Retail

In general, there are two separate supplies of goods in a consignment sale. The first supply is from the consignor to the consignee, followed by the second supply from the consignee to the customer.

Time of Supply Rules 

Goods Sold on Sale or Return terms

For goods sold on sale or return terms, the consignor should account for GST on his selling price to the consignee at the earliest of the following:

1. When any payment in respect of the supply is received;
2. When the invoice in respect of the supply is issued; or
3. 12 months after the removal of the goods.

The payment received must be to discharge an obligation to pay for the supply arising from the adoption of the sale.

Security Deposits

The mere receipt of payment will not be regarded as consideration received if it is held as security pending the adoption of the sale.

If such a security deposit is collected upfront, payment is received only when the deposit is applied as all or part of the consideration for the supply, following the adoption of the sale.

Once there is a payment received or an invoice issued, GST has to be accounted for based on the full selling price of the goods.

Goods Sold on Terms Other Than Sale or Return

When the goods were sold on terms other than on sale or return, the consignor should account for GST on his selling price to the consignee at the earlier of the following:

1. When payment in respect of the supply is received; or
2. When invoice in respect of the supply is issued.

For the consignee, he should account for GST on his selling price to the customer at the earlier of the following:

1. When an invoice is issued; or
2. When payment is received.

The issuing of any type of invoice will be an event that triggers the time of supply. This includes a tax invoice as well as any document that serves as a bill for payment for supplies made by a GST-registered supplier.

An example of such a document would be a debit note.

In general, documents such as sales orders, pro-forma invoices, statements of accounts and letters/ statements of claims are not considered as invoices for GST time of supply purposes. This is because these documents are often not billing for payments and would therefore not be treated as invoices based on normal commercial practices.

For more details, please refer to GST: Time of Supply Rules (e-Tax Guide, 459KB).

A concessionaire is a person who occupies a space in your store to sell their products.

For example, a cosmetic counter in your departmental store. The GST treatment on the sale of concessionaire goods depends on the contractual arrangement between you (the retailer) and the concessionaire.

When you regard the sale of concessionaire goods as your own sale, the GST treatment will be the same as that for goods on consignment. In such cases, the concessionaire is treated as the consignor and you are treated as the consignee.

When you do not regard the sale of concessionaire goods as your own sale, you do not need to account for GST. The concessionaire is supplying the goods to his customer directly. He needs to charge and account for GST on the sale of goods if he is GST-registered.

Replacement of Returned Goods

When you replace the returned goods with similar goods, you (the supplier) can do either:

• issue a credit note to 'cancel' a tax invoice issued previously (if any) and reissue a new tax invoice on the replaced goods; or
• retain the original tax invoice, provided the goods are replaced for free.

When you replace the returned goods with goods of lower value than the original, you may issue a credit note for the difference in price and GST.

When you replace the returned goods with goods of a higher value than the original, you may issue an additional tax invoice on the price difference and the GST. This additional tax invoice must make reference to the original tax invoice issued.

For the required information to include on your credit note and tax invoice, please refer to Invoicing customers.

Refund for Returned Goods

You may have a returned goods policy where you will refund the selling price and GST of the defective goods returned. You should issue a credit note to your customer for the returned goods. The credit note must make reference to the original tax invoice issued.

For the required information to include on your credit note, please refer to Invoicing customers - credit note.

Discounts

In a sales promotion, you may offer your customers a discount on the selling price of your goods and services. Customers who make purchases with a VIP card are also entitled to a discount. In such instances, GST is chargeable on the net discounted price.

Free Gift Given for Purchase

You may give a free gift to your customer when he buys certain items. In such instances, the whole package (main items and free gift) will be treated as being sold for the price of the main items.

Vouchers Given Away for Free

Redeemed for Goods without Consideration

Subsequently, when the voucher is redeemed for goods and no consideration (e.g. money) is received, you need to account for GST if the goods are worth $200 or more.

When the goods are worth less than $200, you do not need to account for GST.

Redeemed for Services without Consideration

When the voucher is redeemed for services and no consideration is received, you do not need to account for GST as deeming of supply is not required for the provision of free services.

For information on the sale and redemption of vouchers, please refer to Vouchers.

The GST treatment for rebates depends on the circumstances in which the rebate is given.

Rebates Received for Exceeding Certain Purchase Amounts

You may receive a volume rebate from your supplier for making purchases above a certain amount. The rebate is equivalent to a discount given for past purchases.

When your supplier is GST-registered, he should issue a credit note showing GST to you. You must then reduce your input tax claim based on the credit note received.

When the rebate is used to offset against the value of your next purchase, your GST-registered supplier should charge GST on the net purchase value (i.e. after deducting the rebate) of that purchase.

Rebates Received for Separate Services Provided to Supplier

When you need to meet certain obligations imposed by your supplier (e.g. undertake advertising and marketing activities) in order to receive a rebate, you are providing a separate supply of services to your supplier.

This is so even if the rebate received is based on your purchase volume from the supplier. You have to account for GST at 7/107 of the cash rebate received and issue a tax invoice to your supplier.

Under the Tourist Refund Scheme (TRS), tourists may receive a refund of GST on goods purchased from GST-registered retailers who participate in the scheme. TRS is available to tourists who are bringing their purchases out of Singapore via Changi International Airport or Seletar Airport, within 2 months from the date of purchase and subject to the tourists' eligibility and conditions of the scheme.

For information on the procedure and conditions, please refer to Tourist Refund Scheme.