Goods on consignment
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 its selling price to the consignee at the earliest of the following:
- When any payment in respect of the supply is received;
- When the invoice in respect of the supply is issued; or
- 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.
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 its selling price to the consignee at the earlier of the following:
- When payment in respect of the supply is received; or
- When invoice in respect of the supply is issued.
For the consignee, they should account for GST on their selling price to the customer at the earlier of the following:
- When an invoice is issued; or
- When payment is received.
The consignee may apply for self-billing on the supplies made to them by the consignor.
Issuing of tax invoice
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 (PDF, 565KB).
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 their customer directly and need to charge and account for GST on the sale of goods if it is GST-registered.
Returned goods from customers
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.
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.
Example 1: Discounts
You are giving a 10% discount on the sale of a sofa set. The selling price of the sofa set (excluding GST) is $2,000. You should charge GST on the net discounted price of $1,800.
GST to be charged = 8% X $1,800 = $144
Free gift given for purchase
You may give a free gift to your customer who purchases 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.
Example 2: Free gift given for purchase
You are giving 1 free cupcake for every 10 cupcakes purchased. The price which your customer pays is $20.
You should charge GST on $20 for the whole package of 10 cupcakes and 1 free cupcake.
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.
Example: Consideration received upon redemption of voucher
You give a $20 voucher to your customer for free. The voucher can be used in the customer's next purchase.
When your customer buys a bag priced at $100 and uses this voucher to offset their payment, you only need to account for GST on $80. The GST amount should be computed by using the prevailing tax fraction multiplied by $80.
For information on the sale and redemption of vouchers, please refer to Vouchers.
Rebates received from supplier
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, they 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 can only be used to offset against the value of your next purchase, your GST-registered supplier should charge GST at the prevailing rate 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 on the cash rebate received and issue a tax invoice to your supplier. The GST amount should be computed by using the prevailing tax fraction multiplied by the cash rebate received.
Retailers operating at the restricted/ transit areas of Changi International Airport
When you operate a shop in the restricted/ transit areas (i.e. after the immigration check-in area) of Changi International Airport, you can zero-rate your supplies of goods to a departing passenger if you have sighted the passenger’s passport and boarding pass. Where the sale in a single receipt amount to S$500 or more, you must record the passport number and flight number of your customer (i.e. the departing passenger) to substantiate the zero-rating of the sale of goods. Otherwise, you have to standard-rate (i.e. charge and account for GST at the prevailing rate ) the sale.
You are required to charge GST at the prevailing GST rate on all goods sold to arriving passengers. However, the sale of duty-free items (e.g. liquor) to arriving passengers do not attract GST. Retailers of duty-free items must record the passport number and flight number of the customer (i.e. the arriving passenger).
For more information on the GST treatment for other supplies made by retailers at Changi International Airport (e.g. sales of services, sales by retailers operating at public areas) , please refer to GST: Guide For Retailers (PDF, 297KB)
Selling goods to tourists
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.
GST on low-value goods imported via air or post with effect from 1 Jan 2023
From 1 Jan 2023, the supply of imported low-value goods (LVG) to customers who are not GST-registered in Singapore would be subject to GST. Specifically, LVG refer to goods imported into Singapore via air or post and have a value (i.e. “entry value”) not exceeding S$400. The entry value is based on the sales value of the goods, excluding freight and insurance costs and any duties payable to the Singapore Customs.
If you are a GST-registered retailer who makes direct sales of LVG which are warehoused overseas to customers who are not GST-registered in Singapore, you would be required to charge and account for GST, at the prevailing GST rate, on these sales.
If you are a non-GST registered retailer who makes direct sales of LVG which are warehoused overseas to non-GST registered customers in Singapore, you would be required to consider such supplies in determining your GST registration liability in Singapore.
Under certain conditions, a local or overseas operator of an electronic marketplace or a redeliverer may also be regarded as the supplier of the LVG made by the suppliers through these marketplaces or redeliverers. In such cases, the operators and redeliverers are required to register, charge and account for GST on the supply of LVG, instead of the suppliers.
Can I display price excluding GST?
No. You must show GST-inclusive prices on all price displays and advertisement or publicity brochures. If you choose to display both GST-inclusive and GST-exclusive prices, the GST-inclusive price must be at least as prominent as the GST-exclusive price. Failure to comply with each of these requirements is an offence that can result in a fine of up to $5,000.
An exception is granted to the 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 to ease their operations.
Otherwise, they may have to display separate price lists for dine-in and take-away items, or to re-compute prices whenever the establishment reduces or waives the service charge.
However, they must still display a prominent statement informing customers that prices displayed are subject to GST and service charge.
Please note that 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.
I am selling goods to my customer for $10,000. I choose to absorb the GST payable by my customer. How should I report for GST? Do I need to reflect the GST amount in my tax invoice?
You have to treat the sum of money received from your customer (i.e. $10,000) as inclusive of GST. The GST amount is derived by multiplying the selling price by the tax fraction.
In your GST return, you need to account for the GST amount as your output tax and the amount payable excluding GST as your standard-rated supply.
GST = $10,000 X 8/108 = $740.74
Amount payable excluding GST = $10,000 - $740.74 = $9,259.26
Your tax invoice should still show the GST as a separate amount. If you issue receipts or simplified tax invoices, you can state the GST-inclusive prices and indicate with the words "Price payable includes GST".
Do I account for GST on deposit collected from my customer?
When the deposit forms partial payment for the goods or services supplied, GST has to be charged on the amount of deposit and accounted for in the accounting period in which the deposit is received.
However, the goods may have been removed / made available or the services may have been performed before the deposit / down payment is received.
In such cases, GST must be accounted for on the full selling price, based on the time of supply rule.
When the deposit is refundable and used as a security, GST is not chargeable. For example, a deposit imposed for the safe return of goods.
The total GST payable on my supply of goods and services shown on a tax invoice is $8.128. How should I round off the amount?
The total GST payable may be rounded off to the nearest whole cent (i.e. $8.13).
With the discontinuation of the issuing of one cent coins, you may round your bills to the nearest five cents to facilitate cash payment by your customers.
Whether a bill should be rounded up or rounded down to the nearest five cents is a business decision.
My customer trades their old equipment in for a new equipment. The retail price of the new equipment is $400. The trade-in value of old equipment is $300. My customer will pay an additional $100 to me to get the new equipment. How should I charge GST?
A trade-in transaction is treated as two separate supplies for GST purposes. The supplier must charge GST on the full selling price of your goods and not on the net difference only.
You should charge GST on the full retail price (i.e. $400) of new equipment and issue a tax invoice to your customer. If your customer is also GST-registered, they have to charge GST on the trade-in value of the old equipment (i.e. $300) and issue a tax invoice to you.
If I sell my goods on sale or return terms, when do I account for GST?
For goods sold on sale or return terms, the sale does not take place until the customer approves the goods to confirm the sale. The time of supply is the earliest of the following:
- When any payment in respect of the supply is received;
- When the invoice in respect of the supply is issued; or
- 12 months after the removal of the goods.
I am a retailer and I charge my customers for providing plastic carrier bags. Do I need to charge and account GST on the bags?
Yes, you are required to charge and account for GST on the charges for the plastic carrier bags. This is because you are making a supply of the plastic carrier bags to your customers in return for the payment received.
The above treatment also applies to the supermarket operators which are required to charge a fee for every disposal carrier bag provided with effect from 3 July 2023.