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Time of supply - 90-day special time of supply for sale of gold
Deposits from customer
Time of supply – 90-day special time of supply for sale of gold
General time of supply rules prior to 1 Jan 2011
Prior to 1 Jan 2011, you have to account for GST on your supply of gold at the earliest of the following under the time of supply rules:
- When the gold is delivered
- When a tax invoice is issued
- When payment is received
Time of supply rules with effect from 1 Jan 2011
With effect from 1 Jan 2011, the general time of supply rules will be changed. The new time of supply for most transactions will be triggered by the earlier of the following 2 events:
(a) When an invoice is issued or
(b) When payment is received.
For more details, please refer to the e-Tax guide on GST: Time of Supply Rules (265KB).
However, the special time of supply rules applicable to gold elaborated below will continue to apply despite the changes to the general time of supply rule.
Special time of supply rules for sale of gold
If the delivery of gold is the earliest event and gold price is not fixed for invoicing purpose, you have up to 90 days from the date of delivery to account for GST and issue a tax invoice. This is provided that payment is not received within the 90-day period.
If you receive payment within the 90-day period, you must account for GST and issue a tax invoice for the amount received on the date of payment. This is regardless of whether the gold price is fixed.
If gold price is not fixed up to the 90th day
You must account for GST and issue a tax invoice based on the open market value (OMV) on the 90th day. For cases where payment has been received within the 90-day period (e.g. partial payment), you only need to account for GST and issue a tax invoice/ credit note on the difference between OMV and the payment received.
When the gold price is subsequently fixed, you need to account for GST and issue a tax invoice/ credit note on the difference between OMV on the 90th day and the fixed gold price.
Example:
You sold gold jewellery under the following arrangement. The price has not been fixed and payment is still outstanding on the 90th day.
As the price was not fixed by the 90th day, you have to issue a tax invoice and account for GST of $70 on the OMV of $1,000 on the 90th day i.e. on 2 May 2011.
Subsequently, on 1 July 2011, you should issue another tax invoice to account for the additional GST of $14 due to the difference between the OMV and the fixed price which amounted to $200 ($1,200 - $1,000).
Deposits from customers
If the deposit forms part payment for the gold jewellery, GST has to be accounted for on the deposit at the time it is received.
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FAQs
As an administrative concession, you are allowed to charge GST on the difference between the value of the new gold jewellery and the value of the old gold jewellery.
| Value of new gold jewellery (inclusive of workmanship fee $30) |
$ 1,500 |
| Less: Trade-in value of old gold jewellery |
$ 1,200 |
| Amount payable excluding GST |
$ 300 |
| GST @ 7% on $300 |
$ 21 |
| Amount payable including GST |
$ 321 |
This concession applies to gold jewellery only. For other goods, a trade-in transaction is treated as 2 separate supplies for GST purposes and you need to charge GST on the value of your goods. For more information, please refer to Trade-in.
As an administrative concession, you are allowed to charge GST on the difference between the value of the new gold jewellery and the value of the old gold jewellery.
| Value of new gold jewellery (inclusive of workmanship fee $30) |
$ 1,500 |
| Less: Trade-in value of old gold jewellery |
$ 1,600 |
| Price difference |
$ (100) |
As the price difference is negative, no GST will be charged on the gold. GST will only be charged on the workmanship fee.
| Workmanship fee |
$ 30 |
| GST @ 7% on $30 |
$ 2.10 |
| Final payment |
$ 32.10 |
Amount refundable to customer = $100-$32.10 = $67.90
This
concession applies to gold jewellery only. For other goods, a trade-in transaction is treated as 2 separate supplies for GST purposes and you need to charge GST on the value of your goods. For more information, please refer to
Trade-in.
No. GST for sale of other types of jewellery is to be accounted for based on the normal time of supply rule. You have to account for GST on your supply of gold at the earlier of the following:
- When an invoice is issued or
- When payment is received
With effect from 1 April 2009, the Hand-Carried Export Scheme (HCES) is applicable if you wish to zero-rate your supply to overseas customer for goods (including gold) that are hand-carried out of Singapore via Changi International Airport. You need to maintain all the documents required under HCES to support zero-rating of your supplies. The person bringing the goods out of Singapore can either be a local person (e.g. your employee) or a foreigner (e.g. your customer’s employee).
For information on how HCES works, the documents to be maintained and how to report GST on your supply, please refer to our webpage on Hand-Carried Export Scheme or e-Tax Guide GST: Guide on Hand-Carried Exports Scheme (310kB).