Module 1: Registering for GST
Learning Objectives:
• What is a supply of goods or services?
• When should GST be charged?
• What is the value of supply?
• What is the time of supply?
On this page:
Charging GST on Supplies – Standard-Rate
Learn about what constitutes a supply, when to charge and account for GST, and how to determine the value of supply.
Learning Activity - Test Your Understanding
Q1. You are selling a machine to Customer A for S$10,000. Customer A is unable to make the full payment and has offered to trade in his old machine for S$1,000 and pay you S$9,000. What is the value of your supply?
A) S$700
B) S$1,000
C) S$9,000
D) S$10,000
Click for the answer
D) S$10,000
A trade-in transaction is treated as two separate supplies for GST purposes. The supplier must charge GST on the full selling price of the goods (i.e. S$10,000) and not on the net difference.
If Customer A is GST-registered, they should charge GST on the trade-in value of S$1,000 to the supplier.
Q2. You accepted an old machine as part of a consideration for a sale. The trade-in value of the machine was S$1,000. You later disposed the old machine through a recycling company and received a total of S$1,200. What is the value of supply?
A) S$1,200
B) S$200
C) S$1,000
D) S$70
Click for the answer
A) S$1,200
The value of supply is the full selling price of the goods, not the net difference.
Q3. A television is on sale for S$1,000. To entice customers, the store has decided to absorb the GST. What is the output tax payable to IRAS for the sale of this item based on the GST rate of 9%?
A) 9% x S$1,000
B) 9/109 x S$1,000
C) 1/109 x S$1,000
D) S$0
Click for the answer
B) 9/109 x S$1,000
The amount paid by the customer will be treated as inclusive of GST. The output tax to account for to IRAS is calculated by multiplying the sum received from the customer (S$1,000) by the tax fraction (9/109).
Q4. Which of the following requires accounting for output tax when given away for free?
A) Hamper purchased from a GST-registered supplier for S$300 given to a customer (input tax was claimed)
B) Transport service for employees
C) Watch purchased from a non-GST registered supplier for S$500 given to an employee in recognition for his hard work
D) Accommodation for employees
Click for the answer
A) Hamper purchased from a GST-registered supplier for S$300 given to a customer (input tax was claimed)
When a business gives goods away for free, it has to account for output tax based on the open market value of the goods unless it falls under these exceptions:
- The cost of the goods excluding GST does not exceed S$200, or no input tax was claimed on the purchase of the goods in the first place; or
- Provision of free food or accommodation to employees.