IRAS | Customer Accounting for Prescribed Goods

You must apply customer accounting when you sell prescribed goods worth more than $10,000 (excluding GST) to a GST-registered customer for his business use. An excepted supply is excluded.

Customer accounting means your customer accounts for GST on your behalf. You cannot charge your customer GST, but you must still report the supply in your GST returns. Prescribed goods are mobile phones, memory cards and off-the-shelf software.

On this page:

Overview of customer accounting

You are required to apply customer accounting when all these conditions are met:

You sell prescribed goods worth more than $10,000 (excluding GST).
Your customer is GST-registered.
Your customer buys the goods for business use.
The sale is not an excepted supply.

Your GST-registered customer will account for output tax on your behalf. You need not charge GST on the supply.

Note:

You can verify if your customer is GST-registered using the ‘Register of GST-Registered Businesses’ on the IRAS website.

Your customer must tell you if they are buying goods for non-business use. You can ask your customer to confirm this in writing.

What are prescribed goods

Prescribed goods	What this means
Mobile phone	A device that makes and receives calls over a cellular network with a screen size of 17.5cm or less (measured diagonally, excluding the bezel). Examples include smartphones and tablets that can make calls with a screen size of 17.5cm or less. Mobile phones sold with subscription plans are excluded.
Memory card	An electronic flash memory data storage device for storing digital information. Examples include CompactFlash, Secure Digital (SD) cards, and Memory Stick. Flash drives with integrated USB interfaces are excluded.
Off-the-shelf software	A non-customised software that is either: Stored in a compact disc or similar storage medium and provided as part of the supply; or Accessible using a product key, licence key, activation code or similar key or code provided in or on any physical packaging as part of the supply. Examples include: Anti-virus software sold in a boxed package. Accounting software sold in a boxed package. Games software sold in a disc. Software downloaded from the internet and accessed by means of a product key or licence key enclosed in or printed on the physical packaging. The following are not off-the-shelf software for customer accounting purposes: Software pre-loaded into machinery or equipment (including computer) and supplied as part of the machinery or equipment. Software that is provided to the customer as a back-up copy. Software downloaded from the internet where the product key or licence key is sent via email.

Prescribed goods

What this means

Mobile phone

A device that makes and receives calls over a cellular network with a screen size of 17.5cm or less (measured diagonally, excluding the bezel).

Examples include smartphones and tablets that can make calls with a screen size of 17.5cm or less.

Mobile phones sold with subscription plans are excluded.

Memory card

An electronic flash memory data storage device for storing digital information. Examples include CompactFlash, Secure Digital (SD) cards, and Memory Stick.

Flash drives with integrated USB interfaces are excluded.

Off-the-shelf software

A non-customised software that is either:

Stored in a compact disc or similar storage medium and provided as part of the supply; or
Accessible using a product key, licence key, activation code or similar key or code provided in or on any physical packaging as part of the supply.

Examples include:

Anti-virus software sold in a boxed package.
Accounting software sold in a boxed package.
Games software sold in a disc.
Software downloaded from the internet and accessed by means of a product key or licence key enclosed in or printed on the physical packaging.

The following are not off-the-shelf software for customer accounting purposes:

Software pre-loaded into machinery or equipment (including computer) and supplied as part of the machinery or equipment.
Software that is provided to the customer as a back-up copy.
Software downloaded from the internet where the product key or licence key is sent via email.

What is an excepted supply

Customer accounting does not apply to the following excepted supplies:

A supply of goods under the Gross Margin Scheme.
A supply of goods to an approved/specified person under the Approved Third Party Logistics Company Scheme or Approved Refiner and Consolidator Scheme.
A deemed taxable supply of goods from the transfer or disposal of goods for no consideration.

How to complete your GST returns and your obligations

You are a GST-registered supplier selling prescribed goods

Your customer will account the output tax on your behalf. You are not allowed to charge GST on your supply of prescribed goods under customer accounting to a customer.

You must issue a customer accounting tax invoice that shows the following details in addition to details required for a tax invoice:

Your customer's GST registration number.
A statement that the sale is subject to customer accounting and the customer must account for GST of $X. $X is the amount of GST that the customer is to account on your behalf which should be specified.

How to complete your GST return

Report the GST-exclusive value of the prescribed goods sold in Box 1 "Total value of standard-rated supplies" based on the normal time of supply rules.
No output tax is to be reported in Box 6 “Output tax due”.

For an overview of how your sales of prescribed goods will be affected, please refer to flowchart (PDF, 326KB).

A GST-registered customer purchasing prescribed goods

You must account for the GST chargeable on your supplier’s behalf as your output tax.

You may claim the GST as your input tax if the purchase is for your business use and the making of taxable supplies. This is subject to you satisfying the input tax claiming conditions, and includes holding a valid customer accounting tax invoice.

How to complete your GST return

Report the GST-exclusive value of the prescribed goods purchased in Box 1 "Total value of standard-rated supplies" and the GST amount in Box 6 "Output tax due" based on the normal time of supply rules.
Report the value of the prescribed goods purchased in Box 5 "Total value of taxable purchases" and claim the GST as your input tax in Box 7 "Input tax and refunds claimed", if you qualify to claim input tax.

For an overview of how your purchases of prescribed goods will be affected, please refer to flowchart (PDF, 326KB).

Special situations

Selling prescribed goods with other goods or services

You should only use the GST-exclusive value of the prescribed goods to determine whether your supply exceeds the $10,000 threshold for customer accounting to apply. Customer accounting does not apply to the sale of non-prescribed goods or services, regardless of its value.

Option for supplier to apply customer accounting for sales of prescribed goods of $10,000 or less

You can choose to apply customer accounting for supplies of prescribed goods of $10,000 or less if you meet certain conditions. Please refer to the e-Tax Guide GST: Customer Accounting for Prescribed Goods (PDF, 538KB) for details.

Exemption for customer making occasional purchases

Customer accounting applies to all GST-registered businesses buying or selling prescribed goods. This is even if you do not regularly buy or sell these goods.

If you rarely buy prescribed goods and want to be exempted from reporting both the output tax and input tax in your GST return, you may apply for exemption from the Comptroller of GST. This is provided you meet certain conditions. Please refer to the e-Tax Guide GST: Customer Accounting for Prescribed Goods (PDF, 538KB) for details.

FAQs

No. Customer accounting is mandatory for the supply of prescribed goods that exceeds $10,000 (excluding GST) made to GST-registered customers for their business use. You cannot charge GST on such supplies.

No. Customer accounting is mandatory for the supply of prescribed goods that exceeds $10,000 (excluding GST) made to GST-registered customers for their business use. Your supplier does not have the option to charge GST on a supply liable to customer accounting.

You must account for output tax on your supplier’s behalf and can claim the input tax in your GST return if the input tax claiming conditions are satisfied. However, if you make occasional purchases, you may apply for exemption from the Comptroller. See "Special situations" above.