MOF accepts suggestions on goods and services tax amendment bill

20 suggestions were considered while 16 not accepted due to inconsistency with legislative drafting convention.

The Ministry of Finance (MOF) has accepted for implementation 20 out of the 38 suggestions on the draft Goods and Services Tax (Amendment) Bill 2010. The suggestions were received during the public consultation exercise held from 1 to 18 June 2010. They will be incorporated into the revised Goods and Services Tax (Amendment) Bill 2010 or IRAS’ e-tax guides. Two suggestions have also been accepted for further study. The remaining 16 suggestions were not accepted for implementation as they are inconsistent with legislative drafting conventions or the GST policy objectives for the proposed legislative changes, according to an MOF report.

Draft Goods and Services Tax (Amendment) Bill 2010
The draft Goods and Services Tax (Amendment) Bill 2010 contains proposed legislation to put into effect the following tax changes announced in Budget 2010, as well as other changes arising from the periodic review of the Goods and Services Tax system:

a) Budget 2010 changes – These are tax changes announced in the 2010 Budget Statement, which seek to ease the cash-flow management of businesses and lower their GST compliance costs:

• Expand the scope of zero-rating of GST for the marine and aerospace industry;
• Simplify the accounting of GST on most supplies to the earlier of invoice date or payment date;
• Introduce a new scheme to allow approved businesses to defer import GST that is currently payable on goods at the point of their entry into Singapore;

b) Other changes – These changes arise from the ongoing review of the GST regime, and seek to clarify existing GST legislation or to improve GST administration:

• Clarify that GST is not chargeable on (i) imported goods that are supplied and remain within Free Trade Zones, Zero-GST or Licensed Warehouses; and (ii) goods that are locally manufactured, supplied and remain within warehouses licensed under the Customs Act;
• Update the GST Act to align with the methods of valuation as prescribed in Customs legislation or the last selling price, where applicable, for the purpose of valuation of imported goods and thus the levying of import GST;
• Clarify the definition of residential property for the purpose of GST exemption;
• Introduce measures to facilitate the self-assessment of transactions qualifying under the Approved Contract Manufacturer and Trader (ACMT) scheme; and
• Allow the Comptroller of GST to provide for a wider scope of electronic services.

During the public consultation exercise held from 1 to 18 June 2010 to obtain feedback on the draft Goods and Services Tax (GST) (Amendment) Bill 2010, a total of 38 comments on the proposed changes were received from the public, of which 22 pertained to the simplification of GST-accounting for GST-registered businesses. MOF has considered all the comments received carefully. 20 of the 38 comments have been accepted for implementation and will be incorporated into the revised Goods and Services Tax (Amendment) Bill 2010 or IRAS’ e-tax guides. Another two suggestions have been accepted for further study. The remaining 16 comments which were not accepted for implementation were inconsistent with legislative drafting convention or the policy objectives of the proposed legislative changes.