IRAS | Module 5 Claiming GST on Business Purchases & Imports

Learning Objectives:

• What are the conditions for claiming GST as input tax?

• When is input tax claimable?

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Claiming GST on Business Purchases & Imports

Learn about the conditions for claiming GST as input tax and when to claim input tax.

Learning Activity - Test Your Understanding

Q1. Which of the following is not a condition for claiming input tax?

A) You must be GST-registered

B) For imports, the input tax claims must be supported by import permits showing the supplier as the importer of the goods at the point of claiming

C) The goods or services must be used for the making of taxable supplies (i.e. standard-rated supplies and zero-rated supplies), or out-of-scope supplies which would be taxable if made in Singapore

D) When claiming medical expenses incurred for your staff, the expenses must be obligatory under the Work Injury Compensation Act or any Collective Agreement within the meaning of the Industrial Relations Act

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B) For imports, the input tax claims must be supported by import permits showing the supplier as the importer of the goods at the point of claiming

Imports must be supported by import permits showing you as the importer of the goods and other supporting documents such as the supplier's invoices and relevant transport documents.

Q2. Which of the following goods or services are not eligible for pre-registration GST claims?

i. Goods acquired for the making of exempt supplies after the business's GST registration date

ii. Office rental incurred within 6 months before the business's GST registration date and is not used to make any supplies before the GST registration date

iii. Goods have been supplied to a customer before the business's GST registration date

iv. Advertising fees incurred more than 6 months before the business's GST registration date

A) (i) and (iii)

B) (ii) and (iv)

C) (i), (iii) and (iv)

D) (i), (ii), (iii) and (iv)

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C) (i), (iii) and (iv)

For point (i): Generally, GST incurred on goods or services acquired to make exempt supplies is not claimable.

For point (iii): You may claim GST in full for goods acquired within 6 months before your GST registration date, provided the goods are still held by your business at the point of GST registration. If you have sold, transferred, or disposed of the goods before your GST registration date, GST is not claimable.

For point (iv): GST incurred on services is claimable in full if the purchases were incurred within 6 months before your GST registration date and the purchases were not used to make supplies before your GST registration date.

Q3. Which of the following statement is true about claiming input tax?

A) You can claim input tax if you have not made full payment to your supplier

B) You should claim input tax in the accounting period corresponding to the date when payment is made

C) You need to repay the input tax claimed if you have not made full payment to your supplier within 6 months from the due date of payment

D) You can claim pre-registration GST in any GST return

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A) You can claim input tax if you have not made full payment to your supplier

You should claim input tax in the accounting period corresponding to the date shown in the tax invoice, even if you have not made payment to the supplier. However, you have to repay the input tax previously claimed to IRAS if you do not pay the supplier within 12 months from the due date of payment.