies of financial services.

  • On the extended scope of zero-rating of prescribed financial services relating to goods situated outside Singapore, it is not clear whether the amended section 21(3)(h) will cover prescribed financial services relating to the goods sold in the course of being imported into Singapore (e.g. title to the goods transfers on the passage to Singapore).

IRAS will provide clarification on its website regarding the place of supply rules for prescribed services relating to goods for export. If the title of the goods is transferred outside Singapore, the supply will be treated as taking place outside Singapore. Prescribed financial services in connection with such supplies can be zero-rated. However, if the goods are imported and then title is transferred, the supply will be treated as taking place in Singapore.  Prescribed financial services in connection with such supplies cannot be zero-rated.

Amongst the suggestions rejected were those that relate to:

  • The inclusion of more coins for GST exemption similar to EU/UK’s practice, especially the Gold South Africa Krugerrand and the Gold America Eagle coins which are of purity of 91.6% as well as to add in coin blanks and privately minted silver rounds in the GST exemption scope.
  •  The removal of the requirement that investment-grade precious metal bars must be produced by a refiner accredited in the ‘Good Delivery’ list of the London Bullion Market Association (LBMA) or London Platinum & Palladium Market (LPPM) in order for be exempted from GST. This will allow popular and established brands of bars that are wide circulated in the local and international market e.g. NTR, Materion, Sunshine Mint and Credit Suisse to trade in Singapore without GST.
  • In the review to allow Comptroller and Minister to set conditions when granting GST remission, there should be a time-barred period for the recovery of the tax remitted, similar to the powers under section 45 of the GST Act relating to the Comptroller’s powers to assess tax due. A broad description of conditions to be set should be provided before remission could be granted in the legislation so as to provide transparency on the nature of conditions that would be imposed.

The remaining suggestions were not accepted for implementation as they are inconsistent with the policy objectives for the proposed legislative changes or legislative drafting conventions. Suggestions accepted will be incorporated into the revised Goods and Services Tax (Amendment) Bill 2012 or IRAS’ e-Tax Guides.

More details of the key changes contained in the draft Goods and Services Tax (Amendment) Bill 2012 can be found here.

Source: Ministry of Finance

Goods and Services Tax (Amendment) Bill 2012 goes through first reading in Parliament

On By taxsgIn e-Gazette, Legislative Updates

15 August 2012

The Goods and Services Tax (Amendment) Bill No. 19/2012 was published in the Government Gazette on 13 August 2012. This Bill seeks to amend the Goods and Services Tax Act (Cap. 117A of the 2005 Revised Edition).

The Goods and Services Tax (Amendment) Bill 2012 incorporates the changes announced in the 2012 Budget Statement to facilitate the development of a gold trading hub Singapore, and to put the GST treatment for investment–grade gold and precious metals on par with other actively traded financial assets such as stocks and bonds. The changes will exempt the import and supply of investment-grade gold and precious metals from GST and introduce a new Approved Refiner and Consolidator Scheme (ARCS) to relieve cash flow for refiners and local consolidators.

It also includes other changes arising from the ongoing review of the GST regime to clarify the existing legislation and to improve administration. These include:

  • extending the scope of GST zero-rating of prescribed financial services relating to goods situated outside Singapore
  • allowing the Comptroller and Minister to set conditions when granting GST remission
  • extending the Temporary Removal Scheme to goods that are removed temporarily from approved warehouses for repairs, and
  • allowing zero-rating of repair services performed on qualified goods outside the Approved Specialised Warehouse.

Once passed, the date of these provisions coming into effect is 1 October 2012, with the exception of sections 5(a) and (d) and 9 which shall be deemed to have come into operation on 1 January 2012.

Source: Government Gazette

Public consultation sought by MOF on changes to the Goods and Services Tax (GST) Act

On By taxsgIn Goods and Services Tax, Latest Tax News

10 July 2012

The Ministry of Finance (MOF) is seeking public consultation on the draft GST (Amendment) Bill 2012. The proposed changes include:

  1. Changes resulting from Budget 2012 to facilitate the development of a gold trading hub Singapore, and to put the GST treatment for investment–grade gold and precious metals on par with other actively traded financial assets such as stocks and bonds. The changes will exempt the import and supply of investment-grade gold and precious metals from GST and introduce a new Approved Refiner and Consolidator Scheme to relieve cash flow for refiners and local consolidators.
  2. Changes arising from the regular review of the GST regime and to improve GST administration and technical clarity. These include:
  • extending the scope of GST zero-rating of prescribed financial services relating to goods situated outside Singapore
  • allowing the Comptroller and Minister to set conditions when granting GST remission
  • extending the Temporary Removal Scheme to goods that are removed temporarily from approved warehouses for repairs, and
  • allowing zero-rating of repair services performed on qualified goods outside the Approved Specialised Warehouse.

The consultation paper and feedback channels can be found at the MOF website or REACH portal.

Source: Ministry of Finance (MOF)

GST (Amendment) Bill 2011 read for the second time in Parliament

On By taxsgIn Goods and Services Tax, Latest Tax News, Legislative Updates

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