STEP 1: Review your GST Declarations for the Past Financial Year
You can detect possible errors in your GST returns by analysing whether there are any:
- major fluctuations in your supplies and purchases declared during the financial year
- significant differences between your declared output tax from “computed output tax” [Note: “Computed output tax” = 7% x Box 1]
- significant differences between your declared input tax from “computed input tax” [Note: “Computed input tax” = 7% x (Box 5 – Box 9)]
- high Taxable Purchases/Total Supplies ratio
You can easily perform this step by just entering your GST declarations into a template specially designed to help you with the above analysis.
For full details, please refer to ASK Annual Review - Step 1 (1472KB) and Template 1 (207KB).
STEP 2: Select GST Return(s) for Review
- Determine which GST return(s) to review:
- Determine the number of GST return(s) to review:
For full details on Step 2, please refer to
ASK Annual Review - Step 2 (1461KB).
STEP 3: Perform Checks for the Selected GST Return(s)
You need to perform checks on every figure declared in your selected GST return(s).
- Check all your GST listings to ensure:
- listing totals tally with respective boxes in GST return(s)
- listings are complete (i.e. all your GST transactions are captured in the listings)
- For each box, select samples from your GST listing(s) to cover your major business scenarios.
- Check your supporting documents (such as tax invoices, credit notes, import permits, export documents, etc.) for samples selected to ensure:
For full details on Step 3, please refer to ASK Annual Review - Step 3 Overview (1485KB) and the following parts of this guide:
Step 3A: Check your Standard-rated Supplies and Output Tax (1476KB) and
Template 2 - Checklist for Standard-Rated Supplies and Output Tax (53KB) Step 3B: Check your Zero-rated Supplies (1492KB) and
Template 3 - Checklist for Zero-Rated Supplies (53KB) Step 3C: Check your Exempt Supplies (1487KB) and
Template 4 - Checklist for Exempt Supplies - Ppty & FS (53KB) (if you are actively making exempt supplies) or
Template 5 - Checklist for Exempt Supplies - General Business (47KB) (if you are in general business)
Step 3D: Check your Input Tax and Refunds Claimed (on local purchases, imports with GST paid, Tourist Refund Scheme and Bad Debt Relief) (1497KB) and
Template 6 - Checklist for Input Tax and Refunds Claimed (63KB)Step 3E: Check your Imports with GST Suspended (e.g. under Major Exporter Scheme) or with GST Deferred (under Import GST Deferment Scheme) (1500KB) and
Template 7 - Checklist for Taxable Purchases (Imports - GST Suspended or Deferred) (75KB)STEP 4: Review and Compare your Financial Statements against your GST Declarations for the Same Financial Year
You can further detect possible errors in your GST returns by checking whether:
- your annual total supplies (in GST returns) is significantly lower than your sales (in financial statements)
- you have omitted to report transactions with related parties or non-trade transactions in your GST returns
- you have accounted back GST claimed previously on purchases not paid up after 12 months from payment due date
For full details, please refer to ASK Annual Review - Step 4 (1472KB) and Template 1 (207KB).
STEP 5: Quantify your Errors (if any) and Submit your Findings to IRAS
At the end of ASK Annual Review, you should disclose errors (if any) to IRAS. If you have made error that is recurring in nature and involves GST, you need to quantify the amount of your error for past years.
For full details on Step 5, please refer to ASK Annual Review - Step 5 (1491KB).
For full details of all 5 steps, please refer to
ASK Annual Review Guide (502KB).
Please note the following
The ASK Annual Review is designed as guidance for GST-registered businesses to conduct a self-review of their GST declaration. IRAS reserves the rights to verify and extend the scope of audit checks beyond the samples selected by businesses which have performed the checks according to this ASK Annual Review Guide. Should additional errors be detected during the course of IRAS audits, they will be treated no differently than those errors detected without an ASK Annual Review.
FAQs
If you are under GST group registration, your selection of samples during ASK Annual Review should cover all members within the GST group and not just the representative member of the group who files the GST returns.
For the whole GST group, the sample size for each figure declared in the GST return will still remain at minimum 30 samples to cover at least 30% of the listing value, or a maximum of 60 samples.
The pre-filing checklists and ASK Annual review are meant for all businesses and do not cover specific GST treatments or requirements under these special schemes. If you are under any GST scheme (e.g. AISS, Approved Third Party Logistics Company (3PL) Scheme, Approved Marine Fuel Trader (MFT) Scheme, Approved Contract Manufacturer and Trader (ACMT) Scheme, Gross Margin Scheme), you need to ensure that your GST treatment and reporting are done correctly in accordance to the specific scheme.
Yes. If you do not wish to use the checklists and templates provided in Step 3 of this guide, you may record the results of your findings on your own checklists or other documents. However, should IRAS request for your working papers, you must be able to show that you have performed all the required checks under ASK Annual Review Guide.
No. If you discover errors in your past GST return(s) before commencement of ASK Annual Review, you should correct the errors by either:
( i) Submitting a “Disclosure of Errors on GST Return” (i.e. GST F7 return) for the affected prescribed accounting period(s); or
( ii) Adjusting the errors in your current GST F5 return if:
a. the net GST amount in error for all the prescribed accounting periods affected is not more than $1,500; and
b. the summation of non-GST amounts in error for each of the prescribed accounting period(s) affected is not more than 5% of the total supplies. In the case where there were no supplies made in the prescribed accounting period, the 5% rule will be applied to the total taxable purchases.
You should complete the Declaration Form and submit it to IRAS to demonstrate your commitment to be GST-compliant. However, you do not have to complete the template on disclosure of errors.
You need not submit your working papers (e.g. the checklist for the samples) to IRAS but do keep them in accordance with record-keeping requirements as IRAS may request them for review.
Whether or not further queries would be raised depends on the nature of your errors. If need be, further clarifications may be sought from you, including requesting for your working papers.
Generally, timely disclosures of error would be considered more favourably in terms of penalties as compared to other businesses whose errors are detected in the course of IRAS audits.
As IRAS adopts a risk-based approach in conducting audit programmes, businesses which have conducted ASK Annual Review can expect minimal audit contact or checks unless negligence or fraud is suspected.
IRAS will waive the 5% late payment penalty if you complete the ASK Annual Review and disclose your GST error(s) for the financial year ended 31 Dec 2010 by 31 Jan 2012 (i.e. 1 year from the statutory filing date of your GST return for the period ended 31 Dec 2010). This is provided that you meet all the qualifying conditions and your situation does not fall within the specific exclusions of the programme. Please refer to IRAS’ Voluntary Disclosure Program for more details.
To conduct ASK Annual Review for this financial year, you should review your GST returns for the accounting periods ended 31 Dec 2009, 31 Mar 2010, 30 Jun 2010 and 30 Sep 2010 (as they fall within the financial year).
Your last return for this financial year is for the accounting period ended 30 Sep 2010 and the statutory filing date of this return is 31 Oct 2010. If you complete the ASK Annual Review and disclose your GST error(s) for this financial year by 31 October 2011, the 5% late payment penalty could be waived.
(Note: The filing cycle of your GST returns is assigned according to your financial year-end. If you change your financial year-end and wish to change your GST accounting periods to fit your new financial year-end, please write in to IRAS by letter or email. For more information, please refer to Choose the right accounting periods.)
Using the scenario in Q8, you have selected the financial year of 1 Dec 2009 to 30 Nov 2010 to conduct ASK Annual Review on your GST returns for the quarterly periods covering from 1 Oct 2009 to 30 Sep 2010.
As your financial year does not tie with your GST accounting periods, you have to compute a “comparable” sales figure for the period of 1 Oct 2009 to 30 Sep 2010 and compare it against your annual Total Supplies in Step 4 of ASK Annual Review.
You may choose any of the following methods that best reflect the “comparable” sales figure:
(a) Actual sales from 1 Oct 2009 to 30 Sep 2010 based on management accounts, including audit adjustments (if any);
(b) Pro-rate 2 months of your audited sales from 1 Dec 2008 to 30 Nov 2009 to obtain sales for 1 Oct 2009 to 30 Nov 2009 and pro-rate 10 months of your audited sales from 1 Dec 2009 to 30 Nov 2010 to obtain sales for 1 Dec 2009 to 30 Sep 2010. Add both pro-rated sales to obtain audited sales for 1 Oct 2009 to 30 Sep 2010; or
(c) Audited sales from 1 Dec 2009 to 30 Nov 2010 if your sales are generally consistent throughout the years.