When and How to Register for GST?

by Avadhesh Sharma SEO Analyst

The Goods and Service Tax (GST) was applied on 1st April 1994 in Singapore. GST is the modified form of UK VAT legislation and New Zealand GST legislation. It is considered to be VAT in some countries. GST is a tax collected on the supply of goods and services made into Singapore as well as imported into Singapore.

All the businesses in Singapore required to be registered with GST if their turnover exceeds $1 million in the last 12 months or is likely to cross $1 million in the next 12 months. Therefore, businesses having turnover exceeding the prescribed limit need to have GST Singapore registration for ease of doing business.

Here are some of the benefits of the implementation of GST to the Government and Businesses.

To the government:

Stable Cashflow

GST helps the government in generating stable cash flow and also predicts tax income in both good and economic environment. Thus it aids the government to invest the cash flow for the development of the country.

Low cost of collection

GST is an efficient tax, and it requires the minimum cost of administration and collection. It is beneficial for the government to collect and maintain records of such Taxes.

More FDI

GST helps the government to lower corporate and personal income taxes. It would increase more foreign direct investment, and this results in economic growth.

To businesses:

Trustworthy

Since the business is GST registered, this would give an impression in the minds of customers for such business that it is an established business and will not be shut down quickly.

Avoidance of Double Taxation System

GST is the tax collected on the supply of goods and service. Therefore GST is considered to be the fair tax system. GST is charged to the individuals only when they spend their money.

Encourages Investments and Savings

GST is a tax charged on the consumption of goods and services. Therefore, savings and investment are kept away from GST. It will help the citizens to save more and invest in productive activities.

Increases Ease of Doing Business

All the taxable businesses are registered within the purview of GST will help the businesses to do business easily. With the introduction of GST, the burden of tax on tax is reduced at multi-stage and final tax is paid by the end-user.

GST Registration Procedure

Overseas companies are always hiring professionals for how to register for GST in Singapore. Singapore GST Registration process is easy and user-friendly. To register for GST, form GST F1 along with supporting documents must be sent to the tax authority. However, in the case of a partnership firm, an additional form (GST F3) should be filled along with details of all the partners. In the case of overseas companies, separate application forms are to be filled such as group registration and divisional registration. In the case of overseas registration, applicants are required to appoint a local agent who will act on its behalf.

The registration process is completed within 3 weeks. Upon successful GST registration, the applicant receives a GST Registration letter. This letter contains the GST number, the effective date of commencement of business. The applicant must file your GST returns electronically.

After successful completion of GST Singapore Registration, then comes the question about the rate of taxes to be charged on goods and services. It must be kept in mind that there are two rates of taxes such as standard-rated – 7% GST and zero-rated GST on taxable turnover. However, exempt supplies and transactions are out of the scope of GST and are not part of taxable turnover. Export goods from Singapore are taxed at zero-rated. Sale and lease of residential property are exempted from GST. The dividend is also exempted from GST.

GST Registration is voluntary on the part of businesses if it satisfies any of the three criteria such as:

It makes taxable supplies

Out-of scope supplies

Deals in exempt supplies of financial services

It is also to be noted that the director of the company, sole –proprietor or partner must complete e-learning courses and pass the quiz before submitting the registration form. However, all the rules and legislation have to be followed, to avoid consequences for late filing and late registration. Therefore, if you want to register your business in Singapore, you must keep in minds the above pointers for the effective running of your business.