2024 GST Rate Change: A Guide for GST-registered Businesses (PDF, 702KB)
In Budget 2022, the Minister of Finance announced that the GST rate would be increased from:
(i) 7% to 8% with effect from 1 Jan 2023; and
(ii) 8% to 9% with effect from 1 Jan 2024.
The revenue from the increase in GST will go towards supporting our healthcare expenditure, and to take care of our seniors.
On this page:
GST rate to apply
Generally, you should charge GST at the prevailing rate at the time of supply.
Hence, if you issued an invoice or received payment for your supply in 2023, you should have charged GST at 8% on the supply.
If you issued an invoice and received payment for your supply on or after 1 Jan 2024, you should charge GST at 9% on the supply, unless you have elected to charge GST at 8% under the rate change transitional rules subject to the conditions for the election.
Where you are required to charge GST at 9% on the supply on/after 1 Jan 2024, you must account for GST at 9% in your GST return. This is regardless of whether you have collected the GST payment from your customers.
You have collected GST at 8% on your supply of goods on 2 Jan 2024 ($1,080 inclusive of 8% GST) as your systems were not updated in time. Notwithstanding this, you would have been required to account for GST on the supply at 9% in your GST return.
The amount of output tax to account is based on the tax fraction (9/109) of the total payment received for your supply. In this case, the output tax to include in your GST return is $89.17 ($1,080 x 9/109).
You are not allowed to charge GST at 9% on invoices and payments that are issued or received before 1 Jan 2024.
Price display
You must show GST-inclusive prices on all price displays to the public (e.g. price tags, price lists, advertisements, publicity brochures, website). Prices that are quoted, whether written or verbal, must be GST-inclusive as the public needs to know upfront the final price that they have to pay.
An exception is granted to hotels and food & beverage (F&B) establishments that impose service charge on their goods and services. They are not required to display GST-inclusive prices for goods and services that are subject to service charge
to ease their operations. However, they must still display a prominent statement informing customers that the prices displayed are subject to GST and service charge.
The exception does not apply to hotels and F&B establishments that do not impose a service charge. It is also not applicable to F&B establishments that levy a nominal service charge without genuine business reasons other than to avoid displaying
GST-inclusive prices. Such businesses are still required to display GST-inclusive prices. Those who do not comply with the price display requirement could be subject to a fine.
For more information, you may refer to Displaying and Quoting Prices.
With the GST rate increase from 8% to 9%, all price displays with effect from 1 Jan 2024 must be inclusive of GST at 9%.
Businesses that were are unable to change their price displays overnight, could display two prices:
- Prices inclusive of GST at 8%, applicable before 1 Jan 2024; and
- Prices inclusive of GST at 9%, applicable with effect from 1 Jan 2024.
Communicating reasons for price/ fee increases to consumer
Businesses should be transparent in communicating the reasons for any price or fee increases to consumers. They should explain the main reasons for the increases and not misrepresent the situation by attributing the increases primarily or solely to GST.
The Committee Against Profiteering (CAP) takes a serious view of any unjustified price increases using the GST increase as an excuse and will investigate all feedback on such cases.
Businesses can refer to the following Frequently Asked Questions (FAQs) from CAP's website on how to explain a price increase to consumers and the type of cases that CAP will investigate.
How should I explain a price increase?
Businesses should be transparent with their prices. Sharing the following information will help consumers understand the reasons for your price increase:
- Why are you raising your price?
- What is the effective date of the price increase?
- What is the price before and after the price increase?
You must not misrepresent the reasons for any price increase as this will mislead consumers.
What types of cases will Committee Against Profiteering (CAP) investigate?
The CAP will investigate all allegations of unjustified price increases of essential goods and services that use the Goods and Services Tax (GST) as a cover.
A number of factors could lead to price increases, such as an increase in operating costs including wages, utilities, rental and materials.
Errors to avoid
Below are some errors that businesses were advised to avoid when preparing for the second GST rate change from 8% to 9%:
Your payments received in 2023 should be subject to GST at 8%. This is so even if the goods and/or services were delivered on or after 1 Jan 2024.
You may have multiple sales channels where you display prices and make sales of goods and services such as mobile Apps, self-ordering kiosks, physical outlets and online websites.
You should have ensured that your receipts/ invoices issued under all sales channels were updated to charge 9% GST* on/ after 1 Jan 2024. Your price displays for all sale channels should also have been updated to 9% GST on/ after 1 Jan 2024.
Even if you had intended to absorb the additional 1% GST, you should still have ensured that your receipts/ invoices issued and price displays that mention the GST rate were updated to 9% GST on/ after 1 Jan 2024.
* Where transitional rules apply, GST at 8% may be applicable on your supplies that straddle 1 Jan 2024. You may refer to Transitional Rules for GST Rate Change for more information.
