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Goods and Services Tax (GST): What it is and how it works

Goods and Services Tax or GST is a broad-based consumption tax levied on the import of goods (collected by Singapore Customs), as well as nearly all supplies of goods and services in Singapore. In other countries, GST is known as the Value-Added Tax or VAT.

GST exemptions apply to the provision of most financial services, the supply of digital payment tokens, the sale and lease of residential properties, and the importation and local supply of investment precious metals. Goods that are exported and international services are zero-rated.

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Taxable and non-taxable goods and services

The table below lists the categories and types of taxable and non-taxable supplies.

  Taxable Supplies  Non-Taxable Supplies    
 

Standard-Rated Supplies

(7% GST) 

Zero-Rated Supplies

(0% GST) 

Exempt Supplies

(GST is not applicable) 

Out-of-Scope Supplies

(GST is not applicable)  

 
Goods 

Most local sales fall under this category.

E.g. sale of TV set in a Singapore retail shop

 

Imports of low-value goods (from 1 Jan 2023)

 

Export of goods

E.g. sale of laptop to an overseas customer, where the laptop is shipped to an overseas address 

Sale and rental of unfurnished residential property 

Importation and local supply of investment precious metals

Sale where goods are delivered from overseas to another place overseas 

Private transactions

See Out-of-scope supplies for more information. 

 
ServicesMost local provision of services fall under this category.

E.g. provision of spa services to a  customer in Singapore

 

Imported Services

Services that are classified as  international services

E.g. air ticket from Singapore to Thailand (international transportation service) 

Financial services

E.g. issue of a debt security

 

Digital payment tokens (from 1 Jan 2020)

E.g. exchange of Bitcoin for fiat currency

 

 

 

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Businesses required to register for GST

As a business, you must register for GST when your taxable turnover exceeds $1 million.

    If your business taxable turnover does not exceed $1 million, you may still choose to voluntarily register for GST after careful consideration.

    Please refer to our webpage for more information on whether you need to register for GST and the responsibilities of GST-registered businesses.

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    Charging and claiming GST

    Only GST-registered businesses can charge and claim GST from their effective date of GST registration. Non-GST registered businesses are not allowed to charge or claim GST.

    Charging GST 

    If you are registered for GST, you must charge GST on all taxable supplies at the prevailing GST rate, except for supplies that are subject to customer accounting. The GST that you charge and collect is known as output tax. Output tax must be paid to IRAS within a month from the end of the accounting period. Refer to our page on filing and payment due dates for more information.

    If you have wrongfully charged or collected GST, you must remit the GST wrongly collected to IRAS.

    Exception

    An exception where a non-GST registered person is required to charge and account for GST is when it sells or rents out a GST-registered business assets in satisfaction of a debt owed. This applies to non-GST registered third parties, such as mortgagees, financiers and auctioneers. For details on how to account for GST in such scenario, please refer to our page on selling/ renting out asset in satisfaction of debt .

    Claiming GST

    If you are registered for GST, you can claim the GST incurred on business purchases (including imports) and expenses, as input tax in your GST return. This is subject to you fulfilling the conditions for claiming input tax.

    Exception

    There are exceptions where non-GST registered businesses in specific industries are given concessions (subject to conditions) by the Minister to claim the GST incurred. These exceptions are:

    1. Qualifying funds that are managed by a prescribed fund manager in Singapore can claim GST incurred on prescribed expenses at an annual fixed recovery rate via remission.  

      Details of the GST remission (such as the types of qualifying funds, qualifying conditions, prescribed list of expenses and procedures to claim GST) are explained in the circular issued by the Monetary Authority of Singapore (MAS).
    2. Real Estate Investment Trusts and Qualifying Registered Business Trusts listed on the Singapore Exchange (i.e. S-REITs and qualifying S-RBTs) can claim GST on expenses incurred for their business and their Special Purpose Vehicles (SPVs).  
      This GST concession applies regardless whether the S-REIT or S-RBT is eligible for GST registration.

      For details, please refer to  GST: Concession for REITS and Qualifying Registered Business Trusts Listed in Singapore (PDF, 962KB)

    To claim the GST incurred, qualifying funds, S-REITs and S-RBTs need to submit a quarterly Statement of Claims to IRAS within one month from the end of the respective quarters.

      As an administrative concession, funds and trusts may file their quarterly Statement of Claims after the due date, subject to the following conditions:

    1. The GST claims are made on tax invoices dated within the relevant quarter; and
    2. The quarterly Statements of Claims are filed within 5 years from the end of the relevant quarter.

    For example: 

    Period of claims: 1 Apr 2017 to 30 Jun 2017 

    Qualifying funds, S-REITs and S-RBTs can submit the Statement of Claims latest by 30 Jun 2022.

    Additionally, you may be able to claim GST incurred before GST registration or incorporation, provided that you fulfil certain conditions. For more information, please refer to our page on claiming GST incurred before GST registration/ incorporation. 

    This input tax credit mechanism ensures the taxation of only the value-add at each stage of a supply chain.

    Example 1: How a business charges output tax and claims input tax

    A GST-registered manufacturer imports leather from overseas to manufacture a bag. The manufacturer sells the bag to a GST-registered retailer. Thereafter, the retailer sells the bag to a consumer.  
    This is how GST works at each stage of the value chain:

    1. Manufacturer

    Pays GST to Singapore Customs for the import of leather

    Import value = $100

    Import GST paid = 7% X $100 = $7 (input tax claimable from IRAS)

    Charges and collects GST for sale of bags to retailer

    Selling price to retailer = $200

    GST charged to retailer = 7% X $200 = $14 (output tax payable to IRAS)

    2. Retailer

    Pays GST to Manufacturer

    Purchase value = $200

    GST paid = 7% X $200=$14 (input tax claimable from IRAS)

    Charges and collects GST for sale of bags to end consumer

    Selling price to end consumer = $300

    GST charged to end consumer = 7% X $300 = $21 (output tax payable to IRAS)

    3. End consumer

    Pays GST to Retailer

    Purchase value = $300

    GST paid = 7% X $300 = $21

    End consumer is not GST-registered. Therefore, he cannot claim the GST paid on his purchase from IRAS.

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    Paying output tax and claiming input tax

    If you are a GST-registered business:

    1. You must submit your GST return to IRAS within a month from the end of each prescribed accounting period. This is usually done on a quarterly basis.
    2. You should report both your output tax and input tax in your GST return.
    3. The difference between output tax and input tax is the net GST that is payable to IRAS or refundable by IRAS.

    Output tax is the GST charged to your customers for goods and services you sell. Input tax is the GST paid on your businesses purchases. If Output tax > Input tax, the net GST is payable to IRAS. If Output tax < Input tax, the net GST is refundable to you.

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    • Why must Singapore implement GST?

      GST was introduced in 1 Apr 1994 to enable Singapore to shift its reliance from direct taxes to indirect taxes. GST has also enabled Singapore to sustain a lower income tax rate. Being a tax on consumption, and not income, GST inherently encourages savings and investments.

    • I am not GST-registered. Can I claim GST incurred on my business purchases?

      No, if you are not a GST-registered business, you cannot claim the GST incurred on your purchases.