Singapore Taxation Journal Reviews

Topics: Tax, Taxation, Income tax Pages: 3 (1669 words) Published: April 4, 2010
This journal entry will focus on the import GST deferment scheme, (IGDS) among the schemes announced in Budget 2010. Currently, GST on imported goods is payable to Singapore Customs at the point of importation, unless Imports Relief Order has been granted or the goods are imported under one of various import GST suspension schemes. With effect from 1 October 2010, eligible GST registered importers can apply for the new Import GST Deferment Scheme. Qualifying conditions will include a good compliance record and adoption of a monthly GST filing. The approved GST registered businesses under IGDS scheme can defer their import GST payments until their monthly GST return due dates. This means that they account for the deferred import GST and claim it as input tax in the same GST return. GST stands for Goods and Services Tax. According IRAS regulation, a company or business is liable to register for GST when its annual taxable turnover is more than S$1 million or it is currently making taxable supplies and its annual taxable turnover is expected to be more than S$1 million. Upon registering GST, a business must charge and account for GST at the prevailing rate which is known as output tax. However, GST registered businesses can also claim from IRAS the GST incurred on their goods and services purchased assuming certain conditions are met which is known as input tax. The limitation is while import GST paid would be recoverable as input tax credits by GST-registered businesses in their GST returns, the process of paying GST upfront and claiming it back at a later date could create a cash flow burden for SMEs. The import GST deferment scheme, IGDS therefore aims to ease the import GST cash flow arising from the time lapse between the payment of import GST and the claiming of import GST for GST registered businesses. This is to allow importers to enjoy a credit period of one to two months, similar to what businesses enjoy for their local purchases. Effectively, there...
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